Spekulatius

No wonder, he likes 3G, he provides some funding and his reputation, and they do all the work. It's a great arrangement for the old fool, who would not like such a deal and the folks that make it possible?

Thanks for posting, I couldn't find the interview. He does a better job of explaining it there than on the call. Interesting stuff. RIAs should be extremely sticky customers. I only have 11 accounts and it pains me just to think about what that process would entail. Hedge fund clients are also sticky, but obviously switching is easier for them (a little over 50% of hedge funds only use one prime broker by the way). I met with a manager several months ago (mid-ten figure AUM hedge fund) who switched from IB to a mini-prime and he said it was a pretty meaningful disruption to his business for a couple weeks. He also admitted he's getting worse pricing now (which should probably be a concern for his clients but whatever). It would be interesting to know why he switched? As a client that has just a few 100k with them, I feel IB has advantages, but also serious drawbacks. There is not one broker, that meets all my demands, but Fidelity and IB probably come closest. If Fidelity makes their international trading and more competitive and allow trading for dark stocks again or IB fixes their reporting and their punitive commissions for lower priced shares, I could envision myself to move completely to either one.

Are your prices adjusted for inflation? As you can see from the graph I posted earlier, after the smaller late-80s bubble burst in TO, it took over 20 years to get back to the same point inflation-adjusted. The prices are not adjusted for inflation. Even more astounding - my first 30 year fixed loan had an interest rate close to 7%, if I recall correctly, my last refinance around 2011 (for a 15 fixed then) and interest rate of 2,5%. it just shows him disconnected home prices can become from fundamentals.

Seems risky to invest in a company that loses 90% of their employees in one scoop. Basically, this company is going to be totally degutted. I know everyone is replaceable, but if you replace everyone at once, well.... I have seen some corporate relocations in my career where the vast majority of the employees was not willing to relocate with the company and the track record is not good. A lot of these business don't exist any more; the business went to zero, before the costs did.

Well you never know. I bought a house in CA in 2002 for $320k. The value of my house peaked around late 2005/early 2006 at ~$500k. The the prices started to go down and value of the house bottomed around 2010 @$280-300k. I for sure would have been able to buy a nicer place for the same money around 2011 or 9 years after I purchased my house. I sold it in early 2015 for $465k because I moved elsewhere. So, even though I did not buy at the peak, I could have purchased my house about 9 years later for the same price after the correction caused by the Great Recession. Strange things happen, when people go collectively nuts.

+1 Until their account RIA business reaches $15000001 in size probably :P

I own some KRG and some SKT. SKT is a high quality Reits that owns outlets and KRG is a mall Reit on the mend with grocery anchored properties.p, with a Cap rate in the mid to high 7% range. I have looked at WPG and CBL but I am not confident in the quality of their properties. I think it will pay to look at quality first, and valuation second, when looking at Mall Reits. I don't think the valuation for better quality assets is at a point that warrants a large bet yet.

Low 30s is the answer I've come to as well. glory, I responded to your email, but TwoCitiesCapital brought up another important aspect that I forgot to mention. Low volatility in the markets has also pushed down trades per day per client. Bear markets will lead to higher volatility and probably more trading and higher profits for IBKR, but likely the stock will be cheaper. IBKR's profits basically went nowhere for 10 years or so, because the main profit generator at that time - the marketmaker faltered and the profits were replaced by brokerage segment, leading to more or less flat overall profits.

Andy Warren went to STX(?), a private media company. There is not much talk here about DISCA, probably because he stock has been flat. It looks to me, that the currency impacts have masked a lot of organic growth and at some point this should abate. I like the fact, that they can reduce their cash taxes with Solar projects (mid teens IRR) and hope that they get this right. Overall, with ~12% of the viewership and only 6% of the transmission fees, they have catching up to do, so I think they would be OK, even if cordcutting accelerates. I really like their Eurosport acquisition, this is a strong brand in Europe and I feel can be monetized better. The stock is a cannibal as well, buying back about 5%+ of the outstanding shares every year. It looks like they will turn down their buybacks a bit, due to cash expense from solar investment, but as long as they are getting a good cash return on those, I don't mind. it's the one Malone company that is still reasonably valued and a good business as well.

I don't expect a recession in 2017 but perhaps in 2018 or 2019. In any case, I think we are getting closer to the end of this economic upcycle. The zero LL provisions that many banks have been experiencing are not sustainable and at some point, the LL provisioning habe to normalize, even if we do not have a recession. The scenario that you are providing for WFC with a 3% dividend, 2 % buybacks and perhaps a 5% book value growth only provides about a 10% annual appreciation potential. For a best case scenario, that I rather slim, imo.

Not sure I agree with either of these statements. An unemployed surgeon is more valuable than an unemployed ditch digger. Price does not equal value. Free education does not devalue the education. The price is just a transaction price. Look at the Chinese cities built upon free IP, they are in fact more valuable because they have removed the transaction cost. Most education and information is already out there to learn freely. Heck, I can download a med school's worth of textbooks and watch all the lectures online. That is not the reason we don't have a civilization filled with doctors, engineers, etc. I grew up in Germany where education is free. You can go to an university and basically study what you want, if you pass the Abitur (except some restricted subjects like Medicine). However starting at a University does not mean you will be able to get a degree. There is not that much guidance, it is sink or swim. Half the students were gone after 2 semesters because they figure they wouldn't make it. I like meritocracy based in skill and hard work.

I agreed... Goodhaven fellas seems to have very similar investment approach as P.Watsa. ;D Who knows, mayb Goodhaven did some tax loss harvesting. Depending on what their purchase price was, a position can be worth more dead than alive.

+10 or so 8) I liked "Fooled by randomness". The rest of his books are just repetitions of the same idea, written with pompous prose.

I also expect a significant increase in provisioning down the road, especially if interest rates keep rising. Right now, provisioning is very low/nonexistent. I expect that most of the windfall from higher interest rates will go into provisioning expenses.I don't think they WFC at 13x earnings is such a bargain here, especially at this point in the cycle.

The purchases are small and have resulted in a bump for the stock. It probably gives them more breathing room too with creditors and suppliers too, if the stock prices looks a bit better. Maybe there is another angle too it. EL sucks as a CEO, so I would thoroughly discount when he purchases stock, especially since he bought stock at way higher prices in the past. It's a different story with a CEO that seems to know what he is doing.

Financials are different in the sense that treating the owners fairly is not the main concern of the regulators. Since most of the capital that financial are working with is debt of some sorts, the main concern is that the creditors and are made whole as much as possible, because the trust that you get paid back is what keeps the financial system functioning. If the owners lose, well that is their problem, but as long as the financial system works, it is not a major concern for the regulators . I always felt that bowing to the regulators is the price to pay for getting access to other people's money at favorable terms.

Chinese love of old, wise and rich men! WEB is sort of the 21st century Buddha.

It is amazing how Buffet has this public persona where if you went to work for him, you had a job till you die. But in reality, if you made mistake, you get the boot or as they say "retire". Despite this, I think Berkshire has some of the best executive/employee retention track record. Does anyone here know how Berkshire pays its managers and what are the tools to keep them on? It seems to me he has this low risk culture for subsidiary executives. If they just dividend the money back to him they get paid more; if they risk some money: they better get it right; if they do get it right, then they get to manage a bigger subsidiary and get paid even more; if they get it wrong, they'd have been better off not taking unnecessary risks and letting Buffett manage the money... In other words: they are allowed to shoot fishes inside a dry barrel; if there is still water then they shouldn't risk it. This kind of low risk culture is the exact opposite we see in public companies CEOs and seems to me is a big advantage for Berkshire wealth maintenance objective. I suspect the acquired business weren't that great and t wasn't just the decline in the price of crude that impaired the,. WFT for example appears to run their business very poorly, or they become poor business while they own them. The executive probably was canned, because that was an unforced error - WEB encourages bold on acquisitions, but does so, because they are supposedly low risk. I think he sees the acquisition price and probably was Ok will what they paid, but if the business owners twelfth is crap, it's on the executive and in my opinion should be dealt with, From my perspective, the due diligence that a lot is of executives do on these acquisitions is laughable. I have experienced a few as an engineer where I thought that sending a few good engineers and operations people into the to be acquire company for some due diligence would have uncovered issues very quickly, the came later back to haunt. in public companies, failure with acquisitions are rarely acknowledged an much less leads firings, at least not at the executives ve level. It can lead to consequences at a mid r upper management levels, when they can't get a handle on fixing something that supposedly did not need to get fixed to begin with. My favorite quote from the Sopranos applies to the business wowners world as well, maybe even more so than for the Mafia: "Money flows up, shit flows down"

Looks like WEB really dislikes DOW and hedges his exposure. I think he is onto something,because DOW was snreally to a large extend a commodity chemical company that claims to be a specialty checmical company and that will at some point see a Dramatic reduction in margin. I think it will be a great short at some point. Besides that, even specialty chemicals see large variations in margins, that tend to expand early in the economic cycle and contract in the mature state. There is a lot of petrochemical capacity being build in NA, which I think can lead to oversupply issues.

"An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.” And another one... To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.” And another one... You've gotta know when to hold them and gotta know when to fold them....

I think one of the issues with those companies (SYTE, PDH) taken over by value investors is that they are really small and generally cash flow negative. When we compare this the Berkshire, in the mid 60's, well Berkshire was already a $50M revenue company back then 50 years ago, which would be like a $500M company now. This means that Berkshire had way less corporate overhead than PDH or SYTE. Berkshire was a crappy business, but it generally wasn't losing money and tax loss carryover and shrinking working capital means that cash could be extracted from the business. Getting in at the ground floor is only a good idea if it takes off. I could well I imagine buying in, when these companies are 10x their current size. Sure, the stock could just go stratospheric and become overvalued, but then there is the possibility that the business improves and the stock does not.

I think some people, after over 2.5 years, still haven't realized that this is pure hope and nothing more. To be clear, Parsad is a great and talented investor and chances are he does very well. This is what I posted 09/2014: For all you know you are already paying a very rich premium to fair value. What is your investment basis other than "the turnaround will work under good management"? How long will it take before things stabilize? Before they get decent returns on invested capital? This will impact your return tremendously. This stock price explosion is little more than speculation and a result of a 5-year old extreme bull market, exploded board membership and idolization of permanent investment vehicles and great investors. No offense to anyone. After all, speculation can still make you serious money when done right. And I still believe it is true. And being honest and thrustworthy and all is nice, but returns are what ultimately matter most. No one is doing this out of charity and neither should you as an investor. I also feel like the risk here was underappreciated by most. Claiming that's how Berkshire etc started back in the day is just cherry picking those few that succeeded. Most fail horribly. Berkshire was in better condition than PDH at start and dilution to stay afloat was not an issue. Yet Buffett said it was his worst mistake. No bonus points for complicated investments etc... Regardless, best of luck to all! +1 I think there will be enough time to invest in PDH, when results are improving and competency of the management is clear. I know it is harsh, but based on what I see so far, this is still a turnaround In progress and management isn't proven. Being ethical and having value bent is good, but not enough to be successful running a business. Running a business well is very hard, turning around a business is even harder and has very little to do with being good at investing, imo.

Buy VSI instead - similar valuation (taking into account the leverage), better comps,less dependency on indoor mall foot traffic. I like their stores much better.

The vacuum tube for the Hyperloop just needs to be large enough in diameter to fit a train through, unless Elon Musk plans are more grandiose than I thought they would be. A tube of let's say 5 m diameter is possible, it is in fact not that different than a pipeline tube, which are able to sustain very high pressures. I will rest my case in this thread, it just encourages trolling and there is not relation to investing either.

It is correct that EV's are still an evolving technology, so it may very well be that they will become more reliable than combustion engines now. That does not matter for a customer who buys the product now however. Also, on the same note, SSD's are not more reliable than hard drives right now, they just fail in different ways. There are some studies around and often hard drives actually win in terms of reliability.