Author Topic: What are you buying today?  (Read 1387897 times)

Gregmal

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Re: What are you buying today?
« Reply #3460 on: December 07, 2018, 01:38:47 PM »
What was Cisco’s P/E or EV/EBIT before it collapsed ?

Over the past 10 years, I've seen two kinds of collapses. First is sky high valuation followed by disillusioned shareholders. Second is stock moving lower first, and value investors screaming bargain all the way down, while E continues to deteriorate. I think AAPL is in the second basket. The problem with valuation with P/E is that you have to be damn sure that E is going to go up, not down. AAPL is changing reporting standards. That's a tip off that the next few Es will be bad.

It seems AAPL got a whole lot more popular(especially around here) once Warren capitulated and bought in big. You'd think there wasn't even a bear case anymore the past year, which is odd because there was the entire way up when Icahn owned it. Just my lazy guess, but Buffett's buying spree probably put $50 a share on this that wouldn't have been there otherwise...


rb

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Re: What are you buying today?
« Reply #3461 on: December 07, 2018, 01:49:23 PM »
What was Cisco’s P/E or EV/EBIT before it collapsed ?

Over the past 10 years, I've seen two kinds of collapses. First is sky high valuation followed by disillusioned shareholders. Second is stock moving lower first, and value investors screaming bargain all the way down, while E continues to deteriorate. I think AAPL is in the second basket. The problem with valuation with P/E is that you have to be damn sure that E is going to go up, not down. AAPL is changing reporting standards. That's a tip off that the next few Es will be bad.

It seems AAPL got a whole lot more popular(especially around here) once Warren capitulated and bought in big. You'd think there wasn't even a bear case anymore the past year, which is odd because there was the entire way up when Icahn owned it. Just my lazy guess, but Buffett's buying spree probably put $50 a share on this that wouldn't have been there otherwise...
There were people here joyfully buying AAPL way before Buffett got into it. I foolishly wasn't one of them. But in the past even if I wasn't a believer in Apple, I came close to buying a few times just because it was so damn cheap.

Of course a stamp from Buffett would move the thesis. Berkshire has never made a mistake with this much capital. I'd venture out to say and Buffett will agree that the Buffett buying spree happened because that extra $50 or more per share should have been there.

Gregmal

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Re: What are you buying today?
« Reply #3462 on: December 07, 2018, 01:59:35 PM »
What was Cisco’s P/E or EV/EBIT before it collapsed ?

Over the past 10 years, I've seen two kinds of collapses. First is sky high valuation followed by disillusioned shareholders. Second is stock moving lower first, and value investors screaming bargain all the way down, while E continues to deteriorate. I think AAPL is in the second basket. The problem with valuation with P/E is that you have to be damn sure that E is going to go up, not down. AAPL is changing reporting standards. That's a tip off that the next few Es will be bad.

It seems AAPL got a whole lot more popular(especially around here) once Warren capitulated and bought in big. You'd think there wasn't even a bear case anymore the past year, which is odd because there was the entire way up when Icahn owned it. Just my lazy guess, but Buffett's buying spree probably put $50 a share on this that wouldn't have been there otherwise...
There were people here joyfully buying AAPL way before Buffett got into it. I foolishly wasn't one of them. But in the past even if I wasn't a believer in Apple, I came close to buying a few times just because it was so damn cheap.

Of course a stamp from Buffett would move the thesis. Berkshire has never made a mistake with this much capital. I'd venture out to say and Buffett will agree that the Buffett buying spree happened because that extra $50 or more per share should have been there.

Wasn't referring to anyone specific in the above. Just an observation. The growth slowdown is obviously nothing new. It just seemed that this worry became less relevant in the past year, coinciding with Buffett buying and the stock going on a tear. I'm a younger dude, but I've never seen Warren fly into a position like he did with this one. I find it interesting to observe from afar.

rb

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Re: What are you buying today?
« Reply #3463 on: December 07, 2018, 02:07:15 PM »
Just off the top of my head American Express (more than once), Coke, and Wells Fargo were also fly into them positions. It's Warren's style when he figures a really good deal. He can't help himself.

Gregmal

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Re: What are you buying today?
« Reply #3464 on: December 07, 2018, 02:33:49 PM »
Yea the bulk of those definitely pre-date my obsession with investing.

Jurgis

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Re: What are you buying today?
« Reply #3465 on: December 07, 2018, 02:34:18 PM »
Picked up more BRK, WFC, AAPL

You see we all can share good prices on the market.  8)
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Lance

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Re: What are you buying today?
« Reply #3466 on: December 07, 2018, 02:50:07 PM »
Throughout the week I bought AAPL, BP, BPR and TCO.

Thanks
Lance

John Hjorth

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Re: What are you buying today?
« Reply #3467 on: December 07, 2018, 05:16:38 PM »
Just off the top of my head American Express (more than once), Coke, and Wells Fargo were also fly into them positions. It's Warren's style when he figures a really good deal. He can't help himself.

I think this is true, rb,

I'll just add one more "more than once" here: Geico. Market value YE 1995 for about half of Geico: USD 2,393.2 M, cost 45.7 M [<-!]. After which he poured USD 2.3 B into it the next year to own the whole thing. Talk to me about averaging up. Crazy stuff. Flirting with it and going heavy on it when he was a young man, too.

I can almost picture him blowing the smoke away from the muzzle of his gun after the second shot, thinking : "Got you, now your mine - I own your butt, you ... beauty."

From the 1995 Annual report Shareholder Letter:

Quote
... Even so, we do have a few advantages, perhaps the greatest being that we don't have a strategic plan.  Thus we feel no need to proceed in an ordained direction (a course leading almost invariably to silly purchase prices) but can instead simply decide what makes sense for our owners. ...

... Talking to Time Magazine a few years back, Peter Drucker got to the heart of things:  "I will tell you a secret: Dealmaking beats working.  Dealmaking is exciting and fun, and working is grubby.  Running anything is primarily an enormous amount of grubby detail work . . . dealmaking is romantic, sexy.  That's why you have deals that make no sense." ...

-I love it! [ : - D]

- - - o 0 o - - -

Edit:

Ceico market price was actually up ~26% at YE1995 because of Bershire's bid for for the last half. Source. [<- H/T Cigarbutt.]
« Last Edit: December 08, 2018, 04:39:11 AM by John Hjorth »
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Dynamic

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Re: What are you buying today?
« Reply #3468 on: December 09, 2018, 02:47:01 AM »
I was put to on all my short puts in AAPL, BAC and WFC, having expected on Thursday that it would take quite a large Friday drop to be exercised on anything other than BAC. That drop happened and the stocks were in my account on Saturday.

AAPL effective price $167.62. Latest price $168.09
BAC effective price $26.07. Friday price $25.42
WFC effective price $49.92. Friday price $50.25

Wrote some 7 December cash covered puts on
AAPL 170 strike for $2.38
BAC 26.50 strike for $0.43

Hat tip to boilermaker75 for this approach to opening long positions.
Sold some WFC $50.50 strike 7 December puts for $0.58 while I was out during my vacation thanks to a GTC limit order.

boilermaker75

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Re: What are you buying today?
« Reply #3469 on: December 09, 2018, 06:40:56 AM »
I've been put to on several positions the last couple of expirations. Some I am keeping, positions I wanted to add to. Some I have turned around and sold covered calls on. If these are positions you wanted to add to, these could be good prices. If not, you could get some pretty good call premiums. For instance the Dec 14, 170-strike AAPL calls are going for $3 per share. The Dec 14, 50.50 strike WFC calls are going for $0.83 per share.

I was put to on all my short puts in AAPL, BAC and WFC, having expected on Thursday that it would take quite a large Friday drop to be exercised on anything other than BAC. That drop happened and the stocks were in my account on Saturday.

AAPL effective price $167.62. Latest price $168.09
BAC effective price $26.07. Friday price $25.42
WFC effective price $49.92. Friday price $50.25

Wrote some 7 December cash covered puts on
AAPL 170 strike for $2.38
BAC 26.50 strike for $0.43

Hat tip to boilermaker75 for this approach to opening long positions.
Sold some WFC $50.50 strike 7 December puts for $0.58 while I was out during my vacation thanks to a GTC limit order.