Spekulatius

Maybe it’s fun, but it did cost PSH a couple of million apparently.

Seems like GOOG shareholders like the change - GOOG stock is up 1.25% when the market is down 1%. I remember what happened to OXY stock when Armand Hammer slipped in his bathroom and broke a rip. https://www.latimes.com/archives/la-xpm-1987-06-18-mn-8023-story.html

Also adding to CCU. Why CCU? or why add now? Because it’s down 3.5% and it’s cheap. Even protesters like beer and get thirsty.

Also adding to CCU.

Spek, can you talk about what’s the reasoning for buying DD? 3) reasons: 1) products with pricing power 2) cheaper than peers (MMM) 3) strong management (Breen with Tyco pedigree) willing to optimize shareholder value That said, it’s held back by weakish economy in the business it operates and tariff concerns.

Timely post: https://berkshirebuffettandbeyond.com/2019/12/03/has-buffett-lost-it/

Well, there is switching cost. The more folks work with the company and the more embedded it is in business processes, the higher the switching cost and risk. I do wonder though they with the virtually zero unit cost models, like SAAS, that when times get tougher, the price may become a tool to acquire or retain customers at some point, especially if there are equivalent competing products around. After all, why wouldn’t a SAAS company not use price as a tool if they have to, since the incremental unit cost is zero. So it’s just a question if the product has substitutes or not. The company I work for just introduced WDAY. I think it replaces an SAP module that was awful. I will see how this goes. So far it looks like the conversion has been botched, the go live is at least one month late and counting.

Added to DD and CTVA.

I think not. But I might be wrong, so let's see what others think. 8) I guess it depends a bit on how you define OK. Both OXY and EOG give some numbers on $50 crude. EOG claims a >10% ROIC and OXY claims they are FCF neutral and able to pay the dividend at this level. RDS claims a $28/ brl Break even point, but they also have substantial other business, so they should be profitable even at that level assuming break even pertains to crude upstream. Virtually any energy company will go through great lengths to explain the cost savings they have achieved since 2014, which is one reason why those low energy prices can persist in my opinion, as these companies can continue to operate. The low prices are not the cure for low prices any more, it’s a deflationary sector. As long as this persists, I think it is hard to make a lot of money investing there.

I think lousy POS IPO’s always existed, but they tended to be smaller issues they were placed by 2nd or 3 rate investment shops. What is new now is that some business with questionable models were growing in tens of billion $ valuation before the IPO. They were sponsored by deep pocketed investors like Softbanks, it also mutual fund investors like Fidelity or the first Tier investment banks (GS, Morgan Stanley). Softbank seems to believe they can create their own moat by outspending anybody else out there, which has some logical underpinning if you believe their investment can become dominant platform companies. While this might be true, it’s also a recipe to fund companies that blow through a lot of money and in some cases don’t even show great economies of scale.

I have occasionally looked at AKS and it seems like a structurally challenged business to me. I guess CLF wanted to squeeze them on pellet (their input) prices after the Vale disaster, but they had to push back because they have trouble to stay afloat as is. It looks like. A bad acquisition to me and the $120M in synergies for a $3B EV purchase seems too small.

He is a gambler. Odd deal: http://s1.q4cdn.com/345331386/files/doc_presentations/2019/Cliffs-AK-Steel-Investor-Presentation.pdf

Yes, that applies to WPG. Some value folks get screwed there. I suspect that BPY will regret their purchase of GGP as well. Note that Sandeep Mathrani just left.

I second this. I do find it strange that nobody mentions the doomsday scenario: 1) continued weak cash flows cause a credit downgrade to near junk 2) due to customers getting uneasy about RR.L meeting their LT obligation after above, RR decides to do a deeply discounted rights offering That would cause dilution at the bottom (foreign ADR holders for sure couldn’t participate and would get screwed) and permanent loss of capital.

It’s not just companies disappearing, it’s public companies slowly eating themselves via share buybacks. The latter is a larger factor than companies disappearing. Also accompany disappearing doesn’t mean that the capital has left the market, if it happens via a stock merger for example. As for the stock market, while it may not be a general bubble, the valuations overall is certainly stretched. There seems to be a particular with a narrow set of “quality” stock going on, while the tiers below in quality aren’t really that expensive. While the downturn in late 2018 was certainly considerable, it wasn’t really a severe bear market. It felt more like a correction, similar to 2011 ( European crisis), late 2015 (energy bear) or 1998 (Asian crisis) a short term correction of 29% or so that quickly reverses. Nothing like 1990/91 or 2001/2002 or even 2008/2009. The latter were certainly severe events, but there is certainly a garden variety of scenarios that can play out between the former and the latter event, especially one, where we take a decline and then an extended market where the market sort of just bounced around, instead of climbing right back up. As for what could cause this, I see multiple things they could cause a decline like, negative interest rates blowing up banks, political changes (election), recession, trade war and most likely a combination of these factors. Of course there are always reasons why the market may go down, or why the market may go up. Staying flexible and have a bit of cash in hand, should bargains represent themselves , is how I intend to play this.

I a guess it’s trapped because they can’t get out at unreasonable prices. I am certain they could get out at reasonable prices with the last rounds going into a loss.

Or they are behind in technology ( RAM feature size , power consumption etc) as they used to be. Is it still true that MU manufactures using trailing edge process tech, while Samsung has jumped to leading edge technology a coupe of years ago.

$50 /brl crude will be bad for the industry, including the oil majors. The oil majors will survive, but many of the share players won’t.The oil majors probably manage to keep their dividends constant, but not much more than that. Capex companies like BHGE, NOV and SLB will suffer too. A $50 crude price basically means deflationary conditions for this sector and it’s not good for anyone. I believe from the fossil fuels, NG has the highest staying lower, as it is the cleanest and cheapest fossil fuels. That’s one of the reason why I like NG focused midstream like WMB and EPD a lot. (I own WMB but no EPD yet).

First time I look at NEWS since 2013 or thereabouts. It’s a messy asset with uncertain earnings power. If Murdoch merges this with Fox as is, it won’t create much value and shift the discount to FOX. I also question the synergies. The fact that both companies occupy the same building doesn’t mean much. Isn’t this mostly WSJ stuff anyways? If so, it couldn’t be rescued when the companies were merged, I certainly wouldn’t like the deal as a FOX shareholder and I don’t think the bus8ds really fit together. Before anything would happen, NEWS would need to separate off the real estate business, sell, the book publisher and get rid off most of most of the newspaper assets, imo. I can see that the WSJ might fit into FOX at some point , maybe News could just sell thet piece off, if it makes sense for both entities?

Somewhere, between #5 and #8, the Millennials will be kicked out of the basement and off the of the old mans family cellphone plan. The struggle will be real.

Because the high market share Is the moat. I know it’s sort of a circular answer.

1) new fridge for wife at whirlpool inside $1100 2) Jeans at Levi’s.com for 50% off and free shipping $28 3)prepaid cellphone service for a year for all 3 member‘s of the Spek family (eBay/ redpocketmobile Store ): $600

It’s about 4% and 1/2 year with of profit. BRK is known of naming their price and sticking too it. No if and when or renegotiation. Keeping it simple may cost them some deals, but it will also make their offers a simple proposition and prevents them from becoming duped like OXY did. when they thwarted CVX.

It’s similar to BRK’s TTS in a sense. I strongly believe that Warren is advertising BRK when he talks about this failed deal with Becky Quick. “ Hey we are open for business and can close a deal quickly!”

Yes, home ownership is Italy is quite high and low in Germany (and even lower in Switzerland) and this is a huge impact on net worth. The balance sheet of Consumer households in Italy is actually in a good shape.