Spekulatius

Once foot goes on to the pedal at price point proposed; no one may return it. If you haven't pressed the pedal, may welcome to join all California streets which are daily flooded with these cars. Completed; 1 year with 24000 miles , drove on road trips on autopilot .Nothing close to this car exists in the market. May want to check out how many second/used available, which indicates proposed returns. There are tons of Model S used available: https://www.tesla.com/inventory/used/ms The prices actually have dropped hugely: last year cheapest Model S used was in 60-70K range, now it's 39K with not that bad mileage. I guess that's understandable: nobody's buying used S when new 3 is available for similar or lower price. Although some S features are better (and you get free supercharging). Tesla does not list used Model 3's yet. Either they don't have used inventory (yet) or they don't want to list them or who knows what. Every time, the price of New car goes down, the price of used cars will go down with it. Since resale values determine the cost of ownership, it seems that Tesla cars are very expensive to own as long as the new car prices are falling so quickly.

My guess is the fact that this deal is in the news means is that the rumour likely is false. BRK has been very good at keep on their plans secret in the past.

It's also possible that they've run out of customers and selling lower price model is the only way to sustain sales/demand. That’s likely. For Tesla it’s grow or die...or grow and die. The online sales model is interesting, but it sort of increases the hurdle. I think some people won’t plunk down $40k to basically do a test drive and return the car I’d they don’t like it. It increases the hurdle to try out the car, imo, which is not what you want when you want to grow into new segments.

BHS’s annuity business has low returns on equity and isnalso volatile, as they are dependent on equity and income market performance. They have hedges in places to limit exposure but these are expensive end lead to Wilde GAAP earning swings. I think internally these insurance use NCAV as a guideline, but it’s difficult to verify these valuations as an investor. What I don’t get is what these insurance companies do when volatility goes through the rough and hedging become very expensive due to high put premiums. Do they use a collar so it even out with proceeds from calls? Some of these insurers got into trouble during the financial crisis - insurers with long term liabilities are always prone to earning quality issues, because it’s basically accrual accounting.

Both adjusted claims and prescription volumes grew nicely. Both are forecasted to grow next year. So they are selling more units but with worse margins. Whether they can stabilize margins is an open question. They are investing heavily in the health superstore concept, so I would expect continued margin erosion. They are also investing in the Anthem ramp-up. I would be interested to see what sort of lift Anthem will give CVS in 2020. The ongoing political pressure on drug pricing and rebates will continue to hurt CVS multiple and revenue. The integration with Aetna is another x-factor. My guess is that there will be a very large write-down in the next 5 years, but can Aetna grow enough to offset the pricing pressure in pharmacy and PBM? If they can somehow stabilize the business, this looks like a homerun. UNH trades for 20x. Surely CVS could get up to 12x? But the market obviously believes that the business won't stabilize. Probably too close to call. Seems like a reasonable bet but the high debt makes this much riskier than it was before the merger. Looks like the multiples for health care insurers are rapidly coming down. I am really surprised they went for 20x earnings to begin with. UNH trades for 8-10x earnings for a long period of time. Looks like CVS got into this business right at the top. I can see already a KHC sized goodwill write off in the next few years.

The earth has reached the carrying capacity 20,000 years ago. Then the humans invented agriculture. I think the concept of a fixed carrying capacity is incorrect as it has static variables as an input, but humans are highly adaptable.

Good point. I too am ignorant on the specifics. I didn't mean to impugn Metro Bank management, but to respond to Cubsfan's comments and assessments as I understood them. Falling victim to a charlatan is the worst case scenario that we all are trying to avoid, but there are many lessor risks in evaluating manager skill and honesty. One heuristic I developed (in a costly manner) was to always sell any financial stock that has a run in or problem with a regulator. I have several experiences with these issues and one I remember vividly was that AIG in one of their filings around September 2008 noted a disagreement about valuation with their auditor , as I recall. I thought about this for a while, my position was already in the hole at that time. I decided to sell, because I thought if their management can’t agree with their auditor about valuation of some assets, who am I to value this stock? It turned to be the correct decision. I had several other experiences like that with banks and none of them would have worked out. It’s a bit different with Industrials or non-financials, but with financial the rule to to sell first is probably right in the vast majority of the cases.

A 10% efficient system that captures energy at 2c/kwh needs an input of energy with a <0.2c/kWh cost to work at the given value.

Yes, very strange. It is either they no longer plan to grow their workforce that quickly or they have made a major re-think about where they wish to grow it. I just wonder what new insight or data they have gotten within a short timeframe? What were these new employees in LIC supposed to be working one - AWS? I don’t think they can get the techie employees they need to secondary cities like Louisville etc. Or maybe they feel that the winds of their prospective employee base have changed after they got the last tax return (or lack thereoff). or there is just less demand now all of a sudden? The last would probably make AMZN a short candidate, given the current valuation. I always thought they Austin, TX would be an ideal hub for them - low taxes , business friendly state and beloved by techies. It will be interesting to see what they announce, but I think the absence of news on expansion would be quite telling.

Isn’t it strange that AMZN backs out of Long Island City and Seattle at the same time? Maybe they don’t need all that office space and overestimated their near term demands.

Generally, a stock market party really gets going after the value stooges leave.

I second what Read the footnotes stated. My impression is that Metro’s management lacked the ability ( to exactly understand the rules governing banking in the UK) and were not necessarily dishonest, but I could be wrong. I haven’t followed this story too closely however.

Hi. I've been looking a bit into that. Seems very interesting. Have you seen a decent writeup anywhere or mind to share a couple of points? What's obvious is the deposit growth, which is incredible. The culture is based on the Commerce Bank model, that Vernon Hill "invented" in America. The culture is real - I can tell you that. Both customers and employees love this company. You have 56 "stores" going to 100-130, roughly in 5-6 years. The "store model" is totally repeatable - and UK will eventually support, perhaps, 200 stores. There are structural reasons for the growth - by that I mean - the UK banking sector is being forced to shrink (I mean the legacy banks) as the UK regulators and the public's interests have not been served. (RBS is still 65% owned by gov). So some assets are being dispersed, the market is opening up, and legacy branches have closed at a fast rate due to cost cutting and poor locations. So there are significant industry tailwinds for the growth of "challenger" banks. Metro is the best of them all. It's the fastest growing bank I have ever seen in my life. Looks like Metro Bank is blowing up. Risk weighting for mortgages off - they had RWA for commercial mortgages at 50% rather than 100%. Did they forgot to read the manual for bank accounting in the UK? Looks doomed to me, or at least has to raise capital. On then surface, it still looks adequately capitalized, but I stay away from financials that can’t get their accounting right - a lot of them become doughnuts. https://finance.yahoo.com/news/british-lender-metro-banks-2018-072746266.html Dumpster fire continues - cash call: https://finance.yahoo.com/news/metro-bank-slumps-shareholder-cash-081129938.html

I thought about this and reviewed the last few years annual statements since I bought it in 2012 and I don’t feel that a tender is such a no brainer. For one thing, getting 10% of the shares tendered would add about $40M to their existing $80M in debt. This is probably OK, but I really liked about this investment that here was very little debt when I bought into this to begin with and I would like them to keep it this way. Their leverage is already somewhat larger than in 2012, due to Capex expenses gong into the new facilities in Texas. I also note that they reduced their units from about 172.5k to 165.5k since I owned it, which is not too bad considering that they are growing their business, while paying a nice distribution a along. The other issue with reducing the unit count is that the liquidity for the remaining shareholders will get even worse. I’d rather have them put a message in the annual report that they are willing to buy back shares from owners in a privately negotiated transaction at prevailing market prices by contacting management. I think the bigger question for me is how they feel about the expansion into Texas after being there a couple of years and if they feel it’s giving a good return on investment. In particular the Houston market, which is dependent on Energy and has low barriers to entry looks iffy to me. FWIW, I just added a few units a couple of days ago below $2200.

Is anyone here qualified to do so? The presenter certainly isn’t. He has Nobel price in physics based on work done in the 60’s and knows very little about Meteorology, nor is he expert in statistics. To debunk climate change , he would need to go into much more detail than he did in this talk, publish some peer review work in this field etc. To my knowledge, he hasn’t done this. FWIW, i have a PhD in physics but that doesn’t make me an expert in other fields. So, what are you doing here in an investment forum discussing investments when you do not have the appropriate educational qualifications? If only the people who can discuss climate change are climate scientists, why are politicians discussing climate change? Dismissing someone's argument because of their lack of expertise is one hell of a condescending manner that would turn off anyone who might genuinely want to participate in a healthy discussion otherwise -- wasn't that the point of democracy? Of course, maybe the goal is to simply shut down all types of discussion around climate change. I didn’t know what there is an qualification needed to sign up for an investment website. The lack of expertise of this presenter is a fact. He is not an expert in climate science and doesn’t really have peer reviewed publications as far as I know. He is consdescenting to the scientist working in this field as he claims they are faking data for example. The global warming theory has been existing since the 1960’s and slowly more and more evidence has been generated . That’s almost 60 years of science. Name me a case where the science consensus with a huge body of work has been wrong for 60 years in recent times. Also, science is not a democracy - the best data and theory wins, not the one with the most votes. I think the real discussion that the public and politicians should be having is what to do with the data. just acknowledging the clime change problem does not necessarily mean that we should abandon all fossil fuel sources. This is a decision that the public needs to make, not the experts, The experts should, provide the input for the decision, but the decision needs to be made by the public. That’s where the politics come into play and where imo some scientists overstep their boundaries. Politicians that state they believe this or that without having a clue about anything are overstepping their circle of competence, imo and are hence not credible.

Bought a little bit of GNRC. I might get this one cheaper , but I like the sector and the brand equity. I also believe this sector has secular growth, even though near term results can vary, based on weather patterns.

In the totally irrelevant department - looks to me like Elon has packed on quite a few pounds of weight.

Is anyone here qualified to do so? The presenter certainly isn’t. He has Nobel price in physics based on work done in the 60’s and knows very little about Meteorology, nor is he expert in statistics. To debunk climate change , he would need to go into much more detail than he did in this talk, publish some peer review work in this field etc. To my knowledge, he hasn’t done this. FWIW, i have a PhD in physics but that doesn’t make me an expert in other fields.

A part of GE for sale would have been my guess as well. WEB knows GE well and has lent them money before. We also know that GE just announced the sale of their biopharm business to DHR for $21.4B, which is the size of a whale for BRK. I suspect though that GE may have tried to sell other assets to BRK than to DHR (DHR has Medical tech focus) but than settled with DHR instead. All the above is pure speculation of course.

I never saw the material, it remained at school. I have no clue what they actually wrote, although I can suspect. My lesson to my son was simply to understand the motivation of the author and who pays for the material, which is easy nowadays with a simple search using Google. Incentives matter, as we all know. What surprises me is that this institution actually have the funds to sent unsolicited material to schools free of charge. MAGA $ at work.

Yes, most companies have better things to do, but over time, companies do change their systems. Then there is also natural attrition from mergers etc. , where the merged companies typically pick the cheaper system/application/SAAS system and the dinosaur application will get sunsetted.

Heartland Institute rings a bell. They unsolicited sent “study material” to my sons middle school science teacher study material that was refuting climate change. The teacher forwarded some of the material to the students to discuss. My son ask me about this and I told him to follow the $ trail and find out who funds and pays these guys. Yeah, the same Heartland institute refuted health issues with second hand smoking, funded by Phillip Morris...

Yes, the CoBF lynch mob can put the pitch fork back into the shed. It’s too bad that he couldn’t fire off the elephant gun and he missed the opportunity to add to equities, but things can happen. Warren will now more likely return money to shareholders via buybacks unless he has another elephant in his crosshairs, which seems unlikely in the near term.

In most likelyhood they're probably not divesting their best/leading/high performing brands. They're divesting laggards so you should expect lower multiples. Of course they divest underperforming brands, but if the company trades at 12x EBITDA and some brands are worth only at 7.5x, the implied valuation for the rest (which isn’t doing that great ithetn) seems pretty rich. Disposing of a business for 7.5x EBITDA doesn’t look great for the credit metrics either.

I believe the dividend cut (allowing for more FCF after dividend payments) soothed the bond market. I also think that this dividend cut was a good decision. If credit becomes and issue, I am sure that BRK would help out, albeit at a price.