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Adam Smith

 
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  • Tesco Regrets [View article]
    I'm looking at this primarily from a qualitative perspective, but will throw in a few numbers for good measure.

    1) The UK publicly traded grocery market is, collectively, trading at a discount to book value. In effect, the market is writing off the future profitability of the entire UK grocery business (I guess with the exception of ALDI and Asda, both of which are privately owned or subsidiaries) in the sense that the assets are more valuable than their value as operators. IMO the grocery market, as a whole, will earn a satisfactory return on equity (over the long run), hence it, as a whole, should not sell at a discount to assets (over the long run).

    2) Now I recognize the narrative that ALDI offers something that Tesco and others do not. Do I believe that this is valid? Not really. I think that Tesco, especially, is just a better all-around store than ALDI. They have a better product assortment, especially in fresh foods, and I just do not think that ALDI can outprice them on branded products.

    ALDI is a niche player. They're very good at fulfilling their niche. I just do not believe that they can supplant traditional grocers, traditional supermarkets. Hence my investment thesis is predicated on this qualitative reasoning. My shares are down 40% also. The difference is that I've always envied companies like Tesco. Supermarkets in general, when run properly, can be wonderful businesses, and Tesco still, has enormous competitive advantages over the vast vast majority of markets out there.
    Oct 12, 2014. 08:37 PM | 2 Likes Like |Link to Comment
  • Tesla: As Competition Intensifies, Its Valuation Is Fraught With Risk [View article]
    "Tesla is going to exploit a hole within the auto industry"

    Is it really a hole, though? And is the 'hole' or market niche, whatever terminology you want to use, more than just a novelty product at this point?

    What exactly do you mean by "Gen III"?

    I think the other facet of your post that I disagree with is this obsession with 100% electric cars. There's more than one way to skin a cat, and I think that consumers don't really care whether a car is 100% electric or not, as long as it provides the luxury/performance etc for which they're looking.

    This is to a large extent currently reflected in the sales figures.
    Sep 17, 2013. 02:45 PM | 1 Like Like |Link to Comment
  • War Is A Racket: The Battle Between Cracker Barrel And Biglari Holdings [View article]
    This is going to be my last reply on this topic, because the people posting comments on here can't stop with the straw man arguments.

    OK so last reply on this. I never said the market was "right" or "wrong". Let me say it as clearly and succinctly as I can: I believe it's disingenous to rate the 'performance of management' (which the original commenter didn't even define) on the basis of a six month movement in a company stock price (up OR down) for the reasons I outlined above.

    As Mike Myers would say "discuss amongst yourselves" but I've nothing further to add on this.
    Jul 30, 2013. 11:10 AM | Likes Like |Link to Comment
  • War Is A Racket: The Battle Between Cracker Barrel And Biglari Holdings [View article]
    "A company that is consistently poorly run will not experience an increase in stock price, even though the whole market goes through the roof"

    I advise you to take a gander at a chart of citigroup stock until 2008...oh the management was so great it was going up and up and up...until BOOM. Not saying that CBRL will go boom, I'm just saying that short-term price movements are at best illustrative of little or nothing and at worst downright misleading.
    Jul 30, 2013. 10:02 AM | Likes Like |Link to Comment
  • War Is A Racket: The Battle Between Cracker Barrel And Biglari Holdings [View article]
    Haha. OK I will opt out of taking your comment as a compliment (by virtue of a reader actually paying attention to and seriously considering my opinion on CBRL management).

    Still, your position is flawed on at least several grounds:
    1) you attribute the run-up in stock price exclusively to "management", and no other factors which could be just as much or even more responsible for the run-up in price
    2) you ignore the fact that stocks-in general-(ie the S&P 500) have run up considerably during this time frame;
    3) you use a run-up in the stock price to JUSTIFY everything that management has done (wrong), rather than making those justifications on the basis of actual, specific credible indicators of performance (i.e. SG&A expenses have decreased by x% and ROE increased by y% as a result of management doing xyz).

    It's very spurious to justify anything on the basis of a short-term swing in a company's stock price is my main point.
    Jul 29, 2013. 01:59 PM | Likes Like |Link to Comment
  • Lukoil: More Attractive Than Western Integrated Oil Companies? [View article]
    I think it has something to do with news surrounding the end of QE. It seems all commodities producers have sold off, but with more of the sell off being in the "emerging" economies, especially Russia and China.

    Would really like it for Lukoil to hit $50 per share, sub $40B market cap. They paid $3.56 per share in dividends last year so on a $50 share price that would be north of 7%.

    Can I see how you calculated your revenue projection for last quarter?
    Jun 23, 2013. 10:20 AM | Likes Like |Link to Comment
  • Lukoil: More Attractive Than Western Integrated Oil Companies? [View article]
    Too much value though, exactly right. However recently I've also been looking at Gazprom Neft, and at current prices, it's extremely attractive IMO. It's trading at something like 1/2 of book and pays an 8% dividend. Somewhat obscene, certainly this sort of stuff rarely happens outside the MICEX.
    Jun 14, 2013. 03:50 PM | Likes Like |Link to Comment
  • Lukoil: More Attractive Than Western Integrated Oil Companies? [View article]
    Not really a Phd-doctorate but in law (juris doctor)
    Jun 13, 2013. 05:40 PM | Likes Like |Link to Comment
  • Lukoil: More Attractive Than Western Integrated Oil Companies? [View article]
    Well you can always sell your shares.

    Earnings were pretty good, at least relative to price paid, for me.

    -Adam
    Jun 13, 2013. 03:01 PM | Likes Like |Link to Comment
  • Lukoil: More Attractive Than Western Integrated Oil Companies? [View article]
    Hey Jimi

    It's been a while since I've received comments on this article.

    I really can't say anything to shale, I haven't done any research on the subject.

    Yes Q1 was a bit of a miss...however I don't think the environment is unique to Lukoil. Many integrated oil majors (ie PTR, CVX etc) if you look at their results FY2012 vs FY 2011 they are equal or down, so this appears to be possibly because of crude prices, not sure, but this appears to be the environment for the industry as a whole.

    Nonetheless the value is quite clearly there IMO.

    PTR has been getting beaten down lately also, though it's not near the value of Lukoil.

    Gazprom Neft, also, is interesting but that's another story.
    Jun 12, 2013. 09:24 PM | Likes Like |Link to Comment
  • StealthGas: Hungry For A Buyback [View article]
    yes we can read thanks
    Mar 15, 2013. 09:52 PM | Likes Like |Link to Comment
  • StealthGas: Hungry For A Buyback [View article]
    Of course you agree with them - the stock's going up, charter rates are still high...it's pretty easy to agree when times are good.
    Mar 14, 2013. 10:51 AM | 1 Like Like |Link to Comment
  • Does Bruce Berkowitz's Sears Math Add Up? Do Your Own Diligence [View article]
    Why make the presentation at all then
    Feb 25, 2013. 09:58 AM | 1 Like Like |Link to Comment
  • Does Bruce Berkowitz's Sears Math Add Up? Do Your Own Diligence [View article]
    It has nothing to do with law, it is merely accounting convention.

    Your comments do not really address anything I've raised in the article. Instead you want people to merely "trust" Berkowitz. There's nothing wrong with that, but that's not the focus of the article. If all you want to do is trust other people, just buy Fairholme and be done with it.
    Jan 31, 2013. 08:38 AM | 2 Likes Like |Link to Comment
  • Does Bruce Berkowitz's Sears Math Add Up? Do Your Own Diligence [View article]
    Good stuff, very well put. I agree pretty much entirely with everything you've said.

    I don't really want to get into a St Joe's discussion, because that's not the focus of the article, but in St Joe's you had in 2011 them taking a $300+ million impairment loss on the land after years of claiming that the book values of the land on the balance sheet UNDERstated true market value. And yes they've utterly failed to monetize any of these so-called "hidden asset values" as has been the case with Sears. Surprising number of similarities in the two investments.
    Jan 30, 2013. 04:07 PM | Likes Like |Link to Comment
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