Rohan

8 Comments

    • What Mohnish Pabrai Didn't Know Hurt Him Badly [view article]
      Sure, clearly he's had some bets go very sour over the past year. But he's forthright enough to add the disclaimer seemingly every time he talks that any stock he buys goes down 50% as soon as he's bought it. That's been his mantra for a while. So I guess the point is that this isn't exactly uncharted territory for his portfolio. I don't recall his numbers from calendar 2002, but they were pretty ugly, not too far from what he's posting right now. Following that, I believe his calendar 03 performance was north of 100%. Generally speaking I think the odds that he's "lost it" and doesn't bounce back from this are exceedingly low.

      While the subprime fiasco was foreseen by many, an all-out stoppage of the securitization markets was even still in the midst of it all a rather low-probability event that took down DFC. Who knows...lots of heretofore unprecedented events taking portfolios down these days, perhaps there is indeed more to come.       Jul 08 06:12 PM
    • Guru Returns Show Just How Tough the Going Has Been Lately [view article]
      Ok, from your link it appears that this isn't the manager's results over the 6 and 12 months, just the "average gain/loss" of the stocks purchased over the period. On a surface scan it doesn't appear to give any weight to position sizing, let alone positions already held.

      So Ken Heebner's numbers, for instance, appear to track relatively closely to what he's actually turned in. That makes sense since he turns over his portfolio 3-4x a year, so recent purchases are actually indicative of his overall fund.

      Still, though, position sizing matters. Joel Greenblatt's number above is entirely based on a tiny purchase of ODP.       Jul 01 04:48 PM
    • Guru Returns Show Just How Tough the Going Has Been Lately [view article]
      Robert Rodriguez is down 22% this year? I'd like to see the data source for that...his FPA Capital fund is up 5%. I'm guessing there isn't a 27% divergence between the mutual fund and the separate accounts.

      Further, Marty Whitman's had a pretty well publicized bad bet against Ackman on the bond insurers, but his Third Avenue Value Fund is only down 17% or so YTD. Not sure where the -40%-esque numbers are coming from.

      Makes me question most of the data on this list.

      Lastly, those of you who expect a fund manager to outperform in every market are just short sighted. Judging a manager based on short term performance, which is exactly what you're doing in criticizing year-to-date numbers, is hogwash. What are you going to take, Greenblatt's 40% annualized for 15-20 years, or a 6-month figure heavily weighted by an AXP holding that may well double in the next 2 years? I'm not arguing that every one of these managers is beyond reproach, but it seems like there isn't a single commenter on this list who comprehends an ounce of Benjamin Graham's teachings.       Jul 01 01:32 PM
    • What Mohnish Pabrai Didn't Know Hurt Him Badly [view article]
      I've been thinking the same thing for some time now about Buffett and macro. I love him to death but I have to say it's a little annoying that as much as he speaks to not paying attention to macro, he has an extremely good hold of the 30,000 foot view of the world. There are nitpicky things that aren't worth one's time, like whether GDP has a plus or minus sign in front of it for 3Q (bottom line is, things aren't well); but as FPA's Steve Romick said at the Value Investing Congress in May, while he almost never discusses macro, it would be putting his clients' capital at risk if he DIDN'T have a grasp of the situation now. His colleague Bob Rodriguez has clearly been all over it the past year, too.

      That said, I think Buffett et al's main thrust is to suggest to the individual investor that over the long haul, making oneself a bottom-up analyst will pay far more dividends than spending too much time on macro; engaging in the latter risks missing the forest for the trees.

      Meanwhile, by the way, I think it's very premature to say Mohnish is wrong about PNCL. Their original NW contract resulted in a big claim during bankruptcy. Not that they'd get 80c on the dollar for it this time, but it seems like it would take an extremely low-odds chain of events from here for PNCL to ultimately have less than $3 equity value (even in BK).

      Seeing as you've read MP's books, you must be familiar with his rollercoaster ride in TSO (from $7 to $1 and back), and I think Frontline followed a similar path. We'll see if this one goes the way of those or the way of DFC.       Jun 27 12:49 PM
    • Winn-Dixie Stores Remains Cheaply Valued [view article]
      "If you want a true value proposition you need to make sure the company is growing revenues per store rather than losing them. "

      Did you even read the article? Here's one data point Mark provided for you, if you actually take the time to scroll up the page:
      "The company has completed 54 store remodels and those completed locations have shown a 12% weighted average sales lift. "

      Same store sales ARE increasing year over year. It's not exactly buried information, bud. Let me make it easy for you, at the end of the first full paragraph of their most recent earnings release:

      Gross margin was 28.0%, an increase of approximately 10 basis points compared to the year ago period, and identical store sales increased 2.2%.

      I guess I'd be intrigued by your argument if you actually had any facts, but you're clearly dead wrong on the one numbers-based assertion you bothered to make.       Jun 17 01:29 PM
    • Winn-Dixie Stores Remains Cheaply Valued [view article]
      Aswo makes an excellent point, replete with logic, numbers, and cold hard facts.

      Wait, I mean the exact opposite of that.

      WMT was supposed to be the end of grocers several years ago. Last I checked, KR and SWY are doing just fine (the former's stock has roughly doubled in the past three years, while the latter's up 50%). Revenues continue to grow and earnings have magically been delivered as well.

      WINN is valued at a ridiculously low multiple of sales (0.1x) compared to its peers at about 4x that, and its EBITDA margins of around 1% are about a fifth those it earned ON ITS CURRENT STORE BASE just a few years ago. It's still comping positive same store sales numbers year over year, exceeding its own goals on almost every front (EBITDA, remodel performance, penetration of private label, etc.), though it does need to get its transaction counts into growth territory. Competition is no idle threat, to be sure - Publix too is formidable - but anyone who still believes the grocery business is a commodity one rather than a convenience one ought to do more research. WINN's stores are decently located, the management team appears fully competent, and there's no reason the company can't get back to decent operating metrics in a few years time. If so, and that seems at least a decent proposition given performance of late, these shares will be dramatically higher.

      Mark is right, WINN is cheap.       Jun 16 07:24 PM
    • Comparison to Berkshire Hathaway Shows Sears Has Hope [view article]
      It's not like Todd is going out on a limb here, guys. I think it's a fair analysis. No two situations are going to be exactly alike and maybe it requires a bit of creativity, but there are plenty of similiarities.

      Al Rob says definitively that Sears is not the next Berkshire. Marty Whitman has expressed the opposite opinion in the past (hopefully that HTML link came through, it's the 2004 Business Week article on Lampert that you can Google): "There is no question [Lampert] will turn Kmart into an investment vehicle like Warren Buffett's...that's what I am valuing into the stock." Marty made a boatload of money and got out, which he explained in the 2005 3Q letter as follows: "At the prices Sears Common is now selling, the company has to succeed in a big way in order to justify these prices." So it was a valuation call.

      Al, regarding the fact that you've made money shorting SHLD, if you actually read Todd's article you'll see he notes quite clearly that even BRK has declined significantly over certain stretches. So what? You want a cookie?

      Regarding AZO and AN not becoming mini-Berkshires, I don't think I've ever heard anyone suggest that was his goal with either of those.

      As for FIG trader, you aren't particularly imaginative, either. Saying Todd's missing the point of Buffettology is idiotic. Once again Todd clearly pointed out BRK's purchase of Nat'l Indemnity in the spring of '67 in order to get access to the float.

      Perhaps your opinion is that Lampert simply cannot accomplish anything resembling a float within Sears (buying an insurer himself with the cash once he's revitalized SHLD a bit?), and sure, that's debatable. But the argument isn't remotely a checkmate in your favor. There remain avenues for Lampert to generate cash through SHLD, so it's not like this story is over, which you guys seem to think.       Oct 26 04:37 PM
    • Comparison to Berkshire Hathaway Shows Sears Has Hope [view article]
      It's not like Todd is going out on a limb here, guys. I think it's a fair analysis. No two situations are going to be exactly alike and maybe it requires a bit of creativity, but there are plenty of similiarities.

      Al Rob says definitively that Sears is not the next Berkshire. Marty Whitman has expressed the opposite opinion in the past (hopefully that HTML link came through, it's the 2004 Business Week article on Lampert that you can Google): "There is no question [Lampert] will turn Kmart into an investment vehicle like Warren Buffett's...that's what I am valuing into the stock." Marty made a boatload of money and got out, which he explained in the 2005 3Q letter as follows: "At the prices Sears Common is now selling, the company has to succeed in a big way in order to justify these prices." So it was a valuation call.

      Al, regarding the fact that you've made money shorting SHLD, if you actually read Todd's article you'll see he notes quite clearly that even BRK has declined significantly over certain stretches. So what? You want a cookie?

      Regarding AZO and AN not becoming mini-Berkshires, I don't think I've ever heard anyone suggest that was his goal with either of those.

      As for FIG trader, you aren't particularly imaginative, either. Saying Todd's missing the point of Buffettology is idiotic. Once again Todd clearly pointed out BRK's purchase of Nat'l Indemnity in the spring of '67 in order to get access to the float.

      Perhaps your opinion is that Lampert simply cannot accomplish anything resembling a float within Sears (buying an insurer himself with the cash once he's revitalized SHLD a bit?), and sure, that's debatable. But the argument isn't remotely a checkmate in your favor. There remain avenues for Lampert to generate cash through SHLD, so it's not like this story is over, which you guys seem to think.       Oct 26 04:37 PM
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