A 10k means different things to different people. For some, to use what I think is a British term, it's a footrace. If you're thinking rings, it's a measure of the purity of gold. For others, a not-so-breezy 100+ page annual report that's filed with the SEC by US-listed companies, full of footnotes, official risks, … Continue reading Up Close With CVS
Time Frames and Adjusted EBITDA
Corporate earnings calls are dry but can be entertaining. There are the rare "boring boneheaded questions are not cool" Elon Musk type comments. There was a lively moment yesterday on FedEx's earnings call when a Deutsche Bank analyst started the Q&A session by asking CEO Fred Smith about "balancing capital investments and returns," given negative … Continue reading Time Frames and Adjusted EBITDA
On Tailwinds
Anyone who wants to understand business should read Warren Buffett's letters*. All of them. Even his partnership ones when he was in his 30s. I read them about 10 years ago, and continue to intellectually salivate near the end of February when a new one is published. They're especially an interesting respite and cross-disciplinary perspective … Continue reading On Tailwinds
January’s Healthcare Index
Inspired by the monthly Harper's Index, this is 2019's first index on healthcare and finance. The average ratio of Medicaid-to-Medicare payments spending across the US across all services: .72; In CA: .52. The factor by which commercial insurance payments exceed the reimbursements from Medicare: 1.88x The net assets of HCA, the largest publicly-traded hospital in the … Continue reading January’s Healthcare Index
Weighing Machines
Without Benjamin Graham we may not know the name Warren Buffett. Graham was an investor, professor, and practical philosopher. He wrote the masterpiece Security Analysis during the midst of the Great Depression, as well as The Intelligent Investor, and was a professor, mentor, and employer to Buffett. Graham wrote that the markets in the short … Continue reading Weighing Machines
On Hidden Risks and Volatility
Volatility in investing can be a great thing. The attraction to Bernie Madoff's scam can be better understood by its lack of volatility. His funds showed annual returns of an eerily consistent 10-12% and at one point reported 72 consecutive months of positive returns. His strategy used a split-strike or collar options strategy (not related … Continue reading On Hidden Risks and Volatility
Why I’m Betting Against Berkshire
In 2008 Warren Buffett made a bet against active investing, or more specifically the active-active, triple-fee side of investing, the hedge funds of funds. This group charges fees for placing money with hedge funds, who typically charge their own two types of fees. hedge fund's ability to pick funds that would outperform the S&P 500 … Continue reading Why I’m Betting Against Berkshire
On RVs and Write-Offs
Businesses love metrics. One form or novel way (a 5 on the hack prowess scale) is to find the perfect metric that makes the future a little more predictable. The eager student tells the elderly person, "Teach me to be wealthy, only quicker" to paraphrase C.T. Munger. A year after the financial crisis of 2007-2008, … Continue reading On RVs and Write-Offs
Passive vs. Active in Investing and in Health
It has taken over 40 years for index investing to reach 20% market share. That's longer and less heft than most people would guess. But it's also a reminder of how a good idea can take generations of incremental awareness and results to move beyond shallow roots. Index investing is a form of passive investing, … Continue reading Passive vs. Active in Investing and in Health
Part 2: Is The Cheesecake Factory in The Healthcare Business?
Now known in some circles for something beyond its array of cheesecakes, 2,000 calorie dishes, and cruise ship-meets-Las Vegas décor, The Cheesecake Factory (CAKE) added a second consecutive quarter of negative healthcare news, a cost that’s hidden in most companies' income statements. The impact of this quarter’s negative healthcare surprise was $4,600,000, or 44% of … Continue reading Part 2: Is The Cheesecake Factory in The Healthcare Business?
