collegeinvestor
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Posts posted by collegeinvestor
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Out of curiosity why are you stopping at 15-20 million instead of like 40 million? i am just wondering is that much harder to invest if you have a fund that is 50 million versus 25 million? Thanks again.
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As you non-US of A folks maybe not know there is a huge oil spill in the gulf of mexico. BP stock has gone down roughly 8 dollars a share. The company has lost 24 billion dollars in market cap in the last week.
The business is obviously very strong and it has strong barriers to entry.
I get a EV of roughly 170 billion dollars. In addition you get operating incomes on average of 30 billion a year. Simple calculations result in an EV/EBIT of 5.6. Isn't this a very small number for one of the largest companies in the world that you know will be around 50 years from now? The company also has a dividend yield of roughly 7%. The dividends alone will allow your investment to double in 10 years. What am I missing here.
Should be interesting to watch and see what happens. They say that the crude oil might not get turned off for months. Maybe someone (not me!) can calculate the slope of - market cap/ gallon of oil spilled into the ocean. In all seriousness this is pretty bad and its obvious that this not the best socially desirable outcome.
Also the thing i noticed is that cash from operations is essentially eaten up by capex and dividend payments every quarter.
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have you looked at bnx. its banks.com stock. the own irs.com and banks among others.
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Im currently still a sophomore in college here in the USA.
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Do you know people that own the land and farm it themselves? I am guessing that has a bigger accounting profit but maybe not economic profit. If you got your cash back in 14 years you have a cash yield of 7% which is pretty good? I am really interested in farming eventually. I just want to save enough cash where I won't have to worry about making the payments. I want it to be more of a laid back atmosphere. Thanks for the help. Its not all about the money, either. It would just be really cool to own a farm eventually and not lose all my money.
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I was wondering if anyone on here owns farms as investments as opposed to stocks and bonds. I always wondered if commodity-like businesses such as farming do well. Thanks a lot for the help.
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Yeah i understand there are probably a lot of better candidates to short with this frothy stock market. Maybe a better topic would have been "Why I am not buying Netflix"...
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IRR is how people get wealthy. Take a look at this:
If you calculate the payback factor= investment/net annual cash flows then you get a figure. (usually positive)
As a result if you can get annual cash flows as long as possible your cost of the investment is less and less substantial.
If you take a look at the formula to calculate IRR you get...... DPV of cash flow * yearly net cash flow - investment = 0
If you can attain net annual cash flows for as long as possible you need to discount these yearly cash flows more and more in order to get these two figures to equal. Discounting these values turns out to equal the interest yield you are returning on your investment.
This is how I feel like Charlie Munger thinks. So if you think about all the business out there first they have to 1) generate cash and 2) need to be able to do it for a long period of time. This is how people get rich. First you need to find businesses that can generate this cash (which is hard) and then you need to figure out which ones can do it for a long period of time (even harder). Most of these businesses, if you find one, have a very large investment, almost negating these very good qualities.
Maybe I had an epiphany here or maybe this is just simple logic.
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Would you rather own Microsoft stock or apple? Microsoft has an enterprise value of roughly 277 billion while aapl has an enterprise value of 246 billion (no debt)
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yup there is no substance to this business, either. They are not producing anything! They are providing a service with easy barriers to entry. I just don't get it! Oh well.
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What about 5 years from now? Can you predict how hard it will be to create a website like this? Do you know netflix will be dominant, then, 10 years from now? These uncertainties plus a high price with no real room for growth ( i mean netflix has been around for a long time now) makes me wonder why this company is worth 5 billion dollars. What do you think the replacement cost is for creating something like netflix? Certainly less than 5 billion!
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the shift towards instant streaming would create less barriers to entry versus the current Netflix business model. Is it easier for me to start a website that streams movies or start a whole network involved with printing dvds and sending them around the country with scale?
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yeah this should be interesting to watch. I dont short stocks either but just thinking about how highly priced this stock is makes me think. How much more can this company grow and where will this growth come from? If you think about it the IRR of return you would get on this stock would be less than a Us treasury bond. This company is not like apple where they can grow in other segments. Are they going to start a netflix in china haha. I just dont understand what people see in this business.
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What do you guys think about this idea. With book value of roughly 200 million and the stock trading with a stock trading at 5 billion dollars this will be an interesting one to watch. In addition they have roughly 200 million in long term debt. If this business was so good why would they need so much debt. Also, it seems as though revenue growth rate isn't enough to warrant this market cap in my opinion. Let me know this should also be interesting to watch.
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What do you guys think of this stock. Trading below NCAV, no debt and could rebound given the economy? let me know should be an interesting discussion.
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thats what i was wondering too. Why are insurance, energy (think big oil), pharma and the casino stocks have not bounced back but the banking industry has gone through the roof?
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haha i dont know any of those terms. I am just thinking that individual investors fixate on stocks and real estate when the bond market dwarfs the stock market. I need to read a lot more. haha.
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I heard that the bond market is way bigger than the stock market. Why are small investors so fascinated with stocks compared to bonds? Is there a way to look through all the different bonds? Thanks a lot.
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Why are you cheering to that haha? :-* :)
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Its actually pretty cheap to start up a e-commerce website. Perhaps a website "as big as overstock" might not be created but there could be smaller websites that permeate overstock.com's market share in an instant. There is no moat, imo. If there is one, its not big again imo. :-*
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What are their barriers to entry if, lets say that they actually do end up spitting off cash flow?
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No equity. No income. Online stores are EXTREMELY competitive. How is this company priced so high in the market?
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this was interesting. Thanks for the link.
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I mean Warren Buffet obviously knows that b/c he sold 1/2 his stake for another company. So he obviously knows more than me. Yet cash flows have been increasing. Perhaps he doesn't think they can sustain those cash flows. Maybe he thinks their pharma pipeline isn't as strong as it used to. I just wanted other people's opinions with actual figures to say this stock is fairly valued. If you were to conservatively predict the growth of this stock based on past results you would get a fairly undervalued co. Thanks.
Applause for Our Board's Host, Mr. Parsad!
in General Discussion
Posted
Eventually your investments will grow. Do you plan to pay out dividends a la Walter Schloss?