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discounted earnings are extended beyond 2025, it just is done very simplistically. He got the high end with wildly optimistic foreign sales, which he explained were very unlikely. I would agree that the estimate overall is conservative given some of his drug assumptions (and the fact that the company may be lowballing guidance), but I think he is taking the approach of a smart value investor here. I do like that the very first thing he did was EV/EBITDA, this was the first time I've watched a video of him. Assumed he was just some rear end in a top hat, but he definitely knows his stuff. Arkane fucked around with this message at 15:12 on Mar 18, 2016 |
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Mar 18, 2016 15:06
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Argh, okay, guess I'll be watching Shkreli over the weekend. Just out of curiosity was he looking at the GAAP figures or the (almost certainly bullshit) "adjusted" earnings that the company is more fond of publishing?
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Mar 18, 2016 15:12
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Skimmed the last few pages of this thread and invested in the first couple of capitalized letters I saw. Is there anything else I need to know about 'stocks'
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Mar 18, 2016 15:14
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Arkane posted:Assumed he was just some rear end in a top hat, but he definitely knows his stuff. It's not contradictory though
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Mar 18, 2016 15:15
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Pirateparty posted:Skimmed the last few pages of this thread and invested in the first couple of capitalized letters I saw. Is there anything else I need to know about 'stocks' Coal is very cheap right now
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Mar 18, 2016 15:32
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Don't invest in coal, all the companies are going bankrupt. Seriously.
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Mar 18, 2016 15:35
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speaking of, anyone seen any good analysis on what shale oil's $50 cap on the market is going to do to renewables companies?
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Mar 18, 2016 15:46
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coffeetable posted:speaking of, anyone seen any good analysis on what shale oil's $50 cap on the market is going to do to renewables companies? oil doesn't compete with renewables
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Mar 18, 2016 15:53
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Agronox posted:Argh, okay, guess I'll be watching Shkreli over the weekend. Using GAAP figures in valuation is almost universally wrong. That isn't to say you should just accept adjusted figures from management, the point is to understand the adjustments and why they were made. GAAP is a set of accounting conventions and accounting earnings don't necessarily reflect actual cash flows. GAAP earnings are typically adjusted for non recurring or non cash charges, items that are expenses for GAAP that aren't really operating expenses (R&D for instance). As a simple example, look at EBITDA, a non GAAP measure, as compared to GAAP operating profit.
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Mar 18, 2016 16:06
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Arkane posted:oil doesn't compete with renewables Yet.
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Mar 18, 2016 17:44
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I disagree entirely, at least when it comes to VRX. GAAP gives you a baseline shared language that helps you make an apples to apples comparison between companies; VRX does not give you the info you'd need to reconcile their GAAP and "adjusted" figures anyway, so in my mind they should be discounted heavily.
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Mar 18, 2016 17:44
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You can discount their adjustments all you want, especially if they aren't giving the information on how the adjustments were made. But GAAP does not give you an apples to apples comparison of economic earnings, which was my point. You don't have to accept the adjustments any management team presents, but looking at GAAP measurements on their own isn't any better and is likely worse. Think of it this way - you can have two companies that are identical in their ability to generate cash flows. Assume they have identical risks and growth expectations. The earnings according to GAAP can be widely different due to choices made for depreciation, amortization, impairments, stock based compensation, and a host of other reasons. GAAP earnings need to be adjusted almost universally - just not necessarily the way a company's management team presents.
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Mar 18, 2016 17:58
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Pirateparty posted:Skimmed the last few pages of this thread and invested in the first couple of capitalized letters I saw. Is there anything else I need to know about 'stocks' MadCatz(MCZ) is at for some mad upswings baby! What if I told you that if you invested 3000 dollars in MCZ today, you had a strong chance of seeing upwards of 200% gains by the year end? Wouldn't you want to get in while the deal is hot? Because that's what the the numbers predict could happen any day. I can assure you that even if you only see 150% gains, your biggest regret will be that you didn't have more to invest because you're not rich enough to swing in the big leagues yet, and MCZ won't get you to the world series, but it'll get you in the minor leagues of wealthy, and from there you can start hitting the ball out of the park with. Every. Trade. And with the sexy New phone you'll be carrying, it'll pretty much be your pocket broker and you'll be able to trade a lot of money easily. Which will be good, you'll probably need something to fill the hours in between hobbies, since after MCZ hits is stride and you reinvest your earnings there, you're not going to have to go to that 9-5 any more.
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Mar 18, 2016 18:18
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drat, you are frighteningly good at this. Ok I'm in
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Mar 18, 2016 18:34
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Goddamn, I should not have stepped in front of VRX. whoops UBS had a big downgrade to sell last week of CAFD and it's reasoning is very questionable, imo. It is creating a buying opportunity. Would love another big sale in the yieldco space right now as I want to maximize yield and get out of some of my more speculative positions after this rally. As to coal, I would genuinely argue buying ARLP is a good idea right now. High dividend that even if it gets cut significantly will still be a good payout, low debt relative to cash flow (and extremely low relative to other coal guys). When the carnage really starts with the BTU and the others, they are going to be very well positioned. They have estimated for 2016 that DCF will be 1.1-1.2x current payout, so they maintained the dividend for now. I am anticipating a cut at some point, and I hope they cut it around 50% and keep the money for buying some assets in the storm and to help their safety net- but for now it's yielding over 20% and its covered by cash flow, not funded by debt. greasyhands fucked around with this message at 19:28 on Mar 18, 2016 |
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Mar 18, 2016 19:04
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Omnicarus posted:MadCatz(MCZ) is at for some mad upswings baby! What if I told you that if you invested 3000 dollars in MCZ today, you had a strong chance of seeing upwards of 200% gains by the year end? Wouldn't you want to get in while the deal is hot? Because that's what the the numbers predict could happen any day. Have you considered a career in the snake oil industry? Or perhaps a biopic starring Leonardo Dicaprio?
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Mar 18, 2016 19:25
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Making several moves here. Sold half the VRX for a $9/sh loss, sold BDSI at a 50% loss but will rebuy in 30 days if its still lower than purchase price of $5.75. Sold BLUE at 30% loss, will rebuy in 30 days if below original purchase price. Bought DWTI with all proceeds at $128.48 #YOLO edit: Oh, I also sold about half of my OPK at +43%. greasyhands fucked around with this message at 00:48 on Mar 19, 2016 |
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Mar 18, 2016 19:57
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Omnicarus posted:SunEdison (SUNE) is at for some mad upswings baby! What if I told you that if you invested 3000 dollars in SUNE today, you had a strong chance of seeing upwards of 200% gains by the year end? Wouldn't you want to get in while the deal is hot? Because that's what the the numbers predict could happen any day.
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Mar 18, 2016 20:01
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GTAT
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Mar 18, 2016 20:07
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I need to pull money from an index fund, but with the market rallying recently, should I ride the wave or pull out now?
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Mar 18, 2016 20:28
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Donald Kimball posted:I need to pull money from an index fund, but with the market rallying recently, should I ride the wave or pull out now? Hmm, yes, let me just know what the market is going to do in the future. Woah! I'm suddenly a billionaire! Wheeeee Serious answer: nobody knows. The uncertainty translates to risk. If you aren't comfortable with sustaining risk with your money, you should sell: this is basically always the case.
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Mar 18, 2016 20:37
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Donald Kimball posted:I need to pull money from an index fund, but with the market rallying recently, should I ride the wave or pull out now?
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Mar 18, 2016 20:44
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Donald Kimball posted:I need to pull money from an index fund, but with the market rallying recently, should I ride the wave or pull out now? If you 'need' the money, what choice do you actually have?
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Mar 18, 2016 21:48
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Donald Kimball posted:I need to pull money from an index fund, but with the market rallying recently, should I ride the wave or pull out now? You should take out a 4% loan because we're about to see 10% market gains, baby!
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Mar 18, 2016 22:05
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mike- posted:You can discount their adjustments all you want, especially if they aren't giving the information on how the adjustments were made. But GAAP does not give you an apples to apples comparison of economic earnings, which was my point. You don't have to accept the adjustments any management team presents, but looking at GAAP measurements on their own isn't any better and is likely worse. You're really, really mispresenting GAAP here. Management doesn't make "choices" when it comes to depreciation, amortization, impairments, etc. Useful lives of depreciable/amortizable assets are comparable among companies within an industry. There are not (or shouldn't be, anyway) instances where you have management depreciating assets like ships over 50 years when the industry norm is 20. That type of deviation is a departure from GAAP standards. Management has very little wiggle room when it comes to manipulating numbers on a GAAP basis - which is why they have now been resorting to just outright adjusting the numbers and stamping "non-GAAP" all over it. If anything, the most susceptible areas of manipulation occur within stuff like legal reserve accounts where there's a degree of subjectivity (it's not easy to compare a specific company lawsuit to an industry norm). I consider GAAP to be a poor metric for REITs and R&D companies. For companies like VRX, where little R&D is actually happening, it definitely is an appropriate metric and definitely better than the "cash eps" metric or whatever garbage that Pearson manufactures during investor presentations. I always find it funny that most of these management "adjusted earnings" calculations involve adding back stuff like "non cash expenses" and "non recurring expenses". Very rarely is there ever such a thing as "non cash income" or "non recurring income".
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Mar 18, 2016 22:42
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Admiral101 posted:You're really, really mispresenting GAAP here. Management doesn't make "choices" when it comes to depreciation, amortization, impairments, etc. Useful lives of depreciable/amortizable assets are comparable among companies within an industry. There are not (or shouldn't be, anyway) instances where you have management depreciating assets like ships over 50 years when the industry norm is 20. That type of deviation is a departure from GAAP standards. Management has very little wiggle room when it comes to manipulating numbers on a GAAP basis - which is why they have now been resorting to just outright adjusting the numbers and stamping "non-GAAP" all over it. If anything, the most susceptible areas of manipulation occur within stuff like legal reserve accounts where there's a degree of subjectivity (it's not easy to compare a specific company lawsuit to an industry norm). This is a load of bullshit. There is a ton of discretion in d&a for financial reporting. Further, d&a presented for financial reporting is completely different than d&a for tax purposes, and when you are considering value you would want to use tax basis d&a as that is what would effect cash-flows. That alone makes the d&a presented for financial reporting relatively worthless, without even getting into the discretion valuation firms and audit firms have in determining the useful lives of amortizable intangible assets. Adding back non-cash expenses and non-recurring expenses isn't controversial in the least bit. Comparing two otherwise identical companies where one has a large goodwill impairment and the other doesn't is a great example of why gaap measures aren't useful for valuation purposes without adjustments. I see and adjust for non-recurring income all the time, so I don't agree with your characterization that it's rare. I didn't say to blindly accept managements adjusted figures - look back at my first post. But just blindly using GAAP figures is equally bad if not much worse. GAAP measures accounting profits, not economic profits, and the two are fundamentally different. mike- fucked around with this message at 00:46 on Mar 19, 2016 |
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Mar 19, 2016 00:36
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Okay, okay, I want to understand what you're getting at. Can you throw me a ticker or two where you think that GAAP earnings or cashflow dramatically understate the health of the company?
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Mar 19, 2016 00:54
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what should I buy
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Mar 19, 2016 01:22
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greasyhands posted:Goddamn, I should not have stepped in front of VRX. whoops dumbass
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Mar 19, 2016 01:28
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Agronox posted:Okay, okay, I want to understand what you're getting at. Can you throw me a ticker or two where you think that GAAP earnings or cashflow dramatically understate the health of the company? An example that has come up in this thread before is Amazon. Since R&D is expensed under GAAP, its GAAP earnings are understated. R&D is more like a capital expenditure, in that the benefits are received over time, but the GAAP treatment violates the matching principle and expenses them as occurred. The financials then have a revenue/expense mismatch - expenses are being charged now that aren't really attributed to the current revenues. All the future revenues generated from this R&D are also affected, as the profits are overstated. An approach to remedy this is to treat R&D like Capex (except for tax purposes). This isn't perfect, and oftentimes the useful life of whatever the R&D is is difficult if not impossible to accurately determine. But the point is that GAAP doesn't (and isn't intended to) reflect economic profits and must be adjusted to determine value. Some other examples are any company that had a large asset impairment, or any other non-cash charge. It works the other way around too - say a company has a large legal settlement and recognizes a bunch of income from it. The accounting earnings wouldn't be representative of the actual operations of the company (assuming it wasn't in the business of suing people) and isn't going to reoccur in the future. This is one reason why metrics like EV/EBITDA (EBITDA is a non-gaap measure) are way more useful than something like P/E. There certainly are plenty of other reasons why, but a big part of this is that EBITDA is a closer proxy to economic cashflows, whereas P/E based strictly on GAAP earnings is a measured based off of accounting earnings, which aren't intended to reflect economic profits. I want to stress that I'm not saying adjusted figures released by a company's management aren't oftentimes horribly wrong or logically inconsistent. Like I said in my first post, you need to be able to understand the adjustments and why they were made, and decide on what the proper adjustments are. But without adjustments, GAAP earnings are almost universally worthless in valuation.
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Mar 19, 2016 01:43
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Been raising cash, keeping a huge position in PEGI though. Really don't know what to think of this market.
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Mar 19, 2016 01:59
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tumor looking batty posted:what should I buy Good question. Figure out something that is cheap and not poo poo and post results.
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Mar 19, 2016 02:24
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tumor looking batty posted:what should I buy RUSS, how can you go wrong with something called Russian Bear?
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Mar 19, 2016 02:33
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greasyhands posted:Goddamn, I should not have stepped in front of VRX. whoops Bought CLD a few months ago at around 1.60. They're similarly situated.
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Mar 19, 2016 02:57
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mike- posted:An example that has come up in this thread before is Amazon. Fair enough. I quibble with some of these points but I think we're both assuming the other is saying something they're not. I'm not saying that E is the be all end all, and it doesn't look like you're saying GAAP is a complete waste of time, so I don't think there's much to actually argue about.
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Mar 19, 2016 03:27
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mearn posted:RUSS, how can you go wrong with something called Russian Bear? a russian mine etf?
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Mar 19, 2016 04:32
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Arkane posted:Good question. Yeah I know I'm not retarded. Was hoping you guys could fill me in since I've been out of the game for a bit
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Mar 19, 2016 04:34
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fougera posted:Been raising cash, keeping a huge position in PEGI though. PEGI has a lot of debt
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Mar 19, 2016 04:36
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tumor looking batty posted:what should I buy Exactly the opposite of what I buy.
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Mar 19, 2016 06:35
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Arkane posted:Good question. Great question... I think financials still have a ways to go, I hold the higher betas (BAC, C), but like GS also, more of a medium to long term trade though. I like TWTR at these levels also (but have been very wrong about Twitter before). Beyond that...things are rough, its a weird market. I've been trading energy, CNX and ETFs mostly, but not seeing much at these prices that I like.
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Mar 19, 2016 15:27
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