yadayada

you teach physics?

thx for posting :). always nice to study a fraud , interesting that 2 auditors resigned after each other, and authorities did and investigation. Would that happen with these chinese fraud stocks on US exchanges (the investigation)? Also Frauds never seem to generate free cash flow. Either investing activities are huge or they just dont generate much net cash. And margins seem not believable at all for a farming company (15% return on assets lol). Not sure what to learn from that situation tho. most of the situations I look at have huge FCF and seem to have easy to verify real estate and large auditors that have not yet resigned.

What the heck does that mean? On the sniffing: And the scratching was already explained :D . Kind of the cliche of what newly rich people do. That is the joke.

well the same as on US exchanges, do due dilligence on that. So far in the company's I like I havent seen it. Also if they own large stakes, they are not incentivized to loot the company.

I was looking at the hk real estate companies but decided against pulling the trigger in the last min.... the key thing is: corporate governance, or protecting minority shareholders. Until I have a better understanding of their corp governance I will consider HK in the too hard pile. I think you have little say in operations, but it is pretty much impossible for insiders to take it private at some cheap valuation if only 10% of shareholders doesn't agree. So if management does a good job why is this a problem?

I think regarding CLUB, a break down of assets at cost: Leasehold improvement: 503 million Club equipment: 99 million furniture & computer equipment: 61 million software: 20 million buildings: 5 million 456 million of 700 million is depreciated. I guess you can do market research and find out yourself in what states these gyms are? Most of them seem to be in new york. If they look still v new and crisp to you, and depreciation was lower in the last 5-10 years (after they expanded basicly) then you could probably safely say that current maintenance capex is sustainable. About period of leashold improvement: Seems like a lot of gym interior can last like 20 years or so easily with a little maintenance. Not sure how long those leases are? And this is most of depreciation. So it looks like customizing a building into a gym is the largest cost, and it is mostly a one time charge.

some cases where actual cash charges are lower then depreciation: Leasing: If they enjoy lower utilization, and models dont really change much. Emeco is a good case. Sometimes trucks are in the garage without being used much in bad years, but they are still depreciated. But models right now are about the same as models 20 years ago. So they dont really need to be updated. Buildings: I think 25 years is the standard here? or 40 years? But there are a lot of pre-world war 2 buildings around now in excellent state. Special cases or industry's where it is not clear what exact depreciation period is because of unusual equipment: I think Outerwall is a good example. They have kiosks in service far past the depreciation period. Liquidation: If they are in slow liquidation, then assets will be sold anyway if they have run out. They might even make a bit of profit on them after they are fully depreciated. Telecoms/cable company's: I think depreciation period is like 25 years? But usually equipment lasts much longer then that. With amortization I would be carefull to blindly write this off. Sometimes they are contracts that need to be renewed to make money. But if it is goodwill then you can safely assume it is something that doesnt actually exist. Software sometimes has to be updated at steep costs but mostly will still function with little capital invested after it is amortized. Regarding gyms, Im not sure. If it is highly priced then I think they need to be replaced, or else it will look v old and shabby. But I cannot imagine weight machines really breaking down fast. If you give them a paint job they look as good as new? Plus it takes little to make the building inside look good. You don't need to buy new expensive interior's every 5 or 10 years. So I think overall they are lower. And I also don't think they compare with casino's.

Richard Feynman has some very interesting things to say on the subject of memorizing some facts, and actually understanding them. im gonna do a charlie munger and let you guys figure out the rest of it :D

yeah but that is not true for hong kong. And for example Keck seng has most of it's real estate in the US, europe or elsewhere in Asia. Texhong is trading at an absurd earnings multiple just because of some short term fluctuations. Also Asia standard for example has hotels in hong kong, and is trading at like a 2.5x earnings multiple and close to net cash. Those hotels have like 95% + occupancy rates. And land will always be scarce in hong kong. This is not empty cities in china we are talking about, this is real estate outside of mainland china that is producing v nice and steady earnings in places where supply is scarce and demand gets higher and higher, and often only the value of the land itself is on the books. Not the appriciated real estate value itself. And like I said, market is only looking at dividends on the short term, and usually not on a 2-3 year time horizon. Asia standard is building a few hotels in hong kong that will be ready in a few years. And if they cannot reinvest the cash, they probably pay it out as dividends. So there is some huge upside potential there.

Quite a lot of stocks on this exchange trade to absurd discounts to book value. Anyone know why? You can find stocks with a 80-90% discount to book value (mostly real estate). They hold little debt, usually quite a lot of cash and pay out 5-6% dividends. It seems they deserve more trust then most of the US traded chinese stocks. A little observation is that they get higher dividend rates, and usually only trade higher when they start paying out shareholders. There are usually insiders who own v large stakes. You want to actually know they can be trusted (just not finding bad stuff on them isn't good confirmation). But if 10% of shareholders votes against a takeover, then it will not happen. So it seems minority shareholders are protected here against majority shareholders robbing the company from under their noses. It is also much harder to just run off with the assets in China somewhere vs those US traded Chinese stocks because of rule of law in Hong kong. Anyone got burned by hong kong stocks? Seems like a lot of low hanging fruit. One more thing is, they all like to hoard cash, I am not sure why. I guess insiders wouldn't have other ways to invest it, so they wait and keep it in the company for future investment opportunities? At least that seems true for the Hong kong real estate and hotel company's. Texhong , a stock i have my eye on, does pay out most of it's earnings that is not reinvested in the company.

Hey i wasn't negative on CM. Just wish he would go in more detail, as I think it is v interesting what he has to say. He also seems to not care who he pisses off either. He easily calls a whole bunch of economists idiots in his speech lol. He must have groups of people who hate him. Buffett is much more politically correct it seems. Which makes me like Munger more tho :D .

Are any of them worth it? Apparantly I had a free trial on Flyonthewall.com. And then there is the news feeds. And reuters fundamentals for like 55$ a month. Are any of them v usefull for a value investor, and worth paying a 100$ or so a month for them?

the problem with munger is that his brain seems to go faster then his mouth can keep up.. Sometimes im not really sure what he is trying to say. Which is kind of a shame. Allthough would love to talk to him sometime. Actually more then buffett, he just keeps repeating the same stuff over and over. This: Godamnit! Tell me about Reverend moon's conversion!

Did he sniff and scratch his crotch a lot the last time you saw him?

we might be arguing past each other here, but if you want to beat the market instead of just buying index funds, don't you want all these people trading for many different reasons? Some of the stocks I buy are really insane bargains. And then I wonder who the hell is selling them to me. If everyone is v rational, studies the financial reports before buying etc, it seems it would be really really hard to find cheap stocks. And you might as well buy an index. Also I might be selling a stock that is aproaching fair value to a day trader, Im done with it, but he might think there is some momentum left in it. But then I guess he would have to sell it to some other sucker, so he would need other suckers. So I guess I mostly agree with you here haha.

the exact same thing with valueinvesting. If I buy a stock expecting like 150% upside, Im buying it off a sucker if I manage to be right a lot. Because that person is selling me a winner. Unless I am wrong ofcourse. Only difference is that day traders look at technicals and we look at fundamentals. Unless I buy it off someone with a different strategy and timeline, i guess then it is not really a zero sum game.

So it seems berkshire and 3g are on a roll. They managed to almost double Heinz' operating profit after buying it. And I thought buffett had lost his mind buying that for over 20x earnings lol. It seems there is a lot of bureacracy in these large consumer product firms. So I thought we could speculate what the next target was here. Liked this article: http://www.bloomberg.com/news/2014-04-09/could-tony-the-tiger-be-next-buffett-elephant-real-m-a.html Seems a way to do leverage from this is with options? These company's seem to have the same characteristics as BAC.

interesting

Some japanese hermit autistic savant turned 13k$ into 163 million$ over like 8 or 9 years lol. I think a 200%+ annual return? http://caps.fool.com/Blogs/check-out-this-japanese/129372 This guy basicly was on the right end of a lot of big mistakes :D Most expensive thing he bought so far was 2 wii consoles i think haha.

what about Icahn's saying that CEO are generally not good because people who were not threatening to the previous CEO were promoted up. Sort of what happened in Microsoft?

Yeah thanks for posting, you killed all hope for me :D . Im a terrible salesman, couldnt sell a cure for cancer. Just curious oddball, you run a fund? I would feel really awkward asking people I know to get them to give me money to manage. Even with a nice track record of at least a few years. Unless they know quite a bit about investing. So the only route I guess is apply with a hedgefund.

yeah those write ups are a gold mine. V interesting to read, and he writes well. This is interesting. I notice that a lot. Something can be a gold mine 3 years from now with pretty high probability, but because it is so far away the market doesn't seem to care. And it often gets sold off by people who try to time the market. edit: ok quote is all fked up.

depends on your pedigree and connection/how much you are starting with/how good of a salesman you are/and a big dose of luck. assume you can raise 10-50 mil from yourself/family/connections, you basically have 3 years to show strong (30%+) and consistent returns. If you are still in the business after 2-3 years, your fund should be at least $100 mil by then. Then you are investable to the institutions. Good fortunes can snowball from here. That's my understanding of the state of the industry right now. Vast majority of the potential investors are outcome focused and only care your performance so luck plays a big part especially you only have a year or two to show good performance yea the thing is, Im pretty confident about my picks. ANd I think i could with little extra work invest like 10-20 million$ in those stocks. My goal isn't really to make enourmous amounts of money. Just leverage what I am currently doing, with little extra effort. Even 5 million$ would be ok, Im ok with living everywhere, so i figure I could cheaply set up a fund for that. I guess I would first have to try and get my family in then. All the non-investment stuff has the biggest potential for sucking away your time. What for example? You give a presentation once a year on all your holdings and how it is going, and that is that. If they constantly harrass you about stupid day to day market movements you just kick them out? Investing in a fund really seems like a catch 22 tho. If you know how to pick a money manager you might as well manage yourself with those skills. And if you cannot manage your own money actively, then you also don't really know what to look for. I bet a lot of those underperfoming hedgefunds talk the talk really well, but dont walk the walk. You can throw around EV/EBITDA and warren buffett and talk about competitive advantages in a way that looks very professional, while your stock picking ability's are just speculative and undisciplined. I would invest in a fund who follows buffett's and graham's principles, but if they then turn around and proceed to make all kinds of risky crazy attacks and shorts on company's like OMEX...

Arent MOOCS going to clean up these schools? Unless you need to learn practical skills in some kind of lab, it seems horribly overpriced. Seems like company's like Strayer are just going to dissapear because they offer a terrible value proposition compared to MOOCS. Especially as these online courses start to gain more credit with employers and you can actually get degrees with them. Not sure if that is already the case, Im not v up to date on all that.

has there ever been a case when everyone talks about a bubble before it bursts, and it turns out to be an actual bubble? Everyone and their mother is talking about how China will crash. How will this affect real estate prices in cities in the west? I think in Vancouver you saw small crappy houses suddenly being worth like 4-5x as much because of the chinese buying those things up everywhere. Maybe we can enjoy lower RE prices if that thing will crash?