User 174536

Skeptical About Buffett's Big Bet

Do you really think BRK could buy $34 billion of RRs in the market? Do you think Buffett amassed his fortune by buying "baskets" of stocks?


On Nov 03 05:13 PM Roger Knights wrote:

> Why pay a premium and put all your eggs in one basket? Why not buy
> a basket of RRs at market prices?
>
> There's a considerable long-term risk in BNI: The port in Mexico's
> west coast that is being built, in conjunction with improvements
> to a railroad line from it to Kansas, that is intended to be a low-cost
> alternative to high-wage US west coast ports. This could divert a
> good deal of traffic.
>
> I thought China had lots of coal.

Skeptical About Buffett's Big Bet

This article is senseless. Do you think BNI management would have sold the company for $70 back in March? If they have any intelligence, the answer is "no".

Second, there's more to valuation than P/E. What's BRK's cash flow? How's it compare to its GAAP earnings?

Thanks for wasting 2 minutes of my life with this nonsense.

Blockbuster: Wattles Buys into the Doomed Company

It's a shame that Wattles didn't buy BGP the day after you did. Then you wouldn't be sitting on a 90% loss in it. I'd bet that BGP will file bankruptcy before BBI. If you'd bother to do any research, you'd see that BBI is profitable and expects to generate $185 million in free cash flow this year (without having to cut inventory to the bone)

AutoNation: Lots to Look Forward to Down the Road

Marcap, AN has bought about $2 billion of stock back the last 3-4 years. That's a direct reduction of shareholders' equity so it's pretty stupid to say this is overpriced based on its P/B ratio.

You also forgot to include inventory in your "current shortfall" calculation. Where do you think the A/P comes from? It can "get" cash by selling its inventory...just like any other business does.

Sears Faces Risk If Economy Doesn't Improve

SHLD sure does have a lot of revenue ($50 billion) for being a store that nobody shops at. TGT (where everyone apparently shops) has revenue of 63 billion.

If you look past the changes in working capital, which will reverse themselves because SHLD isn't growing, they generated + cash flow last quarter.

Sears Faces Risk If Economy Doesn't Improve

This is a joke, right? SHLD has about 1.4 billion in cash on its balance sheet, only 3.5 billion in LT debt, is free cash flow positive, and they're going to file bankruptcy??

Borders to Sell Paperchase: A Good Short-Term Move

The FT article stated a price of 80 million POUNDS, not dollars. Makes quite a difference...

Borders Keeps Us In Suspense

I'm surprised nobody has mentioned that BGP is trading below tangible book value, while BKS is trading at 2-3x book value. This seems like a no-brainer buy to me. The new concept stores are apparently doing better than expected. Due to the financing agreement today, BGP has a big incentive to sell itself by October.

The only thing I don't like is BGP buying back tons of stock a couple years ago around $20, and now issuing a bunch of warrants at $7. Talk about a waste of capital. Way to return money to the shareholders...