Spekulatius

FB numbers are stellar, IMO. As I mentioned in another thread, I started investing in 1982.If someone had told me that there would be a company in 2018 that would grow their revenue from $8B to $12B or 50% YOY, while making $5.6B in operating profit and having FCF left to buy back stock at the same time, I would have thought he would be nuts. Even more so, if he had told me that I can buy this for roughly 20x earnings.

I also think they utilities can at least theoretically recover the cost of a natural disaster from their customers via increased rates.

It ends with him sailing on his yacht and his investors using public transportation.

Awesome work digging into this and succeeding. I am not an OTC expert, but ai know that some guard their financials well. I still have one share of VULC ( had an order in for a hundred but somehow ended up with one share LOL) to remind me how management can stonewall. I have never seen any financials of VULC and have no idea what thr hell they are doing. My one share is up 3.5x from when I bought it.

The thesis seems Ok, but I wouldn’t short it anyways- the turnover is low enough that a short squeeze could be fabricated by someone’s. Also, Joe has cash on hand to do a tender for shares from Fairholme.

OK, I understand now - the allegation is that the losses in these subs were unrecognized on Vestas balance sheet at that time, which basically is accounting fraud. Deminor is apparently a company specialized on “recovery” and probably trying to make a living on shareholders lawsuits, which is more difficult in Europe than in the US. Apparently, they posted a transcript of this speech on their website: https://drs.deminor.com/en/erik-bomans-deminor-addresses-agm-vestas-3-april-2018/

Looks like Vestas has a sub for certain projects (of which the balance sheet is shown) that generated fairly heavy losses. The CEO is correct though, if this sub is consolidated (if in fact Vestas is thr majority holder, which seems to be he case there) then this is not a big deal and there is no fraud as far as I can tell. I don’t even think this answer is that arrogant. He should have alluded to what this sub exactly is doing and why it is supposed to turn around (as indicated in thr annual report).

Interesting. I agree that operating margin at Google is very carefully managed. However, his revenue growth assumptions seem overly conservative. GOOG dropping from reliable 20%+ growth y/o/y to 12.5% y/o/y overnight, then further to 2.75% after 5 years seems really unlikely. My own modeling assumes a reduction in growth rate of 1% per year over the next 15 years to stabilize at 5%. This would give a substantially higher valuation than $969. But nice to see that other than a differing view on input variables our two different models come up similar. My view is that Google is a reliable 15%/year compounder with a free option on another huge hit with Waymo. I've been adding below $1,000. IMO, the fact that GOOG is fairly valued, when you put half the current growth rate in this model, means that GOOG very likely is undervalued significantly, unless the wheels come off.

Mr. Big has more fun. :o

Since it went on sale today, decided to purchase a first lot of CHTR and LRBDA. I agree it’s thr narrative here - communication toll road at 9x EBITDA that will likely benefit from secular tailwinds including 5G. I also added a bit more CMCSA as well - same idea really.

5G is basically just a wireless drop for that last bit of distance to the property. You dont need wireless towers, and they wouldnt have to buy spectrum from VZ. So, hat means that 5G would only work within CHTR or any other service providers service areas?

The increasing cap rate issue become even more severe when there are secular headwinds like with retail properties. B malls trade at a much lower multiple than C malls and if a property drops from the B mall into hr C mall bucket, the cap rate could go from 7 to 10% easily. That is why I am not sure, if stocks like KIM are really cheap. Yes, they do trade at a discount to NAV, but is the discount really 43% like the report above mentions suggest. We know that they dispose of properties for a 7.5-8% cap rate and KIm trades at an implied 8.5% cap rate. Well, at least optically, that is not much of a discount. Of course , KIm claims that they are selling their lesser properties, but what if the bucket of clunkers constantly gets refilled, due to the issues with retail? It is not a gamble that I would be willing too take, given where I think retail is going and considering the fairly high leverage of even Reits considered to be well financed like KIM.

Gate access hardly would seem a hurdle, if the frequency on a route is only 2 flights / week. I think with these low frequency routes, it would just be hard for a new operator to make only returns against an entrenched competitor, unless he is willing to eat losses on that route for a while.

Why is spending a few hundred or even a billion dollar considered a hurdle for Chinese? It’s pocket change, if the government decides they want some of their champions to go down that road.

I don’t like mortgage Reits. Many have blown up in the past, interest rate risk is very hard to manage. It just feels like a bad business model. I would rather own Reits that hold hard assets.

I don’t think that a cannibal stock is something to really look for, as a successful cannibal requires cooperation from Mr Market (with a low stock price at an opportune time) to work. One can always synthesize a cannibal stock itself, via additional purchases. Most cases, stock purchases are done procyclical, when the company is flush, which tends to be when stock prices are high. The giveaway is that most mangement team measure stock purchases by the effort (we returned $X million to our shareholders to last year) rather than the result ( reduced our outstanding shares by X%), so thwt tells us already how they look at this.

There is no evidence to suggest that smokeless products will be less profitable. In fact it should be just the opposite. What evidence do you have of this? Better products will come and go with trialing. FDA will over time regulate most competition due to regulations, fees or studies needed for product verification. I think more competition will make it very hard to replicate the high profit margins with tobacco. There is no way off knowing, but I think it is a fallcacy to believe that smokeless tobacco will be as profitable as tobacco. We have seen already that disruptors can get into this market and get a huge market share, if their product is better. Smokeless tobacco is a new game, and I could see new entrants from the consumer food business or pharmaceutical companies try to play in this sandbox. Other than Marketing muscle, I don’t think the tobacco companies have much of an edge.

I knew what was coming when you asked that question. While I think you may be correct, in some ways, there are many ways to skin the cat and approach investing. I do know quite a few people who have never done a "Deep dive" that you are describing and who have done quite well. I have done OK too most of the time, and if not, it wasn't because I was didn't knew enough, it was because follow common sense. I am a "hobby investor". I work my job as a professional in a specialized field that has nothing to do with finance. Playing the stock market has been one of my "hobbies" since 1982. Since it is a hobby and a profitable at that, I am spending maybe 5-6 hours/week on this, bunt t sometimes very little for many month, if I don't feel like it and there doesn't seem to be much to do. I have also become lazier over time. I certainly don't have the time to spent 50h + on a single stock, especially, since i run a diversified portfolio as an insurance against my negligance. I invest based on heuristics and I am aware that those have limitations. I look at a few quantitative measures as a mental checklist 1) Is this a good business 2) Is the stock cheap 3) Is management capable and honest 4) Is the stock safe (from permanent impairment) 5) Are there more headwinds or tailwinds going forward That's pretty much it. I don't try to be extremely correct. I think it is quite easy in most cases to see if the business is "good" or bad. I also think it does not take all that much to find out if it is undervalued. It can be quite difficult to determine the headwinds or tailwinds in the future and this last one has been a recent addition of mine. I want to see at least 4/5 of these criteria being checked of before investing and I prefer a balanced scorecard over one that just emphasizes one (like cheapness). In most cases, if you are approximately correct on above, you should do OK. There are other reasons why I don't like spending to much time on a single investment. I believe spending too much time will leave to the fallacy, that you believe you know much more about the business than you actually do. If you spent 50h on a single investment, you most likely still have not had an inside look in any of these companies, spoke to an employee or manager and you certainly don't know how the sausage is made. But at least in my case, I found that if I spent that much time, the "sunk time syndrome" often works against me and I feel I need to do something when in fact it may not be warranted. So I might buy a stock, just because I spent so much time on it, not because it is better than another stock in an unrelated business. That has lead to some malinvestments for me in the past. But the biggest reason not to do this is because at least with some experience, going broad beats going narrow and I feel is not detrimental to investment returns, but avoids the nail and hammer syndrome.

I spent probably about 90min total, if that. Its compounding a bit, since i have been following it a bit since 2015,mostly as part of my Malone holdings, which I since sold. The way I do it, when something peeks my interest, I start to read up on the competition and study one or more competitors stock as well. I often like the competitors more since they fall more into a style box. In this case, I found that I like CMCSA. I do agree that CHTR could deliver higher returns, but I think there is lower risk in CMCSA.

I feel like some of the spinoffs are real turds nowadays. There is probably too much mo ey chasing opportunities within this category, but thwt is nothing that a decent marketcorrection can’t fix.Gor now, one is better off watching spinoffs are the Yan investing in them.

PM’ revenues and volumes were below expectation. I am bearish on tobacco because I think smokeless products will replace tobacco quicker than many think and won’t be nearly as profitable , plus new entrants can take significant market share with a better product (see Juules).

The do an amazing job in getting customers sucked in their Business ecosystem. We used to get primes just for the free shipping, but now I use Amazon music, Amazon prime video, Alexa, Amazon locker and we ave an Amazon CC. Amazon went from nice to have to very difficult to replace and the value we are getting is very extremely. Amazon has an tactic to pay it forward for their customers, they offer value first, then raise prices later. No opinion regarding AMZN as an investment and I don’t own stock.

Apple designed their products smartly and not by having 10x tighter tolerance. I know a bit about Apples inner workings and they control their supply chain. They own specify the processes, in many cases, they own the hardware and machines that manufacture the Product (even though threy are installed at the suppliers site) and they have supply chain managers and engineers at the suppliers site to control and check the manufacturing (essential in China). In any case, you get in most cases exactly the product you deserve from your supplier. In the above example with the car seat, the story sounds like utter BS to me. There are probably half a dozen mass manufacturer of car seats in the world that can make any car seat you want, the way you spec it. If they can’t build what you want, you have either specified it wrong, or you went to an incompetent supplier, outside the known circle. In both cases, the problem is Tesla. Supply chain problems are almost always the fault of the buyer. Most likely, Tesla’s initial design of the car seat was crap and then they told the supplier to build it the way they wanted and they got exactly what they asked for. Of course it is impossible to know without and inside view, but that is what experience suggests. A lot of their cash burn is just due to waste. Their manufacturing output isn’t even close to what the output of the old NUMMI factory was, despite many more workers and automation. I know it isn’t totally comparable due to product mix, but still - the magnitude of the gap suggest they are not doing a good job at getting things right in the first place.

I agree convergence and consolidation between wireline and wireless is the most likely path going forward. Verizon has already a dense fiber network in the Northeast and ATT in CA, some areas in the Midwest and South, but each operator needs to cover most of the US to give the consumer the best experience. It seems that in the mid term future, wireless and fiber will start to supplement and compete with each other.

Most likely the difference comes from distributions.