Some Links on Canadian Housing Market, Shorting US-Malls, Mungers/DJCO Handouts … and more

Nice source of numbers, very clean: QuickFS.net – I will add this to my Investment Tools Page

 

On-beyond-Investing went to top of the Canadian Housing Market, so you didn’t have to (link)

There are, apparently, two very important things to know when dealing with real estate.  First, you have to face your fear; this fear is to be ignored and then you should ‘just do it’ and ‘buy now’.  The next step is find what you can afford and then buy it.  Ignore all ‘non-doers’, don’t overanalyze or focus on the numbers, just fucking buy.

The fact that the biggest condo developer in Canada said lenders will bend (but not break, apparently) rules to get you financing in front of 15k people with most people smiling and nodding was shocking.

 

Wall Street Has Found Its Next Big Short in U.S. Credit Market by Bloomberg (link)

Wall Street speculators are zeroing in on the next U.S. credit crisis: the mall.

It’s no secret many mall complexes have been struggling for years as Americans do more of their shopping online.

 

Putting all your eggs in one Basket? “Ackman Sells Valeant Stake After at Least $2.8 Billion Loss” by Bloomberg (link)

 

Charlie Mungers DJCO Handout 1/2  (link)

Continue reading

Francisco Garcia Parames, Cobas AM, azValor

Every country except germany* has its own “Warren Buffett”. The Warren Buffett of Spain is Francisco García Paramés. He was the Star Investing Manager at Bestinver with a 16% annual return over 25 years. When he left Bestinver, their assets fell by almost a third. He had a 2 year break (two-year non-compete agreement) but it seems like he is back now.

Continue reading

Some Links on M&A Activities, Interest rates affecting REIT’s, Jim Chanos, Woodford, …

Highly recomendet:

AdventuresinCapitalism on raised rates on REITS (link)

Look at the charts of various smaller REITs that aren’t being propped up with broad market ETF inflows. These things are getting nuked—particularly in the retail sector.

I did the math of the example mentioned:

PREIT1 vs PREIT2

“To Buy or Not To Buy” – Credit-Suisse on M&A (link)

Companies that act early in an M&A cycle tend to generate higher returns than those that act later.

Empirical analysis shows that M&A creates value in the aggregate, but that the seller tends to realize most of
that value.
Peter Clark and Roger Mills, finance experts who focus on M&A, found that deals they call “opportunistic,” where a weak competitor sells out, succeed at a rate of around 90 percent. “Operational” deals, or cases where there are strong operational overlaps, also have an above-average chance of success.

Jim Chanos Interview (link)

Neil Woodford himself (link)

We are more upbeat on the outlook for the UK economy than many commentators – the market consensus, in our view, has become too bearish in the aftermath of the Brexit vote

Brooklyn Investor commenting Buffett’s CNBC Interview (link)

… but history shows that the market does in fact use interest rates to value the stock market however theoretically wrong it may be, and the greatest investor of all time does so too.

Notes to myself: EssilorLuxottica

I have written about the EssilorLuxottica merger here.

The transaction would entail a strategic combination of Essilor’s and Luxottica’s businesses consisting of (i) Delfin contributing its entire stake in Luxottica (approx. 62%) to Essilor in return for newly-issued Essilor shares to be approved by the Essilor shareholders meeting, on the basis of the Exchange Ratio of 0.461 Essilor shares for 1 Luxottica share, and (ii) Essilor subsequently making a mandatory public exchange offer, in accordance with the provisions of Italian Law, to acquire all of the remaining issued and outstanding shares of Luxottica pursuant to the same Exchange Ratio and with a view to delist Luxottica’s shares.

 

EssilorLuxottica_chart.PNG

This is a Chart of bought companies from 16.01.2017 till today. Luxottica have performed poorer.

I have found no news on the deal “not going through”.

 

Some Math:

Essilor is at 108,226 Euro today

Luxottia is at 49,30  Euro today

“on the basis of the Exchange Ratio of 0.461 Essilor shares for 1 Luxottica share”

108,226 * 0.461 = 49.892 Euro …

Bottom Line:

Buy Luxottia at 49,30€ … get value of 49,89€ … 1,1% difference = minimal

 

Some Quotes from Warren Buffett’s 2016 Berkshire Hathaway Annual Report

Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. – Warren Buffett, 2016 annual report

BERKSHIRE HATHAWAY INC.

Some notes/Quotes I made during reading the annual report:

 

on Berkshires intrinsic value
By our estimate, a 120%-of-book price is a significant discount to Berkshire’s intrinsic value, a spread that is appropriate because calculations of intrinsic value can’t be precise.
 on insurance business
For example, if the insurance industry should experience a $250 billion loss from some mega-catastrophe – a loss about triple anything it has ever experienced – Berkshire as a whole would likely record a large profit for the year. Our many streams of non-insurance earnings would see to that. Additionally, we would remain awash in cash and be eager to write business in an insurance market that might well be in disarray. Meanwhile, other major insurers and reinsurers would be swimming in red ink, if not facing insolvency.
GEICO’s growth accelerated dramatically during the second half of 2016. Loss costs throughout the auto-insurance industry had been increasing at an unexpected pace and some competitors lost their enthusiasm for taking on new customers. GEICO’s reaction to the profit squeeze, however, was to accelerate its new-business efforts. We like to make hay while the sun sets, knowing that it will surely rise again.
on BHSI
We expected significant losses in the early years while Peter built the personnel and infrastructure needed for a world-wide operation. Instead, he and his crew delivered significant underwriting profits throughout the start-up period. BHSI’s volume increased 40% in 2016, reaching $1.3 billion
on BNSF
Last year, for example, in a disappointing year for railroads, BNSF’s interest
coverage was more than 6:1.
To supply a very crude measure, however, our revenue per ton-mile was 3¢ last year, while shipping costs for customers of the other four major U.S.-based railroads ranged from 4¢ to 5¢.
on BH Energy
Low prices are a powerful way to keep these constituencies happy. In Iowa, BHE’s average retail rate is 7.1¢ per KWH. Alliant, the other major electric utility in the state, averages 9.9¢.
on “Forever-Stocks”
Sometimes the comments of shareholders or media imply that we will own certain stocks “forever.” It is true that we own some stocks that I have no intention of selling for as far as the eye can see (and we’re talking 20/20 vision). But we have made no commitment that Berkshire will hold any of its marketable securities forever.
on dividends vs. capital gains
Berkshire, like most corporations, nets considerably more from a dollar of dividends than it reaps from a dollar of capital gains.
on Jack Bogle
He is a hero … to me.
on Berkshires annual meeting
The annual meeting falls on May 6th and will again be webcast by Yahoo, whose web address is https://finance.yahoo.com/brklivestream. The webcast will go live at 9 a.m. Central Daylight Time.

Update

I am back from my vacation, some updates and notes:

Saleorder I installed for BT Group striked and I sold my Position with an acceptable profit (annualized). I am still not sure if I want to do things like that in the future considering the risk/reward profile of that investment speculation.

 

Foot Looker released some good Q4 numbers. The stock now sales for ~15.5 earnings. Btw. I like their reporting.

The Company’s net income increased to $664 million in 2016, or $ 4.91 per share, compared to net income of $541million, or $3.84 per share in 2015.
Seems like Hormel Foods and L Brands disappointed investors. Both stocks lost recently. I am planing to lock at them.
French Vivendi goes down and down slowly… maybe I will look at it again. (Bollore stayed more or less flat)

 

 

To Do list:

  • Read Warren Buffett’s Annual Letter
  • looking at Hormel Foods again
  • looking at Danaher
  • looking at Vivendi
  • looking at L Brands (Victorias Secret)