DCG

I'd really like to see them start licensing Android, now that it's gained in popularity and is a viable contender to IOS. In other words, all the phone manufactures out there (outside of Apple) needs Google/Android more than Google needs them. The equals something Google can potentially make a lot of cash on.

If done correctly, share repurchases are usually preferable to dividends. Double taxation is an important issue with dividends. Corporations are taxed on earnings before paying the dividend, and then investors are taxed (at a higher rate than capital gains) on the dividends. Also, remember that share prices generally fall my the amount of the dividend, so it's questionable how much value you are really gaining from dividend payouts. The problem, as mentioned earlier in this thread, is that a lot of companies buy back their shares at bad times. Boards approve buybacks over periods of several years, and companies often buy back their stock regardless of the stock price. In March of 2009 when stocks were highly undervalues, almost no companies were buying back their own stock. Now that stocks are up, companies are announcing buybacks. For example of horrendous capital allocation regarding share buybacks, look no further than Eddie Lampert. He lost huge amounts of shareholder money buy buying back large amounts of SHLD stock at around $150 a share, and then again when it was at around $120 a share. The company I work for recently announced a couple billion $ in buybacks that will be funded by new debt, which is questionable (but could work at ok in the long run). Anyone of have a list of companies/management buying back their own stock in early 2009?

Unrealistic. I'm not really expecting a BV gain from last quarter, and think there's a good chance of a BV loss.

I first bought a pretty large position Visa during their IPO. Ended up selling for a loss during the crash (got stopped out on it - in hindsight, one of the biggest investing mistakes I've ever made). It went lower than when I sold it, but I ended up buying it back (a smaller position than I originally had) a good amount higher than what I paid during the IPO. I've added to my position a couple times over the last few months. I'd like to see them improve their ROE, but I'm otherwise very happy with the company's management, and I think it's future potential is still great. Much of the world is still on cash and not credit or debit yet, so tons of room for international growth. The long-term risk is competition from companies like Paypal (more than other credit card processors, IMO), and an increase in the ability for direct bank-to-bank transfers that could bypas the CC processors. For example, being able to pay through your smart phone and having money transferred from your bank (the credit card companies could still potentially be involved in those transactions though).

I mentioned this in the BNI thread as well, but I bought some FDX (Federal Expresss) a couple weeks ago for around $70. A small position that I was hoping to add to if it got cheaper, but it's gone straight up since I bought it. Still hoping it pulls back so I can pick up a bit more.

I started buying Google at $275, and even added to my position at around $400 and again at $475. Visa is my 3rd largest position. They get a cut out of a a large amount of purchases throughout the world, and still have huge growth potential, as there are a lot of countries that are still mainly just use cash.

The other side of that is questioning whether they were fairly valued in 2000. And Dell's business has deteriorated in recent years. GE has struggled as well. Wal-Mart is probably a good buy right now, although their growth rate has really slowed (which is just the nature for a retailer of their size).

FFH is an insurance company that strives to use float and free cash flow for investments, so I think they're pretty easy to understand. Basically the same type of business as BRK and MKL. I think Loews is pretty easy to understand, as it's basically a collection of a few unrelated (Hotels, oil and insurance) mediocre companies, but I've never really liked the company. They're very unpredictable and a greatly effected by downturns in the economy, as they're a collection of mostly very volatile businesses.

Regarding buy & hold, I almost always try to look at the decision as the business owner, and when/if I am considering selling a stock, I take the Buffet approach and ask myself 'if I owned the entire business privately, would I sell it right now?'. I try to look at hwo the business will be doing in anywhere from 2-20 years from now. That said, when the market gets ahead of itself, I do sometimes sell portions of holdings, largely to free up cash to use during pullbacks.

I just have a real hard time valuing this company, as their earnings bounce around so much, and I have a hard time trusting Chinese accounting practices. And (if I'm reading correctly) it looks like they're looking to do a secondary offereing in the next year if their stock price goes up. Have any of you taken a shot at a discounted cash flow model for them?

Agreed. I've followed the company for a while and view some of their investements as high risk, and their investments are all over the place. I question their knowledge (circle of competence) in all of the wide variety of industries they invest in.

A short article I came across http://autonews.gasgoo.com/auto-news/1016119/shares-down-byd-airs-grim-outlook-for-ev.html Shares down, BYD airs grim outlook for EV By Amanda Zheng From:Gasgoo.comJuly 22, 2010 Shanghai July 22 (Gasgoo.com) BYD (01211.HK) shares closed at 50.1 HK dollars yesterday. Despite a slight increase over the previous day, the company's share price has fallen by 40.4% over the past three months, compared to its monthly high of 84 HK dollars on April 7, First Financial Daily reported. The main reason for the continuous decline in BYD's share price is that its electric cars cannot achieve commercialization in a short term, said Cao He, an auto analyst with Mingzu Securities Co. China released a plan to subsidize private purchases of electric cars in June this year. BYD's F3DM plug-in hybrid sedan and e6 electric car were both listed on the catalog as energy-efficient models to qualify for the government subsidies. Consumers can get the government subsidy of 50,000 yuan ($7,320) for buying an F3DM car and of 60,000 yuan for buying an e6 electric car. Moreover, the local government of Shenzhen, a southern boom town of China, initialized a green-car subsidy pilot project in July to boost purchasing of new energy vehicles. The Shenzhen government added another 30,000 yuan and 60,000 yuan to the plug-in hybrid electric vehicle and pure electric vehicle respectively. Although motivated by the favorable governments' subsidies, BYD sales have been failing to achieve its expected goals. Reportedly, BYD started selling its F3DM cars to private consumers in March 29, but sales were disappointing with only 14 units sold in April, 2 units in May and 12 units in June, which is far short of its sales target of 1000 units for 2010. The Chinese government's new-energy vehicle subsidy is only a pilot program. To mass-produce the electric cars is still a long way ahead. Therefore, economies of scale may not be able to work magic in a short time with the high cost of battery packs and inadequate support facilities for electric vehicles, an industry expert said.

I don't agree that "The stock market at the moment is extremely optimistic" and don't see where you're coming from on this. The market has been 'optimistic' for about the last 3 days, based on a lot of strong earnings reports, and has been very pessimistic for the last month or 2.

I think most of the transports and service-related transports have gotten pretty undervalued. I started a position in Federal Express recently, but it stock went up a decent amount before I added to my position. Hoping it comes back down a bit. I've been watching UNP and CNI closely as well but haven't pulled the trigger on them.

Most stocks were done big today. 6% is hardly 'massive' for a small company like this.

I'm a bit confused on what people really like about their returns, to be honest. If you compare them with other restaurants, they lag behind on most key metrics. Below is a comparision for last year: RRGB: ROA: 2.9% ROE: 6.31% Net Margin: 2.09% Cash Flow/Sales: 5.01% BWLD: ROA: 11% ROE: 16% Net Margin: 5.6% Cash Flow/Sales: 1.03% EAT: ROA: 3.82% ROE: 12.75% Net Margin: 2.9% Cash Flow/Sales: 5% CMG: ROA: 14.20% ROE: 19.13% Net Margin: 8.35% Cash Flow/Sales: 9.45%

Ate there for lunch yesterday. There were a good amount of people there for 2:00pm. Food was good, although pricey. The chicken sandwich & fries were around $12. Obviously good for them, but I won't spend that much on lunch frequently. The staff was friendly though, so I did have a good experience there.

I mentioned this in the Buffet Books thread a month or so ago, but I'm about 3 quarters of the way through it. It's a real good book. Certainly not the type of book that's so engaging you can't put it down, but he does describe stuff differently than most of the other Buffett books out there. I definiatley recommend it. Definately among the best Buffet books out there, and I've ready most of them.

So they had a Buy on the stock when it was over $150K a couple years ago, but now say to sell it. Analysts are such idiots.

For what it's worth, a mall near me (in Lone Tree, CO) has one of the very few first retail stores Microsoft has opened. I was in the mall yesterday and stopped in to the Microsoft store to check it out. My first reaction was that the store's layout and design is a blatant copy of Apple Stores. My 2nd reaction was that there were only about 7 customers in the store, 4 of which where kids taking advantage of being able to play on their X-Box's. The Apple Store about 40 yards away probably had about 55 customers in it.

I like what Brinker has been doing. The company (and department specifically) I work for has practically every restaurant chain in the country as clients so I am in frequent contact with managers from many of these companies. I've been impressed with management at most of the Brinker locations I've communicated with. I like the fact they they've sold off (most of their holdings of) Macaroni Grill, On The Border and underperforming businesses to focus on Chili's and Maggianos. I think Maggiano's has huge growth potential. The locations by me are huge, and are yet completely packed and have a long wait every time I go there. Brinker's earnings have been real inconsistent over the last decade, and they've had a rough couple of years recently, but I think they're heading in the right direction. I do not currently own any EAT shares.

What are they using their cash flow for, or what are they planning on doing with it in the future? They don't seem be plowing it back into the business to open new stores, correct? At a somewhat quick glance, their cash flow has been real strong for the last couple years, but real inconsistent prior to that.

Increased my holdings a bit in Visa and Google. Started a new position in Federal Express.

I don't really see Red Robin as having the same type of brand loyalty os Chik-Fil-A. While I'm not the biggest fan of Chic-Fil-A's food, they do have a bit of a 'cult' type following, similar to In-and-Out Burger. I just don't see that with Red Robin. What are the main things you like about Red Robin? With only a 6% stake from biglari, what type of role will he be able to play in any turnaround?

I'm much more interested in Paypal than eBay and wish they'd spin it off. My main issue with eBay is I don't have a ton of faith in John Donahoe. I just haven't been very impressed with this guy in all the interviews I've seen of him. As far as the main eBay business, they've mainly grown sales in recent years by increasing their rates. It's becoming pretty damn expensive to sell on eBay. I think there will be a point where a lot of sellers start leaving the site if they continue to jack up their rates.