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batbeer2  Batbeer

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  • rgarga 2015-02-15 08:54
    Would like to have a conversation re posco if can? Maybe we can learn something from each other. 7066760284 or if yiu guve me your number, I can call you. Thank you.
  • batbeer2 2015-01-28 13:37
    Hi Tim, I believe it is possible to generate excess returns with technical analysis. It's just that anyone claiming it is easy is either lying or doesn't understand what it is really about. A friend of mine is a good (options) trader. If I had to hazard a guess he has an IQ well in excess of 155. The guy literally solves a 7 x 7 rubics cube blindfolded. He will gaze at it for 20 seconds and them proceed to solve it without looking at it again. That scares me. He is a very nice gu ...
  • trdoyle 2015-01-28 11:54
    Nice exchange with Dr. Price.  I fail to see how his data mining tactics can be applied with any reasonable amount of success going forward.

  • coryashpt 2015-01-22 13:23
    Hi Batbeer2,
    I was disappointed in IBM's inability to right the ship and grow revenue.  I am encouraged by the growing margins and growth in strategic areas, although still a small part of the company.  I was also disappointed they didn't buy back more shares at such a low level.  Any thoughts?


  • coryashpt 2015-01-12 22:36
    batbeer2 : Hi Cory, Never heard of the company until now. I see that they have an office in Rotterdam which is my city. Shame on me. Often you'll see a company I think you will be pleasantly delighted by reading their shareholder reports and 10-ks.  They just increased the dividend today.  A very shareholder friendly company.  Now on sale of course but I am still trying to understand the moat they have enjoyed over the past 22 years or so.  Let's ke ...

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All batbeer2's Activities

  • batbeer2 commented on The Science of Hitting's article 05-22 16:44
    Spotting Hidden 'Cockroaches' In Investing
    “There’s seldom just one cockroach in the kitchen. You turn on the light and all those others start scurrying around. I couldn’t find the...
    View all 9 comments
    batbeer2 05-22 17:44
    • >> I am not certain whether one can generalize this to other industries. Incentives are key everywhere, but I don't think there are other industries with a similar level of complexity and opaqueness as banking.

      I would argue that the complexity is created to fool the uninitiated. In essence it does not get much simpler than a bank.... yet that is where you'll find endless layers of complexity. GE created a bank to smooth earnings. Management didn;t even make a secret of it. So that is at least one case where we find managers have adding layers of complexity specifically to create earnings if and when they wanted. I'm happy to see GE is now simplifying its balance sheet.

      That captive bank they're spinning out almost brought down the company. 

      In sum,

      Is it bad behaviour that creates the complexity (think Enron)? or is it inherrent complexity that causes bad behaviuor to go undetected?

      Either way, a big balance sheet (relative to revenue) and opaqueness are joined at the hip.... which was my point.
  • batbeer2 commented on The Science of Hitting's article 05-22 11:28
    Spotting Hidden 'Cockroaches' In Investing
    “There’s seldom just one cockroach in the kitchen. You turn on the light and all those others start scurrying around. I couldn’t find the...
    View all 7 comments
    batbeer2 05-22 12:28
    • >> I agree with Thomas also, there are bad apples even in the best orchards!


      But at a company like Citigroup with two trillion worth of assets, I'd say tou can bet your bottom dollar there are 20 cockroaches for each one you see. At a company like Coca-cola you may spot a few but they certainly have fewer places to hide. 

      My theory is of course hard to prove simply because it is difficult to count cockroaches.

      But it is fair to say history has shown critical problems at places like Citigroup, Salomon Brothers, AIG, etc. etc. show up long after they have become too big to handle. All these companies required huge ammounts of capital (=they had low returns on capital). 

      Take Enron. That was a pretty simple busines untill someone grew the balance sheet to ridiculous proportions. Many problems where swept under that rug. When the problems finally became apparent, it was too late. A big balance sheet adds a layer of obscurity that makes it easier for management to hide problems and/or investors to spot them.

      At places like Coca-cola, C. H. Robinson and Precision Castparts there are also problems but they show up long before they are big enough to kill the company. Just name me one example of a company with high returns on capital that had a scandal that brough down the house. 

      Best example I can think of is Polaroid and that one took decades to come to its knees. I don't think it was an accounting scandal that finally did it in.

      Again, just another reason to prefer simple businesses with high returns on capital. 
  • batbeer2 commented on Canadian Value's article 05-22 00:08
    Wake Up Europe - An Essay From George Soros
    Europe is facing a challenge from Russia to its very existence. Neither the European leaders nor their citizens are fully aware of this challenge or...
    View all 2 comments
    batbeer2 05-22 01:08
    • What we have here is a guy who arrived in the UK as a refugee in 1947. Penniless. In the UK he got an education at the expense of British taxpayers (and a bit of charity). This helped him get a job in the US as an options trader. In this capacity, his knowledge of the British system enabled him to make a fortune at the expense of those that helped him when he was penniless. 

      And now he's writing essays about how to shape the future of Europe. Essays that would probably not end up on this site if not for the fact that he is famous for breaking the bank of England. 

      I think it is fair to say ths guy is an opportunist and an arrogant one at that.
  • batbeer2 commented on The Science of Hitting's article 05-20 13:36
    Spotting Hidden 'Cockroaches' In Investing
    “There’s seldom just one cockroach in the kitchen. You turn on the light and all those others start scurrying around. I couldn’t find the...
    View all 3 comments
    batbeer2 05-20 14:36
    • Thanks for an interesting article.


      A thought:


      In life, where would you go hunting for a cockroach? 

      Now invert. Where would you go if you wanted to avoid running into a cockroach?

      I think in business, crooked managers are drawn to those places where you have mountains of other people's money: banks, insurance companies, gambling houses....

      Conversely suck managers are not attracted by plain old operating/manufacturing businesses like C.H. Robinson, Lindsay, Coca-cola etc.

      In my view, you are less likely to run into unpleasant surprises if you stay away from banks, insurance companies etc. and stick to boring businesses like CHRW, KO, LNN, PMD etc. etc.

      In other words, businesses that require very little capital to begin with (asset light) come with the added advantage that they do not attract those with an unhealthy appetite for other people's capital.

      Just another reason to seek out companies with very high returns on capital.
  • batbeer2 commented on Bronte Capital's article 05-19 11:33
    McDonalds: property, ego and identity
    I have just spent a few days in the modern Middle East cities of Doha and Abu Dhabi. This is the only place I have seen which matches China for just...
    View all 1 comment
    batbeer2 05-19 12:33
    • Hi, thanks for an interesting article.

      You say:

      >> They can't possibly be making money here - just planting the flag amongst all the Italian restaurants.

      Off the top of my head, McDonalds rakes in 10% more revenue per square meter than any of their peers (KFC, Wendy's et al). This by the way drops straight down to net margin so in general it isn't like they overpay for the shops they own.

      If, like you imply, they are irrational in picking their spots, what are the others doing wrong?
  • batbeer2 uploaded a new picture 04-22 11:42
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