Sunil Shah's  Instablog

Sunil Shah
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A fund manager who cut his cloth in Schroders London. He joined Coronation South Africa in 1998, running the Smaller Companies Fund which had the best 5-yr record in the sector during his tenure. In 2005 he left Coronation to pursue his passion in writing (and invest without constraints). He... More
My blog:
whitemansnumbers.com
My book:
White Man's Numbers: Excerpt Chapter 13
  • The Cloud and Hot Air and Frogs that dance with Dolphins 2 comments
    Aug 18, 2011 2:08 AM | about stocks: CRM, GLD, SPY, VMW
    Does anyone else feel they make the best investment decisions when real life is falling apart, when the sun might never shine again. AND it is thus entirely because of one's utterly incomprehensible mistakes?

    I do.

    Hence by irrefutable logic, CRM is down a heap tomorrow after earnings. Wont raise guidance again, trading mojos are fleeing cos the graph is sinking. (something about trendy trendlines, I gather...).  As for the PE and ANY valuation criteria, it's almost as ludicrous as the FED's policy decisions are insane.

    Real world could not get worse. Heavy downpour today. Time to swim out of the swamp of hot air in the cloud and back on planet earth.

    "Yeah!" as an exfriend said.

    dislcosure short CRM, Long Gold, 
    Stocks: CRM, GLD, SPY, VMW
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  • Sunil Shah
    , contributor
    Comments (1079) | Send Message
     
    Author’s reply » free cash flow for qtr $31m (excluding cash for shares issued and related tax benefit). OK lets give it 35% growth, for the year, to give you 168$ m free cash for the year. Using new fully diluted shares of 135million on share price of $118 = mkt cap of $16bn. SO price/free cash flow on 35% growth in cash flow= 95 times.

     

    Is that a bargain when market P/Cash is 9-10 times.

     

    This is laughable, but they did get Metallica for their dreamforce conference. I'm sure that makes it worth it
    19 Aug 2011, 02:31 AM Reply Like
  • Sunil Shah
    , contributor
    Comments (1079) | Send Message
     
    Author’s reply » AMENDMENT TO ABOVE:

     

    free cash flow for qtr $31m (excluding cash for shares issued and related tax benefit). OK lets give it 35% growth, for the year, to give you 168$ m free cash for the year. Using new fully diluted shares of 146million on share price of $118 = mkt cap of $17.2bn. Less cash on balance sheet of 1.3bn gives mkt cap of 15.9bn. SO price/free cash flow on 35% growth in cash flow= 94 times.

     

    Is that a bargain when market P/Cash is 9-10 times.

     

    This is laughable, but they did get Metallica for their dreamforce conference. I'm sure that makes it worth it
    19 Aug 2011, 02:50 AM Reply Like
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