Spekulatius

People put huge portions of their worth on this kind of crap, 10% is a baby weighing compared to some people in this thing. http://forum.thecontrarianinvestor.com/index.php?threads/gt-advanced-technologies-inc-gtat.69/ Read through this thread about GTAT, it will open your eyes as to what kind of % allocation some people with good intentions but bad judgement will do. The people that can pull off large concentration successfully are like 1 in a thousand, yet the number of people that attempt it seems reverse; 999 in a thousand. It appears one should short, what the folks on this website invest in. This GTET thread is quite a read. I am surprised how many folks invest their life savings in a microcap with a checkered history but a good sounding story.

Business I admire: Nestle: a consumer staples company truly managed for the long term. Focus in innovation and health. AAA balance sheet since forever. Keyence: Japanese company that is the undisputed market leader for optical sensors. Engineers love them. It seems like a company driven by Engineering and pretty successful at that. Fuchs Petrolub: Family controlled business with focus on mundane lubricants. Very systematic approach to gain market share (acquisitions, R&D) and strong long term financial performance.

Years back a Director at a small company that went public explained it to me like this. Paraphrasing "In a private company when you earn $1 you have $1. In a public company when you earn $1 you have the market's multiple of it. If your company sucks and you have a PE of 5 that is still 5x more than you had as a private company" You can sell your private company at a multiple of earnings, but that multiple of your private company very likely is lower than the multiple of a public company. A rights offering that includes existing shareholders would have been fairer. I don't know how much it costs to do an S-1 filing, but the fees for the SEC are quite small ($100/M of capital raised or so). I suspect that he main cost is for the lawyers writing the prospectus? The 0.048c price is not that unfair, since it seems close to the unperpetuated price of the stock and probably close to the NAV.

MSM is borrowing $365M at a weighted average of 2.09% pre-tax. After tax, this is less than $5M in annual interest. MSM currently pays $1.72 per share in dividends (2.4% yield). This is $8.6M per year. $8.6M dividends - $5M interest = $3.6M "cash saved" per year. In other words, they are borrowing at 1.29% (after-tax) to purchase shares that are yielding 2.4%. This seems smart to me, even if you think MSM is fully valued. -- MSC is trading at the same valuation as August 2008, based on EV/sales. If you believe that the U.S. manufacturing industry will grow and MSC's operating margins revert to normal and MSC continues to take market share, MSC is cheap on "normalized earnings". If you believe that MSC will lose market share to Amazon, this tender is a mistake. While I agree that the tender is accreditive, it limits their flexibility going forward to either invest in their own business (organic or acquisitions) or talk advantage of potential future opportunities to purchase their own shares when they should become really cheap.

Levering up becomes ever more popular, due to low interest rates. This would make sense if the shares are cheap, but that is not the case with MSM.

Gross margin <> pretax profit. While their gross profit indeed may be in the neighborhood of 20%, their SG&A consumed almost 30% of their revenues and was growing much faster than R&D expense (~18% of revenues). Just for reference, GM's SG&A expensive is roughly 6% of revenues, so TSLA needs to grow the company more than 5x to get into a competitive cost structure. Solarcity is going to be a burden for TSLA, balance sheet and management wise. I think the transaction was constructed to save Elon Musk face and spare him the visibility of a failure. Now they can just let Solarcity fail within the bellows of TSLA without drawing too much attention, It remains to be seen, how much the Gigafactory can reduce the battery cost. TSLA has shown that they can build some nice battery powered cars. However, unless they show that they are really good at manufacturing them at a competitive cost, I have a hard time seeing how this can work out, unless loosing money on each unit and making it up in volume is considered a viable business model.

I have to admit, XPO looks pretty good as a short candidate. High debt load, rollup, shady CEO - that is quite a good triage predicting problems. I will predict that much - they will do more acquisitions as well. They have to , most likely to mask issues with their ongoing business. Now I don't do shorting, but this is almost as good as it get's.

TSLA numbers were really crappy last quarter - there does not seem anything to stop the losses from accelerating. Moreover, we will see a lot of competition from luxury car makers (BMW, Daimler etc) in the electric car space within 2 years. I guess nobody looks at the numbers, as long as the belief in Elon Musk is strong....

^ +1

The stock ATMA.L tanked due to concerns over the health of the Nigerian banking sector apparently. It seems to be trading way below book value, but of course the shares of their holdings and the currencies have dropped as well. An interesting story to follow, but I don't know enough to make a informed investment decision. Anyone follows this train wreck closely?

A number of Liberty As are trading below Ks right now. It's mostly irrational, though some people try to explain it as a liquidity premium. I flip flop A's to K's couple times a year. Stopped posting it on CoBF since nobody seems to care. I care and have been swapping around positions as well. Thank you for the reminders! It's free money the way I see it.

$2.7B in pension contributions during the first 6 month of this year, that is a lot of money.

I see - thanks. I'm looking at a refi right now, but I honestly can't imagine refinancing again after this. How much lower can mortgage rates go? By my math, my fees will be repaid by monthly savings within 15 months of refinancing. I'm about to pull the trigger on it. If we get a recession, the 30 year mortgage will get below 3% for sure. I personally like a payback in less than 12 month before refinancing. NY has a tax on mortgage, which creates a hurdle on refinancing with a different lender unfortunately. When I was in CA, I was a serial refinancer with low/no fee refinances. My 30 year mortgage sits at 3.625% and I will start looking if we hit the 3.0%. I give this about a 50% chance.

Besides the rationalization of the consumer banking, the bigger industry challenge may be the rationalization of the investment banking, which I think is in the early innings. Investment banking is rally not earning any reasonable return on the invested capital since 2009, which in my opinion means that the business impaired if not broken. Yet, I have not really seen much rationalization and in particular don't know, why the sky high salaries in this sector have come down. It kind of funny to see an industry that tries to model all other industries (and to some extent determines how they are run) having such abysmal result itself year after year and not going through a rapid transformation that they would probably recommend for any other business sector, but their own. ::)

True, Mr Big has not and probably never will blow up. He will just continue to underperform. In addition, his business acumen is overshadowed by his greediness and hubris. I never invest, if I don't like the leadership. I actually think it is easier T discount a lack of business acumen in a CEO than a lack of integrity

MY favorite compounder is Nestle (NSRGY). I have owned it for 15 years (with some buys and sales over time) and never broke a sweat about owning this company. Over time, this stock has done ver well for me. FWIW! My last buy was in February 2009.

Wells Fargo's online banking platform is the worst of all major banks that I know (far inferior to BofA) and even my small CU is better than what these guys came up with. They have not really changed anything in their banking interface for about 10 years as far as I can tell. And don't get me started in Wells Fargo Brokerage, although the latter has been recently updated. It is simply amazing that a major bank has such an antiquated inline Interface. Their IT budget must be really really small...

I agree. I think the common theme is "If it sounds too good to be true..." It certainly is interesting to watch a number train wrecks (SHLD, Biglari, Zinc were others ) that were so intensely scrutinized as an investment to run aground. It certainly should teach a healthy dose of skepticism and humility ton aspiring investor. While I never invested in any of them (they mostly did not look cheap or Were too complex for me), some did look god even to me at some point, I have to admit. I think more and more that defining one's circle of competence is the most important thing and should rule over almost anything else in investing. When in doubt or something even remotely smells iffy, just stay away on it - because from my experience, if you do put a lot ofwork into something, you inevitable think you understand it and put money in an idea that may be outside your circle, as it turns out later.

Unfortunatly, that appears to be the case and I don't get any shares. I only owned a few BATRA shares but signed up for several thousand more. Didn't work this time, but one can try.

The rights offering should be concluded today. I only own a few shares but went full bore on the oversubscription rights and they seem to be showing up today, looks like 100% assignment to me. That would be a lot of shares and I'd have start watching baseball :P.

The answer for me would be "Never". I will never buy something that I am not willing to hold based on present knowledge. I will change my opinion, if new information warrants it from my POV.

That is such bullshit. This wasn't hard. It had tons of signs of a bad ending: A torrent of M&A, lots of debt, lots of rumors of unethical behavior, very aggressive management, incentives for management to pump the stock price, lots of adjusted non gaap numbers, and every time you try to read a 10-k you get a splitting headache. If you see these things, it's easy to figure out the right thing to do as an investor - you stay away. The people that got burnt on this didn't do investing. They joined a cult in which common sense is suspended driven by a combination of greed and hero worship. All you have to do is go back a couple of hundred pages on this thread to see it in all its glory. If anyone would say anything negative about VRX then you would have a chorus of people basically: 1. Keep repeating: Well Value Act and Sequoia are is so it must be great! 2. Parroting numbers from the management presentation without any reasonable analysis 3. Declaring: You don't get it man, Pearson is an outsider. There are some things that are hard. This one wasn't! Plus that one: 4) CLONING DOES NOT WORK

More grape/farmland acquisitions. Premium grapes don't grow in Kern County....

Haven't bought anything Since February....

Buffet and Munger explain an investment thesis better in one sentence than Ackman does in hundred PP slides ;D