beerbaron
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Posts posted by beerbaron
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If you don't know who the patsy is...
BeerBaron
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what were the odds?
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My idea of what they should do is this:
1) Borrow at low rates to buy back shares (they are AAA so they get the best rates) in tender offer (they've done a large tender offer before)
2) Keep an offsetting amount of cash overseas
They can always pay the loan off later on, for example, when the US govt eliminates the excessive tax on repatriated earnings.
Can't hurt. It's not like it's risky in any way.
Even if they don't lift the tax on repatriated foreign earnings, the spread they'll make on borrowing cheap to buy shares will cover that tax after just a few years if they need to pay off the debt with that foreign cash.
They likely would be borrowing at interest rates similar to JNJ quality companies, so they could use their foreign cash to buy such bonds and the earned income would wash out against what they'd be paying out in interest. Given the lower foreign tax rates on that income vs the tax deductions at higher US rates, this might even work out to positive net interest income.
Why not use their foreign cash to buy back their shares on the foreign market, would that be considered as repatriated money by the IRS?
BeerBaron
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CHBT ... Look at the inventory turnover. This company would have to turn it's products every 4.8 days.
BeerBaron
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That is one the most stupid idea I have heard. Peoples are complaining that Microsoft is too spread in a gazillion of products that lose money and yet they embrace the idea of having it be managed as a conglomerate. Microsoft has enough on it's plate keeping up with competition that the last thing I would want from them is to start acquiring non-core operating companies. I like when a company is focused on it's objective so they can stay leaders. Apple has a very focused strategy and so far it seems to work pretty fine for them.
As for what to do with the money Eric has it perfectly straight. Why would you want MSFT to keep your money and invest it for you? I would much rather have a dividend/buyback s I get back the money. What I do with that money after is my own choice... you can invest it in Fairfax, BRK or whoever you want why would you want to lock it at the original corporation.
There is only one Buffett and only one BRK, you can't reproduce it's success without another Buffett.
BeerBaron
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Here are my questions for what they are worth... Digital Wallets have been present in Japan for the last 10 years.
What's so innovative about them?
How did it play out in Japan?
Who was the winner if any and why?
BeerBaron
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Anybody in Canada should take a loot at MBNA Smart Cash. It gives back a nice amount in checks.
I believe if credit card did not exists everybody would be better but since we don't live in a perfect world. I decided to use them as tools for my own advantage.
I really don't see how having a credit card can increase my spending and I would doubt anybody on this board would too. Money burns the hands of many person but there is a small part of population that is actually net savers, what burns them is spending their hard work in useless crap.
You can't help people that don't know how to manage their money, you just can't. Accept it and stop trying to pop their bubble that they are equals to Prince Charles in wealth. Debt is like a drug, you take more of it to forget about you debt problems.
I like that governments force the extra disclosure, I actually laughed last month when I read it would take me 12 years to pay back a 1000$ credit card bill. It probably made some people cry too, but not the ones most concerned!
BeerBaron
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I think Prem is an investment god and he is the best hedge fund mgr on the planet IMO and FFH is a hedge fund in my opinion without the 2 and 20. I do not own any right now but at the right price I am all in I post a chart of the relative performance of my largest and only insurance investment right now ELF.
It's the first time I hear of ELF. I can't even seem to find a website for them... Do you have a link and/or a short investment thesis?
Do a search on this forum. It's been discussed many times.
BeerBaron
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Penny wise and pound foolish. Imagine the time it will take to calculate this 2 or 3 percent, plus antagonizing of the staff.I think he forgets they are his ambassadors to the public.
Calculating it is pretty easy. Antagonizing the staff is the issue.
BeerBaron
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Just a quick question, how will the FED control interest rate once QE2 goes away? Won't they have to sell those securities too one day?
BeerBaron
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I have a commercial loan coming due. I have been paying a variable rate of prime.
Would anyone here lock in long term mortgage to lock in low interest rate?
-history shows that one is better off sticking to variable interest rate, but interest rates are so low
What rate would be attractive for the next 5-10 years?
I wish 10 Years would be in the 4.5% range. I would take it. Probably 35 Years out of the last 50 were above 6% so the mathemical odds of my loan being profitable look good.
I have a profound hate for variable rates, especially since it<s usually the one that should not use them that opt for them.
Let's use Pascal dilemna:
Fixed Rate Variable Rate
Interest go up to 10% You keep your house Good Move You lose your house
Interest stay flat You overpaid interest. Keep House. You saved money. Good Move.
Why would someone risk it's house to save 10 000$ ... I don't know!
BeerBaron
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Fred's Database has a bunch of loans shown. Koo might be right, the total consumer and commercial loans are plain flat. See attached graphs.
BeerBaron
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Yes, prices are high. The real driver is low interest rates. You can get a fixed 5 year rate for about 3.5%. $700,000 house; $140,000 down; $560,000 mortgage. Interest on interest payment = $19,600/year = $1,633/month. Most families can easily afford this amount.
Viking, I'm about to renew my mortgage... which mortgage originator offers 5Y at 3.5%?
BeerBaron
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BB - A lot of that junk bond issuance is refinancing.
That is exactly what you need refinancing is part of the amount of credit in circulation. I'm just trying to get a feeling of Koo's statement about the de-leveraging of the private sector.
Ideally, one would the last 5 years of the following and add them:
-Top 10 Banks Load Book
-Junk+Corporate Bonds
This would give a fairly good picture of the lending environment. The problem with this approach is that 2008-09 were full of bankruptcies and governments interventions which would make the banks data unreliable.
Anybody has other tools to evaluate if the credit is contracting for the private sector?
BeerBaron
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He says that private sector is not borrowing. Anybody has stats on junk and corporate bonds issuance in the last 5 years?
BeerBaron
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Parsad, there is absolutely no risk, Vancouver home prices never fell significantly in the long run. You are trying to get your clients good returns in the stock market but the real gold mine is right next to you!
BeerBaron
(For those of you less acute to human expression it was a joke!)
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Left or right, the Country is being held hostage by a minority which makes no sense.
HOLY CRAP! You guys have a QUEBEC too??? :o
LOL!
As a Quebecer I'm not offended.
Some people would claim Alberta held hostage the rest of Canada for the last 10 years as well :)
BeerBaron
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I own V. Think it's a little cheaper.
There is a moat, tailwind of paper to electronic should continue for several years and they track inflation rather well. For example, gas prices are up 33% YOY, in V's call, they talked about how the oil component purchases went from 8% to 10% (up 25% YOY). Rather impressive.
Zero debt, do about $70-$80MM in Capex, but there is huge operating leverage. Moreover, the cash coming in goes towards repurchase of stock/dividends.
I would buy MA if it was on sale. Both should do well (think KO/PEP). When I made the purchase, I thought about how Buffett looked at KO (it's been a long time, but at the time 11 out of 64 ounces of consumption was KO products)...in the States, the average person has 3 cards...I think I read that in India it's at .3
I took all my cards out of my wallet (debit, credit, and healthsavings) and all had a Visa logo. They do every type of transaction: unemployment cards, gift, prepaid, employment checks. The tranaction tollroad logic goes a long way.
Great analysis, what did you do about regulatory risks?
BeerBaron
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I looked a bit at it today and could not find anything...this makes me much more cautious... who want's to be the patsy.
Why such a drop? I just can't explain it.
BeerBaron
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50 Years ago a writer named Adam Smith wrote a book called 'The Money Game', it's the same thing all over again.
BeerBaron
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Let's see if I understand correctly.
So basically a large fund, sells a bunch of 100$ Covered Calls when the stock is at 90$. At the last day, if the stock begins approaching the strike price I dump my shares until the stock falls below the strike.
It's illegal but interesting as your biggest loss is only the difference between your selling price and the close price if you don't succeed. Plus you get the option money as a bonus.
Now, guys, think how great that sounds for an arbitrageur. We can't know where the stock will close but we know it will be in a specified range because of those market manipulators...
BeerBaron
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You need idiots like that to make money off! He's world class I have to admit.
BeerBaron
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I have suggested in the past a solution to the growing board size...This would be an option for a user to "Follow" or "Subscribe" to certain members. This would allow a user the option to view the full board, or filter for certain users' posts.
Hey Watsa, it's been a while where have you been?
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Just a few dumb engineers questions:
Where will the battery be? Cell-phone require lots of power no matter the screen type.
Li-Po batteries would be able to actually be in the plastic itself but so far I have not heard of a practical cost application...
Cell phone require big memory size. Big memory size require a lot of IO pins on the ICs. ICs are not flexible. Which part of the device would not be flexible?
What is the practical advantage of flipping a page by bending compared with flipping a page on a IPhone?
Does a flexible structure offer any advantage to the consumer?
I think flexible technology has a nice future but not in portable applications the bend/unbend is way too stressfull for the poor solders.
BeerBaron
TRE - Sino-forest put.
in General Discussion
Posted
Guys if you think it's not a fraud, buy calls. You'll get back your puts money and win on the calls. Who's ready to take the risk that's the question...
BeerBaron