Patmo

Japan fiancial reporting is weird as hell, apparently they can choose from USGAAP, JPGAAP, IFRS or J-IFRS (not even kidding, J-IFRS..... What's the point of IFRS if every country modifies it to their own taste???). Their rules are really ambiguous, basic rule is revenue s/b recognized based on the realization principle which is the accrual basis we're used to but I bet there's a clause somewhere in the JP methods where they can use cash basis accounting in some situations and recognized this cash as revenue earned instead of deferred until services were rendered. So essentially you'd have to back out whatever your estimate of cash balance is deposits from revenues in whatever year and dump it into a deferred liability. Hopefully someone else can confirm as I am talking out my ass a bit here... https://inform.pwc.com/inform2/content?action=resource&id=0000000776625338.pdf and https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&uact=8&ved=0CDEQFjAE&url=http%3A%2F%2Fwww.shinnihon.or.jp%2Fservices%2Fifrs%2Fissue%2Fifrs-others%2Fother%2Fpdf%2Fifrs-jgaap-comparison-v30-E.pdf&ei=M438VJ-9D9PUoATy3oHgCw&usg=AFQjCNGnN3LeLPgxT3jCAdMYi8oe3BR-RA&bvm=bv.87611401,d.cGU are the only two sources of info I could find from a quick googling... On another note there's a new revenue recognition rule that was put out in mid 2014, effective 2017, which if I understand correctly will be used by both US GAAP and IFRS, and features a 5 step guide for companies to follow. http://www.iasplus.com/en/standards/ifrs/ifrs15 and http://www.mnp.ca/media/documents/Financial-Reporting-Library/IFRS/01_Hot-topics/MNP_A-Summary-of-IFRS-15-Revenue-from-Contracts-with-Customers.pdf for some info.

Tim Hortons was the ultimate Canadian GARP until it got acquired. You can still own it as part of QSR, it's a significant chunk of it too. Not sure how valuation looks as part of it but the show runners are 3G capital so I bet you'll be paying a premium compared to before.

+1 Yes it's easy to say let's piss away some capital I have plenty anyway. You do that enough times and you won't have that much anymore. The dual voting structure comes back to their attitude that shareholders aren't smart enough to understand the amazing stuff they are doing and they're gonna hurt themselves by voting on stuff they don't understand. Being on the other side of the fence, I love the simplicity of choice that Google's structure gives to investors: You either buy the story or you don't. You don't have to worry about some random activist running in with their amazing insights and breaking things that may or may not be broken, depending on opinion. I happen to buy the story entirely, thus I'm satisfied that Google gets to do what it does uninterrupted.

They are a pretty interesting lot. My grandfather used to walk the whole town over visting all 3 grocery stores to save 10 cents on a can of tomatoes, then turn around and donate the shirt on his back to his community, always behind the curtains.

I'm kind of disappointed nobody mentioned the 4th option yet...

I think Andrew Wellington's interview is also a very interesting read.

My biggest misses weren't in what I bought or didn't as much as when I bought them and the kind of size I made them. All of my positions I still believe are great bets even at the price I initially bought them at, but could have been made way better as I have a natural propensity to invest in stuff everybody else hates, and share price has a propensity to reflect that hate given just a bit of time. Why would I invest in a double when I can get a 6 bagger? Let the market make a bigger mistake is what I tell myself now. So as I saw price get cheaper and cheaper I felt compelled to buy more and more of the same, resulting in positions that are too large for me. Even if it works well I don't want a 5-7 stock book, I would prefer my dome to start showing AFTER my 20's are gone.

2x shadow stock. Don't know who John is but he gave me the only idea to date that I picked up from a blog. It was so straight forward and simple that I bought a few shares just after reading his writeup. Kudos John.

Let's see how you react when 2 of your 3 positions go down 50-75% in price. Are you ready to stand such volatility?

There was a thread just a week or 2 ago about gold miners. Since gold miners require some of the tougher valuation work out there, I mostly looked at the qualitative side of things to identify potential stocks to acquire as I knew all the gold miners were cheaply valued as a whole so I just wanted to make sure I got some form of quality back for my buck. Sometimes you just gotta let go of the models and numbers and put your faith in your judgement. Mine led me to Mandalay resources, which if you look from a bird's eye view is a gold miner with a value investor's philosophy: They acquire underperforming projects in the safest jurisdictions for a discount, then bring them up to speed with their operational expertise. The company has showcased outstanding capital allocation skills (god I hate that word, it sounds like kewl kids saying kewl kid things, only for investors) and is as shareholder friendly as you'll get in this industry. Although that's not a huge achievement given how low the bar is LOL.

Which is really ironic for a value investing board. Some miners trading for less than cash, mines closing, extreme negative sentiment. Do you have some names that trade for less than cash? kobex, ryan gold Not gold, but Karnalyte resources, about half cash

This event has you compete with the most well known investors and enthusiasts alike in the name of charity. Choose your own 5-stock fantasy portfolio and duke it out in the name of a charity org of your choice. https://portfolioswithpurpose.org/ Anybody done this before? Looks like fun.

That's a stock you should short. Barrick passed on the project when the price of gold was much higher. They greenlit a lot of questionable projects. If we assume that Barrick is somewhat sane and greenlit all of their better/less-mediocre projects, then that means that Donlin Creek is even worse than the stuff that they greenlit. So... Donlin is likely hopelessly uneconomic at current gold prices. Barrick is definitely not somewhat sane, it is nuts. Not that it matters though. The 2 issues I see at first glance in this article are that the DCF uses 5% as its discount rate and that estimated project costs use a less than 20% contingency. I'm no expert on construction and whatnot, but as far as I'm aware the tendency is to plan out with much larger wiggle room than that, and everybody still gets massive overruns anyway. Case in point, here is an excerpt from that very article: "Barrick said that the capital cost for their Pascua-Lama project was estimated to be 50-60 percent higher from the top end of the previously announced estimate of $4.7-$5.0 billion" So essentially you would probably be best served to factor in a 50% overrun on Donlin's estimated development cost, including current contingency. Tag on that a 10% discount rate instead of 5% and see where that goes.

Schwab, which market will drop by 40%? Housing, energy stocks, tsx? Housing prices have to correct by 40% over time in real terms. If there's a 10% drop over 5 years with 4% growth then we are 30% of the way there. Just about every metric for Canada points to housing being 100% overpriced and the average of the metrics implies 40% drop is necessary. Unless money leaves these housing prices can persist but lending is dropping for a reason (which makes the problem worse faster). EDIT: To go with this, the US housing market is still overvalued because numerous interferences stopped the market from dropping. We will likely see flat housing prices with fast GDP growth to finish the correction while Canada may not have the luxury of positive GDP to save them. Also, the point of maximum pessimism is not even close for the Canadian housing market. If anything, this is maximum exuberance. Yeah no kidding, don't know what this other guy is talking about with his maximum pessimism. Everybody's still leveraging themselves up the ass for crappy homes at 10x their salary, and singing about it. Back on topic, I picked up a few more shares of KRN Karnalyte. Keeping it a small position, but pretty excited about the prospects of a company trading at 55% net cash, with a catalyst in early stages of ignition. It's like a net-net on steroids...

MND Mandalay just released production/sales results, stock went up a few %. I'm just collecting dividends and plugging along for the ride. One of my more comfortable bets, but more highly valued too. I can understand why some people enjoy paying up for "quality" (well that's as quality as gold mining will get), it might earn less money but it sure is soothing.

Interesting, I created a post for both of these gold miners but neither got much traction. I agree with the sentiment on both of those, although I feel more comfortable owning MND and just trade Caledonia for a sliver of my book. Last time I bought in the 60's and sold in the early dollar. I intend on repeating this time, although I am prepared for a wide range of outcomes. Caledonia does warrant a hefty discount in its share price with Mugabe and his little buddies pillaging at will, and Blanket looking like it might be on its last breaths. Also take a look at Karnalyte resources which is not a gold miner but owns a large potash project in Saskatchewan, an idea courtesy of shadowstock. Currently trading for a little more than half of net cash as of last reporting date. Has a 2mil/q cash burn, trading at 24mil, cash is 43mil. Monstrous upside if things work out, relatively limited downside if they don't. I expect not to go to 0 if things don't work out but I think money would be lost.

Educational services. Thesis is simple, market believes the company will shut down but it's not going to happen. Not a single party involved in this situation would benefit. The most likely scenario is that ESI will be forced to play nice and be useful again. Which is what is already happening, albeit at very early stage. The only question is whether the co will be able to sustain through further fines and settlements. Currently in good position to do so.

The question is what will be it's net income, going forward... (I haven't researched the idea, but based off of your post, why should 10-year avg net income matter, given how the industry has been in a flux since the last few years...?) It's just to show how cheap it trades now compared to how it has performed in the past. You won't find this kind of discrepency anywhere else. The co will end up doing better or worse than this average, but will not deviate by an incredibly large margin. Will not pump out 500mil year in year out but will not do 10mil either, let alone run sustained losses. Current run rate normalized EBIT and cash flows are both about 80-100mil currently, I think the co will end up doing much better shortly with the housekeeping that's going on but that's my opinion.

ESI has a 10-year average net income of $7.5 and is trading at $10 (was at $4 for a few months). The co is poised to start hitting an upwards trend in a couple years with its reform initiatives. Crazy valuation gap should start closing when SEC issues get cleared out. Even at $30-40 the stock would still be traded at a very conservative valuation. I swear I end up talking about this co in every thread I enter... Too bad nobody else has much interest :'(

Very much agreed, that is the essence of value investing.

Very interesting stuff. The diversification vs. concentration discussion is fascinating, both sides have very compelling arguments. Honestly it seems harder to be more diversified as you need to keep track of more names, and at some point there are only so many materially mispriced stocks. You have to be really skilled to get mind boggling returns, but you also dramatically reduce the chance of your portfolio blowing up. I bet the number of people in the world that can do 40% a year on anything more than 15 stocks can be counted on one hand if at all. The number of people that can do that on 1 stock is without doubt much larger. But also the number of people who went to 0 is exponentially larger as well. One mistake and it's game over. Hell, a mistake is not even necessary, sometimes you make a good decision and the result doesn't follow.

Ah, the airing of grievances. The highlight of the celebration. Here's several. 1. If you're part of the seemingly every growing contingent of younger posters still living at home, please don't offer life advice. 2. For newer posters, please don't feel the need to weigh in with your views on every single thread. 3. If you post about how much angst you have with your investments and you don't know if you're investing properly, etc, please don't then 5 minutes later offer advice to someone else who asked an investing question. 4. If you're under, say, 30, please feel free to get rid of the world weary tone like you've seen and done it all. Ah the good old sarcastic holier-than-thou tone, every time I look up for the poster's name it ends up being the same guy. Do you ever contribute anything besides complaining about other people's posts? This board is free to leave if it's such a drag on your life, you know. New around here? Search Kraven's post history. He's crushed the market investing like Schloss. While most around here are doing 20-30% with 10 stocks or leverage Kraven is doing similar numbers with 100+ stocks and 20-30% cash. I don't care for his returns, he literally just whines like a bitch about other people's comments on every post I see him make. He could return 100000% a day he would still be as useless. Maybe it used to be different eons ago, I don't know but the 2kewl4skewl act just derails threads at best. There's a lot to learn on this board from and for members of all skill levels, if he doesn't want to deal with the lower-skilled among us he can stick to VIC, apparently it's all big boys pants there.

Ah, the airing of grievances. The highlight of the celebration. Here's several. 1. If you're part of the seemingly every growing contingent of younger posters still living at home, please don't offer life advice. 2. For newer posters, please don't feel the need to weigh in with your views on every single thread. 3. If you post about how much angst you have with your investments and you don't know if you're investing properly, etc, please don't then 5 minutes later offer advice to someone else who asked an investing question. 4. If you're under, say, 30, please feel free to get rid of the world weary tone like you've seen and done it all. Ah the good old sarcastic holier-than-thou tone, every time I look up for the poster's name it ends up being the same guy. Do you ever contribute anything besides complaining about other people's posts? This board is free to leave if it's such a drag on your life, you know.

Canada has a lot of tasty GARP stuff for those who are into this kind of investing. Off the top of my head Couche-Tard, Tim Horton's (pre BK), Jean Coutu, etc.

None of the stocks above have a chance in heck to compound sales/earnings at 10-15% for 10-20 years. GOOGL might have the highest growth rate in next few years, but they also have the highest risk of growth falloff. And their market cap with such growth would cross 1T really fast. This is the biggest issue with wide moat high growth investing. Unless you get in early, no trees grow to the sky and the 25 -40 PE is not really undervalued. In case people doubt this, please look at KO and the financial shenanigans it had to resort to to maintain the illusion of wide moat high growth. Buffett has realized this long time ago. That's why cash flow from See's is not invested in See's. Unfortunately, for most companies the money is either invested in diworsefication or in overpriced share buybacks. So, yes, buy wide moats when they are cheap. But don't expect great returns by buying them at inflated multiples. Nevermind that it's also way easier to spot an average business that's selling for cheap vs. a company that has a sustainable competitive advantage...