Spekulatius

motorcycle sales are very seasonal, according to this somewhat dated article. I looked at HOG recent quarterly results and the are still very season, with Spring and summer sales 50% higher than on fall and winter. https://www.fool.com/investing/general/2014/03/13/this-motorcycle-maker-is-surging-through-seasonali.aspx When I bought and sold my Motorcycle, I lived in Northern CA and ther was definitely a lot of seasonality. Weather is not as bad for riders than in the Northeast, but still somewhat cold and lots of rain make riding a bit dangerous and unpleasant in winter. I am fairly sure, thr market for used bikes follows the same pattern. This almost assures, that thr next quarters will be weaker for Rumble, unless they can grow more than the seasonal decline of 30-40%.

There should be seasonality in bike resale’s. Not many people buy bikes in winter. I am guessing that Q2 would be the top quarter. One might get a clue from Harley Davidsons seasonality.

Combining two generic drugs into one branded so they can jack up the price but can't even get it approved. Same old Valeant. Didn’t realize that they are trying to market just a combo of generics. That is why pharmacokinetics are so important - the FDA wants to understand, how these drugs interact. Otherwise, Doctors could just prescribe the two generics together (which I suspect occurs already anyways). Looks like VRX R&D department didn’t d their job well.

Pharmacokinetics is fundamental data and will take a while to acquire. Seems kind of strange to have this Problem so late in the game, since generally, this data is generated to set the dosage. No position.

Banks should really use a multiple of tangible book as a guide for buybacks, IMO. At 2x tangible book, as is the case with JPM, buybacks don’t make all that much sense, IMO. C should really buy back stock when the shares are below tangible book. I suspect that for management to maximize their stock option earnings, a strategy that enhances volatility (buy back when stock is fairly valued/expensive, issue stocks when its cheap) is more profitable.

Which banks are you looking at? So far, I think Lloyd’s (LYG) and ING look reasonable to me.

The positions that FFH takes are no slam dunks and have significant risk, as well as considerable upside. I think they should be sized accordingly, such that even 2 of them blowing up should not impair the company.

I agree. I am no t even sure it is a great idea to leverage, when the market is falling. I believe the sweet spot would be when the economy is already recovering (GDP growing again) and even though the market had bounced back 30-50%, the market looks cheap, because the fundamentals are looking better. In terms of the financial crisis, that would be around 2010. By that time, you could also get really cheap mortgages, assuming you had sufficient equity in your home.

I would argue that if the market drops 50%, most likely buying BRK.B won’t be the best choice. I expect the market offering some crazy bargains , if you know where to look, while BRK.B most likely won’t drop that much, since it will be regarded as a safe heaven stock.

I agree that an earnings accretive deal can be can be value destructive. With the current low interest rates, almost any deal can be constructed earnings accretive. The real question is, if he Capital invested in the deal earns a decent return in investment. If not, doing share buybacks should be lower risk, can be scaled as needed and that is what a deal should be measured against.

I think you guys are overconfident. BRK has fallen 50% top to bottom 2 or 3 times in its history. It can happen again. And if Warren was dead, there's no guarantee it would recover from 50% drop. ::) I'd be more concerned if Ajit died. We could try to tinker, calculate & speculate away in the Berkshire forum about what would happen to Berkshire book value if the market in general tanked 50 percent from here. My rough guess is that BRK equity portfolio of $180B would take a $90B hit in a 50% correction. That’s a hit of about 20% of the market cap or roughly 25% of it’s book value. I expect BRK book value to drop half (or a bit less, due to retained earnings) of the market move. Of course he is going to make it all back and then some.

My bad, I looked at last years numbers for seasonality and it seem that we can expect a ~22% revenue bump, half of which should drop to the bottom line. This would roughly mean $30-35M in FCF during Q2-Q3, but even with that, it seem FCF yield is a whole lot closer to 10% for thr equity rather than 20%. The big concern of course is that there are now so many alternatives to radio entertainment when you are in a car. Sirius of course, streaming music (Amazon music free for prime members, which is what I use, Pandora etc). If this is a melting ice cube, even if slowly, the stock won’t do well.

That's why I keep a spare Heloc or two around... Good idea, I should secure one of those. What do they usually charge if you don't use it? I used to have one, that was unused. The bank gave me a hard time during the GFC and when I wanted to refinance my first mortgage , even with enough equity and not taking any equity out, I had to cancel the Heloc otherwise they would not release the title.

Perhaps I didn’t focus more on this in my first post. They have ZERO issues selling/divesting/shifting/Fire sale-ing/punting/disposing the motorcycles. This is NOT a “can they sell it story”. They have figured out, a while back that, NOBODY is buying motorcycles with cash offers for nearly instant liquidity. They built a tech platform to enable this. (Technically they bought/paid for it from the same group that built the Truecar tech). Think about it, most items we own- small and big ticket- can be sold rather quickly. This includes cars. Motorcycles are similar to cars EXCEPT, they are a want NOT a need. Therefore, there are many of these “toys” sitting around and no efficient way to sell them. Sure you can post it on Craigslist or other sites and get lucky, but chances are your going to deal with a lot of headaches. You can sell your car by yourself but most choose not to and same with a home, which very few sell on their own. Beyond the “toys” in the garage collecting dust, RMBL has proven their ability to shift demographics from 50 year old men towards women and millennials. (I’m being a bit overly broad here). Younger people want liquidity and are non commital. Women don’t want to haggle. (Stereotyping, I know). Dealerships dont offer cash. SO, here is your first platform company that will buy your motorcycle almost instantly. (They are vehicle agnostic and the tech can apply to anything with a VIN #) So to find those bikes they need to market. (See previous post). Once the bike is acquired, they never see it or touch it. It’s picked up, transported and reconditioned through their dealer network. It’s simultaneously listed in their site for a limited time period and if it doesn’t sell to a consumer, it’s sold to a dealer or sent to auction. In all three scenarios they are profitable. This is totally divorce from Carvana that buys vehicles at auction and sells to consumers. RMBL BUYS FROM CONSUMERS AND WILL INCREASE THE AMOUNT SOLD TO CONSUMERS BUT IN AN EFFORT TO HAVE FREED UP CAPITAL, they turn the bikes quickly. How can they make a profit buying a bike from a private person and in case they can’t sell it to another private person, resell it to a dealer? I doubt they make a profit in this case. Also, with no involvement on their own, how can they prevent buying lemons that have non obvious issues (from scrapes etc)?

“Decisive moments in history” from Stefan Zweig is a collection of short stories about key moments in history, as told from the author. It is and example of great storytelling.

Storm of Steel is a good one if your a war enthusiast. i read “Storm of steel “ in German a while ago “Unter Sturmgewittern”. I think it is a better book than Remarque’s “All quit on the Western front”. The Author certainly lived what he wrote about. I really enjoyed “Joseph Fouche” from Stefan Zweig. It details the path of Fouche,a secret service bureaucrat for the King, then under the French revolutionaries, then under Napoleon. Quite a survivor in these times. Stefan Zweig is a great author, but little known in thr US.

Rough number last quarter: Revenue :$300.5M Station operating expenses:$255M corporate :$19M Interest :$23.5M total expense:$297.5M FCF before tax:$3M This excludes all restructuring expenses, which is very generous. Unless they can reduce their station expense and/or overhead or increases their revenues, this is going to be a donut.

I might not be terribly concerned about anti-Americanism, but I wonder about a bit related thing. As everyone knows (parts of) Google and Facebook are not available in China. Apple says that data on their devices is encrypted with no backdoors even for state level actors. What is to stop China from demanding that either Apple provides them with backdoor or Apple devices are banned in China? What would Tim Cook do? There are arguments of why China would never do this. But IMO it's not outside realm of possibility. It would hurt China, but would also accomplish couple goals: supporting local phone manufacturers and getting rid of secure platform for dissidents. If they can ban Google and FB, then why not Apple? I highly doubt that the security of any consumer device can withstand capable code crackers from a state like China. In case China were to demand a back donor by law, I don’t think that Apple could put themselves above the law. Ok, they could, but then they would be legally barred from selling their phone in a huge market. They would have to add this backdoor to devices sold in China. I don’t think it would be a difficult decision for Apple to comply.

ETM looks to free cash flow breakeven at best, unless you count reduction in receivables as cash flow. It‘s not clear to me if they make it.

One never knows, but 1.2x book ( which could be falling when things go badly) is not necessarily the floor. I did a small add at $190 in one account . My next buy would be around $180.

Shame on me, I thought that WeWork was a tech company, and it’s just a glorified landlord. Where is the plug for the bathtub?

This is true in the US as well, it’s just that nobody is worried about US treasuries yet. I do think that in some emerging markets, private credit ratings can be higher than the countries sovereign rating.

Bought a few PDER. Starter position. At least, I should get the quarterly and annual reports now.

Europe isn’t necessarily overbanked. Germany for example has less than Hall the number of branches /100K of population than the US (14 in Germany vs 33 in the US) https://fred.stlouisfed.org/series/DDAI02USA643NWDB The problem for banks in Europe is that competition is higher and margins are lower. A lot of banks have lower NIM (~2% vs 3%+ in the US) and fee income is less too. There is little unsecured lending for example with credit cards in Europe. Mortgages aren’t sold off either, since the equivalent of Fannie/Freddie Mac does not exist. I think the lower profits are due to competition from semi state or federal owned saving banks (Sparkassen), Mutual banks (Raiffeisen) and the lower interest rates overall. The banks that are most similar to US banks are British banks. Those also generate better margins more equal to their US counterparts.

Pretty balanced article from someone who is short BHF https://seekingalpha.com/article/4179284-brighthouse-financial-attractive-short-market-hedge