tag:blogger.com,1999:blog-5389144729834496735.post1545599333967878096..comments2024-03-17T05:15:55.634-04:00Comments on The Brooklyn Investor: Zero-based Budgeting BookUnknownnoreply@blogger.comBlogger19125tag:blogger.com,1999:blog-5389144729834496735.post-1152837168248746182015-04-13T22:14:20.120-04:002015-04-13T22:14:20.120-04:00Hi,
I don't do it, but I'm sure the priva...Hi, <br />I don't do it, but I'm sure the private equity / activist investors are always screening for stuff based on various ratios, SGA to sales etc. to see who stands out as unusually inefficient and whatnot. <br /><br />And yes, hedging is a little complicated. Over time, it probably nets out; you're cost of hedging will pretty much be similar to what you eventually lose anyway. So maybe it's simpler to just have a higher hurdle rate of return for non-U.S. stocks to compensate for the FX risk. <br /><br />I remember looking at the major currencies over the long term, like 10, 20, 30 years, and it ends up that the FX rate changes is sort of close to the interest rate differential over time, so whatever you tended to save you incurred in hedging cost. <br /><br />But that may not always be the case. <br /><br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-13171983193253252392015-04-11T18:35:05.062-04:002015-04-11T18:35:05.062-04:00Looks like a nice read. I wonder if there's so...Looks like a nice read. I wonder if there's some quick metrics to identify bloated companies with lots of fat to cut?<br /><br />btw, I remember in one of your old posts, you mentioned that if an investor tries to hedge this and that risk, they often end up worse than not hedging at all. I've been thinking about that and here's an example when "hedging" actually gives you more risks <br /><br />(last section of my post here)<br />http://cleanupcall.blogspot.com/2015/04/using-leverage-to-reduce-currency-risk.html<br />mspacey4415https://www.blogger.com/profile/11868322471454225634noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-21053906145223626972015-04-06T09:27:45.993-04:002015-04-06T09:27:45.993-04:00Thanks! Thanks! kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-76847849116015167192015-04-04T02:22:06.173-04:002015-04-04T02:22:06.173-04:00Now we can see what Buffett saw in Coca-Cola befor...Now we can see what Buffett saw in Coca-Cola before he invested in it. I remember you had found the 1988 Coca-Cola annual report some time ago. Now we have the whole kit.Investing Denhttps://www.blogger.com/profile/10947359293936060278noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-49834848016652664562015-04-04T02:19:30.643-04:002015-04-04T02:19:30.643-04:00KK,
I got something you wanted.
I put up the Coc...KK,<br /><br />I got something you wanted.<br /><br />I put up the Coca-Cola annual reports since 1980 on investingden.com. You would have to enter "KO" in the ticker search box.Investing Denhttps://www.blogger.com/profile/10947359293936060278noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-54437671701459002022015-04-02T05:59:28.590-04:002015-04-02T05:59:28.590-04:00Its quite interesting that Buffett could get only ...Its quite interesting that Buffett could get only around 10% of Wrigley in 2008 while Mars took the rest. Wrigley seems to be a much stronger business than Heinz or Kraft. <br /><br />Wrigley seems to be like Coca-Cola, it just went up forever.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-78530050016200815272015-04-02T05:56:13.078-04:002015-04-02T05:56:13.078-04:00KK,
I had thought of archiving old stuff but had ...KK,<br /><br />I had thought of archiving old stuff but had put it off because I thought it would be expensive. But my servers are really underutilized currently.<br /><br />So I started serving the annual reports of Burlington Northern, Wrigley, Lubrizol, Heinz myself. They can be found at http://www.investingden.com/buffettarchive/ <br /><br />I also saved the Salix Pharmaceuticals investor presentation just in time yesterday. Less than a day later the Salix IR website got wiped because the Valeant-Salix deal closed on April 1. That presentation can also be found at investingden.com. I guess I will also archive other companies in the process of getting acquired. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-27876108195417032222015-03-31T20:20:57.535-04:002015-03-31T20:20:57.535-04:00KK,
Yes, it was the convenience of having it all ...KK,<br /><br />Yes, it was the convenience of having it all in one place. <br /><br />I am also working on a login/password feature so that users can create a list of tickers for e-mail alerts. If a new presentation or shareholder letter or earnings press release appears, interested users can get an email. <br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-59736372944715791942015-03-31T16:48:13.988-04:002015-03-31T16:48:13.988-04:00Hi, It looks nice, and maybe convenient to have i...Hi, It looks nice, and maybe convenient to have it all in one place. But this stuff is available at sec.gov and company websites so I don't know what the value added of it would be. I guess if you archive it so that there is stuff there that is no longer on company websites, that would be good. Anyway, thanks for dropping by. kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-47401311070585761212015-03-31T05:00:38.587-04:002015-03-31T05:00:38.587-04:00KK,
May I know your opinion about this new websit...KK,<br /><br />May I know your opinion about this new website investingden.com? Here is a link that shows what the site is about: http://investingden.com/djia<br /><br />The website shows the earnings releases, investor presentations, shareholder letters and 10-K/10-Q arranged in tables. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-36956861057343439362015-03-30T12:54:52.543-04:002015-03-30T12:54:52.543-04:00I can tell you how Apple can become a $1 trillion+...I can tell you how Apple can become a $1 trillion+ company tommorow: Buy Tesla and make Elon Musk the CEO. I bet Apple would double on that! kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-49647899595017096402015-03-30T12:23:46.614-04:002015-03-30T12:23:46.614-04:00Oh I'm not saying that WMT doesn't heavily...Oh I'm not saying that WMT doesn't heavily lean on their suppliers, but just that all their success if often wrongly attributed to it. There are other factors, and their ability to streamline operations and lower prices to gain share certainly played just as great a role if not better. Once they became the dominant player, then they can pressure suppliers even more, creating a "lollapalooza" effect, to quote Munger.<br /><br />I do understand your concerns with Apple, and really only time will tell, but I just have trouble with the argument that "technology changes too fast" to intelligently invest. We point to past tech giants that have fallen as evidence of this, but I think this is a little shortsighted. Most of these companies were "cell phone" companies, or "PC manufacturers" or "search engines". For a time they're profitable and prolific, but as the industry and underlying tech evolves, they fall by the wayside because they've skated to where the puck is, not where it's going. <br /><br />Where I think Apple is different is they view themselves as a "personal computing" company. They're not beholden to a particular form factor or function, and have deftly navigated the evolution of computing from PC > Internet > Mobile Devices. And now we see them laying the groundwork for Healthcare, Fashion, Transportation, and Banking. While these industries have implemented technologies (getting on the web, using software to streamline operations, etc), "personal computing" has yet to really make inroads here. <br /><br />There are opportunities for personal computing in Fashion and Healthcare (Apple Watch) that didn't previously exist. It's just starting to impact transportation (Uber, Maps, Autos), and same goes for Finance/Banking (ApplePay). We're seeing all these industries gently being pulled into the orbit of personal computing for the first time, and while Apple may not emerge as the sole victor, I cannot think of any company better positioned. Deep Valuehttp://www.valueiswhatyouget.comnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-3159161818416719102015-03-30T11:17:27.384-04:002015-03-30T11:17:27.384-04:00Hi, that's interesting. But keep in mind that...Hi, that's interesting. But keep in mind that gross margin may not really tell us much about WMT's treatment of suppliers. I looked at something like this a while back when people were accusing WMT of pressuring suppliers and taking the money for themselves. What I figured was that they did keep their suppliers on their toes, but at the same time they lowered prices. That's how they got the share. Maybe K-mart just didn't pass through the cost savings. Everything I've read about WMT indicates that they worked hard to cut costs not to improve margins and profits, but to lower prices (which, of course, over time leads to higher profits). <br /><br />And yes, I know many disagree about Apple. There are a lot of people smarter than me on both sides of the argument and I am not qualified to tell anyone who is right. <br /><br />But I just look at it as a long term investor and notice that the dominant tech firms in 1970 were very different than the ones in 1980, which were also very different in 1990, and then 2000. 2010 too. <br /><br />I am reading a book about Nokia that came out when they ruled cell phones and it's quite scary. I read and wrote about Polaroid here in the past. So my view is more like that, not really Apple specific. And yes, I know Apple is way better and stronger than these other companies (Motorola too) for sure. <br /><br />But anyway, we'll see... <br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-85164201487108398712015-03-30T10:46:08.074-04:002015-03-30T10:46:08.074-04:00This reminds me of a chapter in Bruce Greenwald...This reminds me of a chapter in Bruce Greenwald's Competition Demystified (http://amzn.to/1EqxeyS) about Wal-Mart. Most people think the reason Wal-Mart is so successful is because they lean on their suppliers harder than anyone else. But when Greenwald looked at Wal-Mart in the 70s and 80s, he called out that their gross margins (Rev - COGS) were actually worse than Kmart's. Thus, contrary to popular belief, Kmart actually drove a harder bargain (or had more purchasing power) than Wal-Mart. <br /><br />The area where Wal-Mart was able to shave costs was in SGA, and this seems to be where 3G/BRK are going to focus. Even shaving a few percentage points off SGA can drastically increase ROE so this makes sense. <br /><br />Not sure I agree with your sentiments about Apple as I see a lot of runway for growth (still a lot of the smartphone market left, Apple Pay will only grow over time, Macs continuing their slow and steady march in marketshare and profitability, and even the rumored car). Apple is a computer company, and while that started with PCs in the 80s, our concept of what a computer is has changed drastically since then, and will continue to do so. <br /><br />I think people often discount the market for "computing" as their view of what a computer is basically some combo of screen/keyboard. Apple plays the long game, and knows that "computing" touches nearly every single industry that exists; auto, banking, fashion, etc. I think they're well positioned to capitalize on a lot of these other industries where computing will increasing play a greater role. And contrary to popular opinion, they don't need to own 90% of the share to do well. Taking 10% of the share with most of the profits is totally fine for them, and should be fine for their investors too.<br /><br />Just my $.02, but will be interesting to see how it plays out in the coming years. Deep Valuehttp://www.valueiswhatyouget.comnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-27677260783171112282015-03-28T14:39:06.376-04:002015-03-28T14:39:06.376-04:00Sorry, the book is "True Power" had a Ni...Sorry, the book is "True Power" had a Nietzschean slip there. <br />I think Falconi is talked about a good bit in Dream Big, which is the 3G biography. Fifer's book is also talked about in there in reference to the comment below. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-36010471038067377102015-03-27T17:09:41.899-04:002015-03-27T17:09:41.899-04:00Hmm... that's very interesting about your frie...Hmm... that's very interesting about your friend. I do wonder about that. My only source connecting 3G and this book is Fortune anyway. I tend to think Fortune is the best and most reliable of all of the business magazines so I didn't doubt it at all. But who knows with these things... kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-65531259936009880652015-03-27T16:45:21.674-04:002015-03-27T16:45:21.674-04:00"I imagine the big food companies like BUD, H..."I imagine the big food companies like BUD, HNZ and KRFT are (or were) like this too; that's why it's so easy for outsiders to come in and boost margins by 8% in such a short period of time. I bet the rest of the companies (KO etc.) are in the exact same position."<br /><br />Absolutely! Also being from the banking world and recalling all the people heading out the door during each downturn. But when does that happen for beer and ketchup? I can just imagine the lifetime employees that keep getting added, w/no serious pruning ever taking place.<br />Separately this reminded me of WEB's letter this year, that in addition to all the other benefits of his hands off approach to BRK's operating businesses he has no emotional tie to re-allocating money (out of 1 company and into another). Of course he, and everyone, have been saying that forever, but the letter really hit me over the head with the behavioral benefits of the setup, in contrast to how divisions and departments at every company fight for capital, whether they need it or not.<br /><br />Thanks for the stimulating posts, as always.<br />JC<br /><br />PS - a close friend was coming out of B-school and interviewing at one of the 3G companies late last year and said she mentioned Fifer's book to one of the 3G guys (I think Bernardo, but don't explicitly remember) and he responded that he was unfamiliar... Unsure of the context or if there's some qualifier, but fyi.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-63419029442953383852015-03-27T14:59:58.696-04:002015-03-27T14:59:58.696-04:00Hi, Thanks for that. The Falconi book sounds int...Hi, Thanks for that. The Falconi book sounds interesting. And yes, I've heard something about that about Fifer. <br />Thanks for dropping by! kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-10491557917395603142015-03-27T14:53:06.456-04:002015-03-27T14:53:06.456-04:00Check out Power by Vicente Falconi (original consu...Check out Power by Vicente Falconi (original consultant 3G used in their rise to significance as Brazilian powerhouses). I found it interesting as well as it is his first book published in English as opposed to Portuguese. <br />But what I think is misunderstood about Fifer is how he talks more recently about how brash he was when he originally wrote the book. Talks about how his philosophy towards managing/cost cutting has been significantly refined over the years as he has gained more perspective. So I think that is worth taking into consideration as you read it. I've talked to Heinz a good bit while originally learning about 3G, and they preach culture fit an absurd amount -- strictly searching for employees who abhor costs. A culture like that makes zero-based budgeting pretty easy to implement as a repeatable process. Especially if you have a guy like Hees or Brito up top leading the way. Anonymousnoreply@blogger.com