LC

I didn't notice a Happy Thanksgiving thread, so here's my happy "post-Thanksgiving" wishes (no reason we can't be grateful on other days :) ). From below the Canada-US border, thanks to Sanjeev for managing this forum and everyone who contributes, both silently and loudly!

https://www.multpl.com/s-p-500-pe-ratio This used S&P reported earnings Currently at 23x earnings which is relatively high but with low interest rates and low tax rates may be justified.

Why not just use P/E which does conform to GAAP?

Check out the Gates Foundation 13Fs. Thoughts on RSG vs WM? RSG seems like slight better operators but WM has more scale.

https://macro-ops.com/the-greatest-value-investor-youve-never-heard/ “We can have no finer role model. First and foremost, he was a value investor — a member of that eccentric tribe that believes it’s better to underpay than to overpay.” Those words by James Grant were in reference to one of the greatest value investors the world has ever seen. It’s not who you think it is. And no, you couldn’t guess him given fifty chances. This investor remains off the beaten path, absent from many investors’ Mt. Rushmore of allocators.

Aren't most of the S&P 500 going to be around? I bet that 50% of them will still be in the index. On average, there is a 4.4% change to the index each year according to this article https://www.businessinsider.com/sp-500-index-constituent-turnover-2015-6 Yes but that cuts your universe down 50%. And over 20 years it cuts it down almost 100%. You can simplify the question and ask, "what companies will be around in 20 years" and not even worry about growth - the rest simply won't exist.

You're asking a difficult question. Start by narrowing it down: What companies will be around in 10 years? Then figure out which markets have room to grow for 10 years. Forget the 15% number, if you can get those 2 points correct, the rest will take care of itself.

Or the updated version, Letterkenny

Also just my 2 cents - these read like pseudo-marketing materials where you throw a bunch of fancy words out there and hope it convinces someone to invest with you. Not saying that's the case here as I don't know these guys at all, they may have it right on the money for all I know. But when I hear phrases like "time dilation", "velocity of information"...my eyes roll backwards a bit :)

More from these guys https://static1.squarespace.com/static/5ca38f3216b6405d11e3d4b4/t/5cd77067c830251ea8301574/1557622902586/ComplexityInvesting_9.1.8_Aug19-1.pdf

Usually none: It is more expensive to transport good, quality wood into San Francisco or NYC, compared to, say, Missouri. It is more expensive to find a few thousand sqft of space for a workshop in those areas. And it is more difficult to find a woodworker in these areas, vs a banker or a tech guy. But, it's a lot easier to ship something from China to NYC or SF than it is to Missouri.

Cigarbutt, I'd argue you're over-thinking it with the price manipulation and all the retail psychology. If you just bought the suite next to yours overlooking Central Park and you plan on combining the two, you're already millions of dollars in. If you're furnishing your ski lodge or Idaho ranch, a similar story. A few thousand for some chic furniture isn't giving you a second thought, hell you probably gave your designer/wife a budget and they will take the path of least resistance. IMHO this company is riding a wave of new-money, of which there is plenty as we've been through a 10+year bull market. And it may continue (I mean, the stock is up 10% in 2 days, so what the hell do I know :D) I'd simply argue it is very difficult to build a long-term/sustainable/compounding (whatever phrase you want to use) business over 1000% markups in something like retail furniture. I can't think of a single business which has done so, perhaps jewelry is the only one which I can think comes close. One may do well in the short-term here (or may not, I have no idea). But I think if your holding period is 5, 10 years then I would not want to invest here.

Does anyone know how much this subsidy actually costs? The research I am seeing shows: $75MM in 2014 $135MM in 2016 And estimated $300MM in 2018 In context: The US imported $540 billion in goods from China in 2018. The USPS posted a $3.9 billion loss in 2018. So in that context, this subsidy seems relatively minuscule.

Restoration hardware: $3,950 https://www.restorationhardware.com/catalog/product/product.jsp?productId=prod13040104&categoryId=cat10160012 Alibaba: $326 https://www.alibaba.com/product-detail/Polished-Nickel-Round-Chandelier-Modern-8_62190141605.html?spm=a2700.galleryofferlist.0.0.73096050Te7UUS Now I'll admit they are not exact matches. RH has 1 extra tier and different glass. But I only did about 4 minutes of searching. I am now scuttlebutt champ! ;D Here's another one: Alibata - $375 https://www.alibaba.com/product-detail/6-arms-Restoration-Hardware-wrought-iron_62185951999.html?spm=a2700.galleryofferlist.0.0.7f606ac47a6EHM RH: $3,063 https://www.restorationhardware.com/catalog/product/product.jsp?productId=prod2700550&categoryId=cat10160012 But you see, the Alibaba version lacks the following: Inspired by 19th-century physicist Léon Foucault's gyroscope, our collection from Timothy Oulton is a striking juxtaposition of the rustic and the refined. The fixture's iron, double-gimbal frame encircles a nucleus of upraised lights, its faceted teardrops illuminating from within. It's all about that striking juxtaposition, the double-gimbal frame, the nucleus of upraised lights...so rustic, so refined! That'll be $2700, please!

Bought some ABS as a symbolic gesture, sold TAP a few weeks ago around 58. Breakeven sale price, made a few % from the dividends...and very happy to get it out of the portfolio.

I've worked with him professionally for a number of years for certain consumer modelling related items. Structurally the company has challenges of course, but I always found him capable and therefore anything under his control I would be confident he can manage effectively.

Ralph is a good guy, I would not be worried with him at the helm. I picked up some shares in support.

Even more so I think the benefit of AI comes in medical diagnostics. Huge structured training sets, if people were allowed to anonymize their health records and sell them, en masse to developers, that is decades of medical history over millions of people. Perfect conditions to train models.

looking cheap stuff and then sign egregious leases for extremely large spaces all over the country. Exactly

Exactly. Then the question becomes: what enables high interest rates. And the answer there is, scarcity of capital. Now, I would argue that human capital is cheap. Financial capital is cheap. Material capital is cheap. So, what will cause a contraction in capital availability? That is the question.

Rename this company from Sitestar to Shitshow. I just read about 6 months of posts since the last time I checked this thread... someone said it best, this is a nerdy soap opera. It's like a bunch of kids got their hands on their parent's credit cards, bought 1000 lbs of gummy bears from amazon, and then were completely surprised when they couldn't eat it all and had throw it out. Where are the adults in the room? And does anyone actually still own any of this? I hope not, this now has years worth of red-flags all over it. I would've hoped you all sold months/years ago. And at this point I wouldn't touch any of the associated investment funds either. It's guilty by association (sorry to say). I mean, how anyone can read this stuff and not think "100% Mickey Mouse Operation" is beyond me. Totally mind blowing.

That makes sense. Volume doesn't seem to have improved much so they wouldn't have gotten volume pricing discounts from China.

I try and judge stock picks on two things: -underlying business -financial valuation In terms of the underlying business here, it seems like they sell (cheap) Chinese furniture at insanely inflated prices: https://laurelberninteriors.com/2016/08/10/shocking-truth-restoration-hardware/ An example there is a $79 lamp made in China goes for $1507 at RH. Quality seems lacking. I'm guessing no hand cut dovetails ;D Put it this way, I personally wouldn't buy a piece at RH. The price:value is totally out-of-whack. Perhaps what attracted Buffett is the membership aspect a la Costco? Funny is that these days Costco isn't really the cheapest option, all the major retailers are pretty much in the same ballpark. But, Costco charges that membership fee which creates stickiness. I'm not sure where the great customer value is coming from, seems like a non-Buffett pick in that regards. On the financial side, results have been nothing short of great. They bought 30% of their stock back in 1 year! Their gross margin improvement from 2018 to 2019 has also been impressive (guessing they squeezed China). And the valuation seems pretty decent: Call it 220MM in earnings, trading around 14x earnings. For growing revenues, what looks to be good margins, strong capital allocation (buying back shares pretty aggressively). Those are my 2 cents. I try to avoid businesses where I don't find a value proposition in the product, but aside from that the financial side looks pretty good.

When looking at an overall economy, profit margins are important exactly for the reasons you mention: a signification change in profit margins indicate a structural change in the overall economy. Again if we are looking at an overall economy, is ROE a flawed metric because is ignores the cost of debt? There must be a cost paid by economies which deflate the value of debt capital. Therefore, I would think ROC would be more informative of the nature of an economy.

Most fundamental investors (myself included) have zero industry specific knowledge in healthcare r&d. The ones that do hire specialists (baupost), and their portfolio looks much different than bill ackman and valeant.