benchmark
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On 2/29/2024 at 1:17 PM, E. Nashton said:
Sold the last tranche of my BAC position that was bought in 2012!
I think that it still have some runway when the rate is finally cut...
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2 hours ago, Parsad said:
I'm sure there will be many jobs created. Although I think the net jobs created will actually for the first time decrease historically...and that will probably be permanent as AI/robotics becomes more and more efficient over time.
Cheers!
Yes. I think we have found a good repeater/AI. No matter what new jobs get created, the repeater/AI will be the main worker in these new jobs. Thus the need for regular/average human will be greatly reduced unfortunately.
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6 hours ago, Parsad said:
Just soak it all in. So much to see and do. Every city is different than the other. Delhi...very stalwart and formal. Mumbai...very cosmopolitan and energetic. If you go to Agra, definitely see the Taj Mahal. Jaipur is beautiful and historic. Bengaluru is very modern and the airport is one of the nicest you will ever visit.
We did a whirlwind trip with Fairfax India over about 12 days, and it was spectacular and jam-packed. We obviously had a high-end version of visiting India, but we did do a few things like meet the dabha-wallas in Mumbai, rickshaw through Chandni Chok in Delhi, walked Marine drive in Mumbai...and the food, we pretty much had everything you could imagine!
Cheers!
Thanks Prasad. Is that too packed for 10 days? Did you mostly travel by plane or train?
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4 hours ago, rohitc99 said:
Where are you going ? It can get pretty hot in some parts of the country even by this time of year. So just prepare of the trip accordingly
I need to go to Bangalore for business, but wants to spend around 10 days after to explore the country. Which area is too hot to visit during that time?
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Going to India in late March to April for 10 days for the first time, any recommendation? Thanks.
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18 hours ago, This2ShallPass said:
In Tapestry's earnings call they say transaction expected to close in calendar '24, nothing specific. I only do these arbs with long puts, so timeframe is imp to get decent return.
Did you mean to something like buying Jan 25 45 puts, for example?
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Merry Christmas and have a great new year. Really appreciate everyone's contribution to this great forum.
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14 hours ago, giulio said:
FFH investment team has been playing merger arbs pretty well this year: X, ATVI, DICE, ARCE, PRVB, FSTX, VIVO.
CPRI was a recent buy.
Small positions but I am impressed.
G
when do you expect that CPRI deal to close?
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1 hour ago, Xerxes said:
Not munger. One of the guest on the podcast whose name is Charlieah, ok
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3 minutes ago, Xerxes said:
I like Charlie being so super pumped about it. And the fact that he sold Costco at +35 p/e to buy FFH.
when did this happen?
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30 minutes ago, Spekulatius said:
Results are here.
I noticed that CFG, TFS don’t look that great.
https://www.federalreserve.gov/publications/files/2023-dfast-results-20230628.pdf
Interesting to see that Credit Suisse and Charles Schwab at the top, and USB, PNC at the bottom.
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2 hours ago, gfp said:
See KCLarkin's post above - just think about it as two separate transactions. One where you get diluted by new share issuance (could be good, could be bad, depending on valuation at the time you are diluted) and one where you pay the employee with that money.
This makes sense.
From the owner's earning perspective, isn't SBC always bad? i.e., you now have more dilution. In this case, they have close to 4% dilution from a year ago.
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31 minutes ago, gfp said:
They add non-cash items back in the cash flow statement because those are the rules of that financial statement. It is accounting for the cash. It isn't 'true' earning power and I don't think they are claiming it is (or at least they shouldn't be).
Thanks @gfp
So how should one treat SBC from the 'owner's earning perspective?
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26 minutes ago, Dinar said:
Step one - record an expense on your income statement for stock compensation, which reduces your net income. Step 2, on the cash flow statement you add back all non-cash expenses - depreciation, amortization, and non-cash compensation. There is no issuing RSUs or options to the public.
31 minutes ago, gfp said:This is standard accounting on the cash flow statement. Use the SEC filing and not some yahoo site.
https://www.sec.gov/ix?doc=/Archives/edgar/data/1441816/000144181623000087/mdb-20230430.htm
Page 5 will show you statement of cash flows.
There is $53.7 million in cash from operations during the quarter. This is not "owner earnings" for the reasons mentioned above.
On page 21, they've accounted for SBC in cogs and expenses, and it showed that they have $54 million (loss). But since SBC are 'funny money', they've added it back to cashflow to demonstrate the 'true' earning power (cash flow).
Do I get this right? even if this is standard, but it's somewhat deceiving.
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40 minutes ago, KCLarkin said:
This is an accounting flaw. Basically, the company is using the barter system to game FCF. There really should be two transactions. A hit to the OCF to pay employees. And a financing inflow for the share issuance.
A good example of why the "cash is a fact, earnings are fiction" truthers are wrong.
Just so that I understand, the $103 million SBC is basically them issuing shares to pay employees? As I understand it, assuming it's mostly RSUs, should it be that they issue some shares, and sell the shares to public to cover the tax withholdings for the employees. There is zero cash incoming from the operating perspective, how/why can they claim to be net cash flow positive?
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5 hours ago, Spekulatius said:
Yes, SBC is a no cash expense, so in most tech companies, with little Capex, the difference between the GAAP income and the FCF statement is SBC. Sometimes there is amortization of intangibles and some cash expenses, depending on if the companies pay the employees taxes on SBC gains or not.
In this case, the net operating income is negative, but how can they treat SBC as positive cashflow in the cashflow statement?
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How is SBC generally treated in the cash flow statement?
https://finance.yahoo.com/quote/MDB/cash-flow?p=MDB
For example, this shows an operating cashflow of $53.7 million, but has a negative net income from operation of -$54.2 million. The only reason that the cash flow is positive is that they took about $103million of SBC and counted that as operating cash flow?
I'm curious on if this is standard, and what other ways companies account for SBC?
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Bought some more Google and Fairfax
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1 hour ago, Dalal.Holdings said:
Anyway, I bought some PACWP in the 10s
I thought that their quarter report was decent, and bought some as well
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13 hours ago, yesman182 said:
I interpolated his answer to be " I wanted to sell, but I didn't because I asked to join BAC years ago, so I will stick it out"
I think that he also like Brian and probably thinks that he is more conservative and won't have as much a risk as other banks?
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Let's say that I have sold put option of company A with $8 strike expired today. The stock was at $10 at the close. After the market close, the company announced bad earning, and the stock dropped to $5. Can my counter part (i.e. the buyer of the put option) now exercise the option and force me to buy the stock at $8?
https://www.investopedia.com/terms/e/expiration-time.asp This says that they can do it as long as it's before 5:30pm ET.
If this is true, this means that the after hour movement can change /impact the option holders' decision. Should all company just postpone their announcement after 5:30ET?
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3 hours ago, Spekulatius said:
USB has the infamous toilet flush chart formation - down ~8.5% today. Iwonder what's up. I don't think that they are worse than PNC or BAC in terms of what they did with their security portfolio. They do have a lower CET1 ratio of 8.4% due to paying partly cash for the MUFG acquisition.
Bought a few more shares today, but won't add more.
Maybe it's this (shelf registration):
https://www.sec.gov/Archives/edgar/data/36104/000110465923031197/tm238798-1_s3asr.htm
I bought more USB as well. I think they have good management. I sold my prior batch in the $60s early last year, happy to buy some today.
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1 hour ago, Spekulatius said:
PBR
any risk for that fat dividend?
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13 minutes ago, Viking said:
Is First Republic dead man walking? Credit downgrade to junk can’t be a good thing. Followed by ‘rumour’ it is up for sale? Not something a consumer/business customer wants to hear. It will be interesting to see if any banks actually get sold and to whom.
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First Republic Bank, which was downgraded to junk by S&P and Fitch, is looking at a possible sale: Bloomberg
https://ca.finance.yahoo.com/news/first-republic-bank-downgraded-junk-020341444.html
Ratings agencies S&P Global and Fitch cut First Republic's credit rating to junk status.
The bank is now considering various options, including a sale and boosting liquidity Bloomberg reported.
It could attract interest from larger lenders if it goes on sale.
First Republic Bank is considering various options, including a sale, Bloomberg reported Wednesday, citing people with knowledge of the matter.
The bank is expected to attract interest from larger lenders if it goes on sale, per Bloomberg. The San Francisco-based lender is also looking at options to boost liquidity, per the news outlet.
Ratings agencies S&P Global and Fitch had cut First Republic's credit rating to junk status earlier on Wednesday due to concerns that depositors could pull funds from the lender.
First Republic has been assuring customers of its liquidity since the implosion of Silicon Valley Bank — which in turn triggered concerns about the financial health of regional banks.
On Sunday, First Republic said it was getting $70 billion of additional funding from the Federal Reserve and JPMorgan Chase after its share price slumped sharply amid Silicon Valley Bank's implosion.
"We believe the risk of deposit outflows is elevated at First Republic Bank despite the actions of federal banking regulators and the bank actively increasing its borrowing availability to mitigate risk associated with the bank failures over the last week," wrote S&P Global Ratings analysts Nicholas Wetzel and Rian Pressman.
First Republic's share price closed 21.4% lower at $ 31.16 apiece on Wednesday. They are down 74% so far this year.
Given the new 'reality' that deposits are safe, if anyone buy them at the current price, they are getting it cheap.
Great podcast episode recommendation thread
in General Discussion
Posted
Totally, Gurley is awesome, Gerstner just tries to sound intelligent.