berkshire101

Go for a best seller like 50 shades of gray ;-)

Yes, true. TJX doesn't cater to everyone. That's why retail is such a diverse and growing industry. There are many customers with different needs. My point is that eventually it comes down to price. If two retailers have the same product then most shoppers will go for the lower price one. WFM had products that no one else offered, so people went there to shop. Now you have COST and WMT offering the same product at lower prices. So WFM will have to compete on price eventually. My best investments retail were ones that aim to have the lowest prices. Because in good times everyone loves a bargain. And in bad times everyone needs a bargain.

My experience with retail is to always aim to have the lowest prices. It should be in the mission statement. Because with retail, you're the middleman. And no one cares about the middleman unless they can give you a great deal. So companies like TJX, ROST, WMT, and COST are doing well in this swiftly changing environment. Not sure why anyone would shop at SHLD, JCP, M, or WFM and pay more for the same thing. Shopping experience is nice, but that's a niche market.

So what do you suggest we look at instead?

I'm wondering if people can share their experience working as an analyst for a mutual fund, hedge fund, family office, etc. What's expected when you're pitching an investment idea? What happens if your idea tanks after an investment is made? Who's held accountable for an investment idea? Thanks!

I admire that hair of his.

I enjoy reading the transcripts vs the calls. Who has time to spend 30 to 90 mins listening when you can speed read through one in 5-10 minutes? The real benefit for me is reading multiple years worth of transcripts to see how the company is developing, like what story it's telling. And it gives me a better perspective of how the industry is changing overtime, how the company is reacting to those changes, etc. I find that smaller companies tend to talk more about longer-term objectives. You get better insight into the industry too. Larger companies have too many things going on that mostly everything is so high level.

I stumbled upon this Youtube channel with some great videos on private equity. Though I'd share. https://www.youtube.com/user/financialmodeling/videos

Ah okay thanks guys. I tried ivolatility but it doesn't have info for deep in the money call options.

Hello, does anyone know if there's a site that shows the delta and theta for an option? Yahoo Finance does a good job of showing the option chain for a given stock, but it doesn't have detail info like delta and theta. Thanks!

I'm working a project and need to back-test some theories. Is there a resource that provides the list of S&P 500 companies for any given year dating back to the 1990s or earlier? Many thanks in advance.

berkshire101, can you explain how you think about CLB. In its best year in the last decade, it did $5.7 per share in fcf. Assume normalized fcf goes up to $6, apply a multiple of 20x (which is very generous given that revenue has grown at 10%), and you get a $120 stock. Apply higher multiple of 25x, you get $150. It it trading at ~$100. Even with these heroic assumptions, the upside seems rather limited. Why is this the attractive? What am I missing? So here's my take on it. CLB is an asset-light business with good room to scale in an industry that's +$100 billion, especially when compare to the likes of SLB, HAL, BHI, etc. Top line growth - revenue in this case - may seem modest relative to valuation. It's about 10% annually. What I look at is the bottom line and how fast it's growing, so earnings. CLB has grown its net margins overtime. Earnings grew like 4 times faster than revenue, and it's mainly due to CLB's value-added products and services. It's very difficult to replicate what CLB does since they own so much historical data. Another company that's similar is CMDXF. Their margins are even crazier. The question is has margins peaked? It might temporarily like it did during 2008. Can oil go lower? Maybe. You have bears coming out of hiding saying $20 oil is coming. The economics says that's not sustainable. I'm buying CLB because I believe it'll continue grow earnings in the high teens going forward. It's currently trading around 14-15 times FCF. 20 times earnings seem fair giving the quality. Management says they expect a V-shape rebound in oil prices early next year. Who knows if that'll happen. They say the Saudi's can't continue to increase production because it'll damage their reservoirs long-term and the damage is permanent.

Added to CLB and started a position in NSAM.

So we're a few months away before 2016 is around the corner. Time flies and I feel old now. I thought it'd be fun to toss around predictions what about will happen before 2015 comes to end. I'll start the list and hopefully others will chime in. 1. The S&P 500 will end 2015 with a small positive gain. 2. The Feds won't raise interest rates until after the 2016 presidential elections. 3. Donald Trump is the Republican nominee for president. 4. Oil rebounds to $60 per barrel by year-end. 5. Gold rebound to $1,300 per ounce by year-end.

Thanks! I called Schwab and they're mailing one out to me! Yay!

Thought this was entertaining. http://www.chicagobooth.edu/capideas/magazine/fall-2015/whos-really-in-charge

Hello, I was hoping the smart and kind folks here at CoBF can provide some feedback and add to this investment checklist I drafted. It's based on Buffett's and Munger's 4 filters. Also, if you can share some things on your checklist then that'd be great too! Thanks. :) Is the company within my circle of competence? What are the company’s mission, vision, and values? What product(s) and/or service(s) does the company sell? Who are the customers? how do customers make their purchase? Is the product(s) and/or service(s) value-added to customers? if so, how? Are customers purchasing the product(s) and/or services(s) on a recurring basis? Is the company dependent on government contracts and subsidies for revenues? Are revenues dependent on a concentrate group of customers? Do new technologies foster product and/or service improvements? are customers’ demand increasing in the foreseeable future? how big is the market size of the industry? Is the company a leader in the industry? If so, what is the company’s market share? Is it an attractive industry with many profitable companies? Is the industry growing or shrinking in size? Which part of the economic cycle is the industry in? is it trending up or down? How is technology affecting the industry? is it positive or negative? How can the company grow its market share? Who are the company’s competitors? What are competitors doing differently? What challenges will the company face going forward? How will these challenges be overcome? Will the company require sufficient equity financing to grow? Does the company have any durable competitive advantages? What is the company’s moat? Is the moat dependent on technological superiority? Is there a consistent operating history? Are margins above the industry average? Are margins increasing or decreasing? Are returns on assets, equity, and capital above the industy average? Are returns on assets, equity, and capital increasing or decreasing? Is the company able to raise prices above the rate of inflation? Is the company asset-light and require minimal capital expenditures? What are competitors doing to breach the moat? Are competitors taking market share? How would the moat be breached and/or eroded? Is the company operated by honest and able management? Who are the managers? How long have managers been with the company? Are managers shareholders? If so, what is the ownership percentage? How is management compensated? what is their annual pay for prior years? Does management communicate transparently with shareholders? Does management openly discuss future plans? What are short- and long-term plans? How is management growing the business? Describe the culture? How does management treat employees? Are they well compensated? What is the average employee tenure? Is management’s performance consistent with their past expectations? Does management give shareholders enough information to value the company? What is management’s capital allocation strategy? How are resources allocated toward R&d and sales/marketing? How effectively is management converting return on capital to growth in book value? What metrics does management use to determine business success? How effective is net income converted to free cash flow? Is management consistent with their use of operating leverage? Does the accounting make sense? Are acquisitions considered growth or maintenance capital expenditures? Is there a margin of safety in the current stock price? What is the revenue per share growth rate for the past 5 and 10 years? What is the earnings per share growth rate for the past 5 and 10 years? What is the book value per share growth rate for the past 5 and 10 years? What are the current multiples for earnings, free cash flow, sales, and book value? Are the multiples above or below the average for the past 5 and 10 years? What percentage is the stock trading above or below its historical average? Why is the stock trading above or below its historical average? What is the expected future growth going forward? Is the expected future growth higher than the industry? Is the expected future growth higher than the S&p 500? What multiple will the stock trade in 5 and 10 years from today? What is the expected annualized return if purchased at today’s price?

Buffett taught me how to have a thing for blondes. Or just attractive lady reporters in general. Also, to never criticize someone specifically, rather in category. And to give praise specifically. One more, to really focus on the predictability of the business and have patience.

http://www.bloomberg.com/news/articles/2015-08-29/berkshire-discloses-4-5-billion-stake-in-refiner-phillips-66 Berkshire Reports $4.5 Billion Stake in Refiner Phillips 66

I think he said somewhere in the article that he risked $100+ million to make that $34 million, crazy. Risking 100% of your capital to make 30% something percent.

http://www.bloomberg.com/news/articles/2015-08-28/while-many-panicked-japanese-day-trader-made-34-million Crazy story.

BRK.B and HHC

CLB's management said on the recent conference call that Russia and Middle East production increases are unsustainable. This is what's they said: "If we look at just production levels in the Middle East, you have all countries producing at, what we would think, would be maximum amounts of the amount that they can prove, very little spare capacity there. These are carbonate reservoirs. One of the dangers of producing maximum amounts, from carbonate reservoirs, is you start drawing larger amounts of water. And we would think, at the levels at which we see production throughout the Middle East, that they would be in danger if they continue with those levels, for producing larger amounts of water. And, one of the things about producing water from carbonate reservoirs, once you start producing larger amounts of water, you always produce larger amounts of water, even at reduced production levels. We know these guys are pretty sharp there and that, the statement of we do not believe that those are sustainable, are tied to water production levels." Folks at CLB are projecting higher oil prices towards the end of the year. They're saying they see a V-shaped recovery.

Love, Peace, Muscles, Life. Yeah, I'm high on life right now.

Bulletproof coffee. It's so delicious and healthy.