Seeking Alpha

William Greenfield

 
View William Greenfield's Comments BY TICKER:
  • Coach Inc: A Quick Analysis [View article]
    Scottrade. I really like using them. Great customer service if you ever have any problems. I use them for IRAs and for regular accounts.
    Mar 24 03:35 PM | Likes Like |Link to Comment
  • Coach Inc: A Quick Analysis [View article]
    Boston_AL,

    Thank you for the comments. I must say you really know and understand your Graham and Buffett, as well as where they differ. There are a few things I would like to say in response to your comments above.

    Firstly, the comment about "wonderful" companies was a Buffett quote. The fact that Ben Graham bought less than "wonderful" companies should have no bearing on this quote.

    Secondly, Graham's bargains where usually net-net companies that where priced at a point that made them better dead than alive, therefore he didn't mind if they weren't "wonderful". However, in his normal course of investing he primarily looked for arbitrage situations, as documented in "Benjamin Graham: The Father of Financial Analysis" by Irving Kahn, C.F.A. and Robert D. Milne, C.F.A. (http://bit.ly/ZB77eX).

    Furthermore, in "The Intelligent Investor" Graham basically says what you have pointed out. For the "enterprising" investor Graham is ok with the idea that the investor may invest in less than wonderful companies. However, for a "defensive" investor, Graham advised that they stick to bigger, well known, companies.

    Going in order of your posts, I would like to point out that when you by a stock at a discount of 40% you will stand to gain more than 40% even if the stock takes a full year to appreciate. Take a stock that you value at $100 and is selling for $60. This is a discount of 40%. But if the stock goes up to $100 in exactly one year you will have an annualized gain of 66.6%, not 40%. You must keep in mind which number you are working from to get the right percentage.

    Lastly, you did a nice job with the numbers for Heinz vs. Hershy. I never looked into either company so I really can't say much. I can say that a neighbor of mine is an analyst at Tweedy, Browne and when I asked what he thought about the price Buffett is paying he said that he didn't understand why Buffett was paying so much. As a matter of fact, during an interview recently Buffett mentioned that he wasn't thrilled with the price he paid for Heinz. He mentioned that the only reason he was ok paying such a price was because he felt that 3G Capital can do a good job managing the business.

    As you point out in your conclusion, its better to buy a company at a fair price then to wait for it to fall lower and never end up owning it. I think this is precisely what Buffett was trying to convey when he said "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

    Thank you for your comments and keep on reading.
    Mar 13 10:05 PM | Likes Like |Link to Comment
  • Coach Inc: A Quick Analysis [View article]
    Thanks. The reason I didn't do any DCF is because it has too many assumptions. I wanted to keep it simple. Plus, if I did DCF, I wouldn't have been able to do the analysis on the back of an envelope.

    I definitely agree with you that below $45 is when I would start taking the stock more seriously.
    Mar 12 12:09 AM | Likes Like |Link to Comment
More on COH by William Greenfield
COMMENTS STATS
55 Comments
81 Likes