"It would be very tough for the oil industry to survive if they had to use their own money to pay for the security provided by the US government"
I have always found this argument to be flawed. Why exactly does the US government have the most powerful military?
It is because we have the largest, most powerful economy. Why do we have the most powerful economy? Because our large, developed businesses and corporations are highly productive and do a great job creating and managing valuable property interests - and this includes the military industrial complex.
The reality is that in the absence of a democratic government or even direct individual taxation, Our key industries (Finance, Energy, Drugs, manufacturing, insurance, agriculture, etc) could fund the military industrial complex and enforce their property rights quite effectively - perhaps even at a significant profit relative to current relationships.
Bottom line, i don't think it is is "Government" that subsidizes oil companies or heavy industry, it is industry that subsidizes government and the world's most powerful military.
Regardless, military and economic power are intertwined by necessity, and no where is this more true than in the global economy.
Finally saw a model S a few days ago. A beautiful car. In fact, my wife pointed it out and asked what it was, which is highly irregular. Would love to test drive one.
the dividend and split adjusted IPO price is about .64, meaning the price growth has been close to 9000%. That is far enough off your non-adjusted price that I think it is worth mentioning. Good description of their business model.
I have always felt the real secret to their success (similar to all other coffee shops) is the relatively large size of their coffee cups. When regular customers crave caffeine, their minds associate that symptom with "needing to go to Starbucks" or whatever their favorite coffee shop happens to be.
Go find a coffee mug that is 25 years old (For example at parents or grandparents house) and you will be shocked at how small it is - A visual representation of how individual coffee consumption has gone way up for many people over the past 25 years - i think largely do to the coffee shop mega-cup size trend.
The Paper World Of Brookfield Asset Management [View article]
Roddy, I understand that your style is "investigative" in nature, and that this might mean that you approach companies using a tactic that the the justice system might call a fishing expedition - "fishing" for issues or problems that might exist. Certainly, such an approach can make for entertaining reading.
And I do commend you on linking to the companies actual responses, which I relinked to above.
My biggest criticism with this article was the negative slant (created primarily by artful word choice) relative to your actual findings. Indeed, your most pertinent criticisms could almost without exception be equally applied to any large:
1. Asset management relationship or company 2. REIT/real estate investment 3. GP/LP relationship 4. Global conglomerate 5. holding company
You suggest that Brookfields heavy use of finance makes it vulnerable to a financial crisis, yet fail to credit the company for (relatively speaking) sailing through the 2008 debacle.
Amazingly, you manage to put a negative spin on aspects of the company that make it very valuable - specifically, the unique capital raising and investment platform they have created with their separate public securities.
You also manage to put a negative spin on the high level of insider ownership, which in my mind does align management's interest with shareholders.
With regards to the concentrated voting power, quite frankly I am all for it. It will ensure that the asset management structure stays in place and that management does not face distractions while executing on what I think is a brilliant strategy.
When the underlying strategy is as sound as it is with this company and the future path for growth is so clear, a CEO and top executives would have to literally be insane (sure, it is possible) to mess it up by being underhanded in their dealings.
I am not going to go into greater detail here. Instead, I hope to find the time to do a write-up on this company that gives it the credit that it fairly deserves.
My current estimate for BAM's share price is 140 -160 per share in about 10 years.
The Paper World Of Brookfield Asset Management [View article]
Ted,
I doubt Marty Whitman's highly regarded Third Avenue Value fund or the legendary value investor Lou Simpson, who each have more than 5% of their portfolio (as of 12/31) in the BAM, relied on the advice of Canadian brokerage firms. Same goes for star value investor Tom Gayner of Markel, who (as of 12/31) had just under 5% of the portfolio in BAM.
I personally would rate the credibility of such investors as quite a bit higher than Canadian brokerage firms, who for reasons you mentioned might be biased.
The Paper World Of Brookfield Asset Management [View article]
Unclelonghair, great comment. I would like to encourage you to write a feature article on this company - The perspective of a long term holder who is informed would be invaluable.
Brookfield Asset Management Has Some Explaining To Do To Second Wave Shareholders [View article]
You might want to reconsider your investment logic.
Private equity firms manage risk at the portfolio level, not the individual position level. It is completely logical for a private equity type of investor to forsake a small gain in effort to secure the possibility of a "home run" type of return - that is frequently how they operate.
As such, the investment or risk logic of such a fund is completely different from an individual who buys shares and wants a high probability of a successful outcome on a single, particular investment.
You can't "be on the same side" with another investor if you do not understand their objectives and circumstances.
The company spent a great deal of time replying, as can be seen in the above author provided link.
This article is in fact a textbook or classic smear job: It raises a bunch of questions and suggests something nefarious or underhanded is going on, while not offering a shred of documentation or proof. Clearly, the author has an axe to grind.
Mesa Laboratories: Growth Strategy Is Working [View article]
Mesa Is a great company worth holding for long term potential. I see this as a billion+ market cap company for the patient investor. In fact, it was the subject of my first article at seeking alpha.
Brookfield: A Wealth Creation Machine [View article]
Clayton, though I take issue with your word choice and happen to think IDR structures create value, the IDR is currently at the maximum threshold of 25%, which kicked in at .33 distribution per quarter.
The High Cost Of Backstopping The Wal-Mart Mini Crash [View article]
Profit incentives alone have created a viable mechanism for bringing stock prices up. Look at the way companies have been issuing low cost debt and retiring stock. Look at the way investors can borrow at near 1% and get a positive carry on stocks. Simple valuation techniques suggest lower cost of capital should equal higher equity prices, and by juicing rates lower all cost of capital has effectively been reduced. These things have acted as a significant conduit for fed easy money into asset price inflation. I am not sure a formal agreement (or conspiracy?) is needed.
Heinz May Be A Buffett Stock, But This Isn't A Buffett Price [View article]
You can't understand Buffet with the mentality of a small investor. The nominal value of this purchase will be essentially meaningless within just a few years, never mind how it will look after 10.
Buffett can redeploy the cash flow, influence policy, and has a very low cost of capital. Just keep track of how much cash he takes out of this company over the next five years and redeploys - It is what he does. Rinse and repeat.
How To Profit From VIX ETNs And Futures Contracts [View article]
Hi Soul, I am not an expert on the cheapest or most effective ways to hedge long positions. However, I think monitoring the forward curve can help those who want to use VIX as a hedge know when the costs of doing so are not prohibitively high (or even have a positive edge). I find that when I want to hedge I tend to us S&P Futures and/or sell some of what I consider my more risky positions. Yet this approach is also not foolproof.
5 Reasons Tesla Motors Will Thrive [View article]
I have always found this argument to be flawed. Why exactly does the US government have the most powerful military?
It is because we have the largest, most powerful economy. Why do we have the most powerful economy? Because our large, developed businesses and corporations are highly productive and do a great job creating and managing valuable property interests - and this includes the military industrial complex.
The reality is that in the absence of a democratic government or even direct individual taxation, Our key industries (Finance, Energy, Drugs, manufacturing, insurance, agriculture, etc) could fund the military industrial complex and enforce their property rights quite effectively - perhaps even at a significant profit relative to current relationships.
Bottom line, i don't think it is is "Government" that subsidizes oil companies or heavy industry, it is industry that subsidizes government and the world's most powerful military.
Regardless, military and economic power are intertwined by necessity, and no where is this more true than in the global economy.
5 Reasons Tesla Motors Will Thrive [View article]
The Starbucks Difference [View article]
I have always felt the real secret to their success (similar to all other coffee shops) is the relatively large size of their coffee cups. When regular customers crave caffeine, their minds associate that symptom with "needing to go to Starbucks" or whatever their favorite coffee shop happens to be.
Go find a coffee mug that is 25 years old (For example at parents or grandparents house) and you will be shocked at how small it is - A visual representation of how individual coffee consumption has gone way up for many people over the past 25 years - i think largely do to the coffee shop mega-cup size trend.
The Paper World Of Brookfield Asset Management [View article]
And I do commend you on linking to the companies actual responses, which I relinked to above.
My biggest criticism with this article was the negative slant (created primarily by artful word choice) relative to your actual findings. Indeed, your most pertinent criticisms could almost without exception be equally applied to any large:
1. Asset management relationship or company
2. REIT/real estate investment
3. GP/LP relationship
4. Global conglomerate
5. holding company
You suggest that Brookfields heavy use of finance makes it vulnerable to a financial crisis, yet fail to credit the company for (relatively speaking) sailing through the 2008 debacle.
Amazingly, you manage to put a negative spin on aspects of the company that make it very valuable - specifically, the unique capital raising and investment platform they have created with their separate public securities.
You also manage to put a negative spin on the high level of insider ownership, which in my mind does align management's interest with shareholders.
With regards to the concentrated voting power, quite frankly I am all for it. It will ensure that the asset management structure stays in place and that management does not face distractions while executing on what I think is a brilliant strategy.
When the underlying strategy is as sound as it is with this company and the future path for growth is so clear, a CEO and top executives would have to literally be insane (sure, it is possible) to mess it up by being underhanded in their dealings.
I am not going to go into greater detail here. Instead, I hope to find the time to do a write-up on this company that gives it the credit that it fairly deserves.
My current estimate for BAM's share price is 140 -160 per share in about 10 years.
The Paper World Of Brookfield Asset Management [View article]
I doubt Marty Whitman's highly regarded Third Avenue Value fund or the legendary value investor Lou Simpson, who each have more than 5% of their portfolio (as of 12/31) in the BAM, relied on the advice of Canadian brokerage firms. Same goes for star value investor Tom Gayner of Markel, who (as of 12/31) had just under 5% of the portfolio in BAM.
I personally would rate the credibility of such investors as quite a bit higher than Canadian brokerage firms, who for reasons you mentioned might be biased.
The Paper World Of Brookfield Asset Management [View article]
Brookfield Asset Management Has Some Explaining To Do To Second Wave Shareholders [View article]
Private equity firms manage risk at the portfolio level, not the individual position level. It is completely logical for a private equity type of investor to forsake a small gain in effort to secure the possibility of a "home run" type of return - that is frequently how they operate.
As such, the investment or risk logic of such a fund is completely different from an individual who buys shares and wants a high probability of a successful outcome on a single, particular investment.
You can't "be on the same side" with another investor if you do not understand their objectives and circumstances.
The Paper World Of Brookfield Asset Management [View article]
http://bit.ly/16n5pED
The company spent a great deal of time replying, as can be seen in the above author provided link.
This article is in fact a textbook or classic smear job: It raises a bunch of questions and suggests something nefarious or underhanded is going on, while not offering a shred of documentation or proof. Clearly, the author has an axe to grind.
Mesa Laboratories: Growth Strategy Is Working [View article]
AZZ Incorporated - Shareholders Applaud The Acquisition Of Aquilex Specialty Repair [View article]
Brookfield: A Wealth Creation Machine [View article]
The High Cost Of Backstopping The Wal-Mart Mini Crash [View article]
Heinz May Be A Buffett Stock, But This Isn't A Buffett Price [View article]
Buffett can redeploy the cash flow, influence policy, and has a very low cost of capital. Just keep track of how much cash he takes out of this company over the next five years and redeploys - It is what he does. Rinse and repeat.
How To Profit From VIX ETNs And Futures Contracts [View article]
How To Profit From VIX ETNs And Futures Contracts [View article]
I am not an expert on the cheapest or most effective ways to hedge long positions. However, I think monitoring the forward curve can help those who want to use VIX as a hedge know when the costs of doing so are not prohibitively high (or even have a positive edge). I find that when I want to hedge I tend to us S&P Futures and/or sell some of what I consider my more risky positions. Yet this approach is also not foolproof.