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Valeant: Information Vacuums, Management Credibility and Investment Value
As an investor, would you buy shares in a company that is at the center of a political and legal firestorm? What if this company has a CEO who has lost the faith of his board and an ex-CFO who is being...
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DCF Myth 3: You cannot do a valuation, when there is too much uncertainty!
Uncertainty, both imminent and resolved, has been on my mind these last two weeks. I posted my valuation of Valeant on April 20, making the argument that, at least based on my expectations on what...
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DCF Myth 3.1: The Margin of Safety - Tool for Action or Excuse for Inaction?
In my last post on dealing with uncertainty, I brought up the margin of safety, the tool that many value investors claim to use to protect themselves against uncertainty. While there are certainly some...
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DCF Myth 3.2: If you don't look, its not there!
In this, the last of my three posts on uncertainty, I complete the cycle I started with a look at the responses (healthy and unhealthy) to uncertainty and followed up with an examination of the Margin...
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Icahn exits, Buffett enters, Whither Apple? Value and Price Effects of Big...
In my last post, I looked at Apple, arguing, with a Monte Carlo simulation, that the stock was a good investment at the prevailing market price ($93 at the time of the analysis). I appreciate the many...
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The Brexit Effect: The Signals amidst the Noise
There are few events that catch markets by complete surprise but the decision by British voters to leave the EU comes close. As markets struggle to adjust to the aftermath, analysts and experts are...
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Tesla: It's a story stock, but what's the story?
The last few weeks have tested Teslaâs shareholders and frustrated short sellers in the stock. Shareholders have had to weather a series of bad news stories, ranging from a failure to meet its...
View ArticleMay you live in "exciting" times! An Updated Picture of Country Risk
About a year ago, I completed my first update of a paper looking at all aspects of country risk, from political risk to default risk to equity risk, and wrote about my findings in three posts, one on...
View ArticleMay you live in "exciting" times! An Updated Picture of Country Risk
About a year ago, I completed my first update of a paper looking at all aspects of country risk, from political risk to default risk to equity risk, and wrote about my findings in three posts, one on...
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Investing and Valuation Lessons from the Renaissance
I just got back a few days ago from a two-week family holiday in Italy, where we spent the bulk of the second week in Florence, which we used as a springboard to see Tuscany. I kept away from work...
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The Ride Sharing Business: Is a Bar Mitzvah moment approaching?
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The Bonfire of Venture Capital: The Good, Bad and Ugly Side of Cash Burn!
In my last post on Uber, I noted that it was burning through cash and that this cash burn, by itself, is neither unexpected nor a bad sign. Since I got quite a few comments on what I said, I decided to...
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Superman and Stocks: It's not the Cape (CAPE), it's the Kryptonite(Cash flow)!
Just about a week ago, I was on a 13-hour plane trip from Tokyo to New York. I know that this will sound strange but I like long flights for two reasons. The first is that they give me extended...
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Mean Reversion: Gravitational Super Force or Dangerous Delusion?
In my last post on the danger of using single market metric to time markets, I made the case that though the Shiller CAPE was high, relative to history, it was not a sufficient condition to conclude...
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The School Bell Rings! It's Time for Class!
As most teachers do, I mark time in academic rather than in calendar years and as September dawns, it is New Year's eve for me and a new class is set to begin. In just under a week, on September 7,...
View ArticleLazard, Evercore and the TSLA/SCTY Deal: Keystone Kops or Crafty Bankers?
It is get easy to get outraged by events around you, even when that outrage is not merited. I have learned, through hard experience, that writing when outraged can be cathartic but it can also be...
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Keystone Kop Valuations: Lazard, Evercore and the TSLA/SCTY Deal
It is get easy to get outraged by events around you, but I have learned, through hard experience, that writing when outraged is dangerous. After all, once you have climbed onto your high horse, it is...
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Fairness Opinions: Fix them or Get Rid of them!
My post on the Tesla/SCTY deal about the ineptitude and laziness that Lazard and Evercore brought to the valuation process did not win me any friends in the banking M&A world. Not surprisingly, it...
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Venture Capital: It is a pricing, not a value, game!
Venture capitalists (VCs) donât value companies, they price them! Before you explode, implode or respond with righteous indignation, this is not a critique of what venture capitalists do, but a...
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Deutsche Bank: A Greek Tragedy at a German Institution?
This may be a stereotype, but the Germans are a precise people and while that precision often gets in the way of more creative pursuits (like cooking and valuation), it lends itself well to engineering...
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