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beerbaron

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Posts posted by beerbaron

    Gold Croupier Investments?

    in General Discussion

    Posted

    Actually, my broader question, which I framed as "gold croupier investments" in order to catch people's attentions (hasn't worked, it seems), is whether as value investors, we can capitalize on fear in the market by making "croupier" investments. 

     

    For example, I haven't done much research into IBKR, but my understanding is that the profitability of its operations increase markedly when there is more volatility in the market.  For those who have done detailed research into IBKR, is this the case? 

     

    If so, it could be a better way to profit from fear than using the VIX or GLD/PHYS.  There is a better margin of safety than using those proxies because there is an underlying business that will provide profits regardless of what happens in the market.

     

    Or if there is a correlation between volatility and the use of options for hedging, then options-focused brokers might do better in markets where there is a lot of fear in the air. 

     

    Just seeing if there is anybody else thinking along those lines.

     

    Take a look at Broadridge Financial Solutions, they make money on the amount of fixed income transactions. I have been taking the last week trying to understand them (quite complex operations). I got the idea from an article from Columbia Business School. If they fit my criterias I will post my thesis.

     

    BeerBaron

    Macro vs micro

    in General Discussion

    Posted

    I'm about 17% cash in my investments accounts and I don't expect it to raise through selling of securities unless they reach their intrinsic values. I'm a net buyer of securities since I'm always adding cash from my investments. I have bough very little securities in the last 4 months tough so cash is slowly increasing.

     

    What I have figured out while reading this post is that about 40-50% part of my portfolio is not directly related to an economy recovery but rather past and future stable cash flows. For the last year I've been investing with the mind that we will probably have 0-1% growth rate for the next 5 year. For example here is my portfolio:

     

    FFH 13% (Insurer, somewhat linked to the economy but more linked to outside events)

    Brk 6%   (50% Insurer and 50% Economy related)

    RCH.TO 20% (Distributor of hardware equipment, fully linked to economy, but no debt, lot of cash and awesome and honest management, won't sell unless it reaches much more then IV)

    EH.TO 23% (Rent to own operator, moderately linked to the economy their customer base is much less prone to cut spending. Great new EasyFinancial division will generate huge interest revenues but will not require CapEx)

    XDM.TO 8% (Organizes Not for profit events, not linked to the economy)

    XIC 13% (I keep this one for my portfolio diversification, it's going down as the portfolio grows)

     

    I agree macro matters but instead of selling my stocks and raising cash I have been trying to insulate part of my portfolio to the economy swings.

     

    I'm ready to accept the fact that when the earth trembles the correlation between asset classes is 1.

     

    BeerBaron

     

     

     

     

    1st in line to replace Buffett

    in Berkshire Hathaway

    Posted

    That's an astonishing Horatio Alger boy makes good type story about Li Lu.  When asked yesterday at the AGM about how well the  four Chief Investment Officer candidates had performed recently, Warren was vague, repeating his statement of last year that they didn't exactly cover themselves with glory and were down about 50% during the market meltdown.

     

    That probably eliminates Seth Klarman from the group. I doubt Klarman can go 50% down.

     

    BeerBaron

    Berkshire Valuation using multiple methods

    in Berkshire Hathaway

    Posted

    Good Job Vinod, it basically clearly explains what I already believed but with mathematical formulas. I personnally like the BV/Share 10Y growth as metric for IV.

     

    I've always found that the more we analyze, the more we need to make complex predictions, and the wider the results can be. Focusing too much on details makes us forget that a business like BRK is a very complex organism and we can lose focus because of it.

     

    BeerBaron

    FFH delisting from NYSE

    in Fairfax Financial

    Posted

    I have watched a video interviewing W.R. Berkley and he was explaining that Sarbanes-Oxley kinda pushes insurances companies to release their reserves faster. I was probably quite a nice incentive for FFH to delist, they cannot claim it publicly but it could make them save a lot of $$$ on taxes.

     

     

    BeerBaron

    If you had 290 billion dollars.....

    in General Discussion

    Posted

    Guys, it's time to stop fighting. Apple is a religion for the those who trust and an Anti-Christ for the ones who believe in open technologies. We would be on a geek's web site and the debate would be the same. The only difference is that Moat would be replace by GUI, PE by GHz and Growth by MegaBytes.

     

    Apple makes perfect products for the believers and crappy overpriced products for the non believers.

     

    For me, Apple's fan base is more of an insanity then anything else... but then again I can tell you about a few other organizations that sound insane to me but still lasted 2000 years or 6000 years.

     

    In my opinion, food is a better moat then technology. Our brains are made to react to stimulus. Food is a very strong stimulus as it is a direct part of our survival.

     

    It is also true that the more product creations you make the more you can make mistakes. Toyota has been the leader of Quality Control for the last 30 years and apparently they still made some mistakes...

     

    BeerBaron

    Shorting Netflix

    in General Discussion

    Posted

    I just watched a Canadian TV show where they were interviewing the CEO of Zip.Ca (canadian equivalent of netflix) and the guy said he doubled it's revenues in the last 2 years. Plus, streaming is coming big time, I didn't do the analisys but bandwidth is probably much cheaper then the transport fees. which means higher margins.

     

    The 200M of debt you are referring means that they will need to pay interests of I don't know, maybe 14M. With a FCF of around 100M their cash flow can certainly pay down the interests.

     

    At 40 times earnings the market is certainly putting a lot of optimism into their forecasts but that's no thesis for shorting for me. I look at about 40 stocks a week and out of those 40 there is usually 10 that almost make me puke. It doesn't mean I short them.

     

    BeerBaron

    Any good RSPS funds recommendation?

    in General Discussion

    Posted

    Yeah, but that's painful having to ask somebody else to handle your mail, even if it's not illegal. I actually had to do that for my TD Ameritrade account. They went even further and sent a letter telling me to sell all my holdings and close the account within a month, or they will do it for me! And that's the broker with a Canadian bank's logo on its chest.

     

    Some cynicals would say that the Canadian banking industry probably lobbied for such legislation, you know... to protect the Canadian banks from the much bigger funds competition and lower fees of the US.

     

    BeerBaron

    Insurance issues from Volcano?

    in General Discussion

    Posted

    I goes to say how airline is a crappy business. They are to tight on margins that they can't even pay for insurances...

     

    There will be some costs on the traveller's insurance side... Can you imagine 1M people with 5 days hotels @ 200$ per night (rates doubled last week).

     

    BeerBaron

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