Category Archives: YOU

The Art of Contrary Thinking

The above video is a decent book review of the book, The Art of Contrary Thinking found in this link: http://csinvesting.org/2017/12/01/the-art-of-contrary-thinking/

and http://csinvesting.org/2015/12/16/contrarian-investing-part-ii/

You are neither right nor wrong because people agree or disagree with you but because you have your facts and reasoning correct.

Emotionally, going against the crowd will subject you to ridicule.

Focus on Management Excellence; My Interview Did NOT Go Well!

Identifying-Managers-with-Talent-and-Integrity-May-2017

Perhaps you should differentiate yourself by focusing on management’s character and skill.  However, you will need to focus and work hard to make a difference in understanding who is unique.

Find founder-led companies who are mission driven–one place to start your search.

Imagine putting the numbers of Berkshire Hathaway during the early days of Buffett’s takeover into a spreadsheet–would ANYONE have bought Berkshire.   Who would have focused on Buffett’s integrity and skills?

Also: https://microcapclub.com/2018/05/invest-in-owner-management/

My Interview at Goldman Sachs

 

Interviewer: Are you unbiased?
John Chew: What a dumb question! Next.

Interviewer: No matter how you answered that question, how could you have an edge in researching companies?
John Chew: Well, I ……………..

and

Any suggestions? Is it possible to be unbiased? And based on your answer, how can you have an edge researching companies? Prize.

Stoic Philosophy as seen through Shawshank Redemption; Hickey

Short then is the time which every man lives, and small the nook of the earth where he lives; and even this only continues by a succession of poor human beings, who will very soon die, and who know not even themselves, much less him who died long ago. — Marcus Aurelius.

What upsets people is not things in themselves but their judgments about the things. -Epictetus.

The goal is not to eliminate or repress the emotions to become devoid of feeling, the goal is to attach the right judgments to them.  We can find happiness, love, and beauty without desiring more than is within our control. We can enjoy music so long as we do not wish for it never to end. We can enjoy a cold drink in the sun if we do not at the same time wish for it never to pass.  –Seneca.

The end of cheap debt means more bankruptcies https://mises.org/wire/end-cheap-debt-will-bring-wave-bankruptcies

A Technology Investor Turns Bullish Gold and The Miners (Fred Hickey of High-Tech Strategist)

Actually, Fred is a V E R Y L O N G – T E R M Investor in gold.

Acq. Multiple, Yog Berra and Financial Satire, and Hedge Fund Quiz

While at all times Wall Street analysts try to justify the valuations, here is a fun quote (via Bloomberg) from 2002 looking back from Scott McNeely, the CEO of Sun Microsystems, one of the darlings of the 2000 tech bubble:

“At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes.

What were you thinking?”

An educational, savagely satirical view of our current market conditions and lessons on valuation.   I read about 40 investment letters a quarter and this is about the best I have read in five years. Hilarious! Mark McKinney – Its Like Deja Vu All Over Again – Final and his prior letter: I Dont Get It – Mark McKinney – Final 8292017 New

An excellent interview by Tobias Carlisle.   CHEAPNESS not quality wins!  Yes, I was somewhat shocked.   Why?

http://www.valuewalk.com/2018/01/tobias-carlisle-talks-acquirers-multiple-valuetalks/

ACKMAN INTERVIEW

Ackman’s embattled Pershing Square hedge fund laid off 18 percent of its staff on Friday — a total of 10 pink slips that brought head count down to 46.

Investors have suffered in Pershing Square (PSHZF) vs. S&P 500:

He wants to hire an analyst who can THINK INDEPENDENTLY.  You walk into his office and he asks you, “Can you think independently as an analyst?”

How do you reply.   Be careful…………think for awhile before you reply.  What proof can you give?

If you are struggling to answer, then  https://www.newyorker.com/magazine/2015/11/23/conversion-via-twitter-westboro-baptist-church-megan-phelps-roper

will provide clues.


What determines the price of gold:

How the price of gold is determined Monetary Metals 2018

A Case study on Cognitive Dissonance

I only hear what I wanna hear and disregard the rest.

I have my righteous rage and pointless point of view–The Angry Young Man by Billy Joel

Often wrong but never in doubt–Chicago Slim

You will learn more about investing (or clear thinking) than weeks of hearing investment pundits, or I will send you a check.   Without a point of view, just listen carefully to the above interview.  If necessary stop the video and think after each question how you might respond in that situation.   What techniques is the interviewer using?  What is going on?   There are many levels of psychology and level 1 and level 2 thinking exhibited here.

What did YOU learn?   Even after multiple views, I need to review.  Ignore politics and focus on the logic of the questions and answers.  How does one’s psychological point of view and beliefs devastate a person’s ability to think critically?

Interviewer, Cathy Newman, “So what YOU are saying……………………….”

Jordan Peterson: “I DID NOT say THAT, because I am VERY, VERY, VERY CAREFUL with my words.”

If you only have two minutes to spare, then click on the 22 minute mark of the above video.   Interviewer: “Why should YOUR right to FREEDOM of SPEECH trump a trans-person’s right not to be offended?”   Remember that a “journalist” is asking this question in a Western liberal democracy.

Articles about the interview:Jordan Peterson Interview

Another analysis of the interview

Sandstorm Back of the Napkin Valuation

We last discussed Sandstorm (SAND) here: http://csinvesting.org/2017/11/01/sanstorm-gold-analysis-other-readings/

I did a back of the envelope valuation here: Sand Report

The Experts Are Wrong Again


Bloomberg December 2015: But Societe Generale predicts gold will be a casualty of the rate hike, falling below $US1000 an ounce, to $US955 by the end of next year.

Head of global asset allocation Alain Bokobza says looking at the 2016 panorama, in which US interest rates tighten and the economy fares reasonably well, “that does not argue for a higher gold price.”

“Gold will be a casualty.”

CSInvesting: The purpose of this post is to remind you of ignoring expert advice and to do your own analysis.  The above comment by Bokobza is meaningless blather.   He is simply spouting the consensus view that rising rates mean a declining gold price since gold has no yield.    Beware of simple narratives.

The assumption “Fed rate hikes equal a falling gold price” is not supported by a shred of empirical evidence. On the contrary, all that is revealed by the empirical record in this context is that there seems to be absolutely no discernible correlation between gold and FF rate. If anything, gold and the FF rate exhibit a positive correlation rather more frequently than a negative one!    Source: www.acting-man.com

And today:

More here: Gold and the Federal Funds Rate and Gold and gold stocks Dec 26 2017

UPDATE: Interesting Read

  1. Update: David Collum’s 2017-Year-In-Review-PeakProsperity-final
  2. david_collum-30_years_investing
  3. 2016-Year-In-Review-PeakProsperity

Interview of David Collum: https://youtu.be/Vlr7_vDwg_M

 

HAVE A HAPPY NEW YEAR!

Workshop in NYC (Nov. 17th) and The Arb. Mindset

I have no affiliation, but NYC readers may wish to be aware of the following:

Friday, November 17, 2017: Stock pitch workshop in NYC.  Details: http://www.pitchtheperfectinvestment.com/upcoming-events/

Also, check out the articles at the above website and on the link below…

The importance of the arbitrage mindset

The arbitrage mindset is critical for a great investor. When you have the arbitrage mindset, your mind instinctively identifies arbitrage relationships in normal, everyday situations.  In the link below, we discuss examples involving gold, Dunkin’ Donuts gift cards, pennies, pudding cups and 19th-century Nepalese firearms. We think you will find it an entertaining and informative read.  Click below:

http://www.pitchtheperfectinvestment.com/2017/10/28/the-arbitrage-mindset-gold-coffee-pennies-pudding-cups-and-19th-century-nepalese-rifles/

P.S. Let me know how the valuation on Sandstorm Gold is progressing

Whining about Chipotle

This makes an interesting psychological study.  Who holds the stock and how they react.   ($CMG last at $278, down 14.5%)  Many conversations below show no interest in discussing the valuation of CMG, but just the price (and if the price is declining, the pitiful management).

Also, note the focus on P/E ratio for valuation.   What about the flaws in using P/Es as a valuation metric?   No discussion about the business, cash flows or discount rate.

CMG will probably trade north of 6 million shares today or about 20% of the 28.5 million outstanding shares.  Where are the long-term shareholders?  One in five investors will sell based on one quarterly report.

If you have done your homework on valuation, then unreflective sellers who are throwing in the towel may mean an attractive price over the next few weeks.

I don’t know much about Chipotle, but management should be able to right the ship OVER TIME–the next 24 months–not next quarter. I don’t own any CMG currently.

Time to pile on (rats falling from the ceiling!):   https://www.bloomberg.com/news/articles/2017-10-25/ackman-s-lost-a-lot-of-queso-on-his-stake-in-chipotle

An interesting article on the struggle within the turnaround efforts.

“Every chain restaurant, he says, goes through this rite of passage. For every success like Starbucks, there are former high-flyers like Baja Fresh and Boston Market that no longer have cultural currency and are slowly fading.
Moran (Chipotle founder) remains confident that Chipotle will not end up an afterthought dotting the strip malls of America, but he preaches patience. “Will we climb out of it and get back to our former greatness? I absolutely believe we will,” he told me in June. “But will that take a year or two or three or four? I don’t know. The full recovery from this is going to take a long time.” https://www.fastcompany.com/3064068/chipotle-eats-itself

  • AlabamaHobo

    Why does a burrito company trades for 70 PE.

    Lots of room all the way down to 15 PE. 

    DowPete

    DowPete    yesterday
    Ackman has been unusually quiet about his position in Shipotle. For someone who is forever whining, the silence is golden. Glad he’s underwater in $CMG.

    Mad

    Mad

    13 hours ago

    200$ may not be that impossible tomorrow or later.

    CowboyFan

    CowboyFan

    13 hours ago

    Overvalued stock , for a burrito company.
  • CowboyFan

    CowboyFan

    14 hours ago

    What a POS! Seriously , this is a $40 stock
  • BB
    BB

    16 hours ago

    Why does almost every retail restaurant or fast food chain trade at 15-25xs earnings and Chipotle get to trade at >60xs? Its still way overpriced, should be $100/share or less. Concept is easily duplicatable and has been many times now. Theres plenty of fast food burrito places out there now..

    Tenley

    Tenley

    10 hours ago

    I want a refund on my burrito. It taste weird…
  •  DaveR
    DaveR

    20 hours ago

    Even a lemonade stand could beat the latest benchmark for CMG earnings. If they miss this bunny forget about it.
  • Jh

    Jh

    14 hours ago

    Fair market value $50
  • joe

    joe

    16 hours ago

    Hundreds of high school students chow down at these restaurants every day. Me too
  • liberal

    liberal

    1 hour ago

    I’m loving this fall, hope it goes on through the day and we see 270s today. Make some mulla on those put options from yesterday
  • CT

    CT

    4 hours ago

    The battle line is drawn at $295 ps. Buyers must buy at this previously held level – otherwise, it is abandoned and a new lower strength level is found. But holding this level will be difficult as it represents a triple bottom.

    My bet is that the shares go lower. Once the dam at $295 is broken, the selling will accelerate and we may end up the day at -20%.

  • Jerome R

    Jerome R

    23 hours ago

    20% short interest on a 25 mill float, see you at $400 after ER
  • Jerome R
    Jerome R

    23 hours ago

    20% short interest on a 25 mill float, see you at $400 after ER
  • S.P.
    S.P.

    17 hours ago

    Owning this stock is like having CMG’s molten cheese poured on
  • george

    george

    20 hours ago

    Bloodbath coming after hours. The bombs start decimating your portfolio at 4:30 PM. Get your shovel out to dig your own grave. Just jump in, we’ll kick some dirt on top of you.
  • Mocula

    Mocula

    13 hours ago

    What was the total compensation for the CEO this year? The small amount of money I lost on this stock, means nothing to the officers. As long as they car drive a fancy car or pay a lot for a douchebag haircut, they will just continue to make excuses and take as much as they can.
  • Robert
    Robert

    15 hours ago

    Jerome, Hope you didn’t get killed too bad. This stock is a pig. Over priced. Should see $250 in a week. Cannot beat same stores off a week quarter to comp. McDonald’s had stores close in Houston and Florida. Face it. Bad food, overpriced, competition. The shorts won’t cover until $275.00.
  • WIZARD1973

    WIZARD1973

    16 hours ago

    I can’t believe they think remodeling the restaurants and raising prices are going to bring people back. I hope they have a better plan than that!’
    • Bay Area

      8 hours ago

      This burrito seller is still trading at insanely high PE. Fools find 300 cheap because they are comparing with the peak of 2015. That was a pure scam by Kramer type people. Giving the mess and slumped earnings, risky low margin business, very specific narrow menu, this stock should be trading at no more than PE =10
    • Ahh Haa

      Ahh Haa

      19 hours ago

      About to be Bill Ackholed.
    • Andre

      Andre

      12 hours ago

      I’m hoping this dips sub $290ish for a quick trade. The most brutal selloff periods are in the first hour of trading. Don’t fall in love with a position whether long or short. Volatility in any stock makes it great to spot a trend and make a great trade.
    • kevin

      kevin

      39 minutes ago

      Spoiled foods. Empty stores. Flopping queso. Run and sell!!!

Scamming the Scamer–Funny!

and

SURPRISE! Look what just landed in my inbox today.  I wonder if THIS is FINALLY my chance to get rich.  Lucky me:

ZENITH BANK COMPENSATION UNIT, IN AFFILIATION WITH THE UNITED NATIONS.

ATTN: aldridge56@aol.com

How are you today? Hope all is well with you and family?, You may not understand why this mail came to you.

In regards to the recent meeting between the United Nations and the
Present United States Government to restore the dignity and Economy of the Nations. Base on the Agreement with the World Bank Assistance to help and make the world a better place for all with the sole aim of abolishing poverty.

We have been having a meeting for the passed 7 months which ended 2 days ago with the then secretary to the UNITED NATIONS.

This email is to all the people that have been scammed in any part of the world, the UNITED NATIONS have agreed to compensate them with
the sum of US$ 250,000.00 (Two Hundred and Fifty Thousand United States Dollars). This includes every foreign contractors that may have not received their contract sum, and people that have had an unfinished transaction or international businesses that failed due to Government problems etc.

Your name and email was in the list submitted by our Monitoring Team of Economic and Financial Crime Commission observers  (Creepy!  Is someone spying on me?) and this is why we are contacting you, this have been agreed upon and have been signed.

You are advised to contact Mr. Jim Ovia of ZENITH BANK NIGERIA PLC, as he is our representative in Nigeria, contact him immediately for your Cheque/ International Bank Draft of USD$ 250,000.00 (Two Hundred and Fifty Thousand United States Dollars) This funds are in a Bank Draft for security purpose OK? So he will send it to you and you can clear it in any bank of your choice.

This meeting was first held on the 8th of April 2003. You can view
this page for your perusal:  http://www.un.org/News/Press/docs/2003/ik344.doc.htm

Therefore, you should send him your full Name and telephone number/your correct mailing address where you want him to send the Draft to you.

Contact Mr. Jim Ovia immediately for your Cheque:

Person to Mr. Jim Ovia
Email: 1634150898@qq.com

Good luck and kind regards,

Any ideas of what I should reply?  I will split the profits!