Rabbitisrich
-
Posts
1,066 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by Rabbitisrich
-
-
About 70-30 common to A warrants. 6 years is a long time, and the A warrants get interesting if BAC pays out $3 over that horizon. Depending on how you model the long-term earnings power and the mix of buybacks to dividends, the A shares can greatly outperform the common.
-
Thanks for the attachment.
-
There are still plenty of regionals with improving or bottoming credit metrics, trading at <= 5X PTPP, likely overcapitalized by 10%+. Regionals don't compete with the big four on non-interest activities. They just make more on NIM AND experience lower charge-off rates. If you are worried about geographic concentration, just make a basket.
-
The Valueline 1-pagers are my primary sources of ideas these days. So handy to carry around on a tablet or phone.
-
I've been steadily talking myself out of doubts about some investment banking operations. It's like watching the market price a Starbucks for having bad coffee and overpaid staff, ignoring that it's planted in some of the best locations.
-
You are right, but it looks like the author is playing with semantics to enhance his implication of excessive leverage. He uses the term equivalents but then uses the full notional values to suggest high leverage on invested capital.
-
Something is clearly funky, but it US banks aren't necessarily at huge risk. Quantifying exact damages will be a problem. Look at daily 3 month libor in USD compared to 3 month AA commercial paper (fin + non-fin, it doesn't make a huge difference) and to effective fed funds. It matches pretty closely. Because banks lend to each other in various ways, it would be difficult to lock down one ask and say that's the "real" LIBOR.
-
Eliminating the interest and tax components of a company's expenses makes no sense. Think of two companies, moderately to highly levered, whose earnings, depreciation and amortization (and even maintenance CapEx) are identical. If company A has to pay a higher interest rate and/or is subject to higher taxation (due to geographic location, structure, etc) than company B, they will have the same EBITDA, but company A will have less, perhaps far less, cash with which to acquire businesses, develop new businesses, invest on "growth" CapEx and/or pay dividends. The fact that they have the same EBITDA but vastly different cash generating capabilities suggests a major difference in value, and suggests the lack of usefulness of EBITDA.
-Crip
EBITDA can be useful in those circumstances, particularly if you don't limit yourself to equity. But even if you do, companies with similar EBITDA potential but different tax/interest schedules might have much closer private market than public market values.
-
http://alephblog.com/2012/07/06/an-analysis-of-three-month-libor-2005-2008/
My initial diagnosis is this: whether formally or informally, you have two groups of banks submitting rates for LIBOR. One group is trying to pull LIBOR up, the other is trying to pull LIBOR down. Statistically, if I add up their intercept terms from the first table, they both sum to 0.23%, one positive, the other negative. Even if LIBOR were a simple average, which it is not, this is a colossal game of tug of war, with two equal teams. -
Isn't it being used for valuation? I'm trying to understand why some people prefer this over say P/FCF, etc
If you are comparing companies within an industry, and you decide that different expense rates are largely timing differences, then EBITDA will look past the noise that FCF picks up. If you use an average, or some other smoothing process, then high growth can distort FCF type measures simply by overweighting recent information, so timing differences can lead to incorrect relative valuations. That is one example, but I definitely see how EBITDA can be used to justify, rather than to measure.
-
It's both. You've had some luck, but you also created a lot of luck through initiative, hard work, and integrity. Being smart and humble enough to recognize the value of the opportunities you're being handed helps too.
Yes, but I bet that Parsad could also link those traits to fortunate bumps like good role models, friends, etc... Plus, it's way easier to be ambitious when you see a pathway to be rewarded for effort.
-
Nothing wrong with the metric... just in it's use. Starting from EBITDA can help to look past accounting differences and cyclical differences in capex spending. You isolate those other measures and try to figure out the source of difference and how it affects EBITDA. The inexplicable part is when you see a fast n' furious multiple applied to arrive at a valuation.
-
lets find a few guys and test it :D
I took am a little skeptical about the powers.
I would love to be able thrown away or see that it isn't possible.
Like to know how it feel.
Look at the Sexyama gifs that I posted in an earlier link. A technically sound opponent spots weaknesses in your posture. In the first gif, Sexyama catches the opponent's raised lead leg with his hip, which allows him to tip over the rest of the body with little effort. In the second series of gifs, the opponents rushes into Sexyama, bringing his feet together and accidently placing his center of gravity, again, too close to the Sexy's hip. A quick sweep and counterbalancing arm hook sends the opponent flying. These aren't very muscular moves. It's largely good timing and leverage.
-
Cort's report is consistent with the last manufacturing PMI. Look at the selected comments from machinery, metals, electronics, apparel, furniture, and chemicals.
[*]"Business is still strong, with some nagging question whether it will be sustained." (Machinery)
[*]"The economy and general business seem to be getting better even though recent data say otherwise." (Fabricated Metal Products)
[*]"Significant raw materials price correction underway." (Plastics & Rubber Products)
[*]"Local labor market shows no signs of slowing down. Competition for technical services/skilled craft remains tight." (Petroleum & Coal Products)
[*]"Overall demand signals from sales forecast are trending down in all regions." (Computer & Electronic Products)
[*]"Although our shipments are up year over year and from prior month, we can feel some head winds, especially from Europe. We are watching our expenses very tightly and being cautious." (Apparel, Leather & Allied Products)
[*]"Business continues to exceed forecast in all markets." (Primary Metals)
[*]"Economy seems to be slowing slightly due to concerns in Europe; however, production has not changed a great deal." (Transportation Equipment)
[*]"Business has started to show signs of slowing." (Furniture & Related Products)
[*]"Slowing world economies, particularly China, are reducing 3Q and later orders and drastically dropping some raw material prices." (Chemical Products)
And from non-manufacturing:
[*]"Q2 will be a strong quarter for us; the building market is starting to wake up." (Construction)
[*]"Increased activity and resources related to projects." (Finance & Insurance)
[*]"The upswing in consumer confidence has led to increased business." (Arts, Entertainment & Recreation)
[*]"While we tend to remain optimistic about the economy, our numbers do not show a surge in activity. It appears consumers are maintaining their 'let's wait and see' attitude." (Accommodation & Food Services)
[*]"Business outlook is flat for the remainder of 2012 with emphasis on cost containment, restructuring and cost-savings projects." (Professional, Scientific & Technical Services)
[*]"Business is still strong, but we have seen some softening in growth since mid-March." (Wholesale Trade)[/l][/l][/l][/l]
-
Look at 4:42. The young man jumps to where he is guided.
There are beautifully efficient throws and trips that can be executed against less supportive persons. These gifs of Sexyama show more realistic applications of leverage and timing: http://www.cagepotato.com/gifs-of-the-day-akiyama-even-makes-takedowns-look-sexy/
-
check this out its
Unreal
Unreal, indeed. Very cooperative.
http://www.youtube.com/watch?v=G90YcgwAZTM
-
Keep in mind that IQ is just a summary of complex processes. The same number can cover people with large variations in specific aptitudes. In any case, the investing effect of "intelligence" is relevant so far as it effects your decision rules. If you strip away any romantic notions of intelligence and talent, and just look at relative strengths and weaknesses, then you can strategize accordingly.
I tend to be overly optimistic on companies that I own (I tried to watch as much CBS as possible when I owned it). Solution: keep separate books for long thesis (usually 2-3 paragraphs) and worry points. Something about writing the bullish story, and then setting it aside, clears my mind.
-
This talk about mean reversion is absurd. Why should they revert to the mean if underlying components have changed?
The market doesn't let people get away with outsized returns on employed capital if it can help it. Eventually, you hit a wall with leverage and sales growth, and you have to dip into profit margins to make more money while still achieving acceptable marginal ROIC.
The weird thing about all these mean reversion articles is the static nature of the reversion. I guess sales hold and some expenses just increase? The increase in expenses affects nothing?
-
Lesswrong has a few gems.
This study argues that domestic politics predicts elevated levels of anti-american sentiment. Such sentiment increases in countries where an islamic group competes with a secular group compared to countries where the islamic group has secured power.
http://www.volokh.com/2012/06/24/why-do-they-hate-us-4/
Analysis of a huge amount of survey data collected from 13,000 Muslims in 21 countries showed that those countries where people expressed the most anti-American views were also those where two powerful political elites (one Islamist and one secular) were competing fiercely with each other for supporters. In countries where this did not apply, the amount of anti-Americanism expressed was significantly lower. … Blaydes comments:“When the struggle for political control between two factions escalates, they both tend to ramp up anti-American appeals to boost their own mass support with the result that political debate in certain countries is more or less saturated with anti-American messages. This means that larger numbers of Muslims hear, consider, and are led to adopt anti-American attitudes.
“Conversely we found that in Islamic countries where the battle for local supremacy has already been won by those who are more religious, neither side of the political divide had strong incentives to invoke grievances against the US to recruit supporters and hence the level of anti-Americanism among citizens was lower.”
-
iPad came out more than two years ago, Microsoft executives got an eye-opening jolt about how far Apple would go to gain an edge for its products. Microsoft learned through industry sources that Apple had bought large quantities of high-quality aluminum from a mine in Australia to create the distinctive cases for the iPad, according to a former Microsoft employee involved in the discussions, who did not wish to be named talking about internal matters.
The executives were stunned by how deeply Apple was willing to reach into the global supply chain to secure innovative materials for the iPad and, once it did, to corner the market on those supplies. Microsoft’s executives worried that Windows PC makers were not making the same kinds of bets, the former employee said.
For hardware makers, the PC market has long been a struggle because Microsoft and Intel, maker of the microprocessors that power most computers, have long extracted most of the spoils from the industry, leaving slim profits for the companies that make them. Manufacturers pay hefty fees to license Windows from Microsoft, putting pressure on them to make computers as cheaply as possible using commodity parts.That, in turn, has limited their ability to take the kinds of risks on hardware innovation that have helped define the iPad. Furthermore, with the iPad, Apple has proved that there are significant advantages to designing hardware and software together. When separate companies, each with its own priorities, handle those chores, integrating hardware and software can be more challenging.
Some who study the technology industry still believe Microsoft will get out of the business of selling its own tablet computer as soon as it can persuade other hardware companies to build compelling devices of their own. “I think once they jump-start it, they plan to make money the way they always have — from licensing software,” said Michael A. Cusumano, a management professor at M.I.T.It's not a data oriented article, but still provides good perspective.
-
The ratio should be apples to apples. Market caps are nominal, so nominal GNP is appropriate.
-
Good article from Conor Sen on demographic pressure: http://www.minyanville.com/business-news/the-economy/articles/household-debt-mortgage-mortgage-debt-economic/6/25/2012/id/41956
Three comments: First, we're making good progress. Mortgage debt to GDP has been falling by roughly 1% per quarter. At this rate we'll be back to normal in four years. Second, interest rates, and hence mortgage payments, are far lower today than they were in the mid 1990's. Back then mortgage rates were around 8%. Today they're below 4%. Mortgage debt servicing payments as a percentage of DPI is at 9.18% as of Q1 2012, its lowest level since Q2 2002. The low over the past 30 years was 8.67% in Q1 2000, and it's likely that by the second half of this year household mortgage burdens will be at a 30-year low. And third, just as it's not helpful to think about a “national average temperature,” if you want to know the weather forecast, the breakdown of homeownership -- and hence mortgage debt responsibility -- matters.By the mid-1990s, boomers had all hit age 35, so we weren't getting any new age 35-49 households. Instead, with the safety of a 10-year bullish trend behind them, boomers started increasing their homeownership rate. This peaked in 2005, but a once-in-a-lifetime credit boom led to exotic financing for subprime borrowers, pushing house prices and mortgage debt to unsustainable levels by 2007.However, the number of prime age households had already peaked around the year 2000, the same time that robust economic growth did. Since 2007, boomers started retiring, easy credit went away and unemployment soared, financing a home purchase became difficult, home prices collapsed, households got scarred from the crisis, and Millennials haven't been quite old enough to step in and get things going again yet.
However, demographics have now troughed, and someday sooner than people think, Millennials -- on a debt-servicing basis probably the least leveraged group of 20-somethings in 40 years -- will take the jobs of their retiring parents and start forming households and buying houses.
-
The other recent acquisitions have been domestic portfolios (or secured by domestic assets) purchased from foreign domiciled banks. Is this a similar transaction, or is WFC maintaining a foreign office?
-
Just saw this interesting rental ask price comparison in Seattle:
http://www.urbnlivn.com/2012/06/17/seattle-rents-2002-2012/
Seattle nearly led the nation in unemployment that year.
Rents were higher in 2000 vs 2002. The tech bust was especially painful in Seattle. I was a landlord of two single family homes at that time (Kirkland and West Seattle) -- I remember it well.
Thanks for that detail. Looking at this chart on apartment vacancy rates, the recent recession wasn't even the worst period for landlords in the last several decades: http://www.duprescott.com/productsservices/articleinfo.cfm?ArticleId=575
According to the article, only 1800 units were opened in 2011, but a recent Bloomberg article referenced plans to build 4600 units in Downtown alone.
CFA Exam 2012
in General Discussion
Posted
Congratulations everyone. Now you can promptly forget GIPS and the asset manager code of conduct.
Good luck on the next test fareastwarriors.