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No. of Recommendations: 4
Dear Diary,

Bought VRSN for an emotional hedge which is a horrible way to invest, I know. I have been waiting for a pullback since late summer 2014. Bought a small dink hoping to drive the price down to $60-62 where I will scale it up to a 1-1.5% position. Will go to 2+% if we see $55 all else being equal.

Berkshire owns 10.4% of the company and one of the T's has about 7% of his funds in it. They held at $62 in 1Q2014. As best as I can tell they appear to have added at $54-47 in late 1Q2014 and 2Q2014. $60 (12% gain) a year later seems reasonable. $66.56 and 23% higher a year later seems a bit excessive but I dithered and want a little skin in the game. While I suspect that they are mostly passive investors I suspect they might also offer feedback now and again on company decisions, if not outright suggestions for buybacks/debt/etc... I like that VRSN stopped paying dividends in 2011 and focus on buybacks. VL likes it out to 2019 with really impressive EPS growth. Deranged Monkeys like it as bantered on this board by GM, Canucks and IT. I like buybacks a lot and seem to be seeing a pattern for EPS growth. Ideally they will use restraint on buybacks and buy more at lower prices (unlike what I did today). I feel like I am paying a high price now but have wanted this one for a while.

At first blush it seems hard to figure out competition and monopoly issues so I'm just going to trust the folks at Berkshire and keep this under 2.5% on a fall. The numbers look good and BRK seem like a conservative lot and were buying into the fears that presented themselves in the summer.

I really hope this drops so that I can buy more but if it runs I won't beat myself up as much. I should probably wait and watch on this one but a dink here seems not too dangerous and I can stop kicking myself. Incremental actions help me more than they hurt me I am almost certain.

Gads. Poor DTB. Sorry.
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Added to VRSN today on missed revenues and earnings and it being down 7%. Small add at $62.81. I will add on falls.
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Hitting $86 today and feeling toppy. Anyone think this is getting ahead of itself?

VL predicts it has -2% to +8% annual gains out to 2020. That was a few days ago when it was trading at $80.93. So, that's a year of projected gains in no time, at $86.

I feel like I should scale down but the position isn't really big enough to do much good and I'd want to get back in lower.

Berkshire is holding fast and one of the T's has about 7% of his port in it from what I can tell. Last bought in the $50s back in the first two quarters of 2014. They've owned this for 3 years now and look pretty prescient.

All other "value" managers I follow are out of this name.

trading at 33.9 P/E and VL suggests a 22 PE in 2020. Forward P/E is 25 and change so it's growing into itself maybe.

Unlike WFM, next year looks pretty good. They raised guidance.

Domains up
Revs up
Income up
Margins up
Renewal Rates up -- kinda.
Cash and cash flow both up
Shares down -- though maybe they should continue to slow repurchases at these levels??

Guidance up on most metrics.

Is all that happiness priced in?

I have few growth companies so I'm just gonna ride this one but my gut says to trim here and scale back in 8-9% lower.

Naj's sticky says to let winners run. And I don't really have anything I want to add to elsewhere.

Let's see if it hits $79 before it hits $93. Line in the sand at $86 and my bet would be $79 first.
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Let's see if it hits $79 before it hits $93. Line in the sand at $86 and my bet would be $79 first.


Gads, $90 a day later.

Thank goodness for Naj's sticky notes...
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My sticky notes have kept me in Google for 5+ years now, and also in [at least my initial purchases]: AAPL, PCLN, AIG, MA, GILD, FB.

Now, if I hadn't sold those other big winners too early, looking at you SBUX for the nth time...
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My sticky notes have kept me in Google for 5+ years now...

Yeah, selling has by far been my biggest failing. For at least the last several years I've made at least one high profile horrible sell that has been executed, with the benefit of hindsight, based on one or a combination of:

*excess reliance on outside opinion
*fear (market related and stock related)
*lack of discipline

To be honest, I'm not sure what to do about it.

What I need is a healthy 2nd opinion right before I execute the trade.
And a pause of some length.
An alternative is to fix the trade size (say, at 1%) and ensure I don't do more than a single trade per stock per day though this does NOT include limit orders done previous day (where there is no excuse) in off-market.

The last might be the only solution as I can't say here I'll have a 2nd opinion in place but if give in to any of the above I'll circumvent everything previously put in place.

The problem is my sell rationale doesn't 'feel' overly stupid at first. And I sell a number of times during the year, and most don't seem high profile bad. But my fears w/Google this year tell me I've got something off that needs to be fixed.

I've got to come up with something very concrete - a written plan of some type to address it, and an accountability system to review if I'm target with that plan.
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Let's see if it hits $79 before it hits $93. Line in the sand at $86 and my bet would be $79 first.


I lost that bet. Hit $93 today.
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Let's see if it hits $79 before it hits $93. Line in the sand at $86 and my bet would be $79 first.


I lost that bet. Hit $93 today.


$86 -> $93 -> $78.

Only hit $93 for a day or two but a bet is a bet.

I was thinking of scaling down at $86 and did at $93 though I held half of my shares. Let winners run, ouch. Hoping to scale back in around $72-$68 all else being equal. I will be interested to see if they slowed buybacks in Nov and Dec when the price spiked upwards. It will give me more faith in management if they do -- and I suspect that they did which might have increased the recent fall.

Do buybacks even matter here? Seems that they should to me. They've probably bought $2b in stock over the last 24 months while they've put some debt on the balance sheet. Seems smart as long as they don't lose their monopoly. I'll run when I see the Ts run but by the time I know that the damage might be done. Let's hope they are clairvoyant and conservative and exit early.
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Scaling down VRSN again today at $115.76
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Scaling down VRSN again today at $115.76

$132.50 today. Up 14.4% in about 6 months. Was really hoping to scale back up in this one.

T&T holding tight. Revenues go up a little every year. Share count goes down a good bit every year (Shares:253M in 2003, 97.59M 2017 -- 60% reduction). 5-6% share reduction in the last couple of years. Debt increasing slightly and net tangible assets decreasing but that seems reasonable at this moment in time.


Would like to see this one come back down.
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yeah, I don't get the valuation VRSN
i mean, it is obvious the attraction
the free cash flow
the consistency and the growth - even if modest -
capital allocation, etc.

but the FCF yield is what - 3.5%?
in what could be a rising rate environment?

course, you can make this argument in so many stocks
I continue, for the most part, to sell 5x more than I'm buying (haven't looked - it might be 10x selling than buying), but the things I sell just continue to go up

--

minor comment
PC stuff is infecting everyone but I never thought I'd see anti-capitalism articles in Forbes of all places and Fortune did one of those gender representation articles in the 500 issue (I'm for it if you have qualified people in those places, but I'd find it hard to believe you could find enough candidates in many industries and this article was a kick the can analysis with no merit, esp. since journalism staffs continue to shrink and the magazines become puff pieces). But my favorite was this:

https://www.kiplinger.com/article/college/T042-C047-S002-bes...

From Kiplinger's Personal Finance

Probably the worst Christmas present I ever got was a bill for $31,000 in student loans from Uncle Sam in December 2015.

Present? It is almost like he thought that the free use of other people's money came with no strings. This entire article tells you so much about the millennial generation...
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I continue, for the most part, to sell 5x more than I'm buying (haven't looked - it might be 10x selling than buying), but the things I sell just continue to go up


Are you selling more stocks than you are buying or selling more $$ in stocks than you are buying? Or both? ie. You might be selling VRSN and OLLI but investing all proceeds into DLTR so you could be selling more stocks than you're buying but keeping dollars invested the same.
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This entire article tells you so much about the millennial generation...

And their parents. Don't you think the parents share some responsibility in failing to teach the kids?
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Don't you think the parents share some responsibility in failing to teach the kids?

well, I'll try to keep out of further political commentary, but I think there was a greatest generation and a generation that that gave us Clinton, Bush the younger, Obama, and now the current choice of one bozo vs. the other one who ran so....I think we take the blame for all of it. I mean, with parents like us, they have no hope...
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well, got this one completely wrong

yeah, I don't get the valuation VRSN
i mean, it is obvious the attraction
the free cash flow
the consistency and the growth - even if modest -
capital allocation, etc.

but the FCF yield is what - 3.5%?
in what could be a rising rate environment?


rates low
Q1 just a blowout - 2.4% revenue but 8% operating income growth
but the big news is after interest expense which drops 40.8 vs 22.6
geez...
vrsn at $198
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