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down 8% after beating last Q estimates but taking this Q below consensus partly due to FX headwinds of 250 bps.

Stock is trading at ~14x 2020 est GAAP eps, net-cash.

Their Alternative Accommodations is up to 20% of revenue and 'nicely profitable.'
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kinda a poster symbol for what works and what doesn't, right?
in the stocks where p/s matters, EA don't
in the stocks where EA matters, any shortfall resulted in a huge beat-down
i own hpq - a modest business, but a money marker - but crushed on slowdown expectations

it is tough
to be morally pure and hold your ground
or make money
the only goal is the last one
in the old days, things like this would be solved eventually
not now - not in the days of Amazon, where you can do billions in sales
and not make any money

medicare for all is killing unh right now
I have little doubt this is going to pass - if not now, then 2 or 4 or 6 years from now
everyone is for it - can understand why
when my step-mother was sick and staying at the hospital we never worried about any bill
never worried one iota how long she was there
have ZERO concern for cost - it was amazing
and the supplement company we had - incredible value
course, only the govt could do this - unlimited expenses, finite payment
it was great; nobody in their right mind wants to pay back bills
when you don't have to, esp. when everything from the hospital was inflated 1000% vs.
what medicare would cost

have a lawyer friend who has more than 100k in student loans
thing is, he has a lot of kids and is economically challenged by the choices he has made
cool thing is, he doesn't have to worry about the loan
it gets forgiven based on his economic situation - he told me he has no incentive to make more money and lots of disincentives to never cross over a certain level
again, guy is a lawyer
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you can also see this in low vs. hd

hd is measured on earnings and got hit
low is not measured on earnings cause they R restructuring your grandma so the stock goes up cause they adjust their way to improvement

kinda a neat trick
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No. of Recommendations: 5
i own hpq - a modest business, but a money marker - but crushed on slowdown expectations

it is tough
to be morally pure and hold your ground
or make money
the only goal is the last one
in the old days, things like this would be solved eventually
not now - not in the days of Amazon, where you can do billions in sales
and not make any money


No comment on the Blame Amazon First theory but your HPQ experience made me think about this Ensemble Capital two part post: "The Risk of Low Growth Stocks."

https://intrinsicinvesting.com/2019/02/22/the-risk-of-low-gr...

https://intrinsicinvesting.com/2019/02/27/the-risk-of-low-gr...

The articles utilize their Prestige Brands investment as an example to explore the market effects of slow growth companies.

Even a small change, like a 5% business slowing to 4% (in perpetuity) requires the cash flow yield to jump from 4% to 5%. This means a change from 25x cash flow to 20x or a 20% decline in the price. Ouch.

And I don’t just mean it might exhibit some volatility, I mean it will perpetually be worth 20% less than you expected. This is real risk. The risk of permanent impairment to the value of your investment.


All investing is uncertain. The value of a stock is nothing more than the value of the future cash flows that the company will produce. When the growth rate of these cash flows is high, it is easy to see how volatile future cash flows might be and so the risk associated with that uncertainty is clear. But when the growth rate of a company’s cash flow is low, especially if the company otherwise exhibits strong signs of being a high quality, competitively advantaged business, it is easy for investors to be lulled into thinking they own a “safe stock”.

***

Okay, I lied. I will comment on Amazon and P/S stocks.

If a company is worth its discounted cash flow appropriately discounted to its present value, both the presence of great FCF or the absence of FCF today suggest very little about its valuation.

I can't value Amazon (although my gut tells me it's worth a heck of a lot); I can't value lots of software companies that seemingly trade on P/S (my gut tells me nothing). So what?

What I do have confidence is that today's market is largely being priced off cash flow and earnings. Of course some predictions will be substantially too positive and others will be too negative. Again, nothing unusual there.

I've been investing since the 1990s.

People complained about markets in 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018 and lo and behold even in 2019 although the year is less than 1/4 done.

It's the most consistent attribute of investing :)

ET
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re: amzn

i should have clarified that
what i meant is not that amazon the reality is to blame
it is amazon the model that is to blame
which makes it ok for companies to not generate profits of any type for many years
and get not only a pass from the market
but a very high valuation period
it is sea-change in psychology

i wasn't trying to pass judgement on whether the psychology is relevant

I have never taken my cues from the valuations in the market
I won't do that today
and i've done far better than the market over time
i'm not impacted by what I don't buy

What I do have confidence is that today's market is largely being priced off cash flow and earnings.

sometimes, not always
many times, but not accurately
spec business are fashionable that's true
won't always be so
I'm merely jealous, but not tempted

huge difference but at least I have options

People complained about markets...

little bitch*n never hurt nobody
I've done ok in my time thank you very much
believing what I do and doing what I do
not going to change now - at least, not much
now I'm an old f*rt
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What I do have confidence is that today's market is largely being priced off cash flow and earnings.

P.S.

you don't seriously believe this do you?

we've had many instances in the past 20 years where the above was very clearly and obviously totally false...i mean, just 2 months ago you had businesses 70% of what they were today, some less than that, and the tweaks shifted over a few weeks...

...course, our kids are all doomed. All the WW2 guys are dead, our dumb generation took over, and the mindless idiots in the next are coming...

gotta listen to the Who...
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p.p.s.

pardon my tone
not happy about today


:-<
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you don't seriously believe this do you?

we've had many instances in the past 20 years where the above was very clearly and obviously totally false...i mean, just 2 months ago you had businesses 70% of what they were today, some less than that, and the tweaks shifted over a few weeks...


Yeah, I actually do. If you run down a list of the Top 50 companies by market cap in the S&P 500 there are only two companies which are arguably "What are People Thinking?" Of course these two companies are Amazon and Netflix. Yet I would even argue that Amazon is fine; Netflix I'm not sure about.

Doesn't see ridiculous at all. Not like the run up to 2000. There will also be smaller companies that attract too much or too little fanfare; XYZ Corp. that is growing eyeballs at 40% rate doesn't mean the market is out of whack.

Also, no massive housing bubble and subprime ridiculousness this time around.

https://www.slickcharts.com/sp500

With regards of stocks going up and down 30% shortly after market corrections, this has occurred in markets since Warren Buffett was a wee tike. Very normal occurrence. Indeed, it should happen, right? Doesn't take much change in the long-term growth expectations of stocks to adjust the value up or down 25 percent.

...course, our kids are all doomed. All the WW2 guys are dead, our dumb generation took over, and the mindless idiots in the next are coming...

The Ox's bass line in Won't Get Fooled Again is superb. You can't stay in a funk if you listen to this:
https://www.youtube.com/watch?v=WX_96uKZ7yQ&list=PLTnhng...

And you can't beat the combination of Daltrey and Townshend for pure entertainment. Teenage Wasteland oh yeah:
https://www.youtube.com/watch?v=0YXkX9sZgL0&t=0s&ind...

The WW2 generation we will always owe a debt of gratitude but they're also a generation that has shown absolutely no desire or willingness to adjust entitlements one nickel. They treat entitlement reform like its Normandy Beach and kill anyone who wants to make even the most modest reforms.

WW2 did a superb job as youngsters when drafted but I don't give them as high marks for their voluntary actions as old folk. USA has transformed from a country in which the oldest was poorest to a nation in which the oldest are richest and yet so much government spending is directed to keeping 84 years-old geezers alive for three extra months.

This is the true rich vs. poor divide in America, imho.

Whichever generation actually reforms entitlements in the USA deserves to be labeled the Greatest Generation.

ET
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videos remind me how old I am, thanks.

enjoyed the Spanish subtitles
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have a lawyer friend who has more than 100k in student loans
thing is, he has a lot of kids and is economically challenged by the choices he has made


Higher education is such a racket. Learning is the cheapest and most accessible it has ever been, but getting a degree is the most expensive.

Law school is a good example. At least the third year is probably unnecessary, and a sleepwalk for many (a very expensive sleepwalk). Plus, you spend 3 years and six-figures, then need to pay about $4K on a separate private course to learn what you need to know to pass the bar exam.

Not to mention, schools aren't particularly interested in whether students learn, as that isn't one of the inputs in the US News rankings. In fact, it is a bit of a stigma professionally if a professor is too good at teaching.

To be fair, there are good professors who do care if students learn. Also, many US universities are good research facilities.

Sorry for the rant. I just was reading the 2019-2020 tuition costs for one of my alma maters and adding up what it would cost to send my kids there.
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https://www.collegeraptor.com/find-colleges/articles/afforda...

https://affordableschools.net/20-tuition-free-colleges/

My nearest public Univ is $10k for in-state tuition undergrad, $15k for grad school.
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I graduated in 3.5 years, also worked 20 hours a week. Ignoring the income from working, you could graduate from this school with $36.7k in tuition debt using exact figures, assuming zero aid, which at 5% over 10 years comes to $389 a month before tax credits for your BA, BS or Music degree. This school costs a bit more than the typical State Univ.

At the above school, 72% of students get aid. Income 30-49k gets $8.3k annual. Income 50-75k gets $4.5k a year in aid.

Assuming $4.5k in aid gets you a $223 monthly payment. That's about the equivalent of most people's cable + phone bill these days, or less than they spend eating out every month [$300+ for food and alcohol at restaurants] to get a college degree.
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Assuming $4.5k in aid gets you a $223 monthly payment. That's about the equivalent of most people's cable + phone bill these days, or less than they spend eating out every month [$300+ for food and alcohol at restaurants] to get a college degree.


But what if my darling children want to go out of state and live on campus at a posh private school that encourages study abroad and ...? ZOMG, then what?

Would you be willing to have an informational interview with my children please? ;)
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I did all that and paid my loans off in 9 years [see work hours above] and I survived! So perhaps not the best person to ask. Just tell them to get into Harvard/MIT/Stanford/Dartmouth :)

Coral Gables:

Posh - check
Private - check
OOSt - check
On Campus - check
Good aid - check

It also is quite like studying abroad in many respects as everyone will be fluent in Spanish but you!




[unless you are too, in which case, very much like living in Latin America without the gang-slayings and no passport needed!]
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