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S2S

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Posts posted by S2S

  1. The tremendous overreaction by some members to what were benign and, in my view, completely appropriate comments really reflects very badly on the board.  At the end of the day, Sanjeev, yes, this is your board.  No one disputes that in the least.  You can do whatever you want.  Take your ball and go home if that's how you want to play.  I didn't realize that friendship of public figures equated with a ban on criticism no matter how mild.  People sure criticize people like Berkowitz and it often gets personal.  But I guess that's different.  This is all very disappointing.

     

    Very well said, Kraven.

     

    I have a hard time believing what Hester actually wrote, "Francis Chou has somehow found a worse investment than Overstock", could be considered "spiteful" or "a cheap shot" by some here.

     

    With XING selling off as much as it did, and given that Francis is one of the more prominent names in XING's holders list, I think *some* criticism is inevitable. But hey, I'm not a personal friend of his, what do I know?

  2. Thanks for posting!

     

    Below is a review of  Coursera (http://www.cs101-class.org/hub.php), the venture behind this and a handful of other online classes. It's basically Stanford's answer to MIT's OpenCourseWare.

     

    Review from http://blog.remoteresponder.net/tag/coursera/

     

    I am a big fan of so-called Open Educational Resources (OER)  including free on-line video courses. Stanford’s Databases course is the 12th I’ve completed, but only the second in which I did a “deep dive” by reinforcing learning with exercises, quizzes and exams. In general, I use OER video courses as edutainment  as I usually find the extra work too time-consuming: my goal is to broadly understand how the world works, not to build expertise in every subject I study! So, conceptually, I prefer the traditional form of video courses pioneered by MIT’s OpenCourseWare which in contrast with Stanford’s new approach might be called archived courses. Archived courses make the material available without (m)any social tools. So, working through the materials in traditional OER courses usually requires extra self-discipline and commitment (unless you just watch the videos for fun as I often do).

     

    Stanford’s OER system, online at coursera.org , builds on the basic idea of OER video courses by adding deadlines, interactive feedback from automatically evaluated work, and some, including the Databases course, offer the ability to earn a “Statement of Accomplishment” for demonstrating basic proficiency. It is precisely these social enhancements that makes Stanford’s initiative so noteworthy. Together these social tools provide a shared experience with a clear set of tasks for a cohort of students working through the course at the same time.

     

    The extra interactivity and the focus of deadlines give the Stanford approach to OER a special excitement and sense of goal accomplishment which is absent in archived courses. Even though I prefer the archived courses whose videos can be more entertaining than Stanford’s tutorial-focused approach, I have to admit I was enthralled by the deadlines: they kept me focused. It should be emphasized that Stanford’s courses like the more traditional OER archival courses can be pursued at a pace that suits your time and interest: there’s no imperative to follow the deadlines or earn kudos for accomplishments.

  3. I don't think anyone is questioning this, surely no one is saying anything else than that Apple will continue to grow in the short to medium term.

     

    For me this boils down to one question: which one is more likely, that Apple has changed the economics of the tech business for the forseeable future or that their current earnings is an anomaly and will revert back to the mean? As long as I don't see a significant moat that will change the product cycle of cell phones, computers and tablets, I have no way of knowing that Apple's revenues will be at the same level in 10 years and much less their earnings. Thus, I can only have the standpoint that the top dog in the hardware tech business will continue to change every few years.

     

    So... flip a proverbial switch (or if you prefer, take on the insufferable burden of the market cap crown) and earnings go from growing 20% y-o-y to shrinking to some levels much smaller than current (to justify the inevitable selloff many here are prognosticating, given that AAPL is currently trading at low-teens P/E ex-cash)?

     

    Many cited IBM and MSFT as precedents of tech titans getting too big for their own good, which is all well and good... except both IBM and MSFT have grown earnings fairly steadily after the so called change of thrones (MSFT peak EPS before dot-come bubble burst: $0.90, TTM EPS: $2.76).

  4. Good post, tooskinneejs.

     

    1.  Based on today's press release, shareholders' equity will be cut by $2.2 to $2.4 billion in the 4th quarter due to asset impairments (deferred tax assets and goodwill).  This means approximately 32% of shareholders' equity has vaporized.

     

    2.  In addition, it appears the Company expects a large 4th quarter operating and net loss even before these asset impairments.  So equity will shrink even further.

     

    What I found interesting (or appalling, depending on who you ask) is the timing of the operating losses. 4Q is typically the peak cash flow period for retailers (before the bills for Christmas shipment come due), yet SHLD actually had to use its credit facility during the quarter.

  5. Good read, thanks for posting.

     

    But Chanos also learned early on that the media can turn on you. A September, 1985, Wall Street Journal article accused him and several other prominent short sellers of underhanded tactics such as spreading rumours about companies. And he’s been getting hit with the same rap ever since: Chanos is an opportunist who quietly spoon-feeds reporters to cast a cloud over target companies. “I think every good investor is an opportunist,” says Grant. Over all, he says, Chanos is “a crusader for truth, justice and The American Way.”

     

    Chanos makes no apologies. “We do not call journalists. They call here all the time.” When they do, he’ll explain his research. “We live by the rules,” he adds. It’s a crime to “knowingly pass on information that you know to be false.” In any case, he sees some hypocrisy in the name-calling. It’s fine for money managers and brokers who are long on a stock to explain why, but if a short dumps on a stock, “Oh my God, it’s pitchforks and torches.” In the final analysis, “The market is the ultimate arbiter.”

     

    So true, as often witnessed right on this board.

  6. Hedge funds, which have been ratcheting down their positions in gold futures since early August, were quickly named as the culprits in the latest sell-off.

     

    Some traders said that hedge funds were beginning to unwind, or close out, what has been a very popular and profitable trade for the last 18 months as they bet the dollar would fall and that gold would rise. In the last month alone, the euro has fallen nearly 4 percent against the dollar amid worries about the European debt crisis.

     

    http://nyti.ms/r51iWh

  7. i would say you will have a tarp plan in place before the open monday in Europe.

     

    Someone who's much smarter than me has noted that Europe can't do a TARP till the EFSF is in place. Problem is, approval of the EFSF has just been pushed back to December, the new delayed date when Slovakia is voting on the proposal.

     

    If he's right, we're screwed...

  8. PIMCO CEO Mohamed El-Erian column in today's FT:

     

    French banks could tip Europe back into a full-blown banking crisis

     

    Conventional wisdom may now be only half right when it comes to solving Europe’s mess. Fixing the sovereign debt problem is still necessary, but it may no longer be sufficient. Europe must also move quickly to stabilise the banks at its core in ways that go far beyond what the European Central Bank announced on Wednesday. As senior BNP Paribas executives prepare to tour the Middle East in an attempt to raise fresh funds and shore up confidence, other banks must also show greater urgency and seriousness in dealing with capital and asset quality shortfalls.

     

    Much of the discussion on the crisis is based on the assumption that sovereign debt is both the problem and the solution. Initially, this was correct. The combination of too much debt and too little growth pushed the most vulnerable countries (Greece, Ireland and Portugal) into a classic debt trap. Timid policy responses then fuelled contagion waves that undermined other sectors.

     

    The problem today has become much more complicated. In addition to being on the receiving end, some of these sectors have become standalone sources of regional dislocations.

     

    Italy is, of course, the most visible example. Interest rates on what is the third largest government debt market in the world remain stubbornly high in spite of persistent market intervention by the ECB. Wednesday’s rating cuts of some of the country’s leading banks, following Standard & Poor’s downgrade of the country’s sovereign debt on Monday, complicates matters.

     

    Yet, as notable as this is, it is not the most immediately threatening issue for a global economy that, in the words of Christine Lagarde, IMF managing director, has entered “a dangerous phase”. The rapidly burning fuse is in the European banking system, particularly in France, and Europe is getting very close to yet another tipping point.

     

    The facts are striking and worrisome. Private institutions around the world, and even some public ones, have sharply reduced short-term lending to French banks. Credit markets now put their risk of default at levels indicative of a BB rating, which is fundamentally inconsistent with sound banking operations. Bank equity now trades at a 50 per cent discount to tangible book value on average. To make things worse, the ratio of market capital to total assets has fallen to 1 – 1.5 per cent (compared with six to eight per cent for healthier banks).

     

    These are all signs of an institutional run on French banks. If it persists, the banks would have no choice but to delever their balance sheets in a very drastic and disorderly fashion. Retail depositors would get edgy and be tempted to follow trading and institutional clients through the exit doors. Europe would thus be thrown into a full-blown banking crisis that aggravates the sovereign debt trap, renders certain another economic recession, and significantly worsens the outlook for the global economy.

    So far neither the authorities nor the banks have done, or are doing enough to stop – let alone reverse – this trend. While the ECB has stepped in to offset the liquidity crunch, including by relaxing collateral requirements to make it easier for banks to access the central bank’s repo window, capital cushions and asset quality remain unaddressed. As a result, Europe is on the verge of losing control of orderly solutions to its debt crisis.

     

    To counter this, fiscal authorities and banks must work with the ECB on three immediate, simultaneous and drastic measures. They must inject capital through public-private partnerships, including through Tarp-like mechanisms, present a realistic assessment of the asset side of the balance sheet and enhance depositor protection. Greater burden sharing with the private sector may also prove necessary.

     

    Through the bitter experience of the last two years, Europe now understands that a sovereign debt problem is difficult to solve. It must now realise that the challenges and costs to society multiply astronomically when this is accompanied with a banking crisis; and it must act accordingly.

     

    The writer is the chief executive and co-chief investment officer of Pimco

  9. If I read correctly the Bloomberg screenshot that moore_capital54 posted (link to that post below), Tilson Offshore Fund's 5 year  performance upto 4/29/11 ranks in 52th percentile (of all managers?). Its performance from 4/29 till now is, in all likelihood, much worse and might have even wiped out the bulk of prior period alphas, but for the moment let's work with what we got. It is awfully hard to reconcile this 52th percentile ranking with Parsad's "50 in 10,000", or 99th percentile, comment.

     

    I'm sure there is some degree of survivorship bias built in; that being said, Tilson Offshore's yearly rankings don't scream "super investors", IMHO.

     

    http://www.cornerofberkshireandfairfax.ca/forum/index.php?topic=5246" data-ipsquote-contentclass="forums_Topic" 55846#msg55846

  10. What constitutes "happiness", "good life" etc greatly differs from one country to the next.

     

    In Greece, they don't want jobs: they want to sit on their asses as the money comes in. A job is a burden; it wastes 8 hours a day. If he were running the European Union (EU) he would not have let Greece in. From Charlie Munger at the last Wesco meeting.

  11. "A phenomenal article", per Guy Spier

     

    Weschler may be the most important hire Buffett has made in decades. He isn’t just an investor, though his $2 billion portfolio returned 1,236 percent to Peninsula investors over 11 years. “He plays all the instruments in the orchestra,” says Steve Blaine, who served on the board of Virginia National Bank with Weschler.

     

    He does, in fact, cover all the bases: finding acquisitions, financing them, overseeing management of acquired companies, designing their compensation, allocating capital of the entity that owns the businesses, and understanding lending and credit markets from a bank’s perspective. He also knows how to finance acquisitions in special situations such as bankruptcies; manage long-tailed risks like his former employer W.R. Grace & Co.’s asbestos liability; and control equity- portfolio risk in a volatile market using positioning, derivatives and moderate leverage.

    ...

     

    Involvement by the board is a very welcome sign of progress. The press release announcing Weschler’s new role contained some other subtle signs that changes at Berkshire may be forthcoming. Buffett himself wasn’t quoted. The statement said he will continue to manage most of Berkshire’s $100 billion of funds “until his retirement.”

     

    This is the first time, as far as I can tell, that it has ever been confirmed that Buffett would retire, instead of trying to outwork Rose Blumkin, who ran Berkshire’s Nebraska Furniture Mart until age 103.

    The press release contains another tantalizing hint. Twice, it refers to the period “after Mr. Buffett no longer serves as CEO.”

     

    These cues are subtle -- way too subtle to mean anything definitive. But it makes me wonder whether, at some point, Buffett is going to appoint a CEO while retaining the nonexecutive-chairman role.

     

    That would be a move the business world has definitely not been expecting. It’s also one that may make sense, for Buffett as well as Berkshire. He would remain the company’s most valuable asset -- making the phone calls that get those lucrative deals done, playing the world’s economic statesman, and flattering business owners into selling their companies to Berkshire. Meanwhile, Weschler and Combs would have the primary responsibility for investing Berkshire’s $10 billion a year of cash flow and constantly compounding pool of assets -- in the most turbulent market since the 1930s.

    http://www.bloomberg.com/news/2011-09-15/schroeder-the-hidden-meaning-behind-buffett-s-hiring.html

  12. It's been some time since I last reviewed TEF, but IIRC its dividends are significantly less secured than, say, FTE or DTEGY. I doubt the stock prices will go anywhere until the whole EU situation gets resolved, the timeline of which I have zero clarity on.

     

    Hell, even the US rural telcos (CTL, WIN, FTR) are yielding double digits. They face an entirely different set of issues though.

  13. If Greece wanted to leave tommorow, they could and would not have to ask premission (they have political soveignty already). 

     

    Packer

     

    Withdrawal (voluntary or otherwise) of a country(ies) from the Eurozone makes for good talking point but comes with (some say insurmountable) practical challenges.

     

    This UBS report does an excellent job of detailing the implicatoins (bank runs, domestic debt defaults, cessation of trades etc):

    http://www.scribd.com/doc/64020390/xrm45126

  14. Here's a not-so-flattering view:

    Bank of America shook up its executive ranks in what the firm euphemistically calls “de-layering.” This meaningless bit of corporate jargon - de-layering - is wonderfully ridiculous and has been woefully underused in press releases. So I’m coining a better, newer, just as meaningless but more easily grasped term in the headline: executive-level exfoliation.

     

    http://www.publicradio.org/columns/marketplace/wallstreet/2011/09/executive-level_exfoliation_at.html

     

    I'm inclined to agree with Heidi Moore's point on the personnel changes - ousting Sallie Krawcheck and Joe Price, two popular executives who have little to do with the bank's current troubles, seems like a clear power grab.

     

  15. Many thanks  :)

     

    So the question comes down to the dividend planning.. more than $7 from jan 2012 - jan 2019.. = undervalued.. less = overvalued.. give or take..

     

    I know Im being lazy here but does anyone know the average payout ratio for BAC ?

     

    Between 3-5% during the '02-07 hey days.

     

    Color me a cynic, but to sustain a $1 dividend the common would need to trade at $30+/share.  I'll be very surprised if this happens by next year. Plus, if one is confident that a dramatic re-rating would occur, there's more upside in vanilla call options.

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