claphands22
-
Posts
370 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by claphands22
-
-
Klarman is probably no longer involved with day-to-day analysis, but managing the team or managing the guy who manages the team. He wrote a great book and has a great track record but I don't see him as a guy with lots of fire anymore. Nothing wrong with that. Once you got the money, you've built a successful firm and are spending more time with philanthropy -- proving yourself as a great analyst probably isn't very high on Maslow's hierarchy of needs.
The people I find with really great ideas haven't written any books. They don't manage in the billions, and their idea of talking to the team is looking in the mirror in the morning. They tend to put their ego in their ideas and are eager to discuss their ideas with anyone hoping to sharpen their skills and gain some recognition.
-
The BofA book he mentioned was Biography of a Bank. Out of print it seems and a bit expensive. You can read some of it on google books, I could only read 50 or so pages before I had no more free previews. Mostly about the Bank of Italy (a predecessor of the current behemoth) and its founder. Wish I could read the whole thing.
http://books.google.com.tw/books?id=DwStGACTFTIC&lpg=PP1&hl=zh-TW&pg=PP1#v=onepage&q&f=false
-
Taiwanese real estate prices drive me absolutely crazy. It's all 史八豆 to me. There are loads of empty apartment buildings and real estate agents just like zippy1 says. I remember one day seeing a busy real estate agents office only find out they were only making a commercial ;-)
My guess is the central bank would like to raise interest rates but would be afraid of higher NT appreciation.
Here is a nice little article (in English) about Taiwan's real estate here: http://www.taipeitimes.com/News/biz/archives/2012/03/30/2003529019
-
What Stocks Are People Buying?
Anacott Steel.
Seriously though, not much. I have been fully invested and I don't have much money trickling in. I have bought a tiny bit of CTMMA and some BAC.WSA. I'm thinking about shorting something and I'll also probably do this tender offer: http://motiwalacapital.com/blog/jakk-tender-offer-gives-small-investors-a-chance-to-make-200/
-
-
Last year I was somewhat interested in Spindletop Oil & Gas(SPND). It's small 14M market cap (pink sheet). It has 8M in cash, another million in long term investments, real estate, and some pipelines. To be honest, I haven't kept up on it since I didn't think it was cheap enough and I wasn't confident with valuing their oil/gas properties.
The company has all these related party transactions with another oil company the CEO owns and has all these different arrangements.
http://finance.yahoo.com/q?s=SPND.PK%2C+&ql=1
SEC Files
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000867038&owner=exclude&count=40
(shrug) maybe someone will find it more interesting than I did
-
Yeap, you're right.
-
I thought it was just the Taiwanese news going crazy but he must be pretty good if he even finds his way to a value message board.
Lin is from Taiwan. There is no play on MSG but possiply stinky toufu.
加油！
-
400% in twelve years...them mus' be some mighty fine tacos.
Congratulations on the article Allan.
-
Thanks for the post.
-
Great interview. Costco is great.
I can't speak for the Costco's in Korea, but the ones in Taiwan are insanely busy. Yet, who doesn't love Costco when you get a good hot dog and a drink for 50 NT? (1.65 USD)
-
Hey Junto,
Thanks for the links. I am not really preparing for a hedge fund interview, not that I wouldn't mind working at one, but I rather set my goals on something more attainable - like doing a load of laundry before I go to bed. haha
I am just interested in the analysis and trying to figure out the best answers. Thanks again for the links, I enjoy distress debt investing.
-
Here is my answer to 3. (not good?)
When a company changes their depreciation - it's an accounting change not a business change. Therefore, the GAAP earnings will rise, but the cash flow will stay the same. If you increase the AR - the net income will not change since the GAAP earnings depend on accrual accounting, but the cash flow will decrease since you'll have to wait 10 more extra days each billing cycle to get paid.
Partial answer to 4. (I don't know if this is a good enough answer)
Large unfunded liability is a real liability. In terms of creditors of the company, the pensioners are a head of the common stock holder. Although in the short term they might get away with not getting funded - the long term they won't - especially if there is a bankruptcy/liquidation. It should be counted as debt, but it should be an intalicized portion of the debt since they probably don't have the same covenant restrictions of other debt. Yet, it's important to know the deficit size in relation to the asset size of the company. A large company like JNJ will have an easier time confronting this problem (generally) than a small company with have a larger problem with a larger amount of debt. You would also want to find out what kind of actuarial assumptions they made about the returns they expect on their investments. If they expected a very significant return, then the deficit could even larger since the actuarial estimates are too large. If they expected a small return, then the deficit might be counterbalanced by the the conservative estimates.
1) not entirely sure. I know 80%+ is fully consolidated, 20% is equity consolidated, 50% is consolidated somehow else...? not sure
2) Not sure how to handle the currency exposures. I would say hedge them. Yet, not sure what kind of tool I would use. In terms of the magnitude of the liability, I would have to see how strong Renaults earning power/assets are to sustain whatever liability they were given. (my answer to way too vague & in partial ego defense, I'm tired)
3.) answered above
4.) tried to answer above
5.) duration - how long the bond will last until it's due? I am not even sure what beta means for stocks... I really don't know.
---
That was my crappy crack at it. Was hoping this smart crowd can fill in the blanks and show the error of my thinking.
-
I just got done reading Money Mavericks: Confessions of Hedge Fund Manager by Lars Kroijer. It was pretty good, but then again, I'll read anything financial related (especially if I read it for free; thank you public library)...cockroaches have higher standards than I do. Yet, I thought the list of five questions were pretty interesting. They weren't really "value" questions, but I thought I had a pretty good handle on this financial stuff - but I didn't feel confidant with my answers to #1, #2, partially #4, and #5. Basically, I would have bombed this guys interview.
I thought I give this board a go. More talk about analysis, the better I figure.
"
I devised ten simple questions that I would ask everyone we interviewed for an analytical position. here are five of them (and if you want to work in a hedge fund, it would be useful for you to work out the answers):
1. When you try to separate out the stake Company A owns in listed Company B, what role does minority interest on the balance sheet of Company A play in finding the deconsolidated financial statements?
2. French company Renault has a large stake in Japanese Nissan. discuss currency exposures and what you could do to limit them. Suppose Renaut guaranteed Nissan's debt: how would you think about the magnitude of this potential liability?
3. A company changes depreciation of an asset from 10 to 12 years. What will this mean to its stated cash flows and earnings? What does it mean to cash flow and earnings if you change AR (accounts receivable) days from 25 to 35 next year?
4. Company A has a large unfunded pension liability. Is this a real liability? Should it be counted as debt? If you know that the net deficit is $10 million do you care about the gross assets and liabilities? What else do you want to find out?
5. What is 'duration' in the context of bonds? Does a bond have beta exposure to a market?
I found many of those I interviewed unable to answer the questions to the level we required, however nice they were as people."
pg 93
-
Thanks for the post dcollon.
-
Great book, highly recommend it. I did start skipping some pages toward the end because just like Hester said, it becomes really repetitive.
Interestingly, he puts Fairfaix Financial on the same level as Allied Capital. I'd love to read the Fairfax short book instead of the Allied book, but no dice.
-
Jacob, you are the man. Just sayin'.
+1
-
claphands, The absolute pummelling the stock has taken is what drives me on BAC. I had the warrants and sold them, at a small loss, and bought 2013 options, now the 2014s are available and have been buying them. If this beast is going to go up it will happen quickly and within two years or not at all, IMO. Total amount invested is about 4% position (1/15th of my FFH position). So, I wouldn't say it was a strong conviction by any means. They are cleaning up continuously and its going to start to hit the balance sheet very soon.
A simply risk/reward analysis. Nothing mathematical except being approximately right is necessary. My 2014s go in the money at just about $11.20. What are the odds of BAC not trading at above $11 in the next 9 months? My assessment, such as it is, suggests very low. I have read the entire 10k from last year and kept up with the story.
I have two conflicting sides about this.
First, I've read the analysis on BAC, listened to the conference calls, read the annuals and came to the conclusion that BAC was highly undervalued. (Getting a major bank, that lasted a storm that just wiped out competitors, with capital ratios 2X higher than the last storm, selling at 7.35 a share, where tangible book per share is 13. And a CEO who I have only read good things about. Seems like once and a generation opportunity) I can't see why it shouldn't trade substantially more than where it's currently trading in the next two years Of course, I can't see why it shouldn't be trading substantially higher right now. So on that side of me, I think those options are just a thing of beauty.
On the second side, I made a chart on google finance of WFC that started on Nov, 27 to December 30, 1994. Since this is the time period where someone would have read Berkowitz analysis on WFC (http://www.fairholmefunds.com/pdf/oid1992.pdf), bought a 2 year call options, and would have been thinking about WFC, the same way I am thinking about BAC right now. Yet, looking at the chart (of course this is split adjusted) WFC went from $5.328 in Nov 27 to $5.844 in December 30, 1994. So, what does that say? These banks can stay undervalued longer than our call options can stay relevant.
My criticism about my second side. My data was taken from google finance. Maybe the data is wrong, because it seems to fly in the face of what Greenblatt was saying. Of course in the LEAP article*, Greenblatt said he exited around September of 2004, which was one of the high points of the WFC that year, but if he held on, he wouldn't have made much money. (Sadly enough, WFC actually takes off in 2005.) Also, looking at charts is a fool's errand, WFC and BAC were undervalued for different reasons and there are complicated reasons why markets do things what the do and looking at a simple 2 year chart is just seems ridiculous..
So I see the warrants as a hedge on my own optimism. Yes, I think BAC should be trading higher in 2 years, but just like WFC in 1992, these things can trade sideways longer than you expect. So when I say you have conviction, I mean you have conviction in terms of the timing. I really wish I had this because like you stated above, if BAC turns around in the next two years, there is a crap load of money to be made.
* The Greenblatt WFC leap article, is on page 220 of You Can Be a Stock Market Genius
-
Should bac rise back to 17 I will make 10 x my investment - 180000.
Selling my warrants to buy the options is very tempting. I haven't had the conviction yet to do it, really impressed you have. In two years I'll probably regret not doing this...
-
I don't know if Kyle Bass still owns those Greek CDS, but if does, he must be steaming right now.
-
Enjoyed the Barron's article, especially the pictures. Thanks for posting.
-
How quickly I turnover my portfolio depends on many factors, an average rate wouldn't be of any value and if anything, it would be misleading.
Just wondering, why are you asking this question?
-
That's not a bank. It's a broker disguised as a bank.
-
Like others who responded I'm open to a PM or email (you can find my email on my website linked to my profile) about ideas as well.
In addition I'd say start a blog with your ideas and ask for feedback, post ideas here for feedback. If you have decent content you will get good conversations, at least that's been my experience.
A blog helps you focus your process, when you write something down it forces you to think it through. In addition you have your thoughts captured for a few months down the road when you are trying to remember why you made a certain decision.
I agree with all that Oddball said.
+1. I always look forward to e-mails I get from board members.
Excerpt from new Sheila Bair book
in General Discussion
Posted
Reminds me of the HBO special "Too Big to Fail", where Paulson gives his staff an introduction to the bank heads. http://youtu.be/8c8TRh7MMbA