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Tim Travis
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Tim Travis is a veteran deep value investor and money manager. Travis has extensive experience in traditional investments such as stocks and bonds, in addition to having a unique methodology of combining options and distressed investing with value investing to generate income, reduce risk, and... More
My company:
T&T Capital Management
My blog:
T&T Capital Management Blog
My book:
Learn to Treat Your Portfolio as a Business
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  • Wells Fargo Posts Stellar Earnings-Bloomberg

    Wells Fargo (NYSE:WFC) today released very encouraging earnings numbers today including increasing net interest margins, and strong profits led by mortgage refinancing. The environment is getting better for these large banks and Wells Fargo certainly has the least volatile business structure due to their more vanilla and transparent business model. It's interesting to see bank stocks down after strong earnings from both JP Morgan (NYSE:JPM) and Wells Fargo, but it's a fools errand tying to understand the short term whims of the market.

    http://www.bloomberg.com/news/2012-04-13/wells-fargo-profit-rises-as-results-improve-from-mortgage-loans.html

    Disclosure: I am long WFC, JPM.

    Tags: WFC, JPM, Banks, Earnings
    Apr 13 10:32 AM | Link | Comment!
  • Pressure On Oil Supply Eases-WSJ

    It is very difficult to forecast the future outlook for oil prices. In relation to other forms of energy such as natural gas it is obscenely expensive. Supply isn't really constrained even with the difficulties in demand and production has been relatively solid. Hundreds of billions of dollars are being spent to develop new deepwater and shale projects across the globe. Conversely fiat currencies such as the U.S. dollar have proven to be horrendous stores of value with record deficits, so hard assets such as oil which is also so essential for everyday life, become that much more valuable. Geopolitical risks such as Iran seem to add $10-20 to the price of oil, and most importantly growth in China and other emerging nations has offset slowness in Europe in particular.

    The vast majority of market participants seem to be bullish and while I'm not interested in being bearish the sector I am concerned and feel that a large margin of safety is required on any investment. Most of the large oil companies are spending the majority of their operating cash flow on CAPEX to produce and develop new sources of energy. If prices dip the economics of these projects could really imperil the balance sheets for some of these companies. At T&T Capital Management our favorite names in the energy sector are Apache (NYSE:APA) http://online.wsj.com/article/SB10001424052702304444604577339120918427212.html?grcc=cdbd15771cb08bf8d49c245ee6401799Z3ZhpgeZ0Z3573Z200Z120Z2&mod=WSJ_hps_sections_world and British Petroleum (NYSE:BP). Assuming oil stays where it is both stocks are extremely cheap and if natural gas prices increase that would be gravy for the investment thesis. We also own some bonds in Exco Resources (NYSE:XCO).

    http://online.wsj.com/article/SB10001424052702304444604577339120918427212.html?grcc=cdbd15771cb08bf8d49c245ee6401799Z3ZhpgeZ0Z3573Z200Z120Z2&mod=WSJ_hps_sections_world

    Disclosure: I am long APA, BP, XCO.

    Tags: APA, BP, XCO, Oil
    Apr 13 10:31 AM | Link | Comment!
  • Warren Buffett Feasts On Goldman Scraps-WSJ

    When most people think of Warren Buffett's investment philosophy they think of his large positions in iconic companies such as Coca Cola (NYSE:KO), Burlington Northern, Geico, Wells Fargo (NYSE:WFC), etc. These investments are core positions where he was able to allocate huge sums of money with the understanding that the franchise values would continue to grow over time. These types of businesses aren't easy to buy at great prices so when he had the opportunity he bet big.

    Before Berkshire Hathaway (NYSE:BRK.B) reached such a massive size Buffett engaged in a great deal of merger arbitrage investment which he termed as "workouts." Distressed debt investing is a type of "workout" because the bonds will either pay off at par, or they will likely be converted into a combination of cash and equity through the bankruptcy process. Buffett still executes these types of investments when he is allocating the massive float from his insurance operations, but because many of them aren't large enough to necessitate public disclosure we don't hear much about them. At T&T Capital Management we attempt to emulate many of Buffett's strategies particularly those that he employed when he was running the Buffett Partnership L.P. prior to his acquisition of Berkshire Hathaway. This WSJ piece describes Buffett taking advantage of pressured selling on a small quantity of bonds from Goldman Sachs (NYSE:GS) and I think it is a fun and different perspective into Buffett's methods.

    http://online.wsj.com/article/SB10001424052702303624004577338070658967732.html?mod=WSJ_hp_LEFTTopStories

    Disclosure: I am long WFC, BRK.B.

    Tags: BRK.B, KO, WFC, GS
    Apr 12 10:54 AM | Link | Comment!
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