Rabbitisrich

If you are comparing companies within an industry, and you decide that different expense rates are largely timing differences, then EBITDA will look past the noise that FCF picks up. If you use an average, or some other smoothing process, then high growth can distort FCF type measures simply by overweighting recent information, so timing differences can lead to incorrect relative valuations. That is one example, but I definitely see how EBITDA can be used to justify, rather than to measure.

Yes, but I bet that Parsad could also link those traits to fortunate bumps like good role models, friends, etc... Plus, it's way easier to be ambitious when you see a pathway to be rewarded for effort.

Nothing wrong with the metric... just in it's use. Starting from EBITDA can help to look past accounting differences and cyclical differences in capex spending. You isolate those other measures and try to figure out the source of difference and how it affects EBITDA. The inexplicable part is when you see a fast n' furious multiple applied to arrive at a valuation.

Look at the Sexyama gifs that I posted in an earlier link. A technically sound opponent spots weaknesses in your posture. In the first gif, Sexyama catches the opponent's raised lead leg with his hip, which allows him to tip over the rest of the body with little effort. In the second series of gifs, the opponents rushes into Sexyama, bringing his feet together and accidently placing his center of gravity, again, too close to the Sexy's hip. A quick sweep and counterbalancing arm hook sends the opponent flying. These aren't very muscular moves. It's largely good timing and leverage.

Cort's report is consistent with the last manufacturing PMI. Look at the selected comments from machinery, metals, electronics, apparel, furniture, and chemicals.

Look at 4:42. The young man jumps to where he is guided. There are beautifully efficient throws and trips that can be executed against less supportive persons. These gifs of Sexyama show more realistic applications of leverage and timing: http://www.cagepotato.com/gifs-of-the-day-akiyama-even-makes-takedowns-look-sexy/

Unreal, indeed. Very cooperative. http://www.youtube.com/watch?v=G90YcgwAZTM

Keep in mind that IQ is just a summary of complex processes. The same number can cover people with large variations in specific aptitudes. In any case, the investing effect of "intelligence" is relevant so far as it effects your decision rules. If you strip away any romantic notions of intelligence and talent, and just look at relative strengths and weaknesses, then you can strategize accordingly. I tend to be overly optimistic on companies that I own (I tried to watch as much CBS as possible when I owned it). Solution: keep separate books for long thesis (usually 2-3 paragraphs) and worry points. Something about writing the bullish story, and then setting it aside, clears my mind.

The market doesn't let people get away with outsized returns on employed capital if it can help it. Eventually, you hit a wall with leverage and sales growth, and you have to dip into profit margins to make more money while still achieving acceptable marginal ROIC. The weird thing about all these mean reversion articles is the static nature of the reversion. I guess sales hold and some expenses just increase? The increase in expenses affects nothing?

Was it the NYT that disseminated such an interpretation? Going from $9 to $5 feels differently from $2 to $5.

Lesswrong has a few gems. This study argues that domestic politics predicts elevated levels of anti-american sentiment. Such sentiment increases in countries where an islamic group competes with a secular group compared to countries where the islamic group has secured power. http://www.volokh.com/2012/06/24/why-do-they-hate-us-4/

http://www.nytimes.com/2012/06/25/technology/companies/with-tablet-microsoft-takes-aim-at-hardware-missteps.html?_r=1&pagewanted=all It's not a data oriented article, but still provides good perspective.

The ratio should be apples to apples. Market caps are nominal, so nominal GNP is appropriate.

Good article from Conor Sen on demographic pressure: http://www.minyanville.com/business-news/the-economy/articles/household-debt-mortgage-mortgage-debt-economic/6/25/2012/id/41956

The other recent acquisitions have been domestic portfolios (or secured by domestic assets) purchased from foreign domiciled banks. Is this a similar transaction, or is WFC maintaining a foreign office?

Seattle nearly led the nation in unemployment that year. Rents were higher in 2000 vs 2002. The tech bust was especially painful in Seattle. I was a landlord of two single family homes at that time (Kirkland and West Seattle) -- I remember it well. Thanks for that detail. Looking at this chart on apartment vacancy rates, the recent recession wasn't even the worst period for landlords in the last several decades: http://www.duprescott.com/productsservices/articleinfo.cfm?ArticleId=575 According to the article, only 1800 units were opened in 2011, but a recent Bloomberg article referenced plans to build 4600 units in Downtown alone.

I would say you have either been a landlord or have very good intuitive skills because you have described very accurately what it means to be a rental property owner. He has some great stories on his website about the the investment process. I'm waiting for the next part of this ominously named series: http://ragnarisapirate.blogspot.com/2012/05/sometimes-its-best-to-take-pass-40.html http://ragnarisapirate.blogspot.com/2012/06/walking-away-from-few-million-dollars.html

Just saw this interesting rental ask price comparison in Seattle: http://www.urbnlivn.com/2012/06/17/seattle-rents-2002-2012/ Edit: It looks like the image function isn't working. Is there anything I should do aside from copy and pasting the image location?

Any valuation multiple is just one side of various DCF equations.

http://www.corelogic.com/about-us/news/corelogic-reports-shadow-inventory-fell-in-april-2012-to-october-2008-levels.aspx

If anyone needs a break from reading about banks, Europe, and China: http://www.chicagotribune.com/news/watchdog/chi-0604sushi-1-story,0,4666032,full.story The reverend Moon is a heck of a businessman: http://en.wikipedia.org/wiki/List_of_Unification_Church_affiliated_organizations#Businesses Affiliated businesses include a gun manufacturer, a Chaebol, the Washington Times, and a U.S. property development company.

I think that you could make a reasonable argument that unexpected inflation is theft, although then again, you could say that the very existence of inflationary mechanisms implies that the threat is in the discount rate. Why would homo economicus care about "virtue"? It simply views the world in its various possibilities and makes its bets.

http://www.reuters.com/article/2012/06/19/us-jpmorgan-syncora-lawsuit-idUSBRE85I1PV20120619 The MBIA/BAC appeal on loss causation is supposed to return to trial in October.

I don't think things are THAT bad at SWY just yet. Management has been rolling out an interesting customer loyalty program where you "upgrade" your membership card at the store. Logging onto the Safeway website then offers you access to discounts based upon your shopping history. Some of these discounts are quite severe, such as a 2 lbs Tillamook cheese loaf for $3.99 (normally $9.99), and Peasoup Anderson's for $0.99 ($2.50). My local Safeway posts two employees with tablets to aid customers in upgrading accounts. Despite the dropoff in capex, there is still innovation. If anything, I would accuse management of excessive financial engineering, playing too cute with interest rate expectations, and borrowing too much from the pension plan.

Thanks for the summary. That is really unfortunate. Looking at the March '08 report for FPA Fund, they had some really interesting ideas in retail, but plunked most of their risk money into energy and tech underperformers. The retail picks were really impressive, particularly given their bearish view. Lots of contrarian and thoughtful names... almost seems like a sub-portfolio w/ separate management.