| Author |
The Crooked Path of Capitalism Replies |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
 Posted: Tue May 15, 2012 5:35 pm Post subject: |
 |
|
Ah serendipity!
Was just contemplating taking a position in Berkshire even believing, as Cramer expresses one post down, that his era (and him for that matter) are done. His classic letter on valuation and Berkshire contains all the gospel of what this "currency of finance" was meant to be (with a few nice tricky "intangibles" throw in for great not good measure. And his owners are going to be those few die-hards out there. Since one doesn't invest for the nano-second, or even the quarter--or even the year Berkshire may be the last (outside Exxon and sorta Germany) bastion of the long view. To that end I rolled all my GM preferreds into equiv GM warrants (until the next interest dividend) and the remainder into Warren. And presto! Today I see one of his codgers bought 10M shares of same. I'm probably the youngest codger on his team 
Well all this even though I think Cramer's right: Buffett's cross will be put politely on the wall and "book value" will go into the dustbin of investing. He's still in there with the buybacks, but I think it will be all about the closet bond for the next decade or more. Unless we get a wave of M&A, fine free cash flow and low debt/equity ratios are just gonna be yawners. It's now known what, when push comes to shove, a stock is worth. Next to nothing. And, of all stocks, what has done more to bring about this transformation is the great transformative company, Apple!
Apple (though not that long ago BK'd, on Gates life-support (I wonder if he would do it again?)) is retail's dream come true--everything you could hope and want of a company. No debt. Humongous cash. Free cash flow that small countries could drown in, "moats" far and wide and all built on a nice secure "platform" away from it all. And what do they get? A double with CD rate divi. And how much did you sacrifice for this little gem in your portfolio?!
They went after Jamie's bonus last week...the revolution will not be televised!
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
 |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri May 11, 2012 7:07 am Post subject: |
|
|
Of course JPM wasn't "stupid," it just couldn't execute its momentous "flattener" in a derivatives market that couldn't handle it. They were unable to rebalance the ratio and..... they didn't loose $2B. The myth of infinite contiguous liquidity marches on. They took one for the team on this one.
I'd be surprised if there were any more "surprises" in the other IBs on this one. I'm not buying the selloff however because we just killed a god.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Mon May 07, 2012 11:00 pm Post subject: |
|
|
...and here it surfaces: hero turned villain, icon to has-been, Mr. Wall St. itself ridiculed by Cramer and the power trend now, stocks that work for ME.
| Quote: | | ...I didn't want to write this piece. I think the world of Warren Buffett, and he has made money for hundreds of thousands of people, including many who are now millionaires. It's been a fabulous run. But right now the company has neither growth nor dividend and is, alas, worth more dead than alive. That's right, the breakup value of Berkshire Hathaway well exceeds its current value. Without a breakup, which is clearly not in the cards right now, there's not much hope for appreciation. The stock has underperformed the market drastically, and judging by the talks this weekend, it will continue to do so, because management is contented with its current stance. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sun May 06, 2012 9:07 am Post subject: |
|
|
The "equity premium." Is that all there is?
http://www.economist.com/node/21550273
Read the FT and will oft see the "old fashioned" idea that stocks are but the sum of their future dividends. How old fashioned!
I think this current time of "shareholder" friendly investing (dividends, buybacks, REITs, MLPs, closet bonds, etc.--and concomitant neglect of the rest), will become an era into itself. We have seen, in a pinch, just how little there is behind these fancy printed "banknotes."
http://www.morningstar.com/cover/videocenter.aspx?id=553020
Greenspan, in an interview on the Bloomie this week, referred to stocks as the currency of the financial system. Yes they're useful for measuring M&A, the mother's milk of the stock market. But, in the end, he defined equity by its negative: stock is a bondholder's buffer.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Wed Apr 04, 2012 11:57 am Post subject: |
|
|
| Given all the splash last year of Sino-Forest, it seems like the golden age of shorting Chinese stocks may be over. The opportunities are still there, but too many hedge funds are just blindly shorting Chinese stocks listed on the NASDAQ. |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri Mar 16, 2012 9:30 am Post subject: |
|
|
After first declaring, Oct. 25, '08, that "it's all about bonds, baby"... we can safely say that performance has exceeded any and all expections. Even mine. High Yield in the mid 6's, wow. I got out most everything here in spring/summer '10 and, other than disguised bank equity plays, only about 1% still in HAV--which continues to amaze even amid this spike last few days.
But "performance" doesn't really do this trend justice. It's clear that companies have been run and operated (and bankrupted) almost solely for the interests of their creditors. Equity is just a chit for measuring M&A. And that view has now been imprinted on retail investors (those who are left). Yet here we are, DOW 13000. But how much of that is disguised bond--and Apple!
And the only counter-example I can think of (other than the National Champion banks which HAD to stay trading, of only at $1+) comes from that crusty old equity master, Carl Ichan, and his bald creditor grab on Dynergy. Not only did it fail, but once in the creditor-comfy confines of BK he gets tared, feathered and pilloried:
http://www.bloomberg.com/news/2012-03-16/dynegy-disputes-examiner-s-fraudulent-transfer-finding.html
In the roaring 80's this was just "good business."
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Mon Feb 20, 2012 11:48 am Post subject: |
|
|
Economist Special Report: The Visible Hand
http://www.economist.com/node/21542931
| Quote: | | State capitalism can also claim some of the world’s most powerful companies. The 13 biggest oil firms, which between them have a grip on more than three-quarters of the world’s oil reserves, are all state-backed. So is the world’s biggest natural-gas company, Russia’s Gazprom. But successful state firms can be found in almost any industry. China Mobile is a mobile-phone goliath with 600m customers. Saudi Basic Industries Corporation is one of the world’s most profitable chemical companies. Russia’s Sberbank is Europe’s third-largest bank by market capitalisation. Dubai Ports is the world’s third-largest ports operator. The airline Emirates is growing at 20% a year |
.
That's one thing; Brazil's "privatization of it airports" another:
http://www.bloomberg.com/news/2012-02-16/brazil-s-airports-face-demons-of-privatization-dom-phillips.html
| Quote: | | The PT [Partido dos Trabalhadores, Brazil’s ruling Workers Party], who demonized privatizations, now did one. There are good indications, for example, with the idea that the groups will have to pay part to a fund which will invest in the country’s unprofitable airports. This could work out. |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Fri Jan 20, 2012 3:37 pm Post subject: |
|
|
http://www.economist.com/node/21542452
.... Indeed, since 1998, the effective return to hedge-fund clients has only been 2.1% a year, half the return they could have achieved by investing in boring old Treasury bills.
How can that be, when traditional performance measures for the industry show average returns of 7% or so? The problem is a familiar one in fund management and is the equivalent of the “winner’s curse” that occurs with auctions (the successful bidder is doomed to overpay). Take a whole bunch of fund managers and give them an equal amount of money to invest. The managers that perform best initially will tend to attract more investors, and so will gradually become bigger than the moderate or poor performers (who will eventually go out of business).
But the manager will not perform well indefinitely. By the time a bad year occurs, the manager will be running a much larger fund. In cash terms, the loss on the expanded fund may easily outweigh the gains made when the fund was smaller. The return of the average investor will be lower than the average return of the fund.
http://www.economist.com/blogs/buttonwood/2012/01/hedge-fund-returns
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Thu Dec 29, 2011 9:57 am Post subject: |
|
|
McKinsey Global Rpt, three-pronged structural decline in equities....It's all about bonds, baby:
http://www.ft.com/intl/cms/s/0/52100348-2248-11e1-923d-00144feabdc0.html#axzz1hwIjsLPt
Here's the one bright point:
| Quote: | And in any case, retail investors’ confidence in equities is shattered after the disasters of the past decade. To them, the extra risk of equities no longer seem justifiable. And for institutions, hedge funds and private equity have steadily encroached on demand for public equities.
|
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sat Oct 29, 2011 8:16 pm Post subject: |
|
|
With all the ridicule being heaped upon Europe these days we should withhold condemning the play for the players. Even the best, the German, underneath that deification of efficiency is a yearning towards greater freedom. Who takes the longest vacations in the working world?
Despite popular perception of the Germans as a machine economy (or, rather because of it) they are not machines and have a deep distrust of any economics that demanded the same...and when it comes to abstractions like "debt" that's....verbotten:
http://books.google.com/books?id=QjSi8pCnX-AC&lpg=PA327&dq=economy%20inauthor%3Anietzsche&pg=PA327#v=onepage&q=economy%20inauthor:nietzsche&f=false
Still don't believe it? Take apart a Porshce 911. It has "organs," hind and, most importantly for the hun, an poopshoot 
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
