LC

Thank you...so in that case WTW is pitching the company on reducing their costs, not pitching the plan administrator. In terms of numbers, this is a bit dated, but: According to a 2000 report by the Employee Benefit Research Institute (EBRI), approximately 50 million workers and their dependents receive benefits through self-insured group health plans sponsored by their employers. This represents 33% of the 150 million total participants in private employment-based plans nationwide So about 1/3 this market is self-funded plans and the other 2/3rs or so are fully-insured. I have to dig into the dynamics more but I wonder to which type of client WTW is more attractive.

Do you know how that business is set up? Did the health insurance provider offer that service to the company for a price? It seems like as a company, it's easier to go through the insurance provider who hires WTW to provide these services than do it on their own. My old company did exactly that. I'm trying to figure out the optimal structure for offering employees health coaching as a means to reduce long-term costs, and whether WTW is a beneficiary of this structure or not. I see it as such: OK I'm a company. I have 100 employees. I provide them health insurance through, say, Aetna. Does Aetna come to me and say, for every X number of your employees that you enroll in a health coaching service we provide, you can knock off $100/month from their premiums. Then Aetna goes and pays WTW (or another provider) to provide this service for $50/person. Or do I, as the company, go to Aetna and say, "hey, charge me $100/mo less per person because I've got them enrolled through WTW's program which should be reducing their lifetime cost to you". That former seems to me the best way to intuitively manage the process. Aetna is liable, therefore they should directly control the services offered. In which case, who is WTW competing with for Aetna's (and other health insurance providers) business? And how are they competing? Overall I think this is more of a free-option on the WTW thesis, not the main crux of the thesis (which IMHO is the brand value).

That is fascinating garychen17. Another interesting thing to look out for, thanks for that information.

Those were Elkann's most recent words, but I am not sold. Marchionne is 61 and by the time the Chrysler merger finally goes through will have gone through years of creating the 'new Fiat'. Negotiating with the union, dealing with all the Italian & European politics...I think there's a greater chance that, after a Chrysler deal is finalized, he will spend a modest amount of time setting everything up to move forward but then retire. This is just my personal conjecture but I'm not sure if he is the man to spearhead the new Fiat into the future, nor (given his tone on recent conf calls) does he want to be that man.

The only way I see Mr. Market's valuation as being in the realm of accuracy is if there is growth ahead. Where is the runway? Are people going to stop buying from other home furnishing stores? Are Amazon, Target and Walmart suddenly going out of business? It's not like their offering is so niche that you can't find it elsewhere. I don't quite get it.

I've learned to not hold my breath. I think a deal will get done eventually. Marchionne said somewhere he doesn't plan on staying on with Fiat past 2015. I think a deal gets done before then and he puts the company on track to start running on all cylinders (I'm surprised it took this long for the car puns to emerge) by the time he steps down. So maybe a deal gets done in 1H 2014 or maybe not, but I think Mr. Marchionne won't leave until a deal is done, but he won't rush a deal either.

I haven't either. Perhaps they want us to eat more than our fill during this holiday season :D

Personal products because there are so many psychological factors in play.

I use finviz.com for US screening...they cover other countries as well, though. Thanks for the wisdom, SD. I find my sweet spot is around the $100-300m market cap range. Small enough to be off most (but not all) institutional radars, but large enough that PE guys, small-cap activists, etc. aren't dissuaded. They also get some coverage by smaller sell-side research guys, which can help by piggybacking their marketing efforts to small-cap funds. Plus as Nate said, they're much easier to wrap my head around and consolidate all the relevant information for analysis. Check out the thread on FHCO in the investment section to see one such instance I took part in.

I voted 5-7x Ebitda and here is my rationale: I pretty much ignored the accounting numbers you provided and focused on this: -45 years old -60 stores -Sales in line with economic changes -Products available many other places, though it specializes in one category and does a good job at what it does 45 years old and 60 stores? OK,maybe they operate in a certain niche, which jives with the fact that they specialize in one category. But if that is the case, you would think sales would not be in line with economic changes. But they are...which to me is a red flag. So without knowing exactly what that niche is, I would say it's a somewhat boring retailer. And being a somewhat boring retailer is not the best business in the world...hence 5-7 ebitda multiple. Now I am preparing myself to be embarrassed :)

Ah the author appears! Thank you many times over, infinitee! :D

I agree: Especially when it's one of Buffett's "great businesses", that you can just sit on. Then it's better than cash because even when you can't find anything to buy, your great business is earning an excellent return on capital. So that 10% business might be a mediocre one, and once it's reached fair value or whatnot, you sit there earning a relatively mediocre return. So what's the benefit of holding it? Not much, so you sell it and now you're left with the same problem: having cash and either trying to find another 10% mediocre business to invest in. But that 20% business...if that's a real good business...you almost don't need to do anything unless prices get really out of hand.

This is what i've never understood about the need for an inflating currency. People act like there is no cost to holding a currency (even if it is deflationary). People make cost benift analysis everyday and just because a currency is deflating at 1 or 2% a year, doesn't mean i'm going to hold it forever. at a certain point the value of a new TV etc is greater to me than the deflating currency. The cost benift analysis certainy changes, but the idea that world would be perfectly fine in a 1 or 2% inflationary world...but would collapse in a 1 or 2% deflationary world always seemed odd to me. I don't think the 1-2%/year real costs are the worry, I think it's when something black swan-esque happens and there is real value to a measured inflating of the currency value. Ray Dalio's "beautiful deleveraging" comes to mind.

PlanMaestro's website has an excellent series on bank analysis. Also, the BAC A-Warrants thread.

Lot of free call options...brazil, chrysler, maserati, alfa...IMHO ferrari+chrysler alone is worth more than the current price. There was another PDF from DB i think somewhere in this thread with a general comparison of the auto market. Fiat trades at the lowest or second lowest EBITDA multiple. Where is the downside coming from? Europe is already in the fits and has overcapacity issues...an Alfa disaster isn't going to change much there. If Chrysler is at the top of the cycle now (along with other US manufacturers), Fiat's share price has barely reflected it. Maybe it goes down from $7.50->6.50, but then again maybe it can acquire the rest of Chrysler at a cheaper multiple. I see much more upside than downside, combined with great brands, combined with a share price trading at the lowest multiple among peers.

I couldn't find the original post where this spreadsheet was uploaded, but here it is in google docs: https://docs.google.com/spreadsheet/ccc?key=0Ahf1UeW1kK_xdE9neWJTTDdUT1c0N3VaRGNpLW4wVHc&usp=drive_web#gid=0 All the fields highlighted in yellow are for user input. Essentially the spreadsheet converts the portfolio value into units, then adjusts the # of units when cash is added/withdrawn. You can of course change the index comparisons if your benchmarks aren't the S&P/Russel 2000. To whoever posted this in the first place, thank you!

How do you view bitcoin, given your economic stance? In the long term, what function does it provide? Secondly, let's assume a deflation/inflation neutral argument. What other advantage does bitcoin offer? I see the only real lasting impact being the ease of transfer. Essentially just putting pressure on banks/payment processors/etc to further reduce transaction fees. I see no real improvements in terms of currency usage nor "store of value"....i.e. if the US changed to bitcoin today, nothing in my daily life would improve.

This is my gripe with bitcoin's value in the long-term. There is value in having an inflationary monetary system where the levels of inflation can somewhat be controlled. Yes there are abuses...of course. But IMHO those potential abuses are (1) less harmful than the problems of not having those levers to pull in times of need, and (2) less harmful than the deflationary nature of how bitcoin is currently set up (with a fixed amount). Even gold isn't a totally fixed supply.

I use the spreadsheet which was posted by a member (I forget who...but you are a lifesaver!) on this forum a while back, which adjusts performance for cash added/withdrawn throughout the year to keep an apples-apples comparison.

38% YTD...no complaints here.

I usually suggest to my friends Intelligent Investor followed by Klarman's Margin of Safety (or Greenblatt's Little book), and then Buffett's partnership letters. II: Provides the basic framework MoS/Little Book: Provide real-world examples Buffett letters: Provides lessons from the master himself ;D

Thanks, hard to argue with free!

I've heard stories both ways...some brokers picking up on this and others not...you could be the forum guinea pig if it's not an expensive tender :)

Have you tried tenkara fishing? very enjoyable!