spartansaver

We are not seeing China getting back to normal yet. It looks like L shaped recovery, with hope it will become U in time. September is not very far away and it could be back, mutated and meaner than ever. So much we still do not understand. What if it becomes a W shaped recovery?

0.97x in 2009.

I wouldn't be surprised if Simon's renaissance is a huge part of this volatility. I've been wondering about Renaissance, seems like they own every company down to the tiny stuff.

New Howard Corona memo https://www.oaktreecapital.com/insights/howard-marks-memos

BRK, LUV, FTI, CCF - sold out of my WFTF warrants (sorry to anyone who purchased those), they spiked on volatility despite underlying falling 20% at one point.

Omagh, you say the pace is slowing (perhaps it is in China, but it's hard to trust their figures), yet the chart you are using is logarithmic and looks like it continues to rise at a pretty constant rate outside of China. I've been wondering how you end these quarantines... If China ends Wuhan quarantines and cases spike again, will they go back to a quarantine?

Sold CRNC, up 44% in a couple months. Seems like there is more baked in now.

The inputs for that research paper seem to be rather useless. Taking the public figures (which are likely very inaccurate), and then putting those into a formula is "garbage in, garbage out." The more I've read about it, the more I think that most the info we have at this point is useless. The only thing I can say with reasonable confidence, is that it is more contagious than SARS (and I could be wrong about that). My reasoning - it has likely infected in a short amount of time more than SARS ever did (SARS info was likely also very understated).

Thanks for sharing that firsthand information. I hope everyone in your family ends up alright. What makes you think that’s the number has already hit 100k?

What are you guys making of it? I've been doing a fair amount of reading on it. Seems like it's spread quickly (took two months for SARS to spread to around 500 vs. already Unnamed Corona in less than a month) and can lie dormant for some time (patient in Chicago last visited Wuhan in late Dec. and is only now experiencing symptoms).

The very tough part is being right. In the new 100 bagger book, the author discusses Monster energy, which was written up as a short on VIC prior to becoming a 100 bagger. In hindsight its much easier to see the path to 100-baggerdom, but how often would we invest in things growing rapidly and turn out to be wrong. If it's priced in and you are wrong, then your investment results can turn out very poor. One thing Greenblatt talks about is that he doesn't swing for the home runs. Is swinging for the multi-bagger opportunities the easiest path to success as an investor? Charlie Munger likes it that way, but how many of us can compete at that level?

This thread essentially morphed into your favorite idea for 2020 thread.

To expand on this a bit further, GAAP capitalizes rent and does nothing to the income statement. IFRS capitalizes and also makes adjustment to income statement for an implied interest expense. When looking at companies, it’s important to understand what multiple the company is capitalizing its leases at, because a company can easily manipulate the inputs. I personally am not sure capitalizing leases is the proper way to go about things. For example, should using a third party for cloud storage be capitalized? You are essentially benefiting from the other company building all of the storage, and your company is paying a fee on that storage. Why should certain expenses be capitalized with an imputed interest expense while others are not? A lease also does not operate on the same terms as a debt instrument. Each lease can almost be thought of as a non-recourse loan, with minor penalties for cancellation relative to a loan.

ARPO - Aerpio Pharmaceuticals - Trading below net cash and the company announced in Oct. that it is reviewing strategic alternatives and streamlining operations to preserve cash. Cash at the end of Q4 will probably end around 38mn, and I expect that R&D should be minimal going forward. Perhaps $2mn cash flow burn per quarter. Current market cap is $25mn, so maybe 1.5 years before the company cash starts trending below current market cap. The company has ~$400mn in possible royalty payments, and at the end of phase 1 development for an eye pressure/glaucoma drug (eye pressure drug will only be developed on a partnership basis going forward). CEO owns ~14% of company.

It's wild the influence that some bloggers have. It got posted on Clark Street yesterday midday after it had been posted on Twitter the night before by @valuewacatalyst and it's up nearly 60%.

I see, I found the one ending in V, although no shares have been traded yet. Thanks a lot!

If that is the case, shouldn’t a company doing a spinoff drop in price on the ex date? From the ones I’ve looked at, the company doing the spin falls on the date of the spinoff.

A spinoff situation I'm looking at has the section below in it. How do I know if the shares I purchase are "regular way" vs. "ex-distribution" shares? Thanks "Q: If I sell my shares of XX common stock before or on the Distribution Date, will I still be entitled to receive YY shares in the Distribution with respect to the sold shares? A: Beginning on or shortly before the record date and continuing up to and including the Distribution Date, we expect there will be two markets in XX common stock: a “regular-way” market and an “ex-distribution” market. Shares of XX common stock that trade on the “regular-way” market will trade with an entitlement to receive shares of our common stock to be distributed in the Distribution. Shares that trade on the “ex-distribution” market will trade without an entitlement to receive shares of our common stock to be distributed in the Distribution, so that holders who initially sell XX shares ex-distribution will still be entitled to receive shares of YY common stock even though they have sold their shares of XX common stock before the Distribution, because the Xx shares were sold after the record date. Therefore, if you owned shares of XX common stock on the record date and sell those shares on the “regular-way” market before the Distribution Date, you will also be selling the right to receive the shares of our common stock that would have been distributed to you in the Distribution. If you own shares of XX common stock as of the close of business on the record date and sell these shares in the “ex-distribution” market on any date up to and including the Distribution Date, you will still receive the shares of our common stock that you would be entitled to receive in respect of your ownership of the shares of XX common stock that you sold. You are encouraged to consult with your financial advisor regarding the specific implications of selling your XX common stock prior to or on the Distribution Date."

BIDU - Just seems cheap

I think investing in a business that would benefit from the tailwind of water conservation is a way you might be able to invest. For example Valmont Industries has an irrigation segment that supposedly makes fancy sprinklers for the ag industry. The sprinklers save water relative to current forms of irrigation. If I remember right, Valmont and another company have close to a duopoly in this segment. Just an idea, I have no money invested in Valmont.

I know it's been 4 years since this was asked, but it was never answered. This is my best guess. Merger consideration for GW shareholder was 1) 9.02 in cash per share or 2) .4225 shares of PDS (cash and shares subject to proration ** this is key) after merger announcement, shares in GW fell from $9 to $6 and PDS shares fell even further from $20-25 to $6-7 When GW shares were at $6 Denali shorted GW and hedged PDS around $6ish If the offer went through, PDS was able to prorate the offer between PDS shares and $9 in cash. Well .4225 PDS shares at this time were only worth $2.5 (.4225 x $6). So the GW shareholder was actually getting less if the shares converted to PDS. I believe the opportunity was in how likely it was that GW shares would get the $9 cash payment vs. the PDS shares. PDS financial position was not great at the time, so it seemed more likely the offer would have a greater tilt towards PDS shares. So you could short something that had a decent likelihood of being converted into something that was trading for much less.

SQBG - Very tiny position. Priced like it's going bankrupt. Sold off two significant brands for $166mn ($40mn earn out potential as well - ~12x EBITDA or ~3.9x sales). Remaining business priced at ~6x EBITDA and 3.6x sales. Brands that are remaining seem on par with brands sold (EBITDA is higher on remaining brands partly due to way sold brands were structured). SQBG still has room left on covenants. Seems like a decent probability option. Debt is termed out till about 2024.

I think 50% for 5 yrs would be very hard for Buffett or Munger today or anyone else for that matter. When he said that this year I immediately thought the odds were low it could be achieved, right now, over 5 years. The 1950's in the US were the best decade since 1950 for the stock market. 19.3% annually. But stocks were really cheap in 1950. Perhaps he remember that time. http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm This is W.E.B. we are talking about. The O of O! With the number of situations he's seen throughout his life, he would have the world as his oyster with $1mn. I'm guessing when he was up on stage answering 50% a year, he wasn't daydreaming back to 1950. I would be highly skeptical of anyone else saying 50%, but this is Grandaddy Warren.

Hahaha

The recent Bud-light commercials capture my taste on the subject (dilly dilly commercials where they make fun of fancy alternatives). I don't care much about the taste of a beer, and I'm fine with buying a cheap beer. Up to this point, I haven't had that aha moment where my taste-buds changed and I enjoy an IPA. I think that AB InBev and TAP do a decent job of capturing the market that is okay with simpler beers.