Spekulatius

The best option for the state is to have PCG going through bankruptcy, lay out the victims from the liquidation proceeds and then change the law. If they change the law now, the state or PCG‘s customers have to pay the damages, which I think makes no sense from the states POV. If the current possibility for litigation stays, the PCG newco will have an issue and will be worth far less, which means far less liquidation proceeds for the victims and difficulty to invest in infrastructure going forward.

May I ask why? Valuation is looking less attractive. Pipeline stocks had several failed attempts to move higher in the past. I still own a good bunch but I am reducing positions as they get more overweighted. I would scale back on when they fall again. FWIW, ENB is an ~10% position currently. That‘s pretty high for me.

Discussing the capital structure is not what you want to hear as a shareholder: https://www.prnewswire.com/news-releases/adient-announces-preliminary-q1-fiscal-2019-results-initiates-discussions-to-strengthen-capital-structure-300779024.html

Bought a starter in FRA.DE Fraport is the owner of Frankfurt Airport. Trading at around 9x EV/EBITDA which is cheaper than for most of its history. I am not sure but a strike of the security personell and the trouble with Brexit (which will affect air traffic from Britain) seem to put pressure on this stock. Recent operational performance had been decent. FWIW, I have started to reduce my overweight position in pipeline stocks (WMB and ENB) . I am still holding good chunks and ENB is still my largest position (or close to it). I guess I just have a weakness for infrastructure stocks.

I agree with the freemium model taking share. The nice thing about freemium is that it reduces the hurdle to try it and games gain critical mass quicker. For a MMO game, critical mass is important and this is now way easier to achieve using a freemium model. both ATVI and EA seem stuck milking their existing franchise until a declining user base very likely causes quicker and quicker decline at the tail of Games lifecycle.

Forget about California bailing them out. People have died and politicians needs heads on sticks and it’s better not be their own. PG&E‘s Equipment provided the spark that started these fires, so I think it’s easy to put the blame on them. If the $30B in claims go through, the equity and possibly the preferred are a zero, but the debt may still be good. Debt still trades at 80c on the $ and preferreds at 50%, which doesn’t look like a great risk reward to me. I believe CA legislators would need to indemnify their utilities better against similar claims in the future to ensure investibility, but that wouldn‘t help current investors.

Their goal is to reduce the leverage from 12.6x pro forma to 10.5x, which is still very high. The high IRR achieved in their funds is tpduento leverage. It appears that they put about 1/3 down in equity in a typical fund and the rest from mortgage debt. I also noted that the yield on capital for their development projects is often around 6-7%. That works when cap rates are 4.5% as they are currently in premier cities, but when they go up..... It is clear to me why BPY trades at a discount to NAV - outside investors put a discount on the value markets from BPY ( or demand higher cap rates, same thing ) And with the huge leverage, this translates into to a significant discount to NAV. Reducing the leverage would probably close the discount to NAV, but then that’s not great for BAM since they would get lower fees from a smaller asset base. https://bpy.brookfield.com/~/media/Files/B/Brookfield-BPY-IR/IR%20Day/2018/BPY%202018%20Investor%20Day%20Presentation%20Final%204.pdf

How do folks feel about Th extremely high debt load of BPY/BPR. 12.6x EBITDA leverage is two times the typical leverage of a REIT. I acknowledge that BAM is smart about how they structure the debt at their subs but I consider high levels if debt always risky. I wouldn’t touch a 12.6x leveraged REIT with a 10 foot pole.

Hopefully, shareholders won’t get screwed over like with the C&W merger. Millicom appears to be far larger than LILA, so shareeholders will hold only a minority share of the combined company.

I see a great market for luxury goods, pollution control, infrastructure, public transportation equipment, housing, airplanes , travel/ hotels, cars, social media/ advertising. It will be interesting how this country managed the growth? Did you notice any security or terrorism issues? Those things can really mess with growth and stall a country.

Note that PG&E at a sub level ( not the holding) went bankrupt before in 2001 due to poorly designed deregulation ( leading to Enron price gauging utilities). Back then the preferred were trading at much lower prices than they are trading now. Equity ended up being unimpaired after the release from bankruptcy a few years later. I think the current situation is different though. I just mention thi for historical perspective.

Exposure to above multinational doesn’t give you much leverage to growth in Indian, as it is only a small part of the operations. Many of the above actually have their subs trading in China (Unilever) albeit at nose bleeding valuation and for us retail investors, there isn’t a good way to buy Indian stocks on their native exchange directly. It’s an interesting market, just like Korea, but unfortunately not accessible to retail investors.

I think what you’re describing is called the recency effect. Any asset that has been down and out for years can be affected by it. It’s almost always better to prospect for investments in the bombed out areas. So I think you are on the right track. I’ve also found that when nobody likes your idea and thinks “You’d have to be crazy to buy ____” you should get excited. But you still have to do the work. You need to be different and right, not just different. Bombed out is not enough to warrant an investment. I would always assume that anything that is down and out for a long time, is down for very good reasons. If you invest in these assets you need to see something the crowd doesn’t see and you need to be right within a given time period. Also, one should distinguish between a mental block and a heuristic. A heuristic is based on experience and is different than a mental block. The human brain is lazy and probably doesn’t want to look into areas that have proven to be minefields before when there seem to be simpler ways to accomplish the same thing. I admit of having a bias towards tanker stocks, E&P, mining stocks etc. I don’t think it’s a mental block, I just don’t feel it’s worth spending time on to turn stones around in areas where you need to be right or get wiped out or vastly underperform. It’s a heuristic and to some extend a circle of competence thing.

I haven’t gone skiing for a while, but was surprised how high prices for day passes have risen. I know some folks who don’t go skiing much any more because it has gotten prohibitively expense for the whole family. Maybe the resort owners just overexerted their pricing power. Look out below, when the economy weakens.

The investible pool in Vienna is quite small. in the past, I invested in Vienna Airport (FLU.VI) with decent success, when it was fairly cheap. The best blog I am aware of (for Mostly European stocks ) is Vallueandopportunity. I don’t think he owns Austrian stocks right now. I think NXPI is a higher quality alternative to Infineon at a similar valuation. Andritz is a good company, it does not look very cheap. I think Rosenbauers performance got worse, because of a cartel lawsuits where the suppliers of fire tracks determined quotes for market shares to keep prices high. With “fair” competition, margins may be lower forever in their business.

Probably the best answer to my question above. I have to give SD cudos for having a good balance sheet and GAAP profits, so there is that. But the E&P business is messed up. I used to do way more in this field, but noticed that share revolution really messed up this field in terms of capital allocation and consider it uninvestable. My thinking regards to SD is that if they got so poor bids when the price of crude was much higher and the capital markets much more apprehensive, that I have not business betting these folks are all wrong and I am right buying in this. Sure, there is a right price for everything. When this stock trades at a PE of 6x and a FCF yield of 10%, I am going to take a look. until then, one is better of just sticking with the majors or the large Canadian long life oil sand plays perhaps. At least the majors understand capital allocation and pay dividends.

I would wish them to buy some companies in the aerospace industry in addition to PCP. It’s a great secular growth market where patience will be rewarded. The second one is infrastructure. Pipelines (KMI ?), AirPorts, Harbors etc.

They tried to sell themselves and only got bids for $13/ share and that was when the price of crude was higher. I agree it looks cheap, but why are informed industry insiders not bidding more?

For those who care, Eric disclosed his legal issues and the situation he is in prior to the meetup. I wasn’t aware of it, since don’t follow local news all that much. The story is what it is and I am not inclined to judge. What I do know is that the three of us had a great time talking investing, politics (a bit), stocks , doing a podcast (my first one) and play a board game. I wouldn’t hesitate to do another meetup again.

The Swiss have found an even better solution - they don’t let Amazon operate within their country. Odd judgement, for sure...

Tax changes would not be applied retroactively to transactions that already occurred. It’s an old rule that laws should never been applied retroactively (since Roman law) but there have been cases where this rule was bent or broken....

I doubt they can raise the prices because the GBP goes down against the USD. Why does it matter for a domestic business? They probably can raise prices if inflation in Britain picks up. The currency risk is real however.

What’s wrong about listening to my incoherent ramblings about a stock that one is better of not knowing about?

This is more or less just a continuation of their mail coupon program. They used to sent 20% off coupons to virtually any household every couple of weeks, but no more. Moving this online rather than carpedbombing mail coupons makes sense, since they can track customers better and customize the program.

I agree with Viking that the risk is WEB age. I think the company will be differently run after he is gone. Headquarters will become bigger, because nobody can fill WEb role as a CEO if the holding with such minimal staff and ensure compliance. There is a risk that the culture will change for the worse. I could see BRK getting broken into three pieces (Insurance, Utilities, Industry), but that may not be easy, because the Insurance subs own shares in the other parts as well as the holding company and it may not be able to get the stakes consolidated. BRK is huge and May becoming too large to control for a new CEO. I am in the 5-10% bucket and wouldn’t go higher than 25%. There is always systemic risk that someone, somewhere does something and affects the whole company.