usdtor05

My Partner and I were just discussing how we think the CPA is actually more useful for investing than the CFA. But you need the accounting degree and can probably just learn it all on your own without getting the CPA itself.

Coming from some friends and family who are in the oil business, a lot of those numbers are massaged, even those reported to the commissions. Just something to keep in mind I guess, I know what you are trying to do but I can't remember how to use the TRC website anymore. I'll ask my father in law.

you'll be fine I am sure of it. it's all multiple choice and if you can figure out which one is definitely wrong then you're in a good spot.

@ Plato, your point is valid. Something that people tend to overlook when thinking about Softbank is that they have roughly $50B in Yen denominated debt and say $10B in Yen denominated EBITDA from Mobile/Telephony. If you put a 5 multiple on that business the two basically net themselves out and then you have: 1. Alibaba 2. Sprint 3. Yahoo Japan (in Yen also so...) 4. The other investments most of which we don't even know about outside of the discussed Snapdeal, Uber India (having been there I wonder how that would really work) and the Indonesia Alibaba if you will. Those are worth, based on the market, much more than it's current market cap. Of course if he has to subsidize Sprint using Alibaba the tax affect needs to be factored in. I think it's likely he will subsidize the $10B-$15B Sprint needs with the cash flow from Mobile/Telephony over the next three years. Of course it rates rise significantly he is in trouble in Japan although the debt isn't due tomorrow. Sprint is troubling and really you are betting on Marcelo and Masa Son to pull this off. Masa did this with Vodafone KK but he had the exclusive on the iPhone which certainly helped. If you look at the playbook we can see what is coming from Sprint...price war. In Japan he was going against entrenched competitors and he pulled it off, can that happen again against the US competition I am not sure. One thing I haven't been able to fully wrap my head around, there is no way data usage is going down and therefore Verizon is theoretically only going to get more expensive for me. Verizon's play is to have the best network and offer less data; Sprint has a poorer network in general but is offering unlimited data. Sprint certainly pulled back big time on their capex to take a focused approach which means their overall network roll out is pushed back somewhat. I can't figure out if they come out with a really compelling offer with unlimited that significantly underprices their peers if people will switch. I am still on Verizon because of legacy feeling that Sprint is horrible. My wife uses Sprint and it works 100% fine. Will Verizon, AT&T and T-Mobile follow on pricing/data. Everything I have read on Verizon's spectrum says they can't handle that much data and therefore they might not be able to come with unlimited also but maybe the most recent auction changes this. maybe it's in the too hard bucket to be honest.

yadayada I believe he was saying ex-market maker valuation the brokerage is valued at that.

search spinoffs on here also...lots of stuff

Thanks Bizaro, that's how I have it modeled out but nice to know I wasn't thinking about it incorrectly. Still trying to wrap my head around what the netbacks are on the oil vs. the gas for some of these players. They seem to mix it all together and by the time they are done reporting you can't tell what they are really making without taking a pretty big swag at it. It would seem like if you were to be able to get at those margins you could back into a pretty reasonable valuation if you had solid numbers on the EURs and the true wells costs and operations. I understand the PV-10 theoretically does this for us but half the time when I try to do a high level recalc of the pv-10 using their stated EUR and well costs I don't even get close which tells me either I am way off or they are doing something shady in there... In the end I think it's safest to stay away unless you are a true expert as many of you have pointed out...the hurdle is likely too high for me. I was just trying to find something glaringly obviously mispriced. I went back and took a look at Petrochina in 2002 and looks like Buffet bought at roughly $3/barrel EV/Proved Reserves of which 90% were oil. That's basically what I was looking to do. Thanks to all for your help

thank you for those

fair enough makes sense...the fact that SFTBY is the Son show is a massive positive to me. Get your points. In terms of special sits, SMA is interesting. Basic thesis is: 1. Two businesses (i) OEM, (ii) surgical business (sell instruments, etc. much smaller than the other players here including CareFusion's business) 2. OEM getting bought out, $7.50 will be returned shareholders and then they will spin out the surgical business (stock around $10 now). 3. Implied trading value post spin vs. fcf is around 7x 4. New spinoff will be very small (less than $100M MC so you should/have seen the larger holders getting out). 5. Most funds are likely afraid to take a full allocation here in case the deal falls through but there were a number of bids for OEM so should be ok (Hart, Scott, Rodino approved). You have to buy roughly 4x the amount of the surgical business that you want to own given the cash that is going to be repaid 6. Management is crazily incentivized to grow the business with huge equity grants based on performance (something like 7% of the business post spin vs. current ownership around 1% of the total SMA business). Disclosure - We are long

Thanks Glenn @yadayada yes I've seen you post that a number of times over the board and totally get your position. I am just trying to get my mind around a valuation. Agree they feel like black boxes but is nice to know how to think about them at the least.

@thepupil, are you primarily focused on yahoo as it is much more likely to have a catalyst versus SFBTY? On SOTP, SFBTY is trading at a significant discount.

Hi all, Have a question on how you think about the NG/Oil 6/1 conversion. I understand why it is done from an energy equivalency perspective but in terms of valuing reserves after a conversion to oil or vice versa this would not appear to be the right way to go about it unless I am missing something. Basically I am just trying to come up with a quick and dirty metric to guide me in terms of valuation to see if something is screaming cheap, especially after the moves lately. Would love your thoughts on this if you have a moment.

Mark Jr. When looking at Rightside, they have a projected $28M of "aftermarket and other" revenues that are primarily made up of advertising on domains they own and buying/selling domains. The cost structure from this business is not broken out from the costs of its domain name services biz. We have an "estimate" of what we think the margins should be on the DNS business, but don't know how we should think about contribution margin on the "aftermarket and other." Do you have a sense for what the margins would be on this type of aftermarket business? Thanks.

Or Dean Foods?

Hey did you guys end up rescheduling? If so, I'd love to come to the next meet-up.