Spekulatius

Interesting idea. I laugh anout this example though: I have a much better idea: put the sofa in front of the house and hang a sign on it “Free”. You save a lot of money and hassle this way. It’s also not too convenient to use clutter if you need to access your stuff from time to time. Then you got to make an appointment and wait for the forklift driver to pull your container from the warehouse. And if you don’t need access to your crap, why store it to begin with?

Maybe Coors should consider brewing real beer. The liquid currently sold as such doesn’t meet my specification. Neither does buttbeer. If I were craftbrewer, I would call both of them out on this in an ad.

I doubt that private infrastructure would be cheaper. Sure there is some inefficiency with public infrastructure but the advantage of a low cost of capital is huge. Anyways, my favorite quote is: “What the wise do in the beginning, fools do in the end.” And then there is the age old wisdom: “Goes butter, goes cheese”

6% revenue growth, from a base that wasn’t depressed in 2008 isn’t too bad. revenue growth / share was even better since they bought back a considerable amount of stock ((~20%+ of outstanding, but I could be off). Both AMCX and DISCA had untapped pricing power in 2008 that made it easy to grow for a couple of years until this fizzled out in or around 2013. DIS flatlined (or worse) since 2015, but they did grow earnings since then. DISCA bought a lot of revenue with Scripps (which was dilutive) and Eurosport and another foreign TV station. DIS bought Marvel, Lucasfilm and now the Twenty century studio. I believe they are better positioned than DISCA and AMCX, but the latter could pot. be purchased by a larger player. I think DIS can be compared to BRK in a roundabout way ,as they have become the go to home for premier entertainment property/ IP, while BRK is a permanent home for any private company where the owner compares about the LT prosperity more so than the sales price.

FITB today, it has been very weak lately. DIS yesterday.

7238.T ( Akebono Breaks) will Test that hypothesis. Terrible looking balance sheet and ominous language in their last quarterly report about going concern. This is an interesting case, because Akebono is actually a decent brand name in its space.

Disney is going to have to reinvent themselves every generation and I expect the same will be true in the future. Right now, they are going through a transformation, but they do proactively and from a position of strength. Back in the 80‘s, Disney was an asset play, based on the value of the replacement value of their theme parks.

Good timing. I added a few shares today and I am likely to add more on weakness. I think they will pull something off going directly to the customer, as they have multiple vectors to do so - via streaming presence and physical properties (parks). I think at the very least, they can create an HBO like business going the direct route. I don’t think they will be able to beat Netflix in subscriber growth, nor do they have to. The market assigns high multiples to a subscription business, which I think Disney strives to become, rather than being transaction driven.

FDX can’t or shouldn’t really stop their airplane purchasing program, since its long term, but revenue growth has slowed from almost 10% to 2%, and that should mean that some short cycle Capex can be reduced. The fact that they haven’t changed their Capex plan despite the above seems odd. It looks like FDX is a tough spot for a while with reduced profit margins, slow growth and still high Capex spent. Its not a recipe for a strong performing stock, that’s for sure. Edit: I sold most of my shares before the quarterly results were published and sold the remainder @175. I expected the stock to go down more than it did.

If you adjust the game to match the player with a lowest latency, the game becomes unplayable. The problem is not just latency, it is changes in latency. Players can adjust to let’s say 150msec of latency, but if it goes from 50msec to 300msec a second later than back to 50msec, you are screwed and I don’t think there is a way to adjust for it. Been there. Done it.

FRA.DE is down 7% today on concerns about Capex spent on Terminal 3, as “Own the Rails” has alluded too. Results look pretty good to me. I added some more today.

Except that BA is expensive to begin with (still trades around 20x earnings) and the potential downside scenario that’s more than a slap on the hand is nowhere priced in. If it were going for 12x earnings, I would be all over it, but for 20x, I gladly watch this from the sidelines.

Aspen Aerogels reminds me a lot of a company upstart I was offered a job in after my PhD in the fastener business. Unique technology that was proven to work, patent protected, licensensed the technology to several big companies, funding for a production line, industry veterans in managment, But even I could see back then that the manufacturing was very expensive. Target market was automobile industry. The company went under a few years later. There is a lot of tech out there that works, but isn’t cost effective. Gladly I didn’t take the job Aspen at least has a niche business, but I think they will have trouble to get broader penetration and make meaningful profits.

I agree with you on all counts. I would also suggest that any interest (whether in part or whole) for FCAU, means that a competing offer could also come. FCAU is probably one of the best smaller auto companies available for consolidation, especially with all of the cash, low debt and strong U.S. cash flows. I was off on my timing about a deal getting done before December...but I wouldn't at all be surprised if something happens before July. Cheers! Can Peugeot even do a purchase of the whole company for cash? If it’s for shares then they probably sell off on style and the premium would be small, because Peugeot trades cheaply to begin with. I would sort of like them to take the Fiat operation, even if they pay very little or zero, because I don’t think it’s worth anything. Machione could fix Chrysler, but he couldn’t fix Fiat in a 10 year economic recovery and Italy (Fiat strongest market) is falling into a recession and is unlikely to get any better.

I have mostly purchased stocks in semi attractive business with growing top and bottom lines, selling at single digit PE’s and paying at least an increasing dividend. I have avoided these money losing or barely break even companies or those that are supplier slaves to keiretsus. So no iron bridge construction, textile or refrigerator companies for me. The movements in the Japanese stock markets are a total mystery to me, but from time to time, companies ai know get really cheap, even though the business isn’t changing much. so, I buy what looks cheap, with a good balance sheet (net cash) and paying increasing dividends over time and just ride them - hopefully up. It works more often than it does not and is often not correlated to other stock arrests either, although then Japanese markets sell of, they really do!

FDX results are out and they aren’t good. One could see this coming: https://finance.yahoo.com/video/fedex-q3-results-disappoint-210047285.html Might become interesting again. I am surprised they haven’t guided down Capex with the slower growth. Negligible share buybacks (spent $93M), because no FCF expected this year. I like the business, but this doesn’t look like a great story.

I would guess that Aerospace and space application would be a great fit for high performing lightweight insulation. Why didn’t they get into this space? Certification process too long? Breakeven is a bit of a euphemism for adjusted EBITDA breakeven. There is a big risk that they runout of money and it will be acquired for a song. I also think this was written up in VIC a while ago.

ROP looks like one if the nifty fifties of our generation.

Fiat is a dog with flees. I think a tie up with Peugeot makes a lot of sense and would be a huge positive. I don’t think it would fetch a lot of cash, probably just a stake in the combined company.

Are you guys buying just net - net or do you also look into traditional low PE/ “decent business at very low” price stocks as well. Most of the stocks I am looking at have a low valuation, but arn’t net nets.

The market is not very good at discounting political risk, imo, which avails us great investing or trading opportunities. The innuendo of negative headlines pushed the share price of FB in the $120 an change only to go up to $170 a few month later. I hope to get another bite in the same Apple and would be happy to buy FB again at prices around the recent lows. As long as advertisers stock with FB, the polical risk is somewhat secondary.

I heard about Keystone Financial in a Planet microcap Podcast and liked their approach - they scan through the entire universe of microcap companies and look at changes, valuation and most importantly upwards momentum stand then give buy/sell recommendation. They offer a few newsletters for small cap stocks in the US and Canada. their track record looks pretty good, at least for their CA news letter (the US version is only 3 years old, so it’s hard to tell): https://keystocks.com/services/small-cap-research-service/track-record/ Anyone has an opinion on them, good or bad?

As far as your point on if good management making a difference, it’s probably true in most case, but in this case, the management chose the business it want to operate in. So in that sense, they bear more responsibility than a managment that inherits a bad business. I like the cautionary tale you are telling, but I wouldn't have chosen those tickers to support the narrative. Plus, I can think of other cases I am more skeptical of, but I won't name them. On the other hand even if you had chosen BH (which has had a lot more time to play out than some of these examples), there would be someone out there who would want to disagree. Any successful investor/manager will have imitators. That’s just human nature and not bad by itself. The insurance/hedge fund hybrids come to mind like GLRE and TPRE. The idea sounds great, but it looks like the implementation is way harder than people think. Despite that, there are still people out there who claim, that Buffet was only successful because he had “free leverage” with his insurance company. of course it’s true, except that others can’t get free leverage/float that easily and the investment side doesn’t seem to work out either.

I probably should consider this. I know your post is mostly speculation but if you had to guess how likely do you think this will happen (approximately)/when will this happen? I'm not sure I can put a number on this and would like to update the risk of FB. I do not know for certain that it will or will not happen. At this point I would probably put a barn door guess of 10 to 25% on it. The longer the profitability stays high, the advertising CPMs continue to rise and the CEO acts like he doesn't know what is going on (i.e. publicly proclaiming he is going to develop a monopoly by integrating FB, Instagram & What's Ap) then higher the probability it will occur either in Asia, Europe or here. If competition can drive CPMs down, then this will probably not happen but then the profitability would be impinged anyhow. Packer 2 things to consider regarding the EU: 1) The EU has a collection of laws governing the use of data, the US is one of the few countries that doesn’t. I believe that the US tech companies and probably others have broken the intend of the law and I think this will lead to changes, but probably not breakups of companies. 2) The tax rates that the US tech companies pay in the EU (and the US for that matter) are egregiously low. As these companies will become a larger part of the economy, the EU has to do something about this (and in my opinion the US government as well). 3) FB is more vulernable to antitrust than GOOG, imo. FB has the vision of having a collection of social media properties being run with the same ad engine and probably consolidate the data in one warehouse. It’s a bit of a big brother vision. There could be an issue if the EU for example demands compartmentalization if the data. GOOG is more like a holding of various internet properties and if those were individual Spun off, the sum of them may be worth more than the whole company is worth now.

I have been critical of SYTE here (perhaps cynical), but disclosure and honesty wasn’t the issue. The issues with startup from value investors are two fold: 1) Running a Company is way more than capital allocation. Being a good value investor does not mean that one is good at running a company. Capital allocation is important , but it isn’t the most Important thing. Operational skills, and industry knowledge are the most important thing and far more important than capital allocation. 2) Running a Public Company is expensive. We see this with SYTE and Premier Premier Diversified and even BOMN to some extend. BOMN looks like it has the scale now to pay for this overhead. However, for SYTE and Premier Diversified, the overhead is a killer. We will see about Jeff keeping the SYTE shares. Maybe he has no choice, because the liquidity is too low, but I rarely have seen any executive of a public company keeping shares after leaving. I suspect he want to dispose of his shares to get liquidity for his other endeavors. I think an exchange of some properties for his shares is a likely outcome, but the board needs to be careful with these arms length transaction, especially since the optics most likely won’t look great. Crapshacks may be a strong word, but this isn’t high quality real estate that can be run easily. It’s a bunch of low priced properties in a secondary market that need a lot of TLC to keep make and keep them productive. I don’t think that SYTE has the expertise and management bandwidth to deal with this, so they will get disposed, I think. I agree with “Read the Footnotes” that admitting mistakes is commendable. 90% of the management of public companies will not do this.