123's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/133905/comments http://seekingalpha.com/article/126784-lampert-s-patience-is-rewarded-as-sears-holdings-buys-more-sears-canada-shares?source=feed#comment-437476 437476
30K shares * $18 per share is less than $600,000.

This is an immaterial move. *Beautiful*

Can you please get your nose out of Lampert's a**?]]> Mon, 23 Mar 2009 21:02:48 -0400
30K shares * $18 per share is less than $600,000.

This is an immaterial move. *Beautiful*

Can you please get your nose out of Lampert's a**?]]> http://seekingalpha.com/article/118065-railroads-are-getting-cheaper-vs-gold-and-silver-at-any-rate?source=feed#comment-394458 394458
www.apmex.com/APMEXTop...

(Buy price column, sell price column).]]> Wed, 18 Feb 2009 23:00:59 -0500
www.apmex.com/APMEXTop...

(Buy price column, sell price column).]]> http://seekingalpha.com/article/118065-railroads-are-getting-cheaper-vs-gold-and-silver-at-any-rate?source=feed#comment-389961 389961
"I agree; getting physical metal in your hand carries quite a premium. Those who follow the market know the 'real' and 'paper' metal prices have been bifurcating for months now. I wrote an article about it months ago in October..."]]> Sun, 15 Feb 2009 22:20:56 -0500
"I agree; getting physical metal in your hand carries quite a premium. Those who follow the market know the 'real' and 'paper' metal prices have been bifurcating for months now. I wrote an article about it months ago in October..."]]> http://seekingalpha.com/article/120416-berkshire-little-downside-left-at-current-levels?source=feed#comment-388846 388846 Sat, 14 Feb 2009 22:13:07 -0500 http://seekingalpha.com/article/118065-railroads-are-getting-cheaper-vs-gold-and-silver-at-any-rate?source=feed#comment-379169 379169
You say "real estate" is attractively priced at 500-1000 ounces of silver. What sort of real estate are you referring to, say a house that currently costs $400,000 around the suburbs of New York, or what? I didn't read ther real estate article but "real estate" is not very descriptive.

The second thing is, this website: www.zealllc.com/2008/c..., the third chart from the top, gives the nominal and real prices of silver from 1970 to 2006. The prices in today's dollars are in blue, and the author notes 7 silver price "peaks": $30, 130, 60, 31, 19, 10, and 15. Absent some extraordinary years in the 1970's, silver has rarely traded at or even twice as much as its current price. What are your thoughts on this. I have heard the inflation argument, but purely based on supply and demand where do you think silver stands, and what numbers/facts/data do you use as the basis for this?

Last are you at all concerned about the metals' liquidity - ie will there always be someone to buy that silver bullion or whatever form it is in which you hold your metals.

I checked out those sites, thanks for that, unfortunately they do take a nice hefty premium to spot since ie 10 oz of silver they want around $160 after including the price of shipping. But it's something to consider anyway.

Thanks either way.]]> Sat, 07 Feb 2009 08:32:14 -0500
You say "real estate" is attractively priced at 500-1000 ounces of silver. What sort of real estate are you referring to, say a house that currently costs $400,000 around the suburbs of New York, or what? I didn't read ther real estate article but "real estate" is not very descriptive.

The second thing is, this website: www.zealllc.com/2008/c..., the third chart from the top, gives the nominal and real prices of silver from 1970 to 2006. The prices in today's dollars are in blue, and the author notes 7 silver price "peaks": $30, 130, 60, 31, 19, 10, and 15. Absent some extraordinary years in the 1970's, silver has rarely traded at or even twice as much as its current price. What are your thoughts on this. I have heard the inflation argument, but purely based on supply and demand where do you think silver stands, and what numbers/facts/data do you use as the basis for this?

Last are you at all concerned about the metals' liquidity - ie will there always be someone to buy that silver bullion or whatever form it is in which you hold your metals.

I checked out those sites, thanks for that, unfortunately they do take a nice hefty premium to spot since ie 10 oz of silver they want around $160 after including the price of shipping. But it's something to consider anyway.

Thanks either way.]]> http://seekingalpha.com/article/118065-railroads-are-getting-cheaper-vs-gold-and-silver-at-any-rate?source=feed#comment-376965 376965
How do you recommend buying commodities, especially the metals?

I don't trust the ETF/N's, I was thinking Ebay might be good for example where there are people selling 10 oz of silver bullion for around $155.

What sources do you trust for quality and also a price close to the spot price (not big premium in excess of spot)?]]> Thu, 05 Feb 2009 11:09:59 -0500
How do you recommend buying commodities, especially the metals?

I don't trust the ETF/N's, I was thinking Ebay might be good for example where there are people selling 10 oz of silver bullion for around $155.

What sources do you trust for quality and also a price close to the spot price (not big premium in excess of spot)?]]> http://seekingalpha.com/article/118065-railroads-are-getting-cheaper-vs-gold-and-silver-at-any-rate?source=feed#comment-375428 375428
I've been thinking about this and would appreciate your opinion:

How does one know what the intrinsic value of an ounce (or whatever mass) of gold is? Isn't gold just as prone to a bubble as any other asset?

For example, say gold goes to $2,000 an ounce. How does one know whether that is the proper price for the metal, or whether it is the result of lots of money pushing up the price? If asset inflation that pushes prices past reality (i.e. real estate, stocks), why can't this happen to gold or metals as well?

I mean, two hundred years ago, or whatever, tulips were considered a good store of value for a short period of time. That's an extreme example, but still.



]]> Wed, 04 Feb 2009 10:13:44 -0500
I've been thinking about this and would appreciate your opinion:

How does one know what the intrinsic value of an ounce (or whatever mass) of gold is? Isn't gold just as prone to a bubble as any other asset?

For example, say gold goes to $2,000 an ounce. How does one know whether that is the proper price for the metal, or whether it is the result of lots of money pushing up the price? If asset inflation that pushes prices past reality (i.e. real estate, stocks), why can't this happen to gold or metals as well?

I mean, two hundred years ago, or whatever, tulips were considered a good store of value for a short period of time. That's an extreme example, but still.



]]> http://seekingalpha.com/article/114909-seven-irrational-retail-valuations?source=feed#comment-371615 371615
The economists think that all that needs to be done is to have credit flowing again. Well America and Americans are essentially broke - much of the spending that we've seen the last 3-4 years has been the result of massive asset (i.e. realty) price inflation. Americans then took out home equity lines of credit and spent that too. They took out money from credit card companies and spent that too.

OK so even if credit is not flowing now, and credit starts to flow, this will result in more of the same that got us into this mess. Any relief in the retailers will be short lived at best.

I guess that you are trying to say that these retailers are the exception to the overwhelming rule of struggling retailers, but WHY? How is Abercrombie's business, or Gap's business really all that different from, say, Talbots, or whatever? It's not, in my view. And just because their earnings have held up so far does not at all somehow guarantee that they will continue to hold up. Things could just get worse...and worse...and worse, and not you or any economist out there can tell me otherwise. Obviously I hope that doesn't happen because I live in this country and I want to have a good job and so on, but when it comes to investments or whatever that's something to consider.

No, I do not think there are really any safe paper assets at the moment. With the Fed and US government doing their darndest to dilute the value of the dollar, there is a real wipe out risk with any paper assets.

BTW I think there are some bonds that look halfway decent - for example Sears Holdings has bonds with a 24% or so YTM coming due I think 2011 or 2013. I mean there is a risk of bankruptcy but at least I suppose there you're getting cash instead of these phony buybacks that management does so their f*cking call options will go in the money.

But I haven't bought those bonds because I just don't have the money, also like I said there's a risk of bankruptcy there too and that debt is unsecured.]]> Fri, 30 Jan 2009 19:29:28 -0500
The economists think that all that needs to be done is to have credit flowing again. Well America and Americans are essentially broke - much of the spending that we've seen the last 3-4 years has been the result of massive asset (i.e. realty) price inflation. Americans then took out home equity lines of credit and spent that too. They took out money from credit card companies and spent that too.

OK so even if credit is not flowing now, and credit starts to flow, this will result in more of the same that got us into this mess. Any relief in the retailers will be short lived at best.

I guess that you are trying to say that these retailers are the exception to the overwhelming rule of struggling retailers, but WHY? How is Abercrombie's business, or Gap's business really all that different from, say, Talbots, or whatever? It's not, in my view. And just because their earnings have held up so far does not at all somehow guarantee that they will continue to hold up. Things could just get worse...and worse...and worse, and not you or any economist out there can tell me otherwise. Obviously I hope that doesn't happen because I live in this country and I want to have a good job and so on, but when it comes to investments or whatever that's something to consider.

No, I do not think there are really any safe paper assets at the moment. With the Fed and US government doing their darndest to dilute the value of the dollar, there is a real wipe out risk with any paper assets.

BTW I think there are some bonds that look halfway decent - for example Sears Holdings has bonds with a 24% or so YTM coming due I think 2011 or 2013. I mean there is a risk of bankruptcy but at least I suppose there you're getting cash instead of these phony buybacks that management does so their f*cking call options will go in the money.

But I haven't bought those bonds because I just don't have the money, also like I said there's a risk of bankruptcy there too and that debt is unsecured.]]> http://seekingalpha.com/article/114909-seven-irrational-retail-valuations?source=feed#comment-371193 371193
You think there will be no growth-I think there will negative growth in earnings. I think we are now seeing the tip of the iceberg - we do not yet see the full effects of this recession in these retailers' earnings, but we will.

Basically my view is that your assumptions are misguided.

Also I think an 8-12% earnings yield (even a realistically stable one) is nothing to jump up and down about considering that inflation in the US is around 8-10% per year and maybe even higher in the future. You can thank Mr. Obama and the Fed for that.]]> Fri, 30 Jan 2009 12:24:42 -0500
You think there will be no growth-I think there will negative growth in earnings. I think we are now seeing the tip of the iceberg - we do not yet see the full effects of this recession in these retailers' earnings, but we will.

Basically my view is that your assumptions are misguided.

Also I think an 8-12% earnings yield (even a realistically stable one) is nothing to jump up and down about considering that inflation in the US is around 8-10% per year and maybe even higher in the future. You can thank Mr. Obama and the Fed for that.]]> http://seekingalpha.com/article/114909-seven-irrational-retail-valuations?source=feed#comment-370636 370636
These companies ARE all fundamentally changed by this - and what we have going on is not a mere recession.

Don't imply that Mr. Market an idiot. Mr. Market burned a lot of people over the last 7 years.

The retailing business in the United States has fundamentally changed. Times will be tougher than in the past. People will not make credit-fueled purchases of $80 T-shirts made in China anymore. Throw the old P/E's out the window because they have no relevance anymore.]]> Thu, 29 Jan 2009 23:31:19 -0500
These companies ARE all fundamentally changed by this - and what we have going on is not a mere recession.

Don't imply that Mr. Market an idiot. Mr. Market burned a lot of people over the last 7 years.

The retailing business in the United States has fundamentally changed. Times will be tougher than in the past. People will not make credit-fueled purchases of $80 T-shirts made in China anymore. Throw the old P/E's out the window because they have no relevance anymore.]]> http://seekingalpha.com/article/109552-analysts-ecstatic-over-baytex-energy?source=feed#comment-366043 366043 Sun, 25 Jan 2009 21:45:12 -0500 http://seekingalpha.com/article/113302-ebay-stock-fully-valued-at-current-price?source=feed#comment-356118 356118 Wed, 14 Jan 2009 20:57:06 -0500 http://seekingalpha.com/article/106523-notes-from-steak-n-shake-s-investor-day?source=feed#comment-356019 356019
Yes the real estate may be there but the point is that proceeds from its sale make this at most - at most- a wash.

As for the operating business:

There is another company with a great brand, you could say a long and storied history, selling at a market cap to sales of 1:3, in the casual restaurant industry: it's called Krispy Kreme donuts. I'm sure that after about 15 seconds another 5-10 names would pop up that fit this description.

I just don't think that is an automatic homerun, not even close. If additional facts come to light perhaps, but my final word is that this could very well be a dead company by now. Even if it survives, etc., it will not necessarily be great for investors. Restaurants in general usually just don't have great economics for shareholders.

As for Biglari's capital allocation abilities, there's really not much he can do with a bad business, if this is a bad business. What's he going to do, buy more restaurants?

If you strip away the PR I think that there's much less here than a lot of people think.]]> Wed, 14 Jan 2009 17:49:17 -0500
Yes the real estate may be there but the point is that proceeds from its sale make this at most - at most- a wash.

As for the operating business:

There is another company with a great brand, you could say a long and storied history, selling at a market cap to sales of 1:3, in the casual restaurant industry: it's called Krispy Kreme donuts. I'm sure that after about 15 seconds another 5-10 names would pop up that fit this description.

I just don't think that is an automatic homerun, not even close. If additional facts come to light perhaps, but my final word is that this could very well be a dead company by now. Even if it survives, etc., it will not necessarily be great for investors. Restaurants in general usually just don't have great economics for shareholders.

As for Biglari's capital allocation abilities, there's really not much he can do with a bad business, if this is a bad business. What's he going to do, buy more restaurants?

If you strip away the PR I think that there's much less here than a lot of people think.]]> http://seekingalpha.com/article/106523-notes-from-steak-n-shake-s-investor-day?source=feed#comment-355034 355034 Tue, 13 Jan 2009 20:24:02 -0500 http://seekingalpha.com/article/106523-notes-from-steak-n-shake-s-investor-day?source=feed#comment-355027 355027
1) You ignored that I said the $1.5M per property was a best case (read: unrealistic, in my eyes) scenario because it excluded costs and taxes, and also because it's not at all clear what the value of the properties is.

2) You didn't reply to my question about how much they received for the properties that they did sell.

3) Assuming this (very optimistic, for reasons stated above) liquidation value, the stock is trading around (not above) its liquidation value. And I did not include the $30M of debt or $80M of current liabilities. The company has $60M of current assets, but I don't think they'll get book value for those (I think they'd get less in a liquidation).

4) Even if they can liquidate at the current market cap, where in the world is there any evidence that the leased businesses are profitable at all? Some subset of them may (and I emphasize MAY) be profitable, but (i) if management is so shareholder-friendly, why didn't they disclose which of the restaurants are profitable, and how much profit they're making). My point is, that as a group the leased stores might not be profitable at all. Lets say 10 of the stores are profitable - so they might make $1M a year collectively, or $5M a year collectively, who knows? Not me.

5) Please don't mention this nonsense about how the chain was started during the Great Depression. That is just propaganda from management. Numbers only, please, corroborated by facts. Leave the propaganda at the annual meeting, thank you.]]> Tue, 13 Jan 2009 20:19:03 -0500
1) You ignored that I said the $1.5M per property was a best case (read: unrealistic, in my eyes) scenario because it excluded costs and taxes, and also because it's not at all clear what the value of the properties is.

2) You didn't reply to my question about how much they received for the properties that they did sell.

3) Assuming this (very optimistic, for reasons stated above) liquidation value, the stock is trading around (not above) its liquidation value. And I did not include the $30M of debt or $80M of current liabilities. The company has $60M of current assets, but I don't think they'll get book value for those (I think they'd get less in a liquidation).

4) Even if they can liquidate at the current market cap, where in the world is there any evidence that the leased businesses are profitable at all? Some subset of them may (and I emphasize MAY) be profitable, but (i) if management is so shareholder-friendly, why didn't they disclose which of the restaurants are profitable, and how much profit they're making). My point is, that as a group the leased stores might not be profitable at all. Lets say 10 of the stores are profitable - so they might make $1M a year collectively, or $5M a year collectively, who knows? Not me.

5) Please don't mention this nonsense about how the chain was started during the Great Depression. That is just propaganda from management. Numbers only, please, corroborated by facts. Leave the propaganda at the annual meeting, thank you.]]> http://seekingalpha.com/article/106523-notes-from-steak-n-shake-s-investor-day?source=feed#comment-351732 351732 pg 4

We own the land and buildings of 164 properties and 20 parcels of land. The other 260 or whatever are leased.

At the end of fiscal year 2008, we have $25.4 million in assets held for sale which includes the 14 improved properties and 20 parcels of land which were previously purchased for development.

14 properties + 20 parcels = 34 unimproved and improved parcels. They are held for sale at less than $1M each, about 700K each for $25M

Say they sell all 160 properties for (an optimistic, best case scenario of) 1.5M each - that is $240M. OK. That's ignoring taxes, selling costs, etc. So what's left? A bunch of leased burger restaurants, their operating success is pretty much up in the air.

I think that his really has to be a successful operating business for this to work out and that's not at all clearly the case right now.



]]> Sat, 10 Jan 2009 12:38:29 -0500 pg 4

We own the land and buildings of 164 properties and 20 parcels of land. The other 260 or whatever are leased.

At the end of fiscal year 2008, we have $25.4 million in assets held for sale which includes the 14 improved properties and 20 parcels of land which were previously purchased for development.

14 properties + 20 parcels = 34 unimproved and improved parcels. They are held for sale at less than $1M each, about 700K each for $25M

Say they sell all 160 properties for (an optimistic, best case scenario of) 1.5M each - that is $240M. OK. That's ignoring taxes, selling costs, etc. So what's left? A bunch of leased burger restaurants, their operating success is pretty much up in the air.

I think that his really has to be a successful operating business for this to work out and that's not at all clearly the case right now.



]]> http://seekingalpha.com/article/106523-notes-from-steak-n-shake-s-investor-day?source=feed#comment-351588 351588 Sat, 10 Jan 2009 09:27:35 -0500 http://seekingalpha.com/article/106523-notes-from-steak-n-shake-s-investor-day?source=feed#comment-351587 351587 Sat, 10 Jan 2009 09:26:54 -0500 http://seekingalpha.com/article/106523-notes-from-steak-n-shake-s-investor-day?source=feed#comment-351586 351586
In the 10K, it says that they sold 1 restaurant and 11 parcels of land in 2008. I haven't yet found this, but did they mention how much cash they got for those properties.]]> Sat, 10 Jan 2009 09:25:49 -0500
In the 10K, it says that they sold 1 restaurant and 11 parcels of land in 2008. I haven't yet found this, but did they mention how much cash they got for those properties.]]> http://seekingalpha.com/article/113667-conocophillips-more-than-just-a-great-stock?source=feed#comment-349241 349241 Wed, 07 Jan 2009 22:00:14 -0500 http://seekingalpha.com/article/106523-notes-from-steak-n-shake-s-investor-day?source=feed#comment-349240 349240
2) If the real estate is so valuable, why hasn't it been sold? My guess is that prices are lower today than they were 6 months or a year ago. But I also don't think prices are likely to go up any time in the next couple of years. So that cash flow really will not be coming in any time soon.

Anyone can give phony, overly optimistic projections. It seems management here is outright lying.]]> Wed, 07 Jan 2009 21:51:08 -0500
2) If the real estate is so valuable, why hasn't it been sold? My guess is that prices are lower today than they were 6 months or a year ago. But I also don't think prices are likely to go up any time in the next couple of years. So that cash flow really will not be coming in any time soon.

Anyone can give phony, overly optimistic projections. It seems management here is outright lying.]]> http://seekingalpha.com/article/112703-gazprom-feeling-the-pain?source=feed#comment-346979 346979 Mon, 05 Jan 2009 21:53:49 -0500 http://seekingalpha.com/article/112703-gazprom-feeling-the-pain?source=feed#comment-346978 346978 Mon, 05 Jan 2009 21:52:50 -0500 http://seekingalpha.com/article/107827-12-net-net-stocks-with-real-prospects?source=feed#comment-339519 339519
Seeking alpha must be doing well. great article, very insightful. keep it up.

VVLV and all the stocks up there seem like just the kind of stocks Graham would buy. What do I know. Believe me, I have no clue what I'm talking about. Humility and apologies are in order. Please ignore my above posts if possible.]]> Sat, 27 Dec 2008 23:05:07 -0500
Seeking alpha must be doing well. great article, very insightful. keep it up.

VVLV and all the stocks up there seem like just the kind of stocks Graham would buy. What do I know. Believe me, I have no clue what I'm talking about. Humility and apologies are in order. Please ignore my above posts if possible.]]> http://seekingalpha.com/article/107827-12-net-net-stocks-with-real-prospects?source=feed#comment-339512 339512
Anyone can run a computer screen. That's not security analysis.]]> Sat, 27 Dec 2008 22:37:13 -0500
Anyone can run a computer screen. That's not security analysis.]]> http://seekingalpha.com/article/107827-12-net-net-stocks-with-real-prospects?source=feed#comment-338188 338188 Thu, 25 Dec 2008 12:48:39 -0500 http://seekingalpha.com/article/107827-12-net-net-stocks-with-real-prospects?source=feed#comment-338186 338186
They are trading at discounts for a reason: the managers that run these companies mismanage cash; capital expenditures that exceed operating cash flow and yet do not promise a high (or any) return; and they lack a viable operating business.

I would imagine most if not all of these companies are horrible investments.]]> Thu, 25 Dec 2008 12:46:04 -0500
They are trading at discounts for a reason: the managers that run these companies mismanage cash; capital expenditures that exceed operating cash flow and yet do not promise a high (or any) return; and they lack a viable operating business.

I would imagine most if not all of these companies are horrible investments.]]> http://seekingalpha.com/article/108430-what-caused-berkshire-s-freefall-and-how-investors-can-benefit?source=feed#comment-328514 328514 Sat, 13 Dec 2008 18:19:34 -0500 http://seekingalpha.com/article/108077-stryker-just-what-the-doctor-ordered?source=feed#comment-315507 315507 Wed, 26 Nov 2008 10:57:53 -0500 http://seekingalpha.com/article/106507-ackman-s-sears-sale-an-expression-of-his-activism?source=feed#comment-309463 309463
You two seem to think there are only 1 scenario for Sears-liquidation. That Sears is essentially a balance sheet, not a business.

The problem with this thinking, in my opinion, is that Eddie has run this company like a business, not like a balance sheet, and not like a holding company. And it appears, to me, that he will continue to do so.

So he will continue to try to turn the inventory 4 times a year like the stores have done in the past, at a positive but modest margin, perhaps a bit or somewhat lower than in the past. The problem is that there may well be this unlocked value in the real estate, and in some of the current assets, but Eddie appears to be reluctant to sell it off. It seems almost like he's bought an empire, and is willing to sit on his a** on it.

I mean, if you're sitting on value, why sit on it? Every day that you wait, that is cash tied up in those assets. So the problem with Sears is that it's tough to time the cash flows resulting from any asset sales, because if they come in 20 years or 10 years or 50 years or not at all, you're left with just the cash generated by the business, and that is roughly 1-1.5 billion in good times, and less than that in bad times. Even is Sears makes $1B this year in free cash flow, which probably is not very likely, investors can get similar yields elsewhere now, in companies less levered than Sears (people seem to be ignoring the "only" $4.4B in pension liabilities completely), so I really do not see the value in this one.

This changes, like I said, if Eddie starts throwing off incremental cash with asset sales, but that hasn't been the case.

]]> Tue, 18 Nov 2008 21:02:21 -0500
You two seem to think there are only 1 scenario for Sears-liquidation. That Sears is essentially a balance sheet, not a business.

The problem with this thinking, in my opinion, is that Eddie has run this company like a business, not like a balance sheet, and not like a holding company. And it appears, to me, that he will continue to do so.

So he will continue to try to turn the inventory 4 times a year like the stores have done in the past, at a positive but modest margin, perhaps a bit or somewhat lower than in the past. The problem is that there may well be this unlocked value in the real estate, and in some of the current assets, but Eddie appears to be reluctant to sell it off. It seems almost like he's bought an empire, and is willing to sit on his a** on it.

I mean, if you're sitting on value, why sit on it? Every day that you wait, that is cash tied up in those assets. So the problem with Sears is that it's tough to time the cash flows resulting from any asset sales, because if they come in 20 years or 10 years or 50 years or not at all, you're left with just the cash generated by the business, and that is roughly 1-1.5 billion in good times, and less than that in bad times. Even is Sears makes $1B this year in free cash flow, which probably is not very likely, investors can get similar yields elsewhere now, in companies less levered than Sears (people seem to be ignoring the "only" $4.4B in pension liabilities completely), so I really do not see the value in this one.

This changes, like I said, if Eddie starts throwing off incremental cash with asset sales, but that hasn't been the case.

]]>