manuelbean
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Posts posted by manuelbean
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On 5/29/2022 at 8:57 AM, scorpioncapital said:
" the persistent inflation of the 1970’s was terrible for most equity investors;"
Honestly I do not understand it.
Hyperinflation is very good for stocks. And where is the line between run of the mill 20% a year inflation and hyperinflation? Does something flip at some point to make the 70s result become its opposite in hyperinflation?
Venezuela had one of the best performing stock market of all time. Vertical. All assets, even financial, should skyrocket under high inflation. Of course the society may fall apart and everything confiscated but it seems even under this threat at least stocks do very well (although the currency is trashed and you have to sell your stocks for local currency).Or was something else happening in that 70s article? Were interest rates rising by any chance?
Also shouldn't we look at the 70s experience as a continous process. Sure there were gains after in the 80s but people who held from the 50s and 60s probably got clobbered on the 25 year downside. The sp500 was flat from 1968 to 1991 i think. That was all due to higher rates compressing multiples I imagine. Am I to understand that inflation accumulates stock gains by front-loading them and when the Fed 'fights inflation' , the front-ended gains (often called a bubble) are reversed, causing the index to revert to the level it was many years before??
I think you might enjoy reading this one from Buffett back in 1977.
http://csinvesting.org/wp-content/uploads/2017/04/Inflation-Swindles-the-Equity-Investor.pdf
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The chart and the heading don't really match, do they?
I found this to be interesting
https://behavioralvalueinvestor.com/blog/warren-buffett-pcc
Gary makes an attempt at uncovering the profits after the acquisition (I don't know if they're disclosed on the AR, but from the article it doesn't seem so).
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Any ideas on what Warren meant when he said that he was right on his opinion that Precision Cast Parts would "earn good returns on net tangible assets" but that he had made a mistake "in judging the average amount of future earnings"?
If the earnings are lower than expected, shouldn't the return on assets be lower as well?
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Thanks for your answers.
Could you please explain it as if I were 3?
thanks
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Hi guys, any idea why the number of Apple shares differs from the Annual Report (907,6M) and the 13F (887,1M)?
Thanks,
Cheers
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The two key metrics you may to check out are yield and P/FFO. As these firms do not have to pay taxes they should have a value advantage over tax paying firms. On whole they are in my opinion fully valued. One exception is FUR who has bough properies via defaulted debt.
Packer
Hi Packer, when you say "yield", you're referring to Dividend yield, right? Because you could be talking about the yield at which the company/REIT is acquiring its buildings. One thing is the dividend yield, the other is the actual building yield (rent/total cost of the building). Is this correct?
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Thanks Bizaro, but how do you know that number?
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Hi guys, I'm trying to model Dillard's financials and I got stuck in the Property Plant & Equipment. I wonder if someone can help me.
I've attached an Excel File so you can see what I'm talking about:
A- Gross PP&E
B - CAPEX
C - Cash from the sale of PP&E
D -Gross PP&E (+) capex) (-) cash from the sale of PP&E
E - Difference between D (-) A
If one adds last year's Gross PP&E to this year's CAPEX, one should get this year's Gross PP&E, right?
Maybe not. If the company has been selling assets, one should also subtract the cash from those sales, right?
The thing is, when I do that math, the row "E" should show a "ZERO", but it's far from that.
Why does this happen? The only reason I can think of is that each year there are assets that become completely depreciated, thus disappearing from the books entirely.
Am I thinking correctly? Am I missing something?
Thank you
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Thank you wabuffo, but I just realized how stupid my thinking was.
Nothing to see here. ::) ::) ::)
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I'm drawing a blank here.
How can the "Changes in Inventory" be positive on the cash flow statement? If the inventory decreases on the Balance Sheet, doesn't that mean that it went through the COGS, thus not needing to go through the CF Statement?
Thanks
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Thank you very much for your answers guys.
I'm not really into shorting, I just wanted to learn about short squeezes (maybe to benefit from them in the future), but it seems that there is much lingo that I don't understand, many operations that I wasn't aware of, much information that isn't easily accessible and (according to you guys) a lot of practice needed.
I'll just google it so I can learn the basics so I can have a conversation with you guys ;)
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Thank you very much for your help Gregmal.
I'll be reading your comments slowly over the coming days so I can learn.
Do you know of any bibliography I can read about short squeezes?
Thank you
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Thank you very much for your answer. I'll digest it slowly given that I'm new to this.
I was looking at Dillard's example and I was trying to understand this chart:
https://iborrowdesk.com/report/DDS
Does this mean that there are only a few thousand shares that are available for borrowing?
I would say that the fewer shares available for borrowing, the higher the cost of borrowing, right? But by looking at the chart, it doesn't seem exactly correlated.
What makes the price go up and down?
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Hi everyone, I'm new to short squeezes and I hope someone can help me out.
Without a Bloomberg Terminal, how can an investor know the number of shares that are being shorted (in real time)?
How does one know when shorts are covering (other than by the rise in share price) and how many shorts are actually covering?
Does anyone have good resources on this?
Thank you all
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Hi guys,
I've just read "You can be a stock market genius" by Joel Greenblatt and he says that retail is usually valued on an earnings basis (EPS to be more exact) while cable companies are usually valued on a FCF basis.
I understand why the cable companies should be valued on a FCF basis. There is a high initial investment that probably won't be repeated for a very long time so the depreciation charge isn't a true cash cost.
But what about retail? Why shouldn't investors look at retail on a FCF basis?
*I know that investors should look at both to understand the business yada yada yada, but let's keep it simple.
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Hi guys,
Why exactly is it assumed that the Maintenance CAPEX will roughly equal the D&A expense?
*This question is linked to another one I've posted about ROIC, but given that there might be other investors with the same doubt, I thought that creating a new thread would be a good idea.
Let's picture a company with 1 asset. A house that was bought by $1M. Let's say that the company depreciates the house in 25 years to zero and it won't replace it after that period. If the maintenance CAPEX equals the depreciation charge, it means that after 25 years the company has spent $2M on that house, right?
Why is this so? Why should it match?
I know that finding the Maintenance CAPEX is a long time quest for several investors and I don't want to overcomplicate. I just want to understand the reason people use the D&A as a proxy.
Thank you
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Thank you rranjan.
I know what you mean and it makes some sense. But let's say that in year 3, you've spent $500 on the car. Your true invested capital is the initial $10.000 + $500 = $10.500 whereas according to the accounting rules, your Invested Capital will be $8.500 (assuming you've spent those $500 in the first month of year 3).
A car is something that needs a lot of maintenance, but if we're talking about a house (a properly built, solid one), it might take 20 years before you spend money on it. And on year 19, the invested capital will be much lower than the amount you have invested in the first place.
By the way, can you give me some examples of a case where the depreciated amount doesn't reflect reality?
Thank you for your help
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Hi guys, whatever way we calculate ROIC, if we take the depreciated PP&E value (and all else equal) we will get better ROIC's the older the PP&E gets, right?
Shouldn't we use the original (or un-depreciated) value of the PP&E?
Thank you
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in General Discussion
Posted · Edited by manuelbean
Jungfraubahn has had a Return on Equity of 6-7-8% over the years and the stock has offered a CAGR of 7-8%.
I understand that there is no competition and the business will probably be there 100 years from now, but that fact alone has not led to great returns.