Ballinvarosig Investors
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Posts posted by Ballinvarosig Investors
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The other PIGS must be fuming. Greece have been given a massive debt-writedown despite the fact that many of the structural reforms that were supposed to have been in place years ago have still not been implemented. How long will it be until the debts of Portugal and Ireland become so great that they too will start asking where are is their writedown?
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They've interviewed together before.
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Sydney Finkelstein, the Steven Roth Professor of Management at the Tuck School of Business at Dartmouth College, published “Why Smart Executives Fail” 8 years ago.
In it, he shared some of his research on what over 50 former high-flying companies – like Enron, Tyco, WorldCom, Rubbermaid, and Schwinn – did to become complete failures. It turns out that the senior executives at the companies all had 7 Habits in common. Finkelstein calls them the Seven Habits of Spectacularly Unsuccessful Executives.
These traits can be found in the leaders of current failures like Research In Motion (RIMM), but they should be early-warning signs (cautionary tales) to currently unbeatable firms like Apple (AAPL), Google (GOOG), and Amazon.com (AMZN). Here are the habits, as Finkelstein described in a 2004 article:
There is more.
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PM HarryLong, he mentioned it before to me and may know where you can get a copy.
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I have been civil, so I don't understand why you are taking such a disrespectful and sarcastic tone with me. You've also decided to put a few words into my mouth to try and back your argument up, this does you a disservice.
What have I said that you disagree with? That one should not keep cash on hand for opportunities? That one should not take advantage of a market sell-off driven by macro events? That one should not fish in the cheapest markets?
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I agree with you Parsad. What we saw in 2008 and 2009 was likely to be a one-time, generational event. Today, there are too many folks who won't be as fearful the next time we get a crisis, and who will stand in and prevent the market from falling to those kinds of levels again. The European debate is also probably overblown at this stage. If you excuse the expression, it's a "known unknown" and the market isn't even likely to react too badly to an organized break-up of the Eurozone.
Unlike some on here, I think it's madness to be fully invested in this market though. There will be surprises in the market and buying opportunities down the line. A European or Chinese bank imploding is certainly not off the cards and could cause panic. Weakness in the Chinese economy could cause the mother of all ruminations as highly-dependent emerging economies could take a pasting. Who knows when we'll get the next crisis but I will wager we won't be waiting more than 2-3 years for one, and that the folks with dry powder who are capable of holding their noses will do quite well.
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I don't think so.Perhaps we're getting close?
The months following the Lehman Brothers collapse was the closest I have seen to a "Death of Equities" moment. I remember the stunned silences on CNBC as stocks continually hit new yearly-lows and later watching one acquaintance have a nervous breakdown after getting a margin call on a CFD he had taken out.
Today, the market is a very different place. There is so much trash in the commanding ridiculous prices (Groupon, Salesforce, Tesla, etc.), not forgeting the mooted $100 billion Facebook floatation. You still have commodities at very high levels and even the stalwart mega-caps (PG, KO, etc.) are now looking at close to fair value. The US market certainly isn't particularly cheap on an overall level, especially when you take into consideration the usual value metric of stock market size to GDP, historic PE's and the long-term treasury yield. I think there is probably a little better value in Europe; Total, Nestle, EDF and a few other large caps are at reasonably cheap prices. There is certainly nothing to suggest a firesale anywhere at the moment.
I am probably asking too much to see a return to 2008 when investors were puking their guts up and we saw real capitulation. A disorderly Euro exit, or something that would spook the markets is just what I would like to see.
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Did you even bother to read anything I linked to? The two articles I mentioned are all backed up by quotes from the biggest media sources in Ireland. Richie Boucher in his capacity as head of CEO of the Retail division was personally responsible for lending billions of Euro to a variety of failed developers and companies. I don't know how much clearer I can be about this. Do you really think the reward for losing a relatively small company billions, should be a promotion?Prem and Wilbur Ross obviously left out the key piece of information for their due diligence in regards to Bank of Ireland. They completely dropped the ball by not getting a proper rundown on Richie Boucher via Wikipedia.
Come on...
The Bank of Ireland stake is only small money in the scheme of Fairfax. However, I would prefer if Fairfax and the other dominant shareholders would push for a new, foreign CEO in Bank of Ireland, one that is untainted with the previous reckless culture of the bank. I know that Prem is no fool, so I am hoping that he is working in the background to give this company the leadership that it needs. It will certainly need it, as the NPA's are continuing to increase in the bank as the Irish economy shrinks.
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Where do people get this notion that Richie Boucher (the Bank of Ireland CEO) is even remotely capable? The only reason that Bank of Ireland isn't under the control of the Irish State was because they repeatedly diluted their own stake each time Bank of Ireland were supposed to raise capital. His Wiki page is completely damning, as is this other compilation of statements he made as the bank was in the process of imploding.
http://en.wikipedia.org/wiki/Richie_Boucher
http://www.thepropertypin.com/viewtopic.php?f=19&t=40459
I wouldn't trust the man to make the tea, let alone manage one of the biggest banks in Ireland.
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Support the company!
I have actually eaten at Fionn MacCool's and it was terrible, even for "pub grub". As bad as that was, the horrific pint of Guinness I had was even worse! Parsad, you've got a direct line to the top; if Prem is looking for a man to do some quality control on their Guinness, PM me 8)
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Bmichaud hasn't said anything about whether stocks are cheap or expensive. He has merely shown that the scale of share buyback's isn't necessarily an indication that the market is cheap.Bmichaud how can you say they are not buying at low prices? CSCO is buying back its shares at ridiculously low prices, averaged under $16 last quarter...
How do you know stocks are going to decline to "lower levels"?
Seems to me buying back stock here is a much more efficient way of allocating capital then distributing a dividend...
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http://www.cnbc.com/id/45387194
"We today — I left an order when I left Omaha, I left an order to buy one European stock which we will undoubtedly be buying today, and we'll probably be buying it tomorrow and thenext day, and next week and next month. As you know, it's a matter of record that earlier this year we bought some Tesco, for example. There are — I can think of a dozen European stocks that are quite attractive. Whether they're more attractive than something else I can find in the United States depends on the prices on any given day, or any given week. But there are European stocks I like and there's some wonderful businesses in Europe and the prices have come down on some of them. If the price came down some on Tesco, I'd buy some more of that."
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http://www.gurufocus.com/news/153165/prem-watsa-buys-lvlt-rimm-c-mmi-ppp-sells-kft
Sandridge gets dumped heavily, Level 3 and RIM increased considerably. Small positions initiated in a miner and Motorola Mobility. Level 3 is now the third largest position, RIM the fifth largest.
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https://variantperceptions.wordpress.com/2011/08/29/charting-banking-xxii-three-years-after-lehman/
http://variantperceptions.files.wordpress.com/2011/08/screen-shot-2011-08-27-at-9-53-45-am.png
http://variantperceptions.files.wordpress.com/2011/08/screen-shot-2011-08-27-at-9-54-18-am.png?w=463&h=247
http://variantperceptions.files.wordpress.com/2011/08/screen-shot-2011-08-27-at-9-54-01-am1.png?w=459&h=246
http://variantperceptions.files.wordpress.com/2011/08/screen-shot-2011-08-29-at-12-37-56-pm.png?w=457&h=242
http://variantperceptions.files.wordpress.com/2011/08/screen-shot-2011-08-27-at-9-54-38-am.png?w=466&h=254
In my opinion, there is a lot to be said for buying selected trashy financials that have just made it through this crisis.
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More on ACSOI.Beyond their obvious goodness, these numbers are important because they answer one of the main criticisms thrown at us in the past few months, relating to a metric we put in the S-1 called ACSOI (adjusted consolidated segment operating income) to help people understand how we think about marketing expenses. The reason everyone in the world seems to hate ACSOI is that it makes us look magically profitable by subtracting a bunch of our customer acquisition marketing costs from our expenses. The reason we didn't realize everyone in the world would hate ACSOI (no, it's not the same reason we didn't realize everyone in the world would hate our Superbowl ad), is that we think it actually does a pretty good job at describing our marketing expenses in a steady state—we just didn't realize there would be so many skeptics. I think it's worth going deep on this one more time—brace yourself.Our internal forecast shows two different types of marketing: what I'll call "normal marketing"—which is NOT excluded from ACSOI—and "customer acquisition marketing," which is. The way Groupon spends on marketing is unique in three ways:
1. We are currently spending more than just about any company ever on marketing—in Q2, we spent nearly 20% of our net revenue on marketing, while a typical company spends less than 5%. Why do we spend so much? The simple answer is "because it works." But that's only part of what makes our situation special.
2. Our marketing—at least the customer acquisition marketing that we remove from ACSOI—is designed to add people to our own long-term marketing channel—our daily email list. Once we have a customer's email, we can continually market to them at no additional cost. Compare this to Johnson and Johnson, McDonald's, or most other companies. If I'm a Johnson, and I'm trying to sell you a box of Band Aids, I have to keep spending money on commercials and magazine ads and stuff to remind you about how sweet Band Aids are, even after you've bought your first box. With Groupon, we just spend money one time to get you on our email list, and then every day we email you a reminder of the sweetness of our metaphorical Band Aid. There is no cost of reacquisition—that's unusual (and we created ACSOI to point that out). If Johnson wanted to follow the Groupon strategy, he would have to start a free daily newspaper about bandages and then run Band Aid ads in it every day.
3. Eventually, we'll ramp down marketing just as fast as we ramped it up, reducing the customer acquisition part of our marketing expenses (the piece that we remove in ACSOI) to nominal levels. We are spending a ton now because we're acquiring as many subscribers as we can as quickly as we can. We aren't paying attention to marketing budget (just marketing ROI) in the way a normal company would, because we know that even if we wanted to continue to spend at these levels, we would eventually run out of new subscribers to acquire. So our customer acquisition spend drops severely to reflect the fact that eventually we'll run out of people we can add to our email list. We view this internally as a very large one-time expense and then our job forever after will be to continually convert these subscribers into customers and to make sure our customers keep buying from us. Ongoing, the normal marketing dollars we spend are not something we would remove from our internal calculation of ACSOI.
I tried my best to explain this simply, but it's not lost on me that if you actually understood this, you probably had to read it three times. It's not easy stuff. It's much easier to assume that we're goons. So people can be forgiven for being suspicious. In fact, feel a little bad about how downhearted the critics will be when we don't turn out to be a Ponzi scheme—those are good impulses for journalists to have, and I hope our non-evil ways don't destroy their spirits.
Anyway, there's a reason that I just went on about ACSOI. One of the questions that skeptics ask is, "when you ramp down marketing, won't revenues stop growing as well? Aren't you just buying growth?" Over the past several months we've been consistently reducing our marketing spend and yet revenues are still increasing at a significant pace. In Q1 of this year, marketing represented 32.3% of our net revenues. By the end of Q2 it had fallen to 19.4%. And it has continued to fall over the past several months all because we've been investing in our own long-term marketing channel—our email list.
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How many of the protesters are on $50k a year, which puts them in the global 1% bracket?
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Biglari has responded, his arrogance is breathtaking.
We believe in a pay-for-performance system because it best aligns the interests of management with those of the shareholders. We believe the Board, led by its Compensation Committee, has set a low bar for bonus compensation.http://www.sec.gov/Archives/edgar/data/93859/000092189511002068/prrn14a07428021_11032011.htm
By the way, I can see why he is so eager to try and initiate change in Cracker Barrel. From a cost basis, he must be down by about $10-$15 million on his position from last quarter.
Since BH is likely to swing into a loss for this quarter, do you think Biglari will be returning his bonus compensation for the previous quarter, Parsad ;D
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How Bernie Madoff :oMF also did not follow protocols to segregate client assets from company assets. Could be fines or worse for them and some executives. Cheers!
http://www.cnbc.com/id/45113687
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St Joe hits new lows today and appears to be approaching Einhorn's valuation of the company.
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In Ireland, we have all that already.What happens if Spain, italy, Portugal and Ireland all want a deal? Perhaps 1.4 trillion euros won't be enough??
That may not be as appealing as you think. Greece is going to have to implement severe austerity measures, sell state assets, implement higher taxes, mass layoffs and possible future sanctions by the EU if they aren't done. Would you rather go through what Greece is going to have to do, or try and take your future into your own hands? Cheers!
The state-run electric and gas company is soon to be put on the auction block.
We have been bombarded with massive tax increases (income tax is up, lower-paid workers being brought into the tax net, water charges, property taxes, etc.).
There is a ban on new public sector employment and many public sector workers are been pushed into early retirement.
What I have outlined isn't even the end of it for Ireland. Under the EU/IMF bailout deal, it is planned that we will have austerity budgets every year until the end of 2015, when it is expected that we finally bring our deficit to under 3%.
The European crisis isn't over by a long shot and the action that has been taken this week has just introduced even more moral hazard. Nations like Portugal, Ireland, Spain and Italy, which are already teetering on the brink are now being told that if they do miss their targets and end up becoming a complete basket case, they'll have their debts written off. Also, the measures of this week do nothing to address the real issue of why Europe is a basket case (i.e. because most countries simply cannot live within their means).
I'm getting really sick of hearing this phrase, but this is yet another instance of the can being kicked down the road.
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Another thing, the Greek government look likely to nationalise the banking system. What sort of bodies will be found hidden in the Greek banking system?
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Not really, the Greek debt to GDP ratio is only being brought down to 120%. Meanwhile, the Greek economy is still imploding, so that figure is likely to increase as each year passes. It may very well come to pass that Greece will be forced into another default in two years time.1. The only concrete thing that has been achieved is to take a disorderly greek default off the table.
Also, this does nothing to address the debt of the other pigs. I know that here in Ireland, people are asking why are we being asked to endure austerity and to repay all our debts (plus banking sector debt) in full?
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I was chatting with a chap who has dealt with Weschler recently. Apparently Weschler is a commited Republican too ;D
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I certainly would not be impressed if I was an investor.Ackman has a high IQ but *perhaps* he is straying outside his "circle of competence".
It will be interesting to watch.
He claims that he may make 100 times his money on this play.
Can someone explain how he would achieve this?
He is like making the trade through something called a currency swaption - http://en.wikipedia.org/wiki/Swaption. His risk exposure is likely to be very asymmetric.
Maybe Apple's The Next Berkshire!
in General Discussion
Posted
I am not surprised that Apple have had such a stonking quarter. Over Christmas, the last of my friends who didn't already own iphones (excluding those who have no interest in smartphones at all), finally converted. I would not be at all surprised to see a further pop in the short-term as the iphone continues to gain ground in emerging economies.
It's amusing to see optimism for RIMM based on this. As a consumer platform (in the UK at least) users are deserting in their droves and will continue to do so. Once India and other similar countries (where RIMM are big) finally get their next-gen telecoms infrastructure whipped into shape, the iphone is going to become viable and slaughter RIMM.