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roughlyright

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    What stocks will make their owners rich over the next generation?

    in General Discussion

    Posted

    I own Banco Santander so I was looking at its competitor BBVA for a comparison. Very interesting. BBVA adopted a new control system designed by Accenture that won the Best Bank award in 2013 for that category. The system allows real time financial information. Second, they purchased Simply based in Oregon which is a banking interface as revolutionary as the IPhone. There is a website with an explanatory video. BBVA Compass has 785 branches across Southern US and the financials were unusually easy to read with improving numbers. Is this a result of the Accenture system?

     

    BBVA is similar to SAN with a big expansion across Latin America. The financials are much worse than SAN but improving. Perhaps an innovative bank in a hated industry with geographical spread from a depressed valuation might hit 50 fold gains?

     

    Idea #2 is Prem's new India fund. India hits demographic peak in 2035 so investing now is like investing in US 20 years before their demographic peak in 1999.

     

    Idea #3 is to create a startup for listing on the CSE the Canadian Securities Exchange which is run by and for entrepreneurs with dramatically lower costs. Trading exploded with the marijuana boom. Perhaps we can convince Sanjeev to start a junior BRK allocating capital starting with a marijuana supplies company which is scalable. It is way easier to hit 50x starting from pennies in a hot new industry which will soon enjoy $200B revenues. It would be instructional to create a business plan thread for the idea called "IPOs for Sanjeev" to take advantage of the astute business minds on this board and to encourage him to take the leap. The exercise might help pick out the types of business models most likely to achieve the 50x goal. Most often the opportunities requires capturing a wave. So you need both a good model and an industry with rapid growth like Solar City but with a better moat. In the 1930s the richest man in UK made his fortune taking over failing companies then putting in place management and new business plans. Sanjeev would be good at that. The ability to disrupt and the speed of change is increasing so a junior BRK model is more likely to achieve the 50x goal. SoftBank enjoyed such gains by early investments in Alibaba etc. most of which were private at the time of investment. We need Sanjeev's public vehicle to be able to share such gains.

     

    Aberhound,

     

      How can a retail investor, invest in Prem's India fund?

    What stocks will make their owners rich over the next generation?

    in General Discussion

    Posted

    My vote goes to Senomyx (SNMX). The company's patents and its market position sounds simply great. It has a small market cap today,  at $300 Million. If they really execute on their plan and I can see this becoming a hundred bagger.

     

    At this point, it is lot of speculation. But the potential is certainly there. I cannot possibly see a 20 billion dollar company like Tesla becoming a hundred bagger. Size becomes a obstacle in itself, just like Berkshire cannot continue to grow at the same rate it did in the last 20 years.

    Current Holdings

    in General Discussion

    Posted

    As of right now:

     

    70% BAC (Calls & Common), increasing daily lately. This was 60% not too long ago.

    9% AIG (Warrants)

     

    5% or less possitions in:

    BRK-B

    FRFHF

    HOTR

    AAPL

    SD (Calls)

    MNGGF

    MIDD

    SYTE

     

     

    This excludes:

     

    My 401k plan which I've been contributing to for 2 years at my present company and is 100% invested in mutual funds and would be about 2% of the above portfolio.

     

    Some real estate I own. About 50% equity in my house and I own 50% interest in 20 acres of buildable land.  I've owned this land for about 15 years and I'm not sure what the present market value is.

     

    A large amount of restricted stock in company I work for.  This would be about a 25% position if included in my above portfolio, but the majority of it isn't yet vested.

     

    Rkbabang,

     

      What is your opinion on Mongolia growth group? The new CEO Paul J. Byrne  seems to have a great reputation. He has built several projects going to tens of billions of dollars. He has now started working for such a small company. I thought this a major transformational event for the company. any thoughts?

    For You Believers in DELL

    in General Discussion

    Posted

    I have one comment on Dell. Today's price of Dell is same as where it was on September of 1997.  On September 1997 it was at 12.25, according to yahoo.

     

    In 1997, Microsoft was the king of the software area. Intel and Dell ruled the market with low priced computers and chips. Together this group provided formidable competition to world in providing low-cost PCs. Dell had a great moat because of the low-cost structure compared to Compaq, HP and IBM. With the information we had *at that time*, it was a rational decision for an investor to put their money in to Dell. Their cash-flows were growing. They had a float similar to insurance companies, because they were collecting money before delivering the product to the customers.

     

    Now 15 years later you did not make a penny on this investment, despite being right about the company and its moat in 1997, with the information we had at that time. What makes us think that 15 years from now the result is going to be vastly different?  If you adjust the results for inflation, an investor lost lot of money even after 15 years. 15 years ago it looked like a rational decision based on the information we had, but now proven dead wrong, based on the facts alone.  landscape has changed dramatically now, with pretty strong forces against it. What makes Dell's position so good now?

    What a Lovely Frickin' Day!

    in General Discussion

    Posted

    Anybody has a opinion on Bank of America Preferred shares? I am looking at BAC-PL, which is now trading at $689. The par value is $1000. This is supposed to pay $72.50 in dividends. Here is the text from the prospectus.

     

    "SECURITY DESCRIPTION: Bank of America, 7.25% Non-Cumulative Convertible Preferred Stock, Series L, liquidation preference $1000 per share, and with no stated maturity. Non-cumulative distributions of 7.25% ($72.50) per annum are paid quarterly on 1/30, 4/30, 7/30 & 10/30 to holders of record on the first day of the month in which the payment is due (NOTE: the ex-dividend date is at least 2 business days prior to the record date). The dividends are non-cumulative and if the board of directors does not declare a dividend or the company fails to pay a dividend declared by the board for any quarterly dividend period, the holder will not be entitled to receive any dividend for that quarterly period and the undeclared or unpaid dividend will not accumulate. Dividends paid by the preferred are eligible for the 15% tax rate on dividends under normal holding restrictions and are also eligible for the dividends received deduction for corporate holders (see page S-40 of the prospectus for further information). The preferred shares are convertible any time at the holder's option into 20 common shares of Bank of America Corp. (NYSE: BAC), an initial conversion price of $50 per common share (a 25% premium from the initial price). On or after 1/30/2013, if the price of the common stock exceeds 130% of the conversion price for 20 of any 30 consecutive trading days, the company may, at their option, force the preferred shares to be converted into common shares at the then prevailing conversion price. In regard to the payment of dividends and upon liquidation, the preferred shares rank equally with other preferreds and senior to the common shares of the company."

     

    Any comments?

    Getting Closer to the Brink!

    in General Discussion

    Posted

    SouthernYankee,

     

      That is simply a great reply! you nailed it on the head.

     

      I see that people are more focused on giving a label to a position, than discussing the actual content of the issue being raised. As a private individual, I don't manage my personal financial affairs as badly as the government. I wish our government acted million times more prudently than I do. It needs to do so, because it has quadriplegics and seniors depending on them to cover their living expenses. It is horrible crime, in my view, to mismanage the country and solve a debt problem by adding more debt.  There are lot of soldiers loosing their arms and lives for this country, and the least we can do is to have a government that has the fiscal strength to pay their salaries. I wish Obama came up to the American people and apologized for spending like a drunken sailor, before asking for more money. If a drunken sailor spends $1.5 trillion dollars, I will be very kind to him because, he is spending his own money, unlike these thuggish politicians.

     

    -Roughlyright

    All the negative news

    in General Discussion

    Posted

    I agree with Munger (the poster), that the trend now is deflationary. Fairfax has been in business for a long time, but never purchased the derivatives to protect against deflation. Today's WSJ news shows Prem thinks this is the trend going forward. So, indirectly Prem supports Munger's position  :)

    Question on Put Option

    in General Discussion

    Posted

    I have a question related to Naked Puts sold.

     

    I have sold 30 put option contracts of January 2011 American Express Strike Price 7.5, at $2.50 when the price was under lot of pressure.  Right now the same Put Options are priced at $0.40.

     

    I understand that if these were calls, I could have exercised in 2011 and own stock in its place. However, I sold naked puts. If the stock of American Express remains above say $10 in January 2011, can I still exercise my options and own stock instead?

     

    I wish I actually bought calls as opposed to selling puts. My intents is to convert these 30 contracts into shares. Is this possible?

     

     

    Anyone willing to share a room in Omaha?

    in Berkshire Hathaway

    Posted

    I have a double-bed room in La Quinta Inn located at 1201 Ave H, Carter Lake, IA 51510. The price I got was $190 per one night. I have it booked for two nights (5/1 and 5/2). Anyone interested in sharing the room for two nights?

     

    This hotel runs a shuttle to airport as well to the Qwest Center. Only 2 miles from the Qwest center, I believe. If interested email me at jaysrao  at gmail.com

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