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Green King

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Everything posted by Green King

  1. The second edition of Security Analysis is the most clear and concise piece of literature i have read in my life. Reading it give me feelings of sadness, realizing i might never be able to write so clearly about investing or any topic. Ideas i have been thinking about for month or years is just right there in a few lines or a paragraph. The clearness of Ben Graham's mind is something on another level. :)
  2. RIP Irving Kahn his life showed me how anything can be accomplished over time with enough dedication and focus.
  3. Really...this is what you have to worry about? Mistake of all mistakes!? I crack up every time I hear people second guess Prem. He's not going to be right on everything, and yes they will f**k up royally on some things from time to time, but he will still be right on enough things to outperform almost all of his peers over the long-term...due to the amount of asset/equity leverage they utilize and their pure Ben Graham investing framework. What percentage of their $30B portfolio is in SD? Forget them buying at $8 down...even if they totally screwed up the valuation and understanding of the business, and then they started buying at $20 down...what is the total percentage of the $30B they put into SD...at cost, not today's valuation. They would have had to put in at least $1B at cost into SD to even begin to think it would seriously hurt shareholder equity long-term if it went to zero. I would think their total cost is probably around $400M...if that. And the assumption is that the other $24.6B of their $25B+ investment portfolio is sitting idle doing nothing. Once you get past that, then you can see why this concern is irrelevant! Cheers! +1 Perm always said that stock individually will not beat the market but the portfolio as a whole will do great over time. Cheers GK
  4. http://business.financialpost.com/2013/06/22/are-you-sure-you-can-invest-that-in-your-tfsa/?__lsa=2d85-2c1b Fannie Mae, which used to be traded on both the New York Stock Exchange and the Chicago Stock Exchange, was delisted in June 2010 began trading on the OTC Bulletin Board, which is not a designated exchange; however, because it also listed on the Stuttgart Stock Exchange in Germany, it appears its shares do qualify for investment by TFSAs, regardless of which exchange the shares are purchased through. I recently moved some LCSHF which is listed OTC into my TFSA at Scotia I-Trade without any problems. -CM How does dividend tax work for the OTC ? 30% withholding?
  5. Alright! I will give it a go again. Give me a day. Winning a competition is more depended on telling what the judges want to hear than bringing in something new. Especially in investing since it might be pointless giving a growth investor a value play. In terms of special situation you can do eBay Paypal spin-off.
  6. I think he did it in a cnbc interview. Cheers
  7. Sorry hear that. But looks like he lived a full life. May he rest in peace.
  8. views of ratios could change over time. so using that was a reference can cause mistakes. It is better just view them as bonds and adjust accordingly in terms of risk based on your own analysis. If you are not sure have a large margin of safety or pass.
  9. is there a version of this for Chinese companies ? Also Good luck West! I wish i had your Quant skills.
  10. I am surprised no one mentioned www.footnotechanges.com Thank You
  11. According to Reuters ;) Peter1234, Thanks for coming to the rescue with your reply! This is a great board for this reason! How does someone get delta reports ?
  12. A page from me or you is not the same as a page from CEO of Iscar. The reading of that page will also be different. The key is to know what to look for and that takes a life time of work to get a good understanding. To know what is important and knowable. Bulk of the time is spent getting a idea of what is going on. Also it takes real understanding to put something so complex in to a page. Kind of relates to the discussion that has been talked about on the board about Munger's one liners. From my experience it takes a lot of work in trying to apply them and think about them through real life cases to get a real understanding or them. Than it takes more time thinking about them to integrate them into you daily thinking and usage. but once that is done it pays big dividend over your life time. (but if you just stop at isn't that a true thing to say and leave it at that than it is the same as not reading them)
  13. I hope I succeeded in explaining why the assets are backed up by cash flow. Their cash flow is mostly free, and their reinvestments were almost completely expansion investments. I don't consider this as an asset play, although at some point in the future, it could. numbers in 5 to 10 years : based on their expansions of the last decade and their maturity profile, I guess that only 2/3 of their hectares are mature and fully producing. Over the next 5-8 years, substantially all of their acreage will be mature and generate cash flow. This extra cash flow basically needs no extra investments, apart from a factory they are still building out in 2014. This extra revenue also is higher margin, because the cost to harvest, fertilize, and maintain a immature hectare is about the same as a fully producing and mature hectare. So I guess that at these palmoil prices, and exchange rates, a free cash flow of 1,1-1,5 £/sh should be possible over the next few years. Remember, this assumes no extra investments and no higher palmoil prices. Of course, it is very conservative to assume no extra investments. But in that case there is no need for the net cash of 1£/sh which they can return. So you're looking at a free cash flow of 1,1-1,5£/sh on an investment of 5,75£/sh. With higher or lower palmoil prices, this picture changes drastically of course... Sorry for the later reply i got lazy. :) So what is the reason for the recent decrease in Palm planted per ha relative to investments in PPE ? Change in economics ? or increase in Land prices ? That was the point i decided to stop looking. PPE purchase Plam Plannted (Ha) 2008 20 M 2242 2009 40 M 4479 2010 44 M 7580 2011 50 M 1900 * PPE investment in property from morning star conformed close enough numbers from annual report http://financials.morningstar.com/cash-flow/cf.html?t=AEP&region=gbr&culture=en-US&ownerCountry=USA * Ha planted from annual report 2008 to 2011 There are several reasons for that : - first as you state valuation for farmland has gone up a lot over the last few years. That's also why their current valuation is very cheap. However, that's a minor reason - more importantly, it has to do with the maturity profile of their expansions. A hectare of palmoil only starts to produce after 4 years and reaches maturity after 8 years. So they capitilize costs until at least the 4th year. These investments aren't completely made at the very first day of course. For example, the factory needed to crush the fruit, has only to be built just in time to start crushing when the trees start fully producing, thus in year 6-7 or so. So, suppose the company expands every year with 1000ha. After 5 years, the company not only has to invest in the planting of new trees of the current year 1000ha, but also some fertilizing of 4year old trees which costs are being capitilized or the building of the factory for the 5 year old trees which will start producing. This dynamic guarantees that according to the accounts, the investment cost/planted ha rises over the years, although in reality it's constant. To give an idea of the investment costs : - compensation + licenses : 1500$/ha - planting (biological assets) : 3000-3500$/ha - Infrastructure (road, bridges, living compounds,...) : 2000$/ha - factory : 2000-5000$/ha (mainly depending on subsoil, and environmental investments) Total : 8.500-12.000$/ha These are current figures I got from Sipef, but as I stated before, AEP has lower investment costs. Conclusion : there surely is an element of inflation, but the main reason is the maturity profile of their plantations. They are in the process of building 2 (first is now finished, second continuing) new factories because of maturing plantations, so this should explain it a bit. Thanks Can't believe i miss the plant Capex. i remember reading it in the annual report. i will hope i won't miss these things again. back to more reading.
  14. The real question should be what kind of woman are you spending your time with ? Charlie Chaplin doesn't have the greatest track record with women.
  15. The company was OJSC Pharmstandard and spin off sub OTCPharm.
  16. I hope I succeeded in explaining why the assets are backed up by cash flow. Their cash flow is mostly free, and their reinvestments were almost completely expansion investments. I don't consider this as an asset play, although at some point in the future, it could. numbers in 5 to 10 years : based on their expansions of the last decade and their maturity profile, I guess that only 2/3 of their hectares are mature and fully producing. Over the next 5-8 years, substantially all of their acreage will be mature and generate cash flow. This extra cash flow basically needs no extra investments, apart from a factory they are still building out in 2014. This extra revenue also is higher margin, because the cost to harvest, fertilize, and maintain a immature hectare is about the same as a fully producing and mature hectare. So I guess that at these palmoil prices, and exchange rates, a free cash flow of 1,1-1,5 £/sh should be possible over the next few years. Remember, this assumes no extra investments and no higher palmoil prices. Of course, it is very conservative to assume no extra investments. But in that case there is no need for the net cash of 1£/sh which they can return. So you're looking at a free cash flow of 1,1-1,5£/sh on an investment of 5,75£/sh. With higher or lower palmoil prices, this picture changes drastically of course... Sorry for the later reply i got lazy. :) So what is the reason for the recent decrease in Palm planted per ha relative to investments in PPE ? Change in economics ? or increase in Land prices ? That was the point i decided to stop looking. PPE purchase Plam Plannted (Ha) 2008 20 M 2242 2009 40 M 4479 2010 44 M 7580 2011 50 M 1900 * PPE investment in property from morning star conformed close enough numbers from annual report http://financials.morningstar.com/cash-flow/cf.html?t=AEP&region=gbr&culture=en-US&ownerCountry=USA * Ha planted from annual report 2008 to 2011
  17. they are just looking for confirmation bias. This should be treated just like a investment idea you have a hypothesis of the the business or this case event. You look for facts to evidence to support the hypothesis. If there is enough evidence you buy or say this is true. if not it is put into the too hard pile or become a unsolved case. evidence of a simulator is just noise and does not materially contribute to any conclusion.
  18. How do you determine that the market is more efficient now? Is there a study somewhere that proves this? I have thought sometimes that maybe it is. The net nets have mostly dried up in the u.s. at least, except during major market crashes. But aren't stock prices as volatile as they ever were? The massive influx of hedgefunds, CNBC, the fact that legendary funds, like SEQUX, while the performance is still solid, it's not the outperformance it used to be. The same can be said for other older funds. Yes, it is clear that netnets like the ones Buffett described in the 50's no longer exist. The market is more transparent today, and information is much more available. HOWEVER, that is not saying that the market is overall more efficient at pricing. Back in the 50's I am sure there wasn't mortgage securitization and they were much better at vetting mortgage applicants. So as markets are more stable, we invent more ways to screw it up. It is an equilibrium of booms and busts. I would take issue with a few things in your post. There are net nets like Buffett described, but you have to dig deeper to find them. They may not be in the U.S. There was not mortgage securitization in the 50's as we know it today. Securitization was not the cause of the financial crisis. It is a vehicle, nothing more and nothing less. A car can be driven into a crowd of people and kill them, but a car by itself does not kill anyone. Securitization ended up being used in ways that contributed to the crisis, but it didn't cause the crisis itself. It's only as good as the assets that are securitized. I am not sure that they were better at vetting mortgage applicants back in the day. It's just a different market. There are tons of community banks that operate in the same way they have for dozens of years. There are many small banks that have the same high standards that existed in the past. It's not Securitization its nor the assets. It was a system that was create tp incentives those give people what that want. (make them if they don't exist) people wanting them because they wanted something low risks and give above normal returns. people who believe in them since they are incentivsed to give them. Just human nature nothing more just lake last time and just like next time.
  19. how does one know if that is true ? how would one know if that is happening ? i would like to know how someone measure that.Also wouldn't they just do the same thing they did here.
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