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batbeer2  Batbeer

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  • batbeer2 2016-06-23 10:24
    Hi brinsley, thanks for the heads-up on Kone. Hadn't really looked at that one for a while and the P/E is not as high as it used to be last time I checked. I don't mnd the currency they report in. If Schindler moves its head office to Luxemburg then they start reporting in euros but the company remains otherwise unchanged. What matters is their costs. I would have to check out the Swiss headcount as compared to the total to determine if I'm worried about currency fluctuations. best, ...
  • brinsley 2016-06-23 06:01
    Following on from Schindler/Kone is that as you mention the earnings of Schindler are hurt by the strength of the Swiss Frank due to its haven status, which is not likely to go away, so Kone may be a better bet as they report in EUR and this currency has come down in the last couple of years. Despite this, the market still gives Schindler a higher multiple.
  • Arjun Chan 2016-04-08 08:33
    Batbeer2, Did you forgot to leave a comment on my article :-)
  • batbeer2 2015-12-29 11:36
    Hi Peter, Alas, I think Aggreko's future will be less impressive than its past. Nowadays a larger part of their business comes from constructing more or less permanent electricity plants and "renting" that out. One could say they have become a financing company for third-world countries who need electricity generation capacity but have no cash. I like the short-term rental business of the portable generators much much better.  That IMHO is still a fantatstic ...
  • peterkooi 2015-12-29 06:13
    Hi Batbeer 2,

    You said one year ago:  If there are questions about Aggreko, I would be happy to share what I know about this great company.

    You still believe that?



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All batbeer2's Activities

  • batbeer2 commented on Rupert Hargreaves's article 01-13 10:33
    Buffett and Airline Stocks
    Airline stocks took off in the third quarter last year after it emerged that billionaire investor Warren Buffett (Trades, Portfolio) had acquired...
    View all 3 comments
    batbeer2 01-13 10:33
    • >> the airlines actually have very little control over their own businesses and this hasn't and won't change any time soon.

      It seems Buffett disagrees. I don;t know why but that is what I;m trying to figure out. My point is that the things you mention (volatile fuel etc) are not going away but they can not be the cause of the losses. This has been proven by many companies that need fuel and lots of capital.

      So if there was some unknown factor eacting away the profits that has now disappeared then to me that would be worth figuring out.

      I'll let you know if and when I think I've figured it out.
  • batbeer2 commented on Charles Sizemore's article 01-13 06:37
    A Grumpy Old Man’s Guide to 401k Investing
    Perhaps I’ve been spending too much time with my young kids, but I’ve gotten to be quite good at wagging my finger and speaking in a stern,...
    View all 1 comment
    batbeer2 01-13 06:37
    • Hi Charles,

      Four stars for this otherwise brilliant post... because most places on our planet do not have something called a 401(k).

      Other than that, excellent advice and well put.

      I would go as far as to say anyone who doesn't have the discipline to save 10% of their income should stay away from the stock market. The market will take what you have from you if you are the type that can not save 10% of your income. 

      And no it does not matter how much you make or how old you are. If you can't underspend your income, stay away from the stock market. 
  • batbeer2 commented on Rupert Hargreaves's article 01-12 15:21
    Buffett and Airline Stocks
    Airline stocks took off in the third quarter last year after it emerged that billionaire investor Warren Buffett (Trades, Portfolio) had acquired...
    View all 1 comment
    batbeer2 01-12 15:21
    • Thanks for an article worth reading.

      You say:  but the negative factors that have always plagued the industry remain.

      Then you go on to list three:

      1) ... the cost of fuel remains a significant uncertainty for airline management.

      2) .... Second, airlines remain exposed to price wars. They are engaged in a race to the bottom 

      3) ... airlines are still highly capital intensive businesses, and this will not change. 

      FWIW I think none of these factors are root causes. These factors also apply to a large number of highly profitable industries. Take railroads in the US. They need fuel and are capital intensive and yet they've done quite in recent decades. Interestingly not every railroad on the planet has done well. It's just railroads in the US. So it is not because fuel has become cheaper or less volatile etc. The industry did not just wake up one day and decide to stop being unprofitable. There are other factors at play. 

      So again FWIW let me sgare what I think are two root causes for the poor performance of the airline industry?

      1) Unions. The opertions of an airline are highly dependent on a large number of unions. The guys painting the planes, loading the suitcases, controlling air traffic, serving the drinks,  etc. etc. etc all have their own union and ALL can disrupt your operation. Ironically, it is cheapest to give the smallest group a raise and thereby avoid being shut down. Basically, 12 air traffic controllers based in Iceland could organise themselves and threaten to shut down a large chunk of the northern hemisphere unless they get a 25% raise. Stuff like that.

      2) You have a lot of irrational competitors. Airlines were and in some cases still are an extension of their nations. Once upon a time Pan Am was the US. Air France was France, not to mention Aeroflot etc. etc.

      If you are trying to run a profitable international airline you will encounter something called Emirates. They are of course wholly owned by the government of Dubai. The government will not even bother denying that they have a strategic interest in supporting the rapid development of their airline at the cost of any and all other globally operting airlines.

      That is tough to compete against for the likes of Delta who may not have signifcant (tangible or intangible) government support.

      AFAIK Emirates is not going away any time soon but perhaps someone knows about some regulatory change within the US that might affect the power of the unions in relation to airlines?
  • batbeer2 commented on The Science of Hitting's article 01-10 16:07
    How to Analyze a Company
    A fellow GuruFocus reader recently sent me an email with the following question: “Which books would you recommend if I want to start investing in...
    View all 2 comments
    batbeer2 01-10 16:07
    • Thanks!

      FWIW this is almost exactly how I go about it. 

      One thing I wuld add (this is obviously subjective) is that I take a minute just to think. That is before I look at the numbers. I try to visualise what I expect to see/find.

      - What would be the most significant asset on the balance sheet? Intangibles (= e.g. intellecual property)?, Goodwill?, Cash?, Land and Buildings? 

      - I form an idea of where every cent of revenue that does not end up as net income goes to. If I run my eyes down from revenue all the way to net profit at which point do I lose most? Would it be gross margin (a retailer might spend more than 80% of their revenue just for restocking) or do I expect to see them spend most on R&D (a company developping/selling drugs sells the product at very high gross margin but then turns around and spends it all on R&D).

      So now I have an idea of what I think the numbers should look like. 

      Then and only then do I look at the numbers. Sometimes they are exactly what I expect them to be in which case I feel confident that I correctly understand what the company does. However If they don't look like I expect them to then it gets really interesting. It could mean I (and many others) are thinking about the company incorrectly. That might be very very good because the company is somehow better than people think (Lindsey and Nam Tai have way more cash than you'd expect) or it is very very bad because the company is much worse than people expect.

      Then of course it helps me read the 10k simply because I pick that up with a specific set of questions. I'm am not just reading it from cover to cover. No, I have a set of company-specific questions going in.

      To me at least it makes the reading more effective.

      If the answers are not in the10k then that's too bad because I'll have to find them somewhere else. Just reading a 10k is not an end in itself. I would hope one would be reading it to get answers to questions.

      In short, I know already what my questions are before I get started on the research. Of course I might get more questuions along the way. I don't mean general quations like "is this profitable?" or "how much is their revenue?". The questions need to be specific like "how much premium per customer does Progressive take and how does this compare to GEICO?"

      Doesn;t work first time though. You need to do it this way for while before it is of any use.

      To the casual observer though my proces would be very much like SoH describes. The mere fact that I just sit for a minute with my eyes closed before I start is important though. At least to me.

      Just some thoughts.
  • batbeer2 commented on Benjamin Clark's article 01-10 13:29
    10 Stocks for Using a Benjamin Graham Value Investing Strategy
    Out of the multitude of companies, which ones would legendary value investor Benjamin Graham buy today? I have compiled 10 great companies that fit...
    View all 1 comment
    batbeer2 01-10 13:29
    • Thanks for an interesting crop of stocks.

      You say:

      >> .... As a result, all value investors should feel comfortable proceeding with the analysis.

      I consider myself a value investor so I have to ask: what does that mean?

      The reason I ask this is that I feel very uncomfortabe not proceeding with analysis. To me this is condicio sine qua non. But perhaps I'm missing your point.
  • batbeer2 commented on Grahamites's article 01-10 13:29
    What Is Value?
    In a recent article one of the best writers on GuruFocus, Geoff Gannon, wrote the following: "The value investor in me – the stuff I learned from...
    View all 10 comments
    batbeer2 01-10 13:29
    • C59661 said: "...as Buffet has said, the accountant's job is to report the financial numbers, NOT to analyze them."

      Charlie Munger (Trades, Portfolio) said: "Just because Buffett said someting, does not make it so. "
  • batbeer2 commented on Bram de Haas's article 01-09 12:46
    Why All the Macro Gurus Are Betting on Emerging Markets
    I frequently go over recent Guru trades to see what some of the savviest investors on the planet are buying. Usually, there is an idea or two I want...
    View all 1 comment
    batbeer2 01-09 12:46
    • >> MSCI Emerging Markets grants exposure to 23 emerging markets. China, South Korea and Taiwan make up over 50% of the portfolio.

      Hmm... first off the per-capita GDP of South Korea is roughly $35 000. That is more than 2x the global average. Taiwan's is higher. I don't see how these countries could objectively be deemed emerging markets.

      As for why one would want to own this index...

      Perhaps if you just ignore the name of the index and look at the underlying assets then you'll find that it is simply another way of owning a nice diversified group of companies that are relatively cheap.

      Some might even argue they are cheap on an absolute basis.

      Just some thoughts.
  • batbeer2 commented on James Li's article 01-08 05:12
    Warren Buffett Rings in New Year Bullish on Stocks
    As of Jan. 3, the U.S. stock market is significantly overvalued with a Wilshire 5000 index / gross domestic product ratio of 126.4%. Based on this...
    View all 7 comments
    batbeer2 01-08 05:12
    • >> Bottom line though is that people have to differentiate the personal Buffett from the fiduciary Buffett.


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