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Investment Ideas / Re: GOOGL - Google
« Last post by petec on Today at 10:16:28 PM »
- I would easily pay $5k for the hardware and $25-50 per month if it meant I could text and drive most of the way to the office and back. 

Probably exactly why they don’t do it. You’re not much use as a safety backup unless you’re concentrating. Accident rates would rise, caused by humans overestimating the system and not concentrating but inevitably blamed on Waymo, and the brand image of autonomous driving as a whole would suffer.
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Investment Ideas / Re: FB - Facebook
« Last post by Pauly on Today at 09:50:34 PM »
Apologies if this has already been posted, but interesting email from Zuckerberg in 2015 talking about VR/AR, platforms vs apps, etc. Interesting look into how he sees strategy in the space:

https://www.scribd.com/document/399594551/2015-06-22-MARK-S-VISION#fullscreen&from_embed

Interesting. If the email is legitimate, it sheds more light on FB's thinking behind the Occulus purchase. Still, four years on and Unity is still independent. Did FB ever seriously pursue it? Were they rejected?
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If I held WIN notes in 2015, I would have been annoyed and sold at a loss. But I'm just a small fish.

If I had a few hundred million in WIN notes I definitely would have looked at suing to enforce the indenture.

That's the biggest reason I personally like this decision. I think WIN was playing fast and loose with investor protections. Nobody called them on it, because most credit investors aren't activist. But I think it's good for the markets if public companies have to respect their contracts and obligations.

My two cents obviously, and different points of view are likely just as valid. I have no position here and am unlikely to start one. (Unless maybe Uniti has some beaten down debt issues or something, I might try and look into that if I get some time)
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Investment Ideas / Re: AR - Antero Resources
« Last post by samwise on Today at 09:17:43 PM »
Currently trading at $20.35, I come up with a fair value of ~$26. Not insanely undervalued, but fair value will increase over time imo.

Fair value is based on $4.34 billion cash flow from proved developed reserves over the next 5 years, $1.3 billion in hedge book value (they've realized hedge book gains in 36 of the past 38 quarters), $3.2 billion in value from their ownership in Antero Midstream (AM), plus another $4.2 billion in value in their proved, undeveloped reserves. Debt comes in at $4.3 billion with maturities not hitting for another 5 years. My valuations assume natural gas stays range bound at ~$3.

Probable reserves come in at 34.4 tcf compared to proven reserves of 15 tcf. AR has done a good job of improving well efficiency, so a good portion of these probable reserves will become proven reserves which will add to fair value over time.

AR also produces natural gas liquids and does not hedge this production. Liquids are typically priced at a % of WTI, and the pricing environment has significantly improved over the past few years. In 2015, AR realized liquids price of 35% of WTI, 43% of WTI in 2016, and 2017 guidance is for 50-55% of WTI, with guidance for pricing to stabilize around 55-60% of WTI for 2018+. Assuming $50 WTI and 55% liquids price realization, AR will see $0.9 billion in incremental ebitda over the next 3 years, which I have not included in my fair value

I also prefer to value this using the reserves rather than current income. However the pv-10 is a consolidated number which includes the midstream as an offset to costs of production. So everyone who is adding the midstream equity value and then saying that it's trading at an EV which is 50% of reserves might be double counting the reserves. Not clear if you are doing it Bojack, but worth noting anyway. I haven't been able to see it as extremely cheap as that, though equity does seem like a possible double, but not a 4x. But that just gets us back to the price you initially posted this idea. So not sure what else you saw that I am missing in my simplistic analysis below.

My valuation method is the following. Start from pv-10 and adjust for the costs which are not included in pv-10 with the aim of estimating a company-level standalone DCF: these are the G&A costs, and stripping out the credits from midstream from the production costs, and net marketing revenue which is slightly negative this year. This reduces the current year net revenue by about 40%. If I carry that all the way through future years cash flows (yes this might be too harsh given growth), then the latest pv-10 should drop by 40% before taxes. This results in a value of 12.6*0.6=7.56B . Since this is a stand alone DCF value for the operating assets, I can add the value of the midstream units: approx 2.5 to get a total value of 7.5+2.5= 10B. This compares to the EV of ~7B. So 30% undervalued. Given leverage, equity should double to fair value, if all commodity prices remain the same ( of course they won't).

I am not sure how I should adjust for taxes in this analysis. Also I can't reconcile the development numbers they use in the pv-10, so there may be more downward adjustments. Can add hedges to increase the discount from fair value.

For this 30% discount we get a commodity producer which is middle to low of the cost curve range(associated gas is cheapest, followed by shale), management that has more ownership in the pipeline than the E&P, so they may profit more from production growth than profit at the E&P. It's also n an industry that seems intent on destroying capital, but recently (as in last month) claims to have found religion about shareholder value.

AR's stated intention is to produce 0 to 3B FCF over the next 5 years. So let's take an average and that gets us to 1.5 B or 0.3B per year. That's a yield of 10% on the equity. Good, but not screaming good given the leverage, cyclical commodity cash flows and possible management misalignment.

No position yet. Not sure about management and capital allocation. Any feedback is appreciated.
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Currently watching:

“The Expanse”, Season 3
“Perfume”  Germain Film noire series (loved the book from Süsskind too)
“Russian Doll” - I agree it’s a great script
“ Babylon Berlin” - very athmosperical Film Noir/ crime (of course I am biased towards German TV series)
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 Pref prices are truly unbelievable...

Resolving this requires actions/events totally outside our control and outside the cold but certain logic of a bankruptcy court. Having been here a while through the ups and downs, with - in reality - almost zero leverage, I imagine 2/3+ would take a 50% payout on jpf's. I would. In which case pricing of around 30% of par is not out of whack.

But of course we hope and talk our book and think we should get par.

Just keeping it real lest we all run out and get even deeper into this. Even our most prolific GSE cheerleader Glen Bradford is running out steam and looking at stuff like shldq and ctl. After Glen sells, that's probably when there will be a deal.

You're just messin' with us, so please say something useful or move on. If Bradford is considering shldq (i.e., the common), then he is not running out of steam; rather he has lost his mind and any value investing credentials he might claim.

Messin' is not my intention. It's a note of caution that there's significant risk. This is much less predictable and has taken much longer than buying run of the mill chap 11 or near chap 11 bonds (done a number of times - ukraine, worldcom, conseco, etc).  It's also my guess than many would take significantly less than par for the jprefs given these factors which suggests a price ceiling if one were to add. If I recall the Citi pref conversion was at 60%.

Prudence and price information ... I dunno - doesn't seem useless to me but maybe everyone knows everything already. Glen (100% and margined) and Berkowitz (35% concentration and forced to liquidate half) may have lacked prudence. But it's not over as long as we survive.

Cheers!
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Investment Ideas / Re: TSU - Trisura
« Last post by snowball82 on Today at 07:43:43 PM »
Together maybe we could find some of the current 14 programs in US and next to come.

Those two had been mentionned in the Insurance insider journal :

USI Southwest has finalized an exclusive Intermodal Truck Insurance Program with Hybrid US fronting carrier Trisura Specialty.

https://www.insurancejournal.com/news/southcentral/2018/04/12/486312.htm

Hybrid US fronting carrier Trisura Specialty has put the first deal on its books with an agreement to provide its paper to Allstar Transportation's liability program business, The Insurance Insider can reveal.

https://www.insuranceinsider.com/articles/115192/usi-southwest-partners-with-trisura-on-truck-program
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thanks rros

@MM the attorney who argued collins en banc, David thompson, said that en banc decisions take about 5 months as a mean.  makes some sense as 16 judges are involved in reading majority draft, thinking about writing a dissent or a concurring opinion etc

I don't necessarily think anything will happen on Admin plan front for a while, until at least after calabria is confirmed.  which I am fine with if that happens since trump's going it alone on wall funding is not a good context for what congress will likely think is a go it alone plan in housing finance
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Investment Ideas / Re: AMZN - Amazon.com Inc.
« Last post by Spekulatius on Today at 05:18:54 PM »
The US is kind of unique in the way that a new customer will always get a better deal than an existing customer (everyone who dealt with wireless/cable companies knows this) and likewise, a company that will move will get a better deal than companies that are already there. I guess it is the concept of customer acquisition cost and expecting inertia from existing customers or companies.

I have seen likewise in Europe as well, but not as pronounced than in the US.
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General Discussion / Re: General Accounting questions
« Last post by meiroy on Today at 05:04:20 PM »
Regarding goodwill:

http://www.berkshirehathaway.com/letters/1983.html


The part under "Corporate Performance" and then the Appendix.

If someone wakes you up in the middle of the night you should be able to recite the whole thing from memory.




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