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Investment Ideas / Re: GLRE - Greenlight Capital Re
« Last post by james22 on February 21, 2018, 11:30:19 PM »
GLRE was cheap @~80% book value with a new CEO with a Lancashire pedigree.

Anyone interested?

How about now at ~75% book value and Einhorn believing a shift in favor of value stocks may soon be coming (at least 9 months closer to the end of the cycle)?
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Politics / Re: Gun Control, a TRAP for Trump?
« Last post by rb on February 21, 2018, 10:28:54 PM »
Has anybody else heard of Democrats wanting to roll back the tax reforms/cuts?
Well the democrats didn't say anything but I think you'll raise taxes. You have 104% debt to GDP and you're projected to run a 5.7% deficit at full employment. Btw I think your deficit will be higher than that. It's mathematically impossible impossible for the US to maintain the status quo.

So you have a few choices: raise taxes, cut social security, cut medicare, or cut military. You won't cut social security or medicare no matter the contents of Paul Ryan's wet dreams. That's because the beneficiaries of those programs show up to vote and no matter how much Fox News they watch they seem to like those programs a lot!

Maybe you could get away with cutting military. Even though they tend to be big donors it's been done before. But then tax hikes happened before as well. So if I had to bet I'd bet on a bullshit storm followed by tax hikes.

Edit: The funny thing in all of this is that the US is throwing a ton of stimulus while at full employment. All that stimulus will be sterilized by the Fed. So economically speaking it's just pissing money down the drain. But hey, it's fun.
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Investment Ideas / Re: UBNT - Ubiquiti Networks
« Last post by Grant on February 21, 2018, 10:05:14 PM »
Schwab711, What about UBNT is a black-box to you?

They have historically not done a lot of business in China. TPLink cloned an older version of UniFi, so it's probably preferred for people who want to spend less money and don't mind using what amounts to state-sponsored networking hardware. Last quarter they saw a big jump in Asia revenues, which might be related to Tencent's recent adoption of UniFi.

I would not call Ubiquiti extremely sophisticated. It's mostly a bunch of engineers. They make lots of elementary errors on their less-successful product lines which can probably be traced back to their lack of oversight. Confusing user sessions with user count was unfortunately par for the course.
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Politics / Re: Gun Control, a TRAP for Trump?
« Last post by rb on February 21, 2018, 09:56:53 PM »
This is exactly the type of sociopathic logic/thinking typical of Americans and American politics. Why should I do anything that doesn't benefit me personally. So what if children are executed in schools? If it doesn't benefit me personally who cares right? Maybe you're right.

But maybe you're wrong and voters do care. Voters in Connecticut care. But it's not like Florida is an electorally important state where small changes in electorate can make a big difference.

Or maybe for now you can keep getting away with sending thoughts and prayers. But you have a new category of single issue voters developing. The ones that would like for them, their kids, and loved ones to not be shot up. Maybe that group is not big enough yet... but it's growing every day. Maybe that group won't be large enough in time to vote out the current mummies in congress (so they're safe/right in their sociopathic thinking) but that day will come. Your kid/brother/sister taking 2 in the chest tends to leave a lasting impression.
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Investment Ideas / Re: UBNT - Ubiquiti Networks
« Last post by Schwab711 on February 21, 2018, 09:19:12 PM »
I am long UBNT, but am selling $70 covered calls. I have near-term concerns; mostly I don't think UBNT will hit its FY2018 mid-point revenue guidance. I rarely mind exiting such a volatile stock at an all-time high. Who knows what'll happen with such a high short interest though?

The trouble with building a case based on unusual incidents is that this is an unusual company. You'll find lots smoke regardless of whether or not fire exists. This is especially true when looking at South American distributors, who are necessarily shady. I wouldn't trust anything Flytec self-reports, for obvious reasons. I wouldn't be surprised if Flytec Inc. did $3.3M in 2011, but I'm fairly certain Flytec SA did far more.

I have little interest in Flytec because they do not expose any data I can scrape. However they've been an UBNT distributor for years, and it'd seem fairly safe to trust them to keep paying their bills. Corruption is simply a fact of life in many foreign countries, and does not necessarily indicate a problem for the supplier.

In the latest 10-Q I'm fairly certain "Customer C" is Ingram Micro. This means Flytec could have a maximum A/R contribution of 11%. Since South America was 13% of revenues, I highly doubt Flytec was more than 6%.

Frankly I think the fraud shorts are asking the wrong questions. Do they really think KPMG and Wells Fargo are being fooled? After Andrew Left more or less claimed UBNT's cash horde is fake on CNBC?

The right questions are all R&D related and perhaps outside the short's areas of expertise. I worry neither LTU or AirMax AC seem to have MU-MIMO APs in their pipeline. I worry LTU won't be all it's hyped up to be, and the future of fixed outdoor wireless may actually be standards-compliant LTE gear. I worry the new uFiber products won't catch on. There's tons of optionality in UBNT, but also quite a bit of risk. Fortunately with a little technical knowledge it's easy to figure out how their products will do long before the market does.

I would add that, after UBNT was defrauded out of almost $50 million, they retained FTI Consulting "to provide an Interim Chief Accounting Officer and other resources" (quote is from the FY 2015 10-K). So whoever inside Ubiquiti is pulling off this fraud also managed to hoodwink FTI Senior Managing Director (and former UBNT Interim CAO) Mark Spragg.

http://www.fticonsulting.com/our-people/mark-c-spragg


Schwab711, you are clearly skeptical of Ubiquiti. What's the short case as you see it? What aspect of the company or its operations is fraudulent?


Disclosure: While I've been long UBNT in the past, I don't currently have a position.

Just to nitpick before half-answering, I really don't want to attach myself to the word fraud without also adding voluminous support for the claim. The liability with an unsubstantiated allegation is bigger than my pocketbook. I'm definitely not calling UBNT a fraud right now. I am very skeptical.

UBNT is in some ways more of a blackbox than Knight Capital or Citi because no one other than Pera and the HK auditor will ever see what backs those Chinese numbers. I think the market sees UBNT as simple and folksy, but that couldn't be further from the truth. UBNT is an extremely sophisticated operation. Pera bothers me in that sense because the corporate operations doesn't match his public persona. I'll have a better answer soon.
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Politics / Re: Gun Control, a TRAP for Trump?
« Last post by DTEJD1997 on February 21, 2018, 09:08:26 PM »
He didnít expect to win the last election, and he certainly donít plan on to win in the next one. Why he care? He is more care about opening new trump hotels in India.

But itís a valid concern for GOPs nov election. If they lose, the tax cuts could very well be rolled back.

I heard somewhere today that if the GOP loses control of the House & Senate, then there is a good chance that Trump will face impeachment AND the tax cuts will cancelled/rolled back.

If that comes to pass, I think the USA will be thrown into chaos.  The market will go down, and go down BIGLY.  A lot of businesses are depending on these tax cuts.  If those go, the economy is going to contract and unemployment would surge.

Of course, maybe that is what is wanted?

Sure. But I thought market would crash if  trump is elected and I was wrong. Anyway, I would rather mkt go down in the short term than having Putin decide whoís my president and having NRA commit mass murders

I thought the tax reform/reduction was a good thing.  Here in Michigan, unemployment is down, businesses are expanding, and there is a cautious sense of economic optimism.  Of course, Michigan is frequently WELL behind the rest of the nation.

I think though if the tax reductions are rolled back OR are effective for only one year, it will result in capital spending going down SUBSTANTIALLY.  If that happens, profits are down, unemployment is up...and so on.

I think gun control, Russian meddling, and tax reform are 3 different things, for the most part.

Has anybody else heard of Democrats wanting to roll back the tax reforms/cuts?
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Like Trump or not like Trump it is clear the US today has a much more business friendly government. Taxes have been reduced greatly. Regulation is being stripped away. Optimism of business people in the US is at historic highs.

Trump also is implementing a US first trade stance. NAFTA is currently being renegotiated and it is reasonable to assume Canada will be a net loser with any changes made.

Oil and gas has been one of the engines that a has powered the Canadian economy the past 15 years; not anymore.

Housing has been THE engine of growth powering the Canadian economy the past 8 years but with Canadian household debt to GDP at historic and world highs and interest rates heading higher it is hard to see this continuing.

Politically, federally and provincially (I live in BC) we have governments that are spending inherited surpluses to pay off base (who voted them in), raising taxes on businesses and adding more regulation (pipeline in BC is a great example). Moving forward businesses that can set up in Canada or the US will increasingly pick the US. This will take a couple of years to play out.

When I weave it all together I see lots of risks for Canada moving forward. As a result 90% of my investable assets are in US$ and will likely stay there for the near term.

One possible repreive for Canada is if commodity prices spike higher as usually happens late in an economic cycle (as forecast by Gundlach and others). If this happens our stock market will likely outperform other world markets given its concentration in resource stocks. It is possible we also just muddle through (nothing terrible or good either).

I am an optimist generally but am finding it difficult when looking at Canadaís medium term economic prospects.
See this is another nonsense post. All based of one's feelings and not much fact.

Oil and gas has been the growth engine of the Canadian economy? This is one of those incorrect views that Canada is some gas station. Here's a fact all extractive industries (mining, quarrying, and oil and gas) make up about 8% of Canada's GDP. That is meaningful but nowhere close to overwhelming. Also Canada created a shitload of job in a depressed oil price environment.

About trade I'm not that concerned. Our trade with the US is pretty much in balance. But a large part of our exports is oil. I'm not that old but I don't think I'll see the US taxing oil in my lifetime. On the other hand we are the biggest customer for US exports and we import the stuff that is made in factories in places like Ohio. Our retaliation will hurt bigly. On top of that Canada has had for years a trade retaliation plan that not only targets country/industries but zeros in on retaliation to specific districts and states of politicians voting against Canada. We not only get mean, we also get personal. Now Donald Trump may not be aware of such a plan but I can guarantee you that members of Congress are acutely aware of its existence. So bring it on! This is before we move to regulate and tax the shit out of their tech companies.

You want to talk taxation? Our corporate tax is still lower than in the US. The small business tax rate is significantly lower than in the US. Oh and in Canada you don't have to pay for the workers' health insurance cause we have that covered.

You want to talk fiscal position? Canada's debt to GDP is around 31%. The US's is 104%. Our national pension plan is more than fully funded, the US's has unfunded liabilities up the ass. Our deficit is around 1% of GDP which means that our debt to GDP will continue to shrink at a pretty good clip. The US is projected to run a deficit of 5.7% of GDP (at full employment!). That will cause their debt/gdp to expand in a healthy manner. We in Canada could eliminate corporate taxation completely and still not come anywhere close to running those deficits.

So yea a lot of the stuff that got posted here is nonsense.

By the way Canada's stock market bares no resemblance to the Canadian economy. The ones that make comparisons since 2008 on are basically saying in 2008 I bought a bunch of overvalued oil companies because I thought oil will go to 1,000. But it's not my fault it must be Canada's.

Oh and for the guy that thinks taxation in Canada is higher than in Belgium. Stop talking about taxation and go learn about it.
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This is from CNBC which has been typically pretty favorable to Trudeau:

http://www.cnbc.com/id/105021256

Cardboard
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General Discussion / Re: Mohnish Pabrai (Dalal Street) 13F HR
« Last post by Lakesider on February 21, 2018, 07:36:17 PM »
Not going to help with the valuation here but...

I think Mohnish has identified that KRBL must have a significant moat. Maybe its the economies of scale when storing/aging the rice or that is does its own seed distribution... maybe its something else. Looks like KRBL has managed to maintain its great margins and premium export price in comparison to its competitors. They are the largest producer domestically with an increasing market share of the oligopoly. From some quick google searches it looks like the market for basmati rice is growing internationally with India being the major producer.

I think Mohnish would like the idea of selling rice in India, especially when KRBL seems so dominant in the market. 

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Investment Ideas / Re: QSR - Restaurant Brands International
« Last post by KCLarkin on February 21, 2018, 06:48:41 PM »
Don't they buy businesses which are somewhat inefficient (which Dominos is NOT) & then whip them into shape?

That is the KHC playbook but not really the QSR playbook. QSR seems to prefer buying high quality businesses with good margins and transform them into unbelievable margins.

People had similar sentiments when they bought Tim Horton's and even Popeye's. These companies were bought at what seemed like very high multiples. Actually, compared to what they paid for Popeye's, DPZ looks like a bargain.
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