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bmichaud

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Everything posted by bmichaud

  1. Maybe I would have an ego about it if I could actually analyze the companies myself, but I can't. I have very little confidence that I can continue these results. The fact that you say you cannot analyze companies yourself demonstrates the size of your ego. You know BAC just as well as anyone on the planet. It's the act of screening the universe for the best opportunities that you are self-admittedly not brilliant at doing. Thus you hedge against that weakness by using other fund managers as a "screen". Then your analytical abilities take over from there. So again, I do not understand why you would doubt these abilities all of a sudden after years of proving them out. It's not like you got lucky for a number of years and are "going out on top" as oddball says you are. It's like Buffett calling it quits in 1969 and never managing money again b/c he thought it got lucky for 20 years. Not only should you continue managing your own money, you should set up your affairs so that you could manage other people's money with the least effort possible. Again, it's like: - Michael Jordan walking away for minor league baseball - Michael Jordan walking away after his final championship simply b/c the Bulls' owners did not want to keep everyone on - Tiger Woods walking away from Jack's record in pursuit of becoming a Navy Seal - my pole vault friend who did not attept to vault professionally after being told by many professionals that he's the fastest guy they've ever seen on the runway etc.... etc....
  2. VOD Combo of enhanced bid for Ono and AT&T comments causing weakness. Ono bid appears expensive at 10X 2014E EBITDA. I'm comforted by the fact that Liberty Global finds the assets attractive, and VOD will be able to extract synergies via bundling with current Spanish offerings. AT&T comments (see here: http://www.mobileworldlive.com/att-ceo-plays-hopes-vodafone-bid-report) are shenanigans. It takes years to invest in mobile networks, and now all a sudden AT&T is hesitant to invest in Europe b/c other operators have begun to move? Three months ago T thought Europe was attractive....
  3. Eric, I get that you don't need it, but aren't you going to miss the challenge? Couldn't you refine your style to be less prone to the inevitable blow up? You are brilliant with options and could limit the downside greatly by your various strategies. Not sure why I'm arguing for stay in the game. I guess I've just become such a big fan that it's like watching Michael Jordan retire to minor league baseball after "only" three championships. I mean, not to feed what I imagine is an ego that's tough to control after such phenomenal success, but I look at your track record and brilliance and see a recipe for becoming a self made billionaire.
  4. I'm sure Eric doesn't "need" 10 out of 15 million...
  5. Eric, What made you outsource at this point in time? Not sure where you are at, but for some reason $15MM sticks out. At that level and with your compounding abilities, $1B is within sight - 6 years of 100% returns will get you there. So why stop now? Yes $1B is completely unnecessary, but didn't the money become a non issue at $5MM? If the reason is stress, why not just diversify more among "guru" sponsored picks instead of concentrating your upside so heavily in one stock? Anyway - hopefully you have left yourself a large enough sum to make contributing to the COBF worthwhile :)
  6. Since you are again addressing the entire board, I'm not sure if you are referring to my exact post. Though I believe I was the only one discussing newspapers.... I said one could conceive of reading 500 in a day if that included scanning 5 newspapers in a couple of hours. You missed the entire point of my post (again assuming that's what you are addressing), which was 500 is possible if it is not ACTUAL reading as you point out.
  7. I mean I understand the enjoyment of sarcastically addressing the entire group after they've shared their thoughts, but is it unreasonable to think that people would at least explore a statement like "500 pages per day"? It's not THAT obvious that 500 per day is out of the question. You'd be correct if someone thought actually reading 500 pages a day. I assumed it included scanning things like newspapers, which Buffett claims to "read" 5 per day. At say 30 pages per newspaper, that's 150 pages right there in probably two hours in the morning - or perhaps in his bathtub... Then add in a couple of 10Ks, BRK business unit reports etc.... and one could conceive how Buffett could arrive at 500.
  8. But not sure if I am investing or making a donation to Putin. Hahahahahah - to use Kravens favorite phrase, I LOLed at this one.
  9. Ok so in the interview today Todd said that he reads 500 pages PER WEEK. This article that was flying around early last year said per day: http://www.thereformedbroker.com/2013/04/29/read-500-pages-like-this-every-day/ I thought Todd misspoke when he said it, but then he repeated it. See the video here: http://video.cnbc.com/gallery/?video=3000251628&__source=yahoo%7cheadline%7cquote%7cvideo%7c&par=yahoo 500 pages a week makes FAR more sense. I felt like a complete loser when I started tracking how much I read - did not understand how it was possible for Buffett to read 500 per day, track all of his 80+ businesses and talk on the phone to everyone and their brother.
  10. Unless Buffett was talking about a Tedd/Todd VOD purchase, I can't imagine he was buying VOD.
  11. VOD Trades for ~6X EBITDA. Bottom cycle margins, diversified, scale economics, low leverage + AT&T interest = likely solid premium take-out multiple. 8 to 9X perhaps? 7X worst case - 19% to 60% upside from here likely within a year.
  12. Perhaps I'm splitting hairs, but why would you be able to technically buy under house rules (since excess liquidity is positive) while the SMA fed rules forbid you (because SMA is say $0)? I'm probably chasing my tail, and the answer is SMA rules all but IB just leaves excess liquidity positive even though you really can't buy because you will violate SMA.
  13. That's what I've concluded, though I can't figure out why Excess Liquidity isn't the lesser of SMA or Excess Liquidity...
  14. For those that have Interactive Brokers Reg T margin accounts... Do you focus on SMA or Excess Liquidity for determining long term buying power? Excess liquidity = equity + loan value - maintenance margin Here is the SMA discussion: http://ibkb.interactivebrokers.com/article/66 Bottom line, my question is this: can you make a purchase that brings the SMA account negative as long as Excess Liquidity is positive?
  15. The "rent" part of the equation is likely the answer. By WEB's language, I assumed he was participating in actual farming earnings, not simply collecting rent. Why bother discussing crop pricing and productivity if you are simply collecting rent and paying no other expenses? But yes if he purchased land at the bottom of the market at a 10% cap rate, then he very likely collected a 10% cash yield, and since the rents were likely bottom cycle, they very well could be five times higher now, even though rents increasing 6.6% pa in general is ridiculous.
  16. I would guess that reinvestment over and above d&a would have been needed in order to obtain current productivity levels. Were Deere tractors nearly as technologically advanced then as they are now? Did a technologically inferior Deere tractor cost as much then as it does now in inflation adjusted terms? In order to receive the full 10% yield plus the 6.6% growth, that means the 6.6% is pure 100% pricing power over and above cost inflation - zero reinvestment-based growth. That means farming has one of the strongest pricing power profiles I've ever heard of.
  17. That makes sense if that 10% yield is actually distributable. My guess is Howard Buffett did not pay out 100% of annual earnings - I would further guess he actually reinvested 100% given Buffett would not have cared about receiving a $28,000 annual check. Thus those reinvested earnings are what drove the rise in the farm's valuation.
  18. Say the dividend was $2 on a $100 investment, and that today that annual dividend is now 5 times higher, or $10. The average of the beginning and ending dividend is $6. So $6 x 30 is $180 total dividends received. Now the ending investment is $680 versus $500. 30y cagr rises to 6.6%. Now that assumes no growth in those dividends being reinvested in something. Were the farm a stock, and the dividends reinvested at an average yield of 2%, then the 30y cagr rises to 8.7%. Rough math yes, but the point remains the farm was a average investment at best. The real estate investment is far more interesting, as he bought it at probably 2 or 3 times "normal" earnings, after adjusting for the below market rent. He makes it seem like it was such a breeze and just bought it at 10 times earnings - bologna....that was a phenomenal distressed asset purchase, far from the mediocrity of the farm investment.
  19. His farm investment is up 5 times over what he paid - over a 30 year time frame that's 5.5% pa excluding dividends. My guess is that most of those earnings were reinvested to generate productivity growth, so maybe the dividend yield on purchase price was 2%? (20% payout?). So total return 7 to 10% pa? Doesn't seem to be an unrealistic hurdle rate for holding stocks for "only" 3 to 5 years.
  20. IRM REIT conversion candidate waiting on an IRS PLR. The stock was ~$40 in early 2013 just prior to the IRS announcement that it would delay its PLR. Has bounced between $24 and $30 since then, and is down ~4% today to the low $27's. Pro forma REIT dividend is $2.30, which is a ~8.5% yield at $27. At a 5% FV yield, the stock would trade at $46. PiperJaffray provides a great overview of the issues the IRS is likely looking at - see attached. A ruling is expected soon, and for anecdotal evidence, Lamar Advertising said a ruling is imminent for them. EDIT: I should add - IRM is spending almost $1 per share in REIT preparation costs this year, in capex and opex. Also - this year IRM will pay out $500MM to $1B of accumulated earnings and profits in the form of a special dividend. The last one they paid out in late 2012 consisted of 80% stock and 20% cash. Lastly - insiders bought aggressively in early 2013 after the stock tanked upon the IRS PLR delay. 2014-01-08_IRM=US_Piper_Jaffray_Iron_Mountain_REIT_Conversion_Status_Update.654295411.pdf
  21. SPY October 2014 $185 strike puts, which are down 50% since the January volatility spike.
  22. Some good thoughts by Cullen Roche on Buffett's "no macro ever" thinking. http://pragcap.com/the-contradictions-of-warren-buffett http://pragcap.com/chart-of-the-day-buffetts-9010-vs-the-barclay-macro-index http://pragcap.com/a-falling-tide-grounds-all-boats
  23. Nothing new, but Ackman sees 10 to 15X upside in the common in a legal victory: http://blogs.wsj.com/moneybeat/2014/02/23/ackman-sees-big-upside-to-fannie-freddie-bet/
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