Joel Greenblatt was on CNBC yesterday and said that the stock market is now, as measured by a ratio to free cash flow, in the 95th percentile of cheapness in the past twenty years. The market is typically up 15-20% a year after this kind of cheapness, and a value portfolio can be up mid-30s…
GLRE: Hedge Fund Exposure at Book
Greenlight Capital Re is a reinsurance company that was started up by David Einhorn of Greenlight Capital. Einhorn is one of the new generation hedge fund managers putting up impressive figures (along with Bill Ackman of Pershing Square) as a deep research, focused (concentrated) equity hedge fund. Einhorn does short stocks too so it is…
Sony
I recently read a comment that Japanese investors typically like to buy Sony stock at 0.7x or so book value per share (BPS). That does sound a little cheap, so I took a quick look again, only to remind myself why I don’t own too many Japanese stocks! Sony really is a company that I…
Berkshire Hathaway Price-to-Book
There has been a lot of talk after Berkshire’s announcement of share repurchases. People love to second-guess Buffett and read all sorts of things into his actions and statements. These things tend to be like the Rorschach blot; people read into things what they want to see. In this case, the story is that there…
Bank TARP Warrants
One legacy of the financial collapse is the series of long term warrants on the banks that received TARP money. When large U.S. banks received TARP money from the Treasury in 2008, they also issued warrants on the shares of stock to the treasury department. The Treasury then sold the warrants to the public when…
Berkshire Hathaway Share Repurchase!
The unthinkable to long time Buffett followers seems to be happening. Berkshire Hathaway has just announced that they will (or may) buy back shares. Here’s the press release: Share repurchase From the release: Our Board of Directors has authorized Berkshire Hathaway to repurchase Class A and Class B shares of Berkshire at prices no higher…
Second-Level Thinking
Howard Marks is a well-known fund manager with very good returns over the long term in the corporate bond market (distressed etc…) and has been writing great memos to investors for a long time. They do float around on the internet so when I do find one I spend time reading it and there is…
Where Will the Market Go?
The S&P 500 index closed at 1136.43 and gold closed at $1642.50 per ounce today. I said before that this is not a market forecasting or predicting blog, and I actually really have no idea where the market will go from here. It certainly doesn’t look good. But I thought I would just highlight a…
What is Softbank Worth?
Now that we have a value of $32 billion for all of Alibaba Group (see previous post), we might as well look at the sum-of-the-parts or stub valuation of Softbank Corp. Softbank Corp. owns 32.6% of the Alibaba Group, and that’s worth $10.4 billion or 790 billion yen. Let’s look at all Softbank’s holdings. Softbank’s…
Alibaba Worth $32 Billion, Yahoo Worth?
Figuring out the value of Alibaba Group was a bit of a parlor game as Alibaba Group has dominant businesses that are not listed. Alibaba.com is the only listed entity in the group. The value of Alibaba Group is a crucial factor in determining the value of Yahoo Inc. (YHOO) stock. I posted Dan Loeb’s…