Spekulatius

I would be more concerned about business travel. It’s somewhat discretionary, so it’s one of the first things to go when money gets a bit tight in corporations. In addition, there is a trend to videoconferencing and screen sharing etc. making remote collaboration easier and at least some travel redundant.

Is AAL cheaper than DAL? I don’t think so, based on the metrics I am seeing, except EV/sales. DAL seems to be much better managed, so why would one chose AAL over DAL at this point?

Bk was a much tougher business. The low interest rate make profits thin and they got some powerful big clients who are always shopping for the lowest cost providers. WFC is a much better business. Charles is giving up his stocks in BK and exchanging them into WFC. I switched all my BK into WFC in Dec last year. It's interesting because the custody business should have all the hallmarks of a great business - huge scale needed to compete cost effectively, only a few players able to operate at huge scale, high retention - and yet, the custody banks routinely compete on price, thereby eroding margins. Nonetheless, BNY still earns 20% returns on tangible equity. Custodian banks went from being a great business, to merely being a good business. Apparently a lot of money can be lost investing in companies like that (or at least one can underperform).

ANTM doesn't look cheap at all. Could you share the thesis? It’s GARP. ~$19/ share in earnings and a growth rate > 10%. It’s not crazy cheap, but it trades at a historically large discount to market in terms of PE. This discount is due to political uncertainty (some Democratic candidates proposing single payer /Medicare for all).

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Yes, the media sector has been weak, CBS/Viacom, DIS, NFLX, DISCA have all been weak lately. I like FOX focus on live programming, which means Netflix is not a competitor. They also own news for the conservative viewers (or infotainment) and Fox Sports is pretty good and way cheaper than ESPN.

I beg to differ somewhat. I don’t condone restricting investing in China, but I can understand to forbid the nefarious VIE structures via letterbox holding companies in tax havens for listed companies. The fact is that as an investor in BABA and all these listed companies, you do not own these companies directly, own a contractural right (anyone ever seen these contracts, because I haven’t ) via a multilayered hold8ng structure while in realty a Chinese person or entity really owns this. This was done to get around the problem that the Chinese government does not allow direct ownership of Chinese companies in many sectors to foreigner. It is also a structure that is ideally set up to scam foreign investor out their money without any recourse. so, I think a case can be made that the US should not allow this structure for US listed stocks and the Chinese have a choice either to change their ownership rules ( just like most other countries) and allow foreign ownership and essentially open their capital markets, or those companies delist and trade in the OTC markets.

I like FOX ( as a business, content is another matter), but don’t think that BRK want to be seen controlling a major media/news company. It‘s just too much headaches. I can see them buying a stake or a large position in DIS at the right price. I think there are a lot of business that BRK would be interested in, but the question is more of a seller parting a price that Warren is comfortable with. That intersection is very very small apparently.

I think this one could go from $35B in valuation to bankruptcy in record speed. Someone twittered that with equity market closed, the bonds now start to get into trouble. Then there will be a cascade down to owners of RE too. You have got to admire Neumann here. He made hundred of millions with a total unviable business that didn’t even make it to the IPO.

Napkin thesis came from a recent WFC report on the health care insurance group. ANTM trades at an almost 40% discount to market, which is close to a recent trough discount in 2013 (42%). Average discount to market is ~23%. ANTM is the largest insurer in the market it operates together with UNH. scale matters and health I surname is a pretty good business. Stock trades on political concerns (it fell to a recent low during the first democratic debate when Medicare for all become a big talking point), but those political trends tend to be overrated by Mr Market. If you look further back, then ANTM has traded at single digit PE vs 12x now, so there room to fall.

Bought a bit more FOX and a starter in ANTM.

Softbank / Son are the Hunt brothers of venture capital : https://www.foxbusiness.com/financials/softbank-buy-wework-shares-ipo https://www.investopedia.com/articles/optioninvestor/09/silver-thursday-hunt-brothers.asp Even back then, Saudi‘s were involved as well.

Agree with above. Plenty of pure play RE players to be had a deep discount. I also second that SRG is showing that real estate redevelopment is no panacea.

I agree that big tobacco (or nicotine) will only thrive with regulation. The worst possible outcome is that vaping becomes an business where free markets reign, with lots of players and prices drop to levels in commodity industries and this vaping products then suck market share from regular and higher priced and taxed cigarettes. That’s the doomsday scenario, not tight regulation. It seems to me that the cannabis industry is heading this way. For the nicotine industry, I believe the most likely outcome is that the tobacco tax morphs into a system of nicotine tax and regulation. If I were sure about this, I should probably buy MO.

So, I have been working with Aswath’s valuation spreadsheet and updated the Y2018 numbers with more current Q1+Q2 numbers. There was also a small incorrectness in his spreadsheet where the years to convergence revenue growth rate was hardcoded at 5 years and I have changed that so the years to convergence numbers now actually does change the revenue growth rate trajectory. I get a value of ~$1565/ share, which is somewhat below the current share price of $1740, but not ridiculously so. Aswath has assumed NT growth rate of 15%, but the most important valuation driver seems to be the 12.5% EBIT margin assumption. This assumption by itself seems a bit questionable because I don’t think that AMZN has an EBIT Target, but uses more of a customer LTV. This can be seen by initiatives like 1 day shipping which for sure cause a margin hit, but may increase the customer LTV. Anyhow, I attach this spreadsheet and of course all comment and suggestions are welcome. http://aswathdamodaran.blogspot.com/search?q=Amazon AmazonSept19.xlsx

I instituted the stop loss because I had little confidence in the valuation to begin with. I usually don’t use stop losses. In terms of how to use them, I would think that on would generally look at the price momentum and get back in when the selling subsides. The bigger question however in this case is that I don’t have a reason to get back into SPOT , because the thesis is broken. I do agree that looking at the churn in a more granular would give more insights, but short of having these numbers, we need to use what we have and based in that it doesn’t seem like SPOT is a value right now, not even close. FWIW, I think most of the churn comes from users signing up for a promotion and then cancelling when SPOT goes to full price after the first 3 month or so.

I would also add that BABA itself is a black box with enough yellow flags to make me stay away as far as possible . The complexity of their balance sheet is mindboggling. Now with Jack Ma gone and the party having a good say and what is happening, I don’t think it can be valued easily. It’s not like Mr. Market has never been wrong on Chinese companies before.

I checked the churn numbers and you are correct - the updated monthly churn should be ~ 4.5%, which translated into 42.5% yearly. So here goes the thesis, because the customer value isomer $16 rather than over $100. FWIW, got stopped out of SPOT at $117. I rarely do stop losses, but for those growth/ momentum stock I do as when they’re moving against you, they really can move a lot. And then, the thesis is broken ( sort ) of anyways now. Working on updating Aswaths spreadsheet for Amazon from last year as well and found some smaller issues. The churn issue with SPOT is huge, so perhaps you should let Aswath know?

If you liked this, check this out: https://josephnoelwalker.com/69-the-world-according-to-a-maverick-beach-biding-stock-picker-john-hempton/ It's like 3-hours of Hempton.. Almost through it and I agree it’s a great podcast. It’s interesting that he mentions a Chinese bromide manufacturer as a fraud, which I recall as GFRE and I looked at this in 2010/11 as it was a favorite on the message board I was frequenting ( and still do, Irs Mike Burry‘s old thread on SI) https://www.siliconinvestor.com/readmsg.aspx?msgid=26825434

Sold GTS today for a quick small gain.

Yes, Softbank looks very iffy. It looks like they will get bailed out with Sprint, but I also think that SRM Semi might end up being a poor investment, based on the recent results. With all that debt, Softbank could end up being the Lehman of the engt crisis. It won’t end up destroying the financial system, but it could severely impair startup economy, especially the many company now that scale to size while using tons of money. When the public IPO exit door would closed, there could be a lot soul searching for these institutional investors on what to do and how to value their holdings.

None of this would have mattered if the news hadn’t picked up on this and the IPO had gone through. The board of directors and Son would have nodded to everything Neumann would have proposed.

Again, it sounds like it is free to cable TV subscribers (implying that you still pay for the content, it’s just a different delivery) and not for broadband subscribers. Their video subscribers # from last quarter were 21.6M (and are falling), which about matches the number given above. BB subscribers are higher and about 25M (and moving higher). Linear TV quickly moves to streaming as the default delivery option. This is great for the ca let providers and customers because the hardware for streaming is now cheap (way cheaper than setup boxes) and easier to setup (no tech visit necessary), and set up is mostly self help.

Advanced Energy is heavily tied to the semiconductor and display industry. Their power supplies are used for thin film deposition pretty much everywhere.

Checked on their investor resource website what is going on. Key sentence from the Q2 2019 CC So what’s next? Tariffs are going up even more going forward. Their gross margins are down significantly due to the tariffs on Chinese goods, but they don’t seem to be able to move this to a more cost location? So effectively they are saying that they are doomed? What about their competitors? Their cheap stuff seems to be getting hit disproportionately hard due to high % of cost of goods.