Spekulatius

Upselling "can be simply exposing the customer to other options that were perhaps not considered ". https://en.wikipedia.org/wiki/Upselling I believe they waited to start these emails until they had a $45,000 offering because it magically gets to their $35,000 reservation price point after the tax credits. It isn't unreasonable to think that some buyers may have a budget of $35,000 and not realize there are $10,000 in potential tax credits. I was being sarcastic. This practice of attempting the upsell is not nearly as shady as some of the common practices in the “traditional” auto industry. I realize that you were being sarcastic about the shady practices from "traditional" dealers but in doing so I felt as though it was distracting attention from a likely justified reason for them to send these emails. The $35,0000 reservation holders have been frustrated with the waiting time so attempting to offer them another configuration that they may be pleased with was possibly the primary motivation. $45k is a whole lot closer to the $35k price point than $65-70k, so I think some customers will take the offer. I don’t think there is anything shady about upselling, since it is pretty clear what you are buying and how much it costs upfront.

For all practical purposes, Jeep and Ram are Fiat right now. The Fiat legacy brand only generates a fairly small amount of the profits, maybe 20%. FCAU for all practical purposes is a NA light truck manufacturing company right now. That's the point. This culture has been changed for good and for the better. Marchionne was so close to this management team, they're not likely to let him down. Plus you have an owner that is largely aligned with his shareholders. How much more can you ask for? Yup! And Manley's leadership of Jeep has been stellar. Look at what he's done with Jeep in the last decade. I think both Jeep and Ram could sell for nearly the entire market value of FCAU. Powerful brands with huge consumer loyalty. Cheers!

Results in the last quarter were anemic and growth (except interest income) has all but stalled. It feels like a lot of headwinds in this business and no growth. It’s probably an Ok value here and they passed the stress test in a decent shape, unlike STT, but I don’t see large upside.

Again, we are mentally in synch here, alwaysinvert. I suppose that some staff member regularly provides him the numbers, or per specific & ad hoc request. I think we should use market value of the holdings, not intrinsic value. If the market value of Buffets shareholding’s goes down, very likely the general market goes down too and other stocks competing for dollars to be invested in BRK will get more attractive as well. I wish I could mark up some illiquid stocks I own to fair value :o

Most reinsurers are down due to concerns about catastrophe losses. FFH has equity exposure on top of that. That said, I added a few shares at $483 today.

Brand equity is determined by the premium a company can charge for selling the same product. By that measure, I don’t think Tesla has brand equity. At least I would prefer to purchase the same car that Tesla builds currently from another car company, because I would be more assured of service and the quality of the product. I think Tesla’s brand equity is their ability to raise a lot of capital much cheaper than any other company can. Thats the Elon halo. I do concede that Tesla cars are top in terms of specifications for their product and the autopilot, but that means there engineering is strong, plus they are willing to sell a lot of product at a loss. I also believe they the regular car companies are poised to catch up in the next 2-3 years.

LOL. This market really hates automakers. It can always come worse. now with MM, 500M in EBITDA will be missing, which can cause an earnings revision and presto, we have an earnings miss. No joke, but this occurred with BASF when they announced a merger of their E&P and refinery sub (Wintershall).

I'm not sure "pales in comparison" is correct. The $6.2B deal is only $0.6B away from the $6.8B Marchionne wanted from KKR before he passed away. At that time, KKR had offered $5.8B. FCAU needed two things to happen in any deal...a reasonable price and ensure that their component supply wasn't disrupted. They got both. Could they have held out for more...possibly. But they got mostly what they were asking for and they can move forward. Cheers! Valuations are way down from a few month ago in the car supplier sector. There are a boatload of companies trading at around 5x EBITDA now. DLPH alone lost ~ 50% of their market cap in the last few month.

I don’t think the Chinese will target Apple either, but I do think they will advantage their national champions in their home market. Note that Apple seems to have lost significant market share in China since at least 2015 x their revenue has fallen from ~ $55B in 2015 to ~ 44B in 2017 and I am guessing that this is probably going to continue, since the Chinese currency has depreciated this year, making Apples products more expensive or at least converting the same revenues into less USD.

Yes, that’s it in a nutshell.The EBITDA margins from 20-30% that the company is generating for commodity polymers are not sustainable. I expect these to drop to the mid teens.

My wife ordered an XR, upgrade from an iPhone 6. I also believe it will be a big seller.

^ The chinese government can within China, with the great firewall. FB has a disproportionataley large market share in social media, but this is hardly a monopoly in terms of information and I really wonder about the folks who get their news from there.

Should be 15% in a taxable account in the US and zero in an IRA. At least that’s how ENb works for me and I don’t see why BAM should be any different. Anyways, BAM dividend yield is so low, they it hardly matters.

Yes, it is absolutely true that it all depends on the quality of deals and how the assets acquired are managed. I just wanted to point out the EV and the fact that funds need to be raised , because I think mentioning $1B in EBITDA and $5.2B in market cap just by itself is misleading. I mentioned this before, but I believe the real entity to own is BAM, because they can “skim the top” without providing capital. That’s the beauty of the GP/ LP structure.

When did you own NWLI at 35% of book? I sold them this summer at $319 a share. I notice that they have drifted down towards $280 recently and on a book value of $507 that looks pretty good to me. Just wish the family would actually do something to close the discount. I held the stock for 6 years, it was good to me but man closing that discount somehow would be nice... I believe it was in the 2011/2012 timeframe. At that point, NWLI was trading quite a bit below 50% of book. I bought in the $130-135 range.

That's if the company doesn't liquidate. If creditors don't approve of the restructuring then they're liquidating, which I think is better anyway. They're projected to burn $200 million in the next 30 days..the longer they stay open, the more burn (and less money to go around). Creditors may mind getting screwed by Fast Eddie a second time. I would probably vote for liquidation too, if I were a bond owner.

Their enterprise value is $12.5B roughly so with $1B EBITDA, they seem fairly valued. New deals will require new equity and debt, so it all depends on how they buy and how they manage the assets. increasing size alone is good for BAM, but not necessarily for BBU limited patterns.

To be fair, the economics in the smartphone industry are tough too, but Apple has been able to command a premium. that said, Apples iphone 1 was profitable from day one and Tesla is racking up higher losses, the more they produce. They also have structurally high costs due to manufacturing in one of the most expensive regions in the US (Fremont, CA) and it’s not clear to me that the quality of their produce is close to industry standards, much less for the premium segment they operate in. I think it is funny to think that there is a floor to TESLA stock, because other tech companies may buy it (GOOG, Apple). While it is possible, it wouldn’t be smart, because they could buy the assets they want for pennies on the $, if TESLA goes in distress and gets reorganized. However, at this point, I suspect thet most employees would be gone (at least engineers and managers), but the Gigafactory may be worth something. I hear this all the time that investors hitch their Waggon on a buyout for accompany in distress, yetnit rstely happens, because companies in distress are such a mess usually, they no acquirer would touch them. I hope they make it though and learn how to sell cars for a profit. it still doesn’t mean this works out as an investment, but the world is better off, if this company stays in business, IMO.

I really have given up almost upon trying to understand economics. I just try to observe and it seems to me that we are about to see higher inflation amd higher interest rates. I think thet all I need to know as far as investing is concerned. I suspect the effect changes are hard to product , because a lot them are mass physiological in nature and more determined by trend that the absolute numbers. I mean a 2% or 3% base interest rates shouldn’t really make any difference in rational business environment, where return expectations are mostly in the double digits anyways, but there is a psychological effect when interest rates are near zero for a long time and heaven forbit , they rise to 2% all of a sudden.

Pete, you can't hide your nationality! [ : - ) ] I’m not trying to. I’m just pointing out that the economic risk in the U.K. is not Brexit, it’s the very real possibility that our next Chancellor (finance minister) is a self described Marxist with Maoist sympathies. Possibly true. In any way, I will stay clear of U.K. stocks until this is cleared up. I own some Anglo US utility stocks PPL and NGG and I have heard this flares about nationalization, which from my perspective isn’t a problem, as long as shareholders are fairly compensated. I do recall the nationalization of French banks in the early 80’s, but shareholders then were fairly compensated in thet case, so from my perspective as an investor, it’s not a problem. As far as Brexit, I am sure in the long run, Britain will be fine, but it could be a tough 5 years after the Brexit occurs. I also think that London’s role as a financial center will be significantly diminished, but even that may be better for the UK in the long run.

I don’t think banks are going to crash in Europe, it’s more like a slow motion train wreck. The biggest problem are not bad assets, it’s lack of profits. A bank with a 2% or less NIM just doesn’t work very well, but they is what most banks have to content isn’t in Europe. it’s the same with some savings and loans, they can survive, but they can’t proper. the exception seems to be LLoyd (LYG) which has a NIM close to 3%. that extra 1% is a 50% higher margin than with a 2%NIm bank, which makes all the dollar difference in the world. Of course Britain is very likely going to see a hard Brexit and possibly a recession and after that, banking in London won’t be the same again, IMO. On rule I live by is they buying a bank stock is always a bet on the home region/ country economy. If the local economy/ country is not going to do well, the bank won’t do well either, even if it’s well managed. I think UBS is a differnt case, because it is 50% global asset manager, 25% Swiss bank and 25% investment bank, it should be less dependent on local macro than most other banks in Europe.

Good write up. Ubernsncertainly more than an app, it connects two pools,nahe driver pool and the rider pool, both of which benefit from scale and network effects. I certainly miswrote when I stated that it’s just an app, it’s more than that. I do think I am correct when stating thet autonomous vehicles are more of a threat to Uber and Lyft than they are a tailwind, because they negotiate the network effects from the driver pool, although this will take a long time. autonomous driving is probably 10 years out anyways.

Interesting numbers. With 15k miles/year, 30mpg and $3/gallon, my fuel cost is about $1500/year. So a 85kwh battery pack is equivalent to 11 years of fuel for a typical vehicle and mileage. How much does it cost to install a 220V charger in the garage? $1000? Or do people just use the 110V, even if it takes a while?

Thanks for sharing above article, The scope of the fraud is true truly staggering and will be very expensive for the enables that are going to get caught. The EU has become much less forgiving to while collar fraud, tax evasion, and collaboration to stiff competition than in the past and the fines have become much much higher,

Also, Uber and Lyft have no advantage as it pertains to electric and/or autonomous vehicles. They have a user base and an app, that’s it. If a company comes out with an autonomous vehicle and they have capital and a user base like GOOG or Apple, they could put out Uber and Lyft out of business. There is no indication to me thet the benefit of lower cost from electric or autonous vehicles (if indeed there is one) will accrue to Uber or Lyft.