WeiChiLoh
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Posts posted by WeiChiLoh
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Is it supposed to be a good investment, or an investment that has lots to talk about?
Well. Originality & personally educational.
Have you ever noticed that you've learned more from the bad investment ideas than from the good ones?
Yup, I agree. But, again. Originality. I dont want to be the 1000th person analyzing HLF. In addition, I dont want to have any preconceptions. If it is a bad investment, I want to learn that through the process and understand why.
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Outerwall ? Relatively simple business, but possible to have a lot of discussion around that one
Outerwall seems fun!
SHLD and FNMA...kind of a crowded situation.
Outerwall is interesting, it screens well...but from a rudimentary reading of the 10K....it sucks.
9X FCFF business.
Operating in segments which has tremendous secular headwinds.
Why pay $2 for Blu-ray & $1.50 for DVD, per day per title, when I can pay $8 per month for all the titles I want.
Coinstar is also kind of terrible. Shift to digital-based payment media should add pressure to the business.
D&A, not including amortization of content library, is ~50% of EBITDA.
A fun project.
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Is it supposed to be a good investment, or an investment that has lots to talk about?
Well. Originality & personally educational.
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Outerwall ? Relatively simple business, but possible to have a lot of discussion around that one
Outerwall seems fun!
SHLD and FNMA...kind of a crowded situation.
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I am about to participate in a stock pitch competition and I need some ideas! Do you guys have any suggestions?
Preferably:
Market Cap, perhaps, $400-$500 million minimum?
Special situation maybe? Does not have to be a U.S. listed entity.
All in all, just an interesting company to analysis.
Thanks!
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I have hike some small sections of it during hikes in North Cascades National Park in WA. I can make some gear recommendations if you are interested. How many days or weeks will you be hiking? What section are you planning to tackle? There are a lot of great hikes in the Western US. Some of them coincide with the PCT, many do not.
Actually, I am not too sure to which section I am tackling yet. I am an international that is going to study in the states in fall of 2015. I am not too familiar with the terrain, weather patterns,etc, so do you have any recommendations to where I can learn more about them?
I am open for 2-3 months?
Unfamiliar terrain, environment, people. I am hoping that this would be a self-transcendental experience.
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Check out the links below. It's to a website for the film Mile...Mile and a Half. The film is about a group of video, film and sound people hiking the John Muir Trail and documenting it. It's actually a great movie/ documentary (we found it on Netflix a couple of weeks ago) and the scenery is amazing! Through the website, you may be able to find other blogs, journals or forums that can help hikers interested in doing what you want to do.
http://themuirproject.com/mmah/film/
Thanks this is really helpful!
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I haven't hiked it, but I've intersected with it multiple times on mountain bike. (You're not actually allowed to bring bikes on the trail itself).
Those few times I've intersected with it have been absolutely beautiful parts of the trails I was on, almost the highlights of them. It kind of makes me wonder if Muir hand picked the best parts of the Sierras to do :D
I would definitely do it, especially if you have the time. You won't regret it.
Ooooo that is interesting. How about the mountains to sea trail? Or the Sierra Cascades bike route?
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Anyone here hiked Pacific Crest? I am planning of doing it the summer before freshman year, not the whole trail of course. I need help with the preparation and the actual trail itself, what to look out for, etc.
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I am buying Dow Chemical.
Cheap valuation statistically. Dan Loeb just joined the board and believes Dow Chemical is significantly under-earning its potential and NOW, we got oil prices going down, possibly massively expanding margins by stimulating demand via economy growth and reducing cost via feedstock.
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SHLDW & BCOR.
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how about playing this by buying certain stocks? Some way to get a bit of upside even if it does not happen.
YES! That is what I am doing actually. Long Hong Kong prop, Long HKD.
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Can somebody please clarify? High inflation rates, social unrest and other issues in Hong Kong would mean that the Hong Kong Dollar (HKD) would LOSE value in relation to the US Dollar? Going short would be the right trade, yes?
The issue is there's a peg, so the trade isn't long or short it's just the binary bet that one day the peg will be removed. I remember Ackman pitching this, I remember a discussion around it on here as well.
It could be another 5,10,15 years until the peg is removed. No one knows. Maybe when the Chinese elite start to bet on this trade it's time to join them.
Interesting point. I will take note of it. However, don't you think if this issue is left to fester, the resulting chaos is not really worth a peg which, in the first place, should be remove a lot time ago? I believe that the peg would be remove sooner rather than later and I would want to be position my portfolio correctly.
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Can somebody please clarify? High inflation rates, social unrest and other issues in Hong Kong would mean that the Hong Kong Dollar (HKD) would LOSE value in relation to the US Dollar? Going short would be the right trade, yes?
High inflation and social unrest are a result of a pegged currency, although social unrest is more of a sub-result of high inflation.
The core idea is that the problem is a pegged currency, so to solve the problem, unpeg and let the HKD appreciate. Yes it is true that in the short run HKD will lose value in relation, but that is more of a result. And even if so, the HKD peg trades at a very tight band on 7.75 to 7.85, so the downside isnt significant.
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I have been toying with this same idea in my head but didn't take any action the last 3 years. On hindisght, a good move.
How are you doing your 25x leverage?
I am just doing it via CFD. The carry is like 20bp so roughly 5% annualized.
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Ackman pitched this 3 years ago (September 2011).
Might be an interesting presentation if you can find it.
That is strange. Isnt Ackman primarily an equity guy? Nevertheless, thanks for the information.
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Any thoughts?
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I don't know whether this is the right place to post this idea, but the risk reward characteristics looks highly attractive.
History:
HKD peg to USD @ 7.75
Peg currencies must have similar monetary policies if not there will be arbitrage opportunities
But Hong Kong economy is now mainly driven by China, not US or EU.
China driven economy, US driven monetary policies = terrible results. High inflation rate. Property prices valuation at ludicrous levels. Result in a widening wealth gap, people with assets versus those who doesn't.
In situation like this, we tend to see civil unrest, which we have seen as of late.
A recent interview with Hong Kong leader says that half of the people in HK earns less than USD$1.8K. If things goes to free voting, you get poor driven policies.
It seems to me that the government is finally realizing the effects of their legacy policies. They should unpeg soon if they cherish their jobs or if they wishes to sooth the riot.
Buying HKD now seems like an attractive opportunity. There is almost no borrow cost and the worst case scenario, to me, is that you dont lose money and the peg remains. However, if they unpeg and goes to a level like USDHKD 5x or go to free floating, the upside is tremendous. Personally, I have placed out 25x levered bets on the HKD.
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Does it make sense for a company to have a positive reinvestment rate in a FCFF calculation? It kind of make sense for me as the company I am analyzing is in a declining industry, and thus they should start harvesting their working capital as rev decline.
Now. What if the company has negative working capital ratio and is in a declining industry. Does this mean that working capital actually goes up as rev decline, which further squeezes FCFF?
Am I right?
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I tend to think PP&E/Sales is a better metric to focus on than absolute capex level.
I also find that most managements definitions of maintenance vs expansion capex is closer to "keep the machines running" as opposed to "adequately support organic growth"
So in the context of your model - I assume capital intensity approximates that - and yet it goes from 11% ish, to 16% today, to 18% - and your marginal capital intensity is even higher.
So if you like those assumptions, then its totally plausible there is no equity value on their current business model, or somewhere better 11 and 16 is sustainable and you've understated their ability to generate cash.
Hi top,
I dont really understand your point of capital intensity and equity value. Would you mind explaining that?
Thanks!
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why don't you save it as a google doc or dropbox and post the link here.
I was actually hoping to limit the number of people that can read it lest I am ridicule, but then again, heck it.
Here is the link: https://www.dropbox.com/sh/montt2kejcmx2in/AADPtdCatMxg5cc5mmuNugmga?dl=0
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Its entirely possible for a business to lose value from growth. If say the base business earns a 15% ROIC and reinvests the retained capital at 5%.
However here it just sounds like you have a mechanical issue in your model.
basically impossible to troubleshoot w/o seeing the model
Would it be possible if I send you my model?
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I had just finished working on my financial model when I noticed something quite peculiar.
The company I am working has high ROIC and is operating in an industry that I believe is in its early growth stage (~20% growth rate for ~5 years, followed by mid-high single digits growth rate). It is also useful to note that I calculate ROIC as Change in EBIT/ CAPEX+Change in NWC. So, from the data that I stated, this company should be at least an interesting company to look at, considering EV/EBIT is rather low.
HOWEVER, after doing a DCF, the value of the company is only 10-15% of the current market capitalization, which doesnt really make sense to me considering the company have such high ROIC and high growth opportunity. Apparently, the projected 5 years DCF value is even slightly negative. After playing around the the numbers, it seems that the company is actually losing value in growth. 0% growth rate value > 20% growth rate. How is this possible considering the high ROIC?
Link : https://www.dropbox.com/sh/montt2kejcmx2in/AADPtdCatMxg5cc5mmuNugmga?dl=0
I have only recently started my journey on financial modeling so some advice from the veterans would be helpful!
I need suggestions
in General Discussion
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Do you have any suggestions? CRMZ looks interesting as a personal project.