DooDiligence

I thought the SA link was going to tell us to all buy Wells Fargo. I'm a shade over 30% now. Good find, thanks.

Bumped DVA to 5% & trying to buy some Jan 2020 $60 Calls (my bid will probably not be met.) I want to hear Cramer yell, SELL, SELL, SELL so I can bid on some lower strikes. --- Scared to do anything more with my 4.8% ESRX (kinda wish it was <3%) (crap, the market may make it so.)

"Buy & hold an ETF & you're taking a slice of ignorance." (paraphrased) (Holy crap, what a concept.) "Tried to stick to philosophy but wound up creating index funds because..." (paraphrased) (Looked like he wanted to cry & rightfully so. Seems like a great guy.) --- "Fidelity needs to produce research at a lower cost" (again, paraphrased) "Strategy on this is above my pay grade" (Distribution costs should be negligible so where do you cut after you cut your revs with $4.95 trades?) (Lower pay for non-2nd level thinkers?)

"There is a famous picture of Paul Tudor Jones with a piece of paper on his bulletin board that says ‘Losers average losers’. As value investors, we always want to believe that the stock is overreacting to bad news. A typical analyst report goes: This is a disappointing quarter but my value estimate fell only 5% while the stock fell 15%, so it’s a lot cheaper than what it was yesterday. This led us to do a lot of research into our own ideas. When the fundamentals start deviating from what our analysts had projected, averaging down on those names tend to not work. It made us alter how we thought a little bit more, which for us is certainly more valuable than learning what Warren Buffett eats for breakfast. What Warren does — buying great businesses that are run by good people, buying and holding, thinking about long term — is still the core of our investment approach. Nothing pleases me more than when somebody says that what we do at Oakmark is very similar to Buffett. At the same time, that doesn’t mean we can’t learn from people who do things very differently from what we do." - Good point...

"Foremost is the current valuation of a company, and the second most important is a management team that is focused solely on maximising per share value. Some of the best opportunities today are in very large financial companies selling at low book value, selling below P/Es with managements that have learnt that growth through shrinking shares outstanding can be just as valuable as topline growth. The last thing I want to invest in today is a financial services company, where the management is trying to grow by growing their loan book 10% a year. Companies that maximise per share value, no matter if that means they don’t grow or even if they shrink, will be great bets." Bolded statement, True or False? (hint, the answer is true.) --- Attachment from CSInvesting.com Teledyne-and-Henry-Singleton-a-CS-of-a-Great-Capital-Allocator.pdf

"It is hard to come up with companies that have pricing power today because so much of the opportunity, and venture capital money, is in finding a way to get a product directly from the producer to the consumer. This is much more efficient than the value chains of today, where you have a producer selling to a distributor, then to a retailer and then to the consumer. It is hard to see anyone in that chain having pricing power when the competition lies in the producer trying to get directly to the consumer. Look at the example of Gillette. Five years ago, you could say that it was as entrenched as a consumer brand could get. Media marketing to the consumer directly has turned that industry upside down." "The pricing power is probably with those companies that are earning almost no money because they are massively growing scale to become the dominant player and only then worry about monetising. YouTube is monetising numbers by charging like 4 cents per hour watched, whereas typical cable is charging 20 cents. It has pricing power, but it’s not a separate company selling at a low P/E and having pricing power. It is a company that is reinvesting heavily to dominate its business. Amazon is probably one company that has pricing power. Today, pricing power is in a different place than it was 20 years ago. Back then, you would have said that the cable networks or consumer brands had pricing power." - Excerpt from https://www.outlookbusiness.com/specials/masterspeak_2017/companies-that-maximise-per-share-value-even-if-they-dont-grow-will-be-great-bets-3783 previously posted on another thread by Liberty.

Brilliant illustration! "When you have an industrial company that is growing, that growth tends to be represented by building new factories, which is capital expenditure. It goes on the balance sheet and is expensed over the 30-year life of the company. On the other hand, when a company like Alphabet invests for growth, it is done through their income statement, which depresses its current earnings. When someone new looks at Alphabet and they see it trading at 35x earnings, they would say that it’s almost twice the market multiple and does not obviously look like value. If you look deeper, you may find they are losing $5 a share per year on some bets they are making. But when you consider what the Google search engine is worth, it’s not generating just the amount of reported earnings; it’s generating $5 a share more. These are VC-like investments made in the company that, if made through a VC firm, would be showing up on the balance sheet as an investment and not going through their income statement." I think @ScottMoneyHall said something like this before but in fewer words...

I'd rather BRK buybacks but that view may change into retirement. Or not; like you said, sell if you need supplemental cash. Other companies with better places to deploy cash should do so. Screw dividends, except maybe with something like Altria (seems like they'd be able to find a way to spend some $$$ to expand alcoholic bevs but shareholders would go nuts if the dividends started getting diverted.) When I learned about BRK Energy & how they started putting former dividends back into the company, it helped me understand (I'm only assuming that these investments are digging a moat around the operation.) --- Many people imagine that it's easy to extrapolate a steadily increasing dividend will return x% of my investment & the rest should be provided by a bigger business down the road (whether it works out that way or not WTFK.) Is is that much harder to figure out if cash deployed (instead) towards organic or acquisitive growth will result in more value? (You bet it's friggin harder with 2nd level thinking & all that.) - not saying I can think like that but a lot of people here & on FinTwit sure as shit can...

Bump

I deleted a few posts/clogs over on that other thread but had to leave 2 in order to keep myself honest (probably could move those - yea or nay?)

I actually meant selling fuel on credit. Sorry John, future posts will go to the right thread.

Oops... https://www.law360.com/articles/951809/abn-amro-adds-defendants-to-12m-defaulted-loan-suit Hispania Petroleum SA --- I got sucked in by Eike Batista before & suppose this could be another one...

You still following MVN/MDLNF? A lot has happened since 2014. New management & a cash infusion (see attachment.) Jose Penafiel is the new CEO & he appears to have a lot of experience in the Vaca Muerta, Permian, etc., & he's had extensive dealings with Lukoil (Formerly the CEO of Hispania Petroleum SA & an Oxford PPE grad FWIW.) --- Cristina is gone? https://www.forbes.com/sites/riskmap/2017/03/23/argentinas-mid-term-elections-will-macris-pro-business-reforms-stand-the-test/#769e1da426ca Likelihood of a recurrence of the Repsol mugging? --- It appears that the reforms are attracting capital http://petroleumworld.com/story17010605.htm --- Does anyone know if they still cap petroleum to curb exports? --- Price is significantly lower than 2014 & looks like it has enough volume for small accounts. and of course https://en.wikipedia.org/wiki/Vaca_Muerta --- Not sure if this is significant https://globenewswire.com/news-release/2017/09/27/1133980/0/en/Madalena-Announces-Change-of-Auditors.html I think they're looking for the removal of a statement regarding "ongoing concern" --- I haven't read any of the company's reports yet & so far it's just a neat sounding story. I'll listen to the latest call... (this idea came from a Tweet by Maglan Capital) 08092017_Announces_the_Issuance_of_Warrants_to_Hispania_Petroleum_SA.pdf

Credit?

Sounds like a perfectly Phil Fisher'ish thing to do (might find a good manager to put money with in the process...)

Me 2 because it's the 1st trading day of the month. This is my 2nd month in a 12 month plan (equal amounts every month.) Just layin' the strategy out for any lurkers. It's kind of liberating 2 have 1 company 2 buy regardless of price (might break me of chasing 1/8's & 1/4's on stuff I plan 2 hold semi-4ever...) I believe Berkshire itself does something like this when building a position. Only that their buy parameters are a little different from ours; a % of trading volume, daily buying, and of course a shitload more quantity of stock until they get to just under the 10% ownership of the entire damn company (we start to sweat when it gets close to 10% of our portfolio) ;D I look at BRK's BV & it amazes me. Could anyone take Berkshire's mkt cap in cash & re-create the company? I don't think so. I'm not counting on a re-rating by markets over the next decade or so but... Just what, exactly, holds BRK at such levels? I feel comfortable dollar cost averaging over the next year. The 1/8's & 1/4's thing is really stupid (kinda like playing Lunar Lander on an old punch card machine) & I'm just not gonna do it any more. I range from 3% to 6% positions & will prob wind up with 10% or more in BRK (call it a capitulation of sorts.)

Lower prices means more demand too. Lots of projects that wouldn't make sense with a 100m launch might make sense with a 10m launch, for example. And once you start building bases on the moon and creating staging areas for interplanetary travel for a lot of mass, the number of launches go up really quickly... But I don't think he cares, he just wants to do his part to push the space sector forward. If it means not optimizing the economics perfectly, ¯\_(ツ)_/¯ If you believed they put a man on the moon Man on the moon If you believe there's nothing up his sleeve Then nothing is cool

Me 2 because it's the 1st trading day of the month. This is my 2nd month in a 12 month plan (equal amounts every month.) Just layin' the strategy out for any lurkers. It's kind of liberating 2 have 1 company 2 buy regardless of price (might break me of chasing 1/8's & 1/4's on stuff I plan 2 hold semi-4ever...)

Ditto...

That would be a shame if it is, just when his short would have worked out. I recall Tilson actually writing a great piece on exactly this. Quite humble It was maybe late 2015 into mid 2016 where he acknowledged no longer being able to take it and covering almost all of his short book in November, only to see 90% of them declined by something crazy (like 60% on average) over the next 6 months. If only he had Michael Burry as the gatekeeper.

@ScottMONEYHall (Brilliant, insightful, diligent & non conventional)

Sex, drugs, and rock'n'roll. also bajillions of bucks, CoBF, fame, Internetz, superpowas, youth, vintage youth, exploding kittens, Instagram, cheese and good night's sleep. Why not!?!

It does. Short the bad stuff & lean in on your longs. Thanks DC ----- "Follow your bliss" - J. Campbell https://en.wikipedia.org/wiki/Joseph_Campbell

Pics please! Watch is supposed to arrive on the 22nd & there will most certainly be images, in the water (there may or may not be fish in the photos...)

Holy moly, a pink swan event! I was thinking about going 2 Bermuda some day but if I gotta dress like that, not...