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2015-09-02

  • batbeer2 commented on The Science of Hitting's article 09-02 12:26
    Weight Watchers: Three Takeaways From the Second Quarter
    Weight Watchers (WTW) recently reported second quarter results, and there were a few things that caught my eye. Just to be clear, this isn’t a...
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    batbeer2 09-02 13:26
    • @Idaustin

      Thanks!
  • batbeer2 commented on Thomas Macpherson's article 09-02 11:06
    Extreme Markets and Decision Making
    In 1815 at the battle of Waterloo, forces of the Allies defeated the Napoleonic forces in a violent two-day battle. The leader of the British forces,...
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    batbeer2 09-02 12:06
    • @ Adib

      There is another important option.

      Let's say you have a strategy of buying to hold and you've selected a handfull of (growth) stocks accordingly.

      For example you would want to own Costco for a few decades but not at any price. So you peg the value at $150. Just to be safe, you wait patiently for a chance to buy if/when it dips under $100.

      SO then you buy and it quickly runs up; it becomes expensive. But your analysis shows the intrinsic value is still compounding at satisfactory rate. 

      So you tell yourself that as long as 1) you bought at a discount to intrinsic value and 2) the intrinsic value is compounding at a good rate, you have absolutely no reason to sell.

      Not saying that is a superior strategy but it is IMHO perfecty rational. Instead of trying to outsmart mr. Market by buying low and selling high, you act much like the outright owner of fast-growing business.

2015-08-31

  • batbeer2 commented on Nelson Hsu's article 08-31 07:20
    Think Twice Before Following Warren Buffett Into Phillips 66
    Berkshire Hathaway has disclosed a $4.5 billion stake in Phillips 66 (PSX). Phillips 66 is organized into four operating segments: Midstream,...
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    batbeer2 08-31 08:20
    • >> I passed on Phillips 66 because there was no way for me to predict the crack spread or to have confidence in its future earnings.

      FWIW, I think the crack spread is not as relevant as most analysts of this company claim.

      A question: If Phillips 66's fate were determined solely by the price of (US) oil and its fluctuations, how is it possible that the company has been doing what it does for more than a century?

      The answer lies in looking at the efficiency of the operation. In other words, how much does this company spend to refine a barrel of oil? The simplest way to estimate this is to calculate how much of the gross margin drops down to the bottom line and compare that across the industry. In other words, you back out the ever fluctuatring cost of oil to find the per-unit cost of the operation.

      One could take it a step further by comparing the SG&A and Capex spent per barrel refined. etc. etc. If you do that, I think you'll find Phillips 66 is as efficient as they come.

      What this means is that when they're on international oil (level playing field) they earn more than most and when they're using domestic oil (because that happens to be cheaper), they hit the cover off the ball.

      Just some thoughts.

2015-08-25

  • batbeer2 commented on Dr. Paul Price's article 08-25 13:35
    Invest When You Feel the Worst
    Most of the damage has already been done. If the stock market climbs a wall of worry, then we’re certainly primed for better news. There is...
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    batbeer2 08-25 14:35
    • >> Invest When You Feel the Worst

      In my view if you are the kind of person who feels bad when stocks get cheaper, you shouldn't be investing in stocks at all. You can't win.

2015-08-23

2012-04-22

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