texalope

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20 Comments

    • Sun Mar 2nd 09:40 AM | Rating: 0 0
      Commented on:
      2 Noteworthy Points From Warren Buffett's Annual Shareholder Letter
      Primus is a good bet and here's my thinking.
      You have to think like an owner of a privately held business with no daily quote.
      They have a solid book. Spreads are going up so the income stream is rising. My company is getting paid quite well for the risk we're assuming (much like the Property and casualty business after hurricanes Katrina and Wilma).
      My accountant comes in quarterly and tells me we're losing tons of money because he marks our holdings to market. My bank account is growing larger and larger and my prospects for continuation of this stream of money are very good in this cycle. I have no intention or need to sell my assets into this weak market, I'll hold them to term(about 5 years) until my insurance guarantee expires. My accountants' proclamations do not hold much value for me. My bank account does.
      If a competitor came to me and offered half of book value for my good business with a growing stream of cash flows, I'd be a fool to sell it to him. Frankly, I'd buy his business under the same arrangement. So, these factors tell me Primus is a good buy here at 50% of economic book value.
      The risk- a black swan event occurs with a huge bankruptcy that I couldn't predict. An outlier type event that can happen with any investment at any time.

      I don't think that's enough to dissuade me from a bet that will double my money at the least($9 assigns no value to ongoing business) so this company is worth more. But,that amount is subject to debate.
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    • Sat Feb 16th 11:26 AM | Rating: 0 0
      Commented on:
      Time to Discard Price/Book Ratio When Evaluating the I-Banks
      Earnings in the IBanks are very lumpy. It's not like selling coke or cereal.
      Using a P/E is very risky. Right now, net worth is questionable. There are some assets which may be undervalued too.
      I submit that it is impossible to really value these companies at this time. Notwithstanding this, I am an investor in GS because I like owning this kind of business . I like their long term prospects and I feel the stock will reflect their true value over time. If you study their history you quickly recognize this company is a survivor of all kinds of investing climates. They have always attracted superior management that capitalizes on the situations presented to them.
      I'm comfortable accepting this as the basis of my investment.
      View article »
    • Mon Jan 14th 08:31 AM | Rating: 0 0
      Commented on:
      A Contrarian Take On the Countrywide Acquisition
      I believe this acquisition will create the opportunity to restructure a large number of mortgages EFFICIENTLY. This will ultimately reduce pressure on real estate prices and help increase sales. With mortgage rates so low and pent up demand building, the last part of the equation is firming up real estate prices. If the government or Fed were involved in supportung this transaction, I rhink it was a smart move.
      View article »
    • Sun Jan 13th 16:46 PM | Rating: 0 0
      Commented on:
      A Rare Opportunity To Buy AmEx On The Cheap
      Ben graham used Book Value as a metric to determine a company's value. He believed anything above 30% over book leave you hostage to the vagaries of the market.
      On a historic basis this stock is at the higher end of its book value ranges. From a classic value perspective there is no margin of safety in this price.
      I agree it's a great franchise. I believe it has distince competitive advantages and great earnings power value. I also think that the replacement value of it assets is much higher than book which doesn't accurately reflect the investment made to create this company reputation over its long history. I agree that the stock is depressed from what it was. I don't think there is a margin of safety.
      View article »
    • Tue Jan 1st 08:53 AM | Rating: 0 0
      Commented on:
      Another Gift of Debt Securitization: 6 Year Car Loans
      The lenders and car dealers are very savvy when it comes to car loans. They make sure their loan to value ratios are large enough to cover themselves in the event they have to reposes. Many of the car loans they make, will never be repaid and they expect it. In sub prime area which is largely used cars, they often resell the same car over and over.
      View article »
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