Spekulatius

Joe Kernen ought to be one of the worst interviewers in TV history. It’s funny how he gets agitated and starts to rant when Dimon mentioned the CO2 problem and carbon tax as a solution.

Anyone knows what's currently in Rule Breaker portfolio? I believe that Netflix, Shopify and Amazon are in, based on what I heard in their podcast.

I agree that Fries should go. I have followed LBTYA forever , but haven’t bought until very recently. This business needs some solid execution and even slow growth in top and bottomline on a somewhat consistent basis makes this a $30 stock, imo. Fries has never presented a plan and executed to it during the 5+ years I followed this. It’s a neverending game of moving yardsticks.

A few issues/ questions: 1) It seems that Aspen has national accreditation, but not regional. Some of the regional accreditions (NY, CA, New England ?) are way harder than national standard, so I am not sure the Aspen’s degree is useful in many states. 2) How are they dealing with topics than can only be thought well with a physical presence. my wife had to work on anatomy (actually dissect cadavers) and work with ROA patients (sort of an Internet ship), when she got her RN degree in a community collage in CA. This just can’t be thought online. When you skim the message board, it clear that some students report issue with respect to above or some college don’t accept credits from Aspen. 3) Why do they need to raise cash every 18 month? BG2008, thanks for bringing this to our attention prior to the secondary. This might be a good tactical opportunity to get into the stock, if it sells off.

Thanks for sharing and welcome to the board. Your notes look great. My best ideas “where the fish are”: Equity stubs - if the business is stable or growing even slowly, they should work out, especially in today’s low interest and low spread environment Motley fools rule breaker portfolio seems to have a lot of multibaggers. I don’t know their hit rate, but they are defining onto something, imo.

So with WPC, ORI and MCY, you are bullish on property insurers? ORI looks interesting based on valuation metrics. I have owned MCY before ( a long time ago) when it traded at book value. I used to have my car and property insurance with them when I lived in CA. Added to my small starter holding on today’s Mr. markets hissy fit after the earnings release at $22 and below. Anyone know what this drop as about? I looked at the earnings numbers and they seemed fine to me. Anyways, it’s a relatively cheap stock and a decent business in today’s overpriced market. Book value is $20, so I buy this for 1.1x book. I have seen cheaper, but also way more expensive. I used to follow the company, but it dropped of my radar after it took many years to work through the aftermath of the financial crisis.

I use margin very sparingly for extraordinary opportunities. I would also limit myself to perhaps no more than 20% of my portfolio and reduce it as quickly as possible. Berkshire May have a lot of cash, but it has had several 50% drops during its trading history, so a 2:1 margin could definitely wipe you out, regardless of the fact that Berkshire ultimately was fine.

I think Paycom has GAAP profits while the other one don’t. It’s a nice and well run company, but the multiple is very rich, as you correctly pointed out.

There is a history of simplifying the structure (of course they take their due time). It seems reasonable Bollore is planning to simplify it further before handing it over to his son. As explained here https://valueinvestorsclub.com/idea/Financiandegrave%3Bre_de_lOdet/7018632841 that would most likely primarily benefit holders of ODET rather than BOL. Meanwhile this is a compounder over decades which can be purchased at a large discount to IV (it does like to invest in riskier markets and take on political risk e.g Africa and the recent fight with Berlusconi). I believe you'll do good regardless of short term changes to the structure if your investment horizon is measured in the decades. Looking forward to seeing contrary opinions :) @John: Glad to help keeping boredom out the door. Don't forget about the wife though, ODET will be there next week/month/year ;) Besides ODET (the holding above Bollore), there are other ways to buy in a discounted way into Bollore Spagetti structure though the low liquidity backdoor: Plantation des Rouges (not publicity traded and controlled by other holding companies like ARTO.PA) it controls CBDG.PA (62.8%) Compagnie Cambodge - CBDG.PA Financier Moncey - MONC.PA (quite interesting) La Societe Industrielle et Financiere de l'Artois - ARTO.PA These belong to a group of 4 Holding companies underneath Bollore, but only the three above are publicity traded. The float of these companies is quite small (<5% for the latter two) so they could easily be taken out. ARTO.PA has ~570M € in cash. Simply a mind boggling construct.

I agree on the balance sheet, it’s keeping me away from it so far. GME is clearly a dying business, which is not the case with MIK, imo.

Interesting clinical candidate with an unmet need. It looks to me like they will need to raise cash with a secondary very soon though. It shouldn't be too difficult to raise money (they've already done some licensing deals - one with a Japanese major and they also got some funds from CF foundation). Their Ph 3 results for Lenabasum should most likely be great (their Ph2 data and recent hiring shows they are prepping for approval) - out in a few months. Stock is ripping. Up 60% since this above discussion. Funnily i discovered this stock from a podcast where a healthcare VC with a great track record was pounding the table on it like crazy. I assume this VC was Jeff Arnold in “Angel Invest Boston” podcast. that’s a great podcast and I subscribed to it. https://podcasts.apple.com/us/podcast/angel-invest-boston/id1180248689?i=1000442790546

I heard this on the radio and made a note to follow up. I mean, Australia seems to be doing it so why not US? He did say we are importing deflation so as long as you don't import too much of it or too little, things will stay as is. Maybe, this time is different :). On a more serious note, I'm having hard time identifying excesses. Everyone around me (and I get the concept of selection bias) is cautious and is sitting in 60/40 portfolios and this includes newcomers to the market, old timers, and those who bought and lost houses in 2007. Market climbs the wall of worry. 1) For starters, housing in Silly Con valley is more expensive than it was in 2007. That applies to other west coast areas as well. 2) startup boom may collapse. Lots of froth apparently getting funding. Collapse will impact real estate, could computing, software revenues and housing (see 1) 3) Increased leverage of public companies - nothing too concerning, but will definitely reduce the flexibility in a recession for higher leveraged companies 4) Private equity bubble (hard to quantify, but based on the multiples being paid, there could be problems if credit dries up a little) 5) lower or negative interest rates - if those come to pass, they will destroy the financial system like cancer. 6) political change or geopolitical events (Markets assume that Trump wins, but is this a sure thing. Democratic candidate isn’t picked yet and could be negative for the market too). Iran or North Korea going rogue and forcing our hand. A recession could be occurring not because of one it factor, but because a garden variety of factors all nudge things into one direction (as they impact each other). Example of those garden variety recession were 2001/2002 and 1990/91. Just a few ideas of what can happen. If everyone expects sunshine even just a regular shower will get everyone running for cover.

10x normalized EBITDA isn’t exactly cheap in my for a company with that big of an existential issue. The fact that Airbus stock is also very expensive isn’t really helping all that much. Perhaps and investinöd thesis is w might benefit from Boeing’s problems - perhaps defense peers who might benefit from a sale of some of Boeing’s defensive business? my former holding BAESY benefited from some crumbs from the UTX merger where they acquired some business, even though the sales prices wasn’t exactly a bargain (12x EBITDA) LMT could never buy Boeing’s defensive business (at least not aerospace) unless thenUS government accepts that they have a monopoly on Advanced fighter Aircraft and many other things going forward. I can’t see that happening. Perhaps GD or UTX/ Raytheon...

SAAS Company revenues may not collapse in a recession, but it will be harder to land new deals, meaning that revenue growth will fall substantially and with that it will be hard to justify the frothy multiples.

it's unlikely max doesn't fly again that said, they're saying June/July for FAA approval so likely this turns into December BA's balance sheet, however, is starting to look a little less solid than it was only a year ago... not sure the additional interest expense that they will pay on the $10B is baked-into the price especially since they likely pay it all to LUV and AAL? I think it is possible that software changes won’t suffice and they have to change the hardware. This will probably cost $10B‘s , cause a lengthy delay and most likely the plane won’t be called 737 max any more. So in that sense, it may never fly again.

Regarding HA, it seems that Southwest will be competing with them more and more going forward. While I take it with a grain of salt a pilot who works for LUV told me that HA would be toast in a couple of years, because they cannot compete with LUV. https://www.staradvertiser.com/2020/01/19/hawaii-news/southwest-opens-hilo-inter-isle-service/

I have started to invest in Japan (after dabbling with some Japanese large caps trading in the US) after the 2011 Fukushima disaster, which caused a huge selloff in mid and small caps and offered a significant opportunity. After that played out, I have done some investments, that mostly turned out to be longer term swingtrades. I bought the stocks mostly based on metrics, but feel that my lack of understanding is a real issue, so expect for my post Fukushima trade, I never allocated much resources (capital or time) in Japanese stocks.

What is Boeing worth if the 737 max never flies again? The external liabilities to their customers (which they would need to make whole) and their supply chain are huge. It’s probably a doughnut in this case, or close.. Mr Market has been underestimating the problem and is starting to wake up. Perhaps regulatory capture will bail them out, perhaps not. It’s hard to handicap in an election years and sometimes politicians need heads on sticks. Airbus may well be dominating the commercial airplane business, if they play their cards right.

I started to look at this. I think they were bought out by private equity and then IPO’d again. They have been consolidating the arts and craft store category (Aaron). lots of debt from private equity heritage (~2.6B), but appears that it can be supported by EBITDA (~$800M). http://www.rocketfinancial.com/Financials.aspx?fID=264862&p=2&pw=8740404&rID=2 Recent negative sales trends seem to have wrecked the stock. My wife likes these stores aNd thinks that Amazon can’t really compete easily because a lot of items are low priced and need to be felt and matched to other items. So, it’s not easy to shop this only. It’s appears that management want to instill more of a sales culture and also foster community and demand through classes/activities. Seems to make sense to me. No position yet, I am just bouncing this off. I think it is a better bet than GME or TLRD , because the business is more defensible.

BAESY gone from my non-taxable accounts today.

Disney owns Family Guy and Simpsons now, I would assume American Dad also. In that case I don't understand why Fox mgmt then mentions all these cartoons as an opportunity in their entertainment segment? From page 8 in the AR19: "FOX Entertainment. FOX Entertainment delivers high-quality scripted, non-scripted and live content. During the 2018-2019 broadcast season, FOX Entertainment primetime programming featured such series as 9-1-1, Bob’s Burgers, Empire, Family Guy, The Orville, The Resident, The Simpsons and Star; unscripted series such as The Masked Singer, Hell’s Kitchen, MasterChef Junior and 24 Hours to Hell and Back; and event specials such as a live production of Rent." The cartoons that 21th century Fox used to produce still run in FOX channels, but the IP went to Disney with purchase of the studios. Fox now owns their own animation studio (Bento box) and intends to produce their own content going forward. Thanks for the clarification. Can you provide a source to this information? Does that mean that fox don’t earn a dime on their cartoons going forward? Disney mentioned owning the Simpsons in their IR presentation following the merger with 21th Century Fox. Secondary source: https://www.vox.com/culture/2019/3/20/18273477/disney-fox-merger-deal-details-marvel-x-men

I thinking that hedge funds are the likely marginal buyer pushing stocks higher. It’s had to find any large hedge fund that is bearish and most seem to be long. In addition, the FED repo action since Fall 2019 provides them with more liquidity (hedge funds are one beneficiary of the Fed providing liquidity via Repos). I could be wrong, but they my guess - the trade phase 1 deal with China provided the all clear sign, and after having underperformed for so long, these guys needed to do something and going long with liquidity provided is the lowest resistance way to go. https://www.cnbc.com/2020/01/17/david-tepper-and-stanley-druckenmiller-both-still-bullish-on-stocks.html

Disney owns Family Guy and Simpsons now, I would assume American Dad also. In that case I don't understand why Fox mgmt then mentions all these cartoons as an opportunity in their entertainment segment? From page 8 in the AR19: "FOX Entertainment. FOX Entertainment delivers high-quality scripted, non-scripted and live content. During the 2018-2019 broadcast season, FOX Entertainment primetime programming featured such series as 9-1-1, Bob’s Burgers, Empire, Family Guy, The Orville, The Resident, The Simpsons and Star; unscripted series such as The Masked Singer, Hell’s Kitchen, MasterChef Junior and 24 Hours to Hell and Back; and event specials such as a live production of Rent." The cartoons that 21th century Fox used to produce still run in FOX channels, but the IP went to Disney with purchase of the studios. Fox now owns their own animation studio (Bento box) and intends to produce their own content going forward.

RDS is an oiled major that seems to become more like an utility over time. At least that’s the ghost I am getting from the management presentations. The bull case is probably that it is way cheaper than any utility one can buy, with a dividend yield of ~6%+ and improving financial performance, I can see the stock retreating over time.

The Japanese market is for trading not investing. I have had decent results doing just that. In all that dreariness, there seem to be blurbs of euphoria or momentum trading or whatever it is that can be used to exit. It’s just a matter of when usually.