Author Topic: What are you buying today?  (Read 2198239 times)

tombgrt

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longinvestor

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Re: What are you buying today?
« Reply #1241 on: June 30, 2015, 09:02:04 PM »
Hi longinvestor,

I think investment / share will overstate BRK  IV

http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/i-hate-this-post/msg213620/#msg213620
http://brooklyninvestor.blogspot.com/2013/03/value-of-investments-per-share.html
http://brooklyninvestor.blogspot.com/2011/12/so-what-is-berkshire-hathaway-really.html

I'm confused by the concept of retained earning being a separate component of value. When you are valuing investments / share & the current estate of operating businesses, does not the value thereof include the PV of their reinvested earnings? Isn't an earnings multiple simply a shorthand DCF with an implied growth rate? The growth comes from reinvested retained earnings, right?
I thought about that and to keep past clearly separate from future, the PV only includes RE from year 2012 onwards. All prior RE ignored in PV calculation. Also on #2,  used a 10x multiple for a business where earnings have grown 20% for a very long time. Surely no double counting, no ?

RE, as described by WEB is in lieu of dividend payouts. If $400B were to be paid out over the next 20 years and we reinvested it, isn't that separate from operating earnings? Both BNSF and BHE, where the lion's share is being retained are choosing to do this (100%). So yes, Vinod's suggestion is to estimate BRK's IV from earnings growth rate. If my thesis is correct, the recently burgeoning RE story should show up in a higher earnings growth than 20%! Just working with my boredom and tired of only using past #s

I ran across this quote from Munger, thought I'd re-post here with all of this back-and-forth about calcs

Warren talks about these discounted cash flows. Ive never seen him do one. ["It's true," replied Buffett. "If (the value of
a company) doesn't just scream out at you, it's too close."
] 1996 Berkshire Hathaway annual meeting

Lance

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Re: What are you buying today?
« Reply #1242 on: July 07, 2015, 02:39:01 PM »
Over the past week or so I've bought AMIGY, AXP, BP, GSK, MET, NLY, PRU and RDS-b. 

Thanks,
Lance

orthopa

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Re: What are you buying today?
« Reply #1243 on: July 07, 2015, 03:37:31 PM »
Bought some more BP today, 6.2% div yield.  :)

gokou3

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Re: What are you buying today?
« Reply #1244 on: July 07, 2015, 04:33:55 PM »
Bought a small position in CHAD yesterday for a bearish view on the Chinese market.  This is after seeing that the chinese government implemented various desperate / foolish policies to try support the stock market index values with muted effect.  The retail investors which constituted 80% of the Chinese stock market will continue to exit their (margined) positions.  Up 10% today.

KinAlberta

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Re: What are you buying today?
« Reply #1245 on: July 08, 2015, 11:48:11 AM »
Bought a small position in CHAD yesterday for a bearish view on the Chinese market.  This is after seeing that the chinese government implemented various desperate / foolish policies to try support the stock market index values with muted effect.  The retail investors which constituted 80% of the Chinese stock market will continue to exit their (margined) positions.  Up 10% today.

It's a tough call.  When I do things like this I take an extremely short term view, grabbing quick profits and feeling lucky.  My view is that, like bubbles eventually popping, some wars are quite predictable, but the battles and outcomes aren't. Once a war starts the unexpected dominates the scene.

Schwab711

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Re: What are you buying today?
« Reply #1246 on: July 08, 2015, 01:04:46 PM »
Bought a small position in CHAD yesterday for a bearish view on the Chinese market.  This is after seeing that the chinese government implemented various desperate / foolish policies to try support the stock market index values with muted effect.  The retail investors which constituted 80% of the Chinese stock market will continue to exit their (margined) positions.  Up 10% today.

This position is literally fighting an entire country that is on the opposite end of the trade. What holdings does CHAD own? I sincerely doubt they have true short positions so you are taking on significant amount of currency risk, market risk, tracking risk, possible near-term stimulus/bailouts, and you may have ownership issues (assuming CHAD has "simple" holdings). I haven't looked at CHAD at all, but China is a dangerous market for retail investors and leveraged (even 1x) ETFs are purely short-term instruments.

I'm extremely biased because I have 2 lawsuits sitting on my desk from when I had invested in RTO Chinese companies 5-7 years ago. These are offers to collect the equivalent of 0.5% and 1.1% recovery rates after all that time. I'm lucky I got a dime considering I didn't actually own anything other than promises to pay me profits from companies I definitely didn't have a stake in.

Just something to keep in mind.

drzola

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Re: What are you buying today?
« Reply #1247 on: July 08, 2015, 01:12:28 PM »
More Russell  :)

kab60

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Re: What are you buying today?
« Reply #1248 on: July 08, 2015, 02:55:24 PM »
Doubled Ntelos position and doubled Wilh. Wilh. Holding ASA - both around 15 percent positions

jawn619

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Re: What are you buying today?
« Reply #1249 on: July 08, 2015, 05:03:23 PM »
Stocks on sale