Myth465

I think with the rebound in the markets so goes the macro. I also think we are just burned out on Macro. Those wanting Kraft, WMT, BRK, Target, and other top tier companies at 5 x FCF are still holding there cash waiting for armagedon. They will be right one of these days with a pull back, but I predict they will still be holding cash waiting for all hell to break lose. The rest of us will probably buy low and sell high, or at least try to. I dont think there is a shift, I just think the doom and gloomers are quiet for now. They have missed a massive rally, and have nothing to really brag about. They will return when something tips things back to being negative (muni bond, euro, us debt, state budget, other). With that said the market is ahead of itself and we are probably borrowing from the future. Profit Margins are at an all time high, oil is going up which will squeeze the consumer, and the market is just generally way ahead of the economy with regard to a recovery. I expect a pull back followed by a rally followed by a pullback. With regard to 5 years out. In 5 years I think everything will be gravy as long as the market doesnt get too far beyond mainstreet. We are 3 years into a 7 year process. I think we will continue to muddle through, going from crisis to rally and back again for a few more years. Thats my 2 cents, overvalued as usual.

Going forward this thread will not be read in the morning or immediately after lunch. ;D

I stay with the PC due to the lack of a learning curve. I have also used Linux Mint which I like alot. I would go to best buy and test drive a mac for 20 minutes. I cant get over the frustration, I can do anything on a PC and have put together at least 20 of them. Its tough starting all over with a Mac and I dont think I will every do it. Plus all my freeware and other apps are on a PC.

I like Einhorn and Ackman, I just dont think of them as gods who walk on water or the next Buffetts. They are just decent investors who one can learn something from.

Eddie you are about 1 - 2 years past due. I recently watched Megamind and it was quite good, I highly recommend it.

This one is not so bad. I would pick the US because im American, Canadians are basially American too ;D. The issue is housing is too much work. With that said a nice vacation home in Spain or Greece sounds nice.

I figure Redding will get at least book value for the Melbourne property. They are also selling into a strong market with low cap rates, and prior to a collapse. Its a nice option because they may get 1.1 - 2.0 BV. It will shrink the debt, remove some of the hard to value assets, and allow them to develop the other properties. I think its a nice move .Also been open sense May so I figure a sell should be announced sooner or later.

Try FBKZF on the pink sheets. Its how I own it. I have been looking at Mercer but Fibrek just seems like a better deal. I like the take over talk as well. The only reason not to buy Fibrek inmo is fear of a take under of sorts.

Sounds like you are trying to get past first base. Alert I kinda wish I had one of those lower boxes checked. Its the worst of both worlds, a pullback in my stocks and a flat market. I am hanging on to what little cash I have right now though. I may buy more FBK if she keeps selling off. I have enough oil and gas, and may get more WDC if we loss another 10-15%. --- Ericopoly you are on a roll between this and that AAPL thread. Unfortunately I find myself stuck on first base quite a bit (In more ways than one lol).

I thought about that but WDC has been eating their lunch for years, and is now focusing on enterprise. I only want to big boy if he is not likely to stay the big boy. A shrinking number 1 means they are losing market share. Also I love the consumer side of WDC and have been using there live devices for a number of years. 1/3 of the value guys hate tech, 1/3 of them seem to talk about WDC, and the other third seem to talk about Seagate. I dont get the Seagate one because WDC is cheaper and everyone agrees is better managed.

Bronc I would be happy with 1/100 or 1/1000 of that lol. I may get another chance to double down if we have another 5% day. Either that or pair it with Seagate. INMO all of the earnings info is noise. WDC has been warning for about 6 months, and over delivering. What does it matter if they have revenues of 2.2 billion vs. 2.27 billion. If they earn $800 million - $1 billion in FCF on their EV value and can do so for the next 3-4 years then everything else is everything else. The industry is also likely to continue consolidating. At some point we will have only 2-3 major players. I dont understand why you would want Seagate though when you can buy WDC, anyone have any insights.

Yes. --- Debt has a funny way of making each and every quarter matter. If not quarter than at least the year. SVU is the classic example of .... While debt can provide incentives to ‘drive carefully,’ as we’ve seen with the success of many LBO firms, massive leverage is often akin to driving with a knife built into the steering wheel. Sure, you’ll drive carefully, but watch out if you hit a bump in the road. The more I work at my company (fortune 500), the more I realize that companies are giant lumbering beasts. Few people really truly know whats going on on the inside and most outsiders have no clue. Behind all those pretty numbers on the income statement and balance sheet are a bunch of assumptions and moving parts. The trend points down, and the knife is on the dash. Its easy to say its overblown but is it really? You can assume things pick up but thats a bit optimistic to me. At best I would project the past forward at flat numbers. We also have a credible excuse for the declining earnings. Many think the stores are getting squeezed by inflation. Most think inflation will continue whether the CPI picks it up or not. You said eventually they can pass it on to the customer, but eventually is a long time if inflation keeps rising over the long term. I think its a good bet / gamble. But that hair on the girls chin are real, its nice to just ignore it but it wont go away. They dont have much wiggle room and if they dont pay off that debt the SP will stay in the tank. The stock is going down because they are massively levered and have declining revenues. One of those is fine, but both scares the hell out of people. You would ideally only want to lever something up if it had very stable revenues. They bought on a bunch of debt, have made acquisitions, have written off the acquisitions, and have revenues which are declining. Thats why the stock is down. As I told a coworker who invested in IRE, AIB, Circuit City - Sometimes when there is smoke there is a fire.

Lol We definitely have that table and I think we all know who is sitting there. Hopefully im not sitting next to that guy (from you guys perspective lol). Thanks for the link, will look at it as well. I will also see how the no sugar in my tea / coffee thing works. I drink about 3-4 cups a day with 3-4 teaspoons per cup. Dont drink much else though in the way of sugary drinks.

They tried to buyout Seagate and an LBO was tried with Seagate but they couldnt agree on price. The thesis is laptop and desktop sales will fall due to sales by Tablets, Smartphones, and Netbooks. All use SSD or flash. Many also believe SSD or Flash will assault the laptop and desktop markets. WDC has clearly stated that Data is stored somewhere and every file on the internet is stored in 6 different places. Data will continue to be digitzed and video downloads will require hundreds of thosands of servers and millions of hdds. People arent replacing devices. They are adding extra devices and many of these devices require additional storage. SSD is fast, but is not cheap. INMO there will be a place for everyone. WDC has a presentation which breaks alot of this down, and thinking about this has me considering more research on LVLT. How many HDDs do you think Netflix needs to digitize there entire library? Then how many will they need for backup and redundancy purposes? Then how many do you think they need to support 20 million customers? Then how many do you think they need when people will only accept blueray? ---- The only issue is the cash on the books is overseas. Management appears smart. I would like them to use the cash to buy an Asian SSD or Flash producer. We have 2 years for this to play out and I believe WDC will generate at least $800 million to $1 billion in FCF (they did $500 million in CF in Q4). If nothing happens I will exercise my options and probably look to buy more shares. Like I said if I had $4 billion I would buy the company.

Me too. It's amazing sometimes how little changes can see big benefits though. I had some congestion and at times if felt like my nasal passage was slightly constricted/inflamed. I needed to take deep breaths often. I got the old, "take a decongestant or sudofed" and the general, "watch your diet, specifically dairy" answers. It wasn't until I ran out of sugar one day. I had my coffee(s) and evening tea without sugar for the first time ever. After 3-4 days I was breathing normally, no need for deep breaths. And of course I only have Coke in moderation since it has, in the area of 12 teaspoons of sugar per can. :o That video was amazing. Thanks for the original poster. Had my first cut of tea and coffee without sugar. Also sent it to 5 people. Tough to give up, but now will be used sparingly. Will watch the Gary vid this weekend. Thanks again guys.

I bought leaps on WDC around $27 and I am quite happy. The market is rather strange. We had a great quarter and she sells off. I have 2 years though. If I had the cash I would buy the whole company. Its as close to a no brainer that I have seen in a long time. The short thesis is silly and dead wrong. I have like a 3% position though due to other ideas being out there. I feel you too, companies in my world are worth 10x CF to 15x CF depending on growth. So mega caps at 10x CF dont excite me. One can still however find 5-10 WDCs out there and that is all one needs.

I agree. I think people want top tear companies at less than 5-6 CF (look at WDC, subtract the cash). We are value investors - There are plenty of Ugly Betty type companies going through some stress which are cheap on current, past, and future cash flows). These companies are at 5x - 7x CF and some are even growing. There are even top notch large caps which dominate their industry trading at less than 10X CF after taking out cash. You cant tell me Google, Apple, and MSFT arent cheap. They arent for me, but should deliver great returns for someone at some point.

A better question may be why do you guys like something. What gets you guys excited about something? We can rattle off tickers all day, but that doesnt seem to offer much value. What are you guys looking for? I remember that one guy who wanted Coke / Pepsi / Kraft at 4-5x current earnings and perhaps projected earnings. Keep dreaming. A man should have standards, but one must be realistic.

I really like these 2 Munger quotes. We look for a horse with one chance in two of winning and which pays you three to one. You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing. --- Right now I see enough mispriced gambles which warrant further research. I also believe I own quite a few mispriced gambles. I dont like the track (its raining), but think my horses are above average. I think this is however always the case. If you poke around, there is always something cheap to research or buy. I dont see many screaming buys at 2x CF, but believe there are a good number of deals out there. My winners have come to dominate my portfolio though, and I dont feel like trimming them right now. That will likely prove to be a mistake. --- I am trying to keep these Munger quotes in mind though. ○ Charlie Munger - "It takes character to sit there with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities." ○ Charlie Munger - "There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn’t awash in cash — and I don’t want to go back." Perhaps I lack character, and am simple going after mediocre deals.

I had up to 18% but am down to 8%. There are a few more small caps I want to take 2% positions in. I am going to sit on my hands for a bit, but there are quite a few bargains out there inmo. The market however is quite expensive and is outrunning the real economy / recovery. We are borrowing from the future and that means someone will have to experience low returns to bring things back into line. My bargains will get cheaper though which makes them less appealing. I think we know how the song goes, just no one knows when. The music is playing, and the girl I am dancing with is cute so....

I am a big fan of RDI, I plan to look into it a bit more but may take a position sooner or later. I also like Carmike.

Watching the video but I love sugar. Love sugar. Damn. I hope he is not too convincing.

I would look at the Pabrai's second book. You have assets, and earnings power in my opinion. I would probably pick up a Bruce Greenwalds book as well if you want valuation ideas. I do very simple valuations based on assets or fcf / growth. Most of my analysis is qualitative actually. I think its pie in the sky and you will simple be precisely wrong if you get too detailed with valuations. When you see a fat girl (or guy if thats your thing) do you need to know the weight to know they are fat. I mangled the quote, but I think its one of Buffetts bet ones.

I cant make heads or tails on this one but if you are long today seems like a nice day to be buying warrants, options, or shares. Any thoughts on what normailzed earnings will be. I guess one could add back all the write offs from this year to get a run rate. Then maybe adjust up or down depending on whether you are bullish or bearish (more pain or new profitable loans). What are you guys doing to get comfortable.

I could probably name 10 who are into gold.