Spekulatius

Same thoughts here, this has just become too cheap, unless we are missing an elephant in the room. The healthcare sector traditionally has pretty stable fundamentals, but it’s market perception can cause wide swings. I read the last investor conference transcript and I liked their no nonsense approach. I found it interesting that they had headwinds from Aetna shifting to prescriptions to CVS and how the pharma value chain changes lead to a more fee for service business model and the PBM might get disintermediated. I am adding on weakness.

I believe part of MKL’s halo has disappeared, due to recent missteps ( Reinsurance writeoff, annual loss - both are related) and hence the premium to other insurers in term of P/ B is shrinking. Fair value is in the eye of the beholder, but if this P/ B shrinks to the level of Y, AXS or RE then MKL has another~20% to go. MKL deserves to trade at a premium to above group imo, but I felt it was larger than deserved until recently. I feel that the price is getting interesting, but I haven’t put much work in it.

Used car prices are anchored by new car prices and as prices drop for electric cars ( which I think is inevitable), so will used car prices. It doesn really matter much how long the car will last, also the jury on this one is still out. I am willing to bet that my Subaru will exceed 10 years if service life. I am not sure the Tesla’s will last that long. I agree that a battery swap is technically easy, but it will be expensive. Also name we one example where a substantially new software ran on old hardware.

We are on the internet. What do you expect us to do?? Haha, very true. I read the article and it’s true that the Aegis fund seems to run a true value strategy (with microcaps) and it’s performance has been dreadful. So, I am not sure the authors claim about the performance of the strategy is correct based on the examples provided. Either way, the studies about low P/B were I think academic study and not based on mutual fund performance.

I have been listening to a lot of value investing podcasts and most practitioners seem to believe that price /book has stopped working for some time ago. Quite a few others believe that even PE or even any quantitiave metric has stopped working, at least for mid and large caps. I think there is evidence that this is probably correct in most market segments. There are probably pockets in the market (microcap) or countries where these old heretics for value stocks still work. It is probably more important to understand and evaluate the business now, rather than looking at metrics. looking at metrics now is really easy, but understanding the business is harder and there is a better chance that a business is misunderstood rather than a business with great great value metrics is overlooked.

As an investor or in Enbridge, it’s unfortunately very sad.

The issue with the rapid technical advance with electric cars is rapid loss in value and that means high cost of ownership. This hasn’t been considered much, but given the number of customers screwed by Tesla’s price cuts, I think it will be in the mind of potential customers. Leading might be a better option, if the offers are good. That's much more of a problem for ICE cars (or really any mechanically complex machine.) The more "electric" the car is, the more it's essentially a software update issue that doesn't require a new car purchase. I expect electric cars to have a MUCH longer ownership timeline than ICE vehicles historically have had. It’s not just software that changes, it’s the battery, engine, sensor etc that’s evolving faster for electric cars than for ICE‘s, hence I expect a faster loss in value. The buyers of Tesla cars seeing their used car values plummet already. It won’t happen with the Subaru I own.

Well, Detroit went through a bankruptcy in 2013, and the Pensions obligations took a much smaller haircut than other debt obligations. Buffet wrote about this and clearly stated that moving a company to location with a pension problem implies a liability for the company or their employees and needs to be considered. Buying a property or house in such a Location is pretty much the same.

The issue with the rapid technical advance with electric cars is rapid loss in value and that means high cost of ownership. This hasn’t been considered much, but given the number of customers screwed by Tesla’s price cuts, I think it will be in the mind of potential customers. Leading might be a better option, if the offers are good.

My experience as well- some stores are nice, others seem neglected. I haven’t seen customers in Target stores in pajamas yet ( common in some Walmart stores) so there is that.

I am betting on tequila via CUERVO.MX. Tequila is underpenetrated anywhere but in Mexico and the USA, imo. Supply constraints for Algarve hurt in the short term, but should benefit an integrated company like Becle ( CUERVO.MX) in the long run. Family business and a good balance sheet are additional positives. I think the most important attribute in spirits is brand building.

Transplants are limited by the availability of transplant organs. the problem with home care is complexity and compliance. A lot of dialysis patients have issues (drug addiction, tendency of negligence, mental etc) and home care requires skill , compliance, hygiene and a partner who can support, when something goes wrong. A lot of patients probably couldn’t do the necessary task them selves at this point or wouldn’t comply. While home care is preferable from a clinical POV (the more frequent treatment cycle causes less issues), the home dialysis systems need to be simplified from a users perspective to increase the addressable market.

Why do you think it’s overearnin? According to some metrics like revenue per passenger, AENA is earning way less than European peers. Admittedly, the EBITDA margin is quite strong, but combined with above, it looks like this is more to low costs than to high revenue take.

A lot of Target stores feel a bit like Walmart stores nowadays in terms of layout and product feel. I think clothing in particular has gone a bit downhill. Walmart stores have improved a little. I think TGT made a huge mistake with their half baked grocery push a while ago. They are just not competitive in this segment on price and much less on variety. That said, their recent sales results were quite strong and they are building momentum in online sales.

Tesla uses a cheapskate approach to autonomous driving, unlike GM and Waymo. Tsla’s approach is very unlikely to lead to lead to autonomous driving in the foreseeable future.

Here comes real competition. I still think they have some work to do to catch up to Tesla, but a 260 mile range for 36k is a real competition for the Tesla. Moreover, you can order this car now: https://thenewswheel.com/2019-hyundai-kona-electric-named-edmunds-editors-choice-for-best-ev/

Some thing is wrong with the society when people like this get so far.

From Buffett’s interviews it is clear that KHC Not just got overagressive just on pricing , they apparently started to bully their customers, namely the grocery chains. I greenits still a good business, make like $6B on $7B of tangible capital. It’s just not good enough to justify $100B of intangible capital any more. I also think that KHC apparently acknowledges the problem and adjust the pricing (as volumes are rising while margins are falling). This should in the long run defend the remaining brand value. As far as Groceries are concerned, there seem to be local oligopolies in every local market where I lived. Here in the Boston burps there is Market Basket and Wegmans (both are private) and Long Island we had a higher end local chain, that had an amazing deli and fish counter (very popular in LI) and the best cheese selection they I have seen beyond French hypermarches anywhere. I don’t think larger chains can touch those, as they seem to have carved out niches in both market segments and regions that are very hard to replicate and compete against. I think home delivery is one trend to watch out for disruption in this market. Anyways, I am watching KHC as I think it might become interesting at some point. I would be a buyer at 9x EBITDA assume everything stays about equal, as I think this would give a margin of safety, even if it is a slowly melting ice cube.

I found this article about trend following quant funds interesting. It’s turns out they didn’t do too well in 2018. Apparently the culprit is that there is too much money invested in the same strategy: https://www.bloomberg.com/news/articles/2019-03-01/one-of-wall-street-s-most-popular-trading-strategies-is-now-failing

Interesting article on beer. I was surprised to see that even craft beer brewers are hurting. It’s a bear market for beer :o https://www.ccn.com/millennials-killing-us-beer-next-victim-is-heineken The trend to spirits is mentioned as well. Heineken is the Budweiser of Europe, imo. the stock looks pretty overvalued too, but I think they are better run than Ambev.

^ well stated, imo. I don’t own either one, but Heiko is the one I would pick.

Added to FCAU and bought a starter in WBA

I personally will get interested at 9x EBITDA, which would be around $26 , I think.

I believe their approach could work. I also believe what you said about a big write-down in the future. Yes, CVS approach could work, but there is a whole lot more risk both from an execution and balance sheet angle compared to WBA. If you like the retailing side, there is no reason to stick with CVS when you can buy a pure play at a similar valuation ( adjusted by leverage). I always try to isolate a long thesis from its expression.

If I owned CVS and fon’t Like their integrated health care approach, I would just sell and buy WBA instead. FWIW, I just bought a starter in WBA today in today’s mini crash.