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Awesome, I might follow you into the position…although I’m worried GooG could trade sideways for a few yars.
Cities teem with evil and decay, let’s give it a good shake and see what falls out!!
i too am worried about that scenario, however 1) it doesn’t matter what it trades (though ppl i help will question this) in the short-intermediate term 2) focus on the business and the stock will follow….
i don’t like the fact there is no dividend, but you can’t have it all….i figure i get my divs from my share of Santander…..
i’m still considering INTC….will see how that pans out…will get more insight over the weekend….
Frank have you ever looked at the healthcare IT sector? I think there’s some strong growth in that area. IT firms tend to have high switching costs I believe and perhaps in the medical arena that could be magnified.
I’m currently looking at QSII and MCK, haven’t thought “deeply” about it though.
Healthcare IT i read about only in newspapers/articles: impression I get right now is that it is extremely difficult to get clients to sign up as the different systems do not “talk to each other” and doctors are relunctant to incur the upfront cost (putting the info into the database) ….however, i believe Obama is giving them more incentive…if you dig deeper and find something pretty good, let me know…..
at this point anythign to do with IT/tech, I’m sold on google and optimistic on their 5 avenues 1) ads 2) mobile ads (android) 3) hardware (tv, handsets for more ads) 4) glass 5) cloud ….not all will make money but i can see how they could…..
I’m probably being heretical here to the value investing orthodoxy. But do you think LNKD is somewhat cheap if you look at it on an FCF rather than Net Income basis? The firm is profitable and it has room to grow….people do pay to use it.
Frank you ever looked at Markel? Seems to be similar style of biz as Berkshire or Loews.
yupe looked at Markel…..still looking at the moment….
It seems to me that a lot of these insurance/investment firms like Y, BRK, LUK, MKL, L, etc etc have been trading at historically low valuations since the 08 crisis. In terms of book value they’ve rapidly recovered but valuations have not kept up.
But then again, I don’t really know how to value insurance firms….
struggling with their valuations but you’re right on the account of historical valuation.
broadly speaking, they’re an excellent firm (compounding bv by 12%)…however, using my math, you will likely earn 7-8% a year on this security over the long haul….i think the company is decent but its not terribly undervalued at the moment…..
Yeah I agree on Markel, definitely adding to my watchlist though…may sell puts on it….I’m going long Loews (L). BVPS has compounded at roughly 10% over the past 10 yrs…and it’s trading below BVPS…and BVPS tends to underestimate value….management is good…so *tap on wood*…
I know you object that much of their growth has come through buybacks, BUT, I see it as a positive that the firm is willing to buy back regularly over time in order to create appreciation, so I don’t need to look for a catalyst.
i sorta like Lowes but i like the growth to come from the underlying business. From what I have gathered, lowes is a top notch operator in terms of efficiency and capital allocation, but their underlying businesses are weak (I have diamond and I think they operate well over there but they basically milk out as much as possible from their aging fleet of drillers). i think you will make money on lowes though. however, i dont think i can put 20% of my money into that at the moment.
if i didn’t mention, i got in on intc last week at a touch off of 25…
Also, you know in the Greenwald book.. for the margin of safety calc PV/EPV…what was the “solved” equation he had in the appendix of the Intel chapter? i think he has M=1-(G/R)(ROC/R)/1-(G/R) but i can’t seem to reproduce his matrix using that…
I actually have not read Greenwald’s book…..sorry. Maybe I should….
You’re right on your point about Google, it really is quite undervalued and both G and Msft have distinct niches in the software world. I have tried using Bing, but Google just “feels” right in a way that Bing doesn’t and I keep switching back to G.
There was a post on VIC about Sallie Mae Preferreds (SLMBP), they’re floating rate bonds trading at 45 with par of 100. But idk how you feel about the student loans on Sallie Mae’s balance sheet
i definitely like MSFT too……waiting for it to dip a bit before I get in……..maybe i’m not seeng something very obvious as i’m no expert in the tech space but it strikes me as odd that a company with strong and sticky cashflows is selling for ~10X P/E, P/CF…..i mean, the growth may slow, but over the years MSFT/Intel has grown their cash flows by over 100%+…….the market is essentially saying these guys are not going to grow anymore which is pretty big a stretch to me…….analysts are saying their margins mgiht contract and global growth blah blah blah, but i really don’t get it….and they have a solid dividend to boot….
In case anybody is interested given what we’ve discussed re: insurance.
so you like insurers ha?
They do have attractive characteristics and seem to be trading at cyclical lows….but I dont know much about how to evaluate them….I should learn this…
you have to get expertise in 1 or 2 industries I think for employment in Canada…
coming from Canada, it was either financials or mining/energy……both these sectors are huge and quite difficult imo…..but its worth it cause you can leverage it to other sectors quickly
In case anybody is interested given what we’ve discussed re: insurance.
Research with a sense of humor lol. Thanks for the share
Frank have you ever been able to decipher Leukadia National’s financials? That thing is a monstrosity.
Parker Hannifin looks real interesting, need to smoke on this a little bit more though…
haven’t looked at Leukadia….
I”m going long JPM today….5% stake….
valuation and postiive headwinds in terms of dividend increase/buyback and US recovery (slow)….not a great bank overall but has assets to support a tangble book valuation
CIO losses should be manageable even if it goes to 15B (they can earn through that)…..the losses are a positive to me as it helps clean house…..
through the cycle i expect them to earn in the area of 11-15% of ROE so given valuation I can make north of that range…..
frankarabia, are you out of your cotton picking mind with JPM?
please explain. perhaps i’m missing something.
i think its an average bank selling at a below average price with capital repatriation on the way…….
of the big 5 (BAC, C,. JPM, WFC, USB) JPM ranks right in the middle in terms of quality but valuation is off and was wacked cause of the CIO losses….
you’re buying this bank at Tangible book with the bulk of repurchase demands already settled…..CIO losses also cleared though more lossess on it can occur but can be earned through….US housing looks to have turned or not getting significantly worst…..
strenght of the bank include (not limited to JPM) high coverage, provisons trending down, high capital ratios…i don’t like their productivity ratio but things can be better……i personally feel the big US banks will get stronger overtime…..breakup value of the bank is also higher than current market value….once investment banking picks up at the same time lending increases, you will see this stock revalued close to 1.3-1.5X book…..
you could make all those arguments for all the big banks, again why JPM?
buying citi/bofa is buying lower quality bank at junk level valuation (there is a diff)…..buying JPM is buying average quality bank at below average valuation…and wfc/usb are selling at where banks should typically trade at for the risk adverse investor….
and no you cannot make the same statement for all those US banks….
just became a bigger partner wtih teva…
What do you see in Teva in the long term? Aren’t they just a generics maker? Or do you see them migrating up the value chain?
EDIT: You’re right, they do have some really good metrics…hmmm.
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