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Riley Wilkins

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  • Signs Of An Approaching Bear Market [View article]
    I think many investors worry way too much about "corrections" and market crashes. Buy good companies at good prices and you have no reason to worry. Bear markets create opportunities. Many people forget that the market is just the aggregate of many individual companies; Just because the market as a group is "high" shouldn't prevent the investor from buying companies selling at cheap prices.
    Aug 14 04:17 PM | 4 Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    They're not, it was a separate sentence in my comment..
    Aug 14 03:58 PM | Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    I agree that Google is a great company with a strong economic moat, but I disagree with your line:
    "I believe Google deserves to be trading more in line with the rest of its Internet peers."
    Comparing Google to the valuations of Twitter, Facebook, Netflix, Priceline is ridiculous. Social media as a group is in a bubble; The DFCF valuations no longer make sense. IMO Google is fairly valued or somewhat overvalued using a DFCF.
    Aug 14 10:48 AM | 8 Likes Like |Link to Comment
  • Tesla: The One Major Item That Concerns Me [View article]
    Nice point, most social media companies have a falling marginal-cost curve whereas Tesla's marginal cost is more of a U shape. I can't wait to see how it plays out.
    Aug 12 05:28 PM | Likes Like |Link to Comment
  • Tesla: The One Major Item That Concerns Me [View article]
    I wouldn't touch (long or short) Amazon, Groupon, Tesla, Twitter, Salesforce, Facebook et al. Cool companies, crazy valuations. I read the other day that at Tesla's current price, investors are paying $1,000,000 for every car that it sells…
    $19 billion for WhatsApp, possible $10 billion dollar valuation for SnapChat... In 10 years we'll look back and realize how crazy these figures are.
    Aug 12 02:34 PM | 2 Likes Like |Link to Comment
  • Tesla: The One Major Item That Concerns Me [View article]
    "Tesla: The one major item that concerns me"
    The $32 billion dollar valuation… Enough said.
    Aug 12 12:28 PM | 2 Likes Like |Link to Comment
  • Are IBM's Earnings Really Low Quality? [View article]
    (187.47-182)/182 ~ 3% decline
    Why not just start averaging in? There is no guarantee that shares will dip to that level. If you like the company at $182, you should like it at $187, so long as you have a long term horizon..
    Aug 11 05:38 PM | 1 Like Like |Link to Comment
  • Is IBM Grossly Undervalued? [View article]
    Discrepancy between FCF and Earnings?
    Well to get FCF: Take Net income, subtract Cap Ex, subtract change in working capital, add back amortization of intangibles, and add back depreciation charges… There should be a discrepancy…
    Aug 11 03:10 PM | 1 Like Like |Link to Comment
  • Is IBM Grossly Undervalued? [View article]
    More like IBM to Oracle or Accenture.
    Aug 11 03:05 PM | 3 Likes Like |Link to Comment
  • Is IBM Grossly Undervalued? [View article]
    How do I say this?
    Using IBM's 'high' P/B as an investment thesis is ludicrous. If you really want to find a proper value for IBM, estimate how much free cash IBM will produce over the next five to ten years, and discount it back to present value. I expect IBM to produce around $100 billion in free cash from FY15-20. If management continues to use 50-70% of that to repurchase stock, 35% of the current shares outstanding will have been repurchased by 2020. That means everyone's "slice of the earnings pie" is much much bigger. When every stock certificate gets a larger cut of the pie, than the value of the share increases. The market acknowledges this increase in value by their willingness to pay more for every share.
    Aug 11 03:02 PM | 4 Likes Like |Link to Comment
  • Is IBM Grossly Undervalued? [View article]
    it would be silly to value IBM using a price to book. That's best used for companies that may be liquidated or businesses like BRK.B which have "look-through earnings," earnings that are made by the subsidiaries of Berkshire Hathaway, but not recognized by the holding company on a GAAP basis. I'm certain Buffett valued IBM using a discounted FCF analysis, in which case it's actually very cheap.
    Aug 11 12:37 PM | 3 Likes Like |Link to Comment
  • Tesla Will Become The Victim Of Its Own Success [View article]
    Great point @Taskmaster
    Aug 8 02:53 PM | Likes Like |Link to Comment
  • Tesla Will Become The Victim Of Its Own Success [View article]
    @ Zoltan, great fact:
    "The company is currently valued at roughly $1,000,000 per vehicle expected to be sold this year."
    Such a good point, right now investors are paying $1 million dollars for every sale that Tesla makes… Can someone say "Bubble?"
    How many people will respond to my comment with, "It's going to dominate the world, like seriously…" or "listen R-Tard I've made mad stacks on TSLA, it's easily worth $400."
    Play any kind of mental games to come up with whatever figure you want.
    Not a short seller, never have been, but Tesla is way, way overpriced. I'll let others play the greater fools game.
    Aug 8 02:44 PM | 2 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    Great article, I recently wrote about IBM and came to the same conclusion. One of the cheapest mega caps out there. I plan on sitting back, collecting the 2.4% dividend and enjoying some nice capital gains going forward.
    Aug 8 02:35 PM | Likes Like |Link to Comment
  • Why The Arguments Against IBM Are Misleading [View article]
    It's not just about betting on the right company (Like Berkshire H), it's also about paying the right price. If you invested in Microsoft in 2000 you would be losing money due to decrease in market cap, opportunity cost/ and inflation even though Microsoft has increased earnings tremendously over the last decade. How is this so? The answer: People were exchanging shares at a price that had ballooned at such a faster pace than the intrinsic value of the company. A great company, still a great company, but massively overvalued at the time. My guess is that people buying into Amazon, Tesla, Twitter, Groupon at this moment will see the same thing over the next decade like Microsoft in 2000, their true valuations will be slow to catch up to the current market price. Cool companies, but valuations that no longer have any relevance to their intrinsic value. It's not fair to say that Ban and I are regressive. I'm still developing my own investing philosophy, albeit one that is mainly based upon the people/ strategies that have done exceptionally well over the long run. Why not buy great companies at great prices and hold for a long time? I know that strategy works. I have an understanding of short selling, short-term options, LEAPS, junk bonds, and other more esoteric financial instruments like credit default swaps, but I don't have the capital or knowledge to trade them. With short selling I see my upside capped at 100% and my risk is UNLIMITED. I don't like those odds. With options I see a shrinking window, a time bound trade. I could be 'right' about the movement, but still wrong about the time frame. I don't like those odds either. Maybe my views will change over time. Let me know if you hear of anyone in the 'new generation' making 40-50% returns for a decade. I'll gladly hand them my money. Until then I'll just buy good companies that have fallen out of favor, and hold them. Been long AAPL since $524 pre-split, long IBM $189 and still adding.
    Aug 8 02:00 PM | 1 Like Like |Link to Comment