北海道羊蹄山名水公園 December, 2012

** 常在注意美元日元匯率, 又剛好用美兌日匯差賺到美元. 想想原本的1美元現在可以換到更多的日元, 就乾脆也選擇去日本花掉它好了, 就選了北海道. haha :D 玩完回來剛好收割獲利.

** 沒幾天的時間(從12/12), 很快的已經到了預期的獲利目標二了.  最好是可以考慮平倉等待了, 前面到現在, 獲利也算是非常好了, 不能再貪心了(haha :D  ).  再等待好的時機點, 對的形態形成, 再來考慮放空(買日元多頭勢). 應該不會太久就會有不算太小的回調要發生. 請密切注意及準備好.

 

Previous Post on Berkshire Hathaway BuyBack

A few days ago it was reported that Berkshire Hathaway bought back $1.2 Billion dollars worth of CLASS A Berkshire Hathaway(股票代號: BRK-A).  The purchase was not done on the open market, and it was all purchased from a single long time investor.  For comparison purpose, the company has spent only $126 Million dollars for the net purchase of shares the last four quarters combined.

Berkshire Hathaway has announced raising its maximum target price of Class A shares to 120% of Book Value.  Previously the most Berkshire Hathaway was willing to pay was 110% of Book Value.  Obviously Book Value is a number updated at most quarterly because it is a balance sheet item.

There is a speculative possibility that Warren Buffett sees an improving economy through the lens of his collections of businesses.  Aside from insurance and investment, Berkshire has a number of housing related businesses.  I am not sure about the rest of the country, but in the San Francisco bay area, especially the silicon valley, I notice a dramatic positive attitude shift towards housing, and prices are appreciating rapidly.  This could mean the company is becoming even more undervalued.  The Net Present Value of purchasing its own share could be more favorable than many other investment projects that the company has looked at.  Buying a dollar for fifty cents is the primary motive of any value investor.

However, I think, once again, this recent vote of confidence on its own share is just a cover up.  This could be part of the succession transition plan.  By reducing the float in circulation, this move probably serves to further solidify future management and board control of the company through Class A share, which is worth 1500 times a Class B share but 10,000 times the voting rights of a share of Class B.  This large purchase of not-from-the-open market signals the company’s concern of “CONCENTRATION OF POWER” outside the company insiders.  In stead of Buying Back on the open market from a variety of retail investors whose individual proxy impact is negligible(Why? Because each share Class A costs $130,000.00 yeah! More than the average “ANNUAL” salary!), Buy Back from one large shareholder, who has the potential ability to influence proxies against management’s wish, in essence eliminates future troubles such as proxy fight.

This is not an attempt to undermine Berkshire Hathaway as an iconic company.  On the contrary, Berkshire Hathaway will remain an economic powerhouse for years to come.  As long as the management and board serve with the best interest of all the shareholders in mind, shareholders will benefit from the insights and expertise of the managers.  A corporation is rarely a place for democratic rule.

Most traders and investors are short sighted.  We are wrapped up as a whole in the daily price movement of a stock.  It is true that the SHORT TERM RETURN of a stock can come from capturing share price fluctuation.  However, LONG TERM RETURN can only come from the long term actual profit the underlying business generates.

Berkshire takes it one step further whenever it can,  it buys whole business and skip the waiting for the profit reflection on a stock price.  This way Buffett and company have direct access to the profit generated and apply that capital to make more investments that churn out more cash.  The current Free Cash Flow after paying for debt service is about $17 Billion a year.  The company has about $46 Billion on its balance sheet.  That is a lot of ammunition, and the company is yearning for the next big investment.

With Berkshire’s business model and Buffett and company’s sharp investment acumen and unwavering mentality, this is how INTEREST COMPOUNDING can truly work to make people wealthy.

I am long term bullish.  A price floor may have been temporarily established at 120% of current book value due to buyback.  However, always proceed cautiously and buy with a margin of safety.

We welcome comments and thank you for your supports.  Have a Safe and Happy Holidays!

 

 

從圖中可以看出來, 經過今天的上漲, SPX到了1430附近的阻力區域, KD線也有所謂lower high的現象, 要注意大盤在這個阻力區回頭的可能性. 大家也可以看到, 大盤在1430-1360的區域上下了將近兩個月了, 這仍然是目前的交易區間, 如果向上突破, 下一個將會面臨之前三次都沒有成功突破的1470壓力價位. 如果向下突破, 下一個支撐會在1280-1290的位置. 這些分析可以提供給你佈局明年一月份現金流的策略. 但是我個人而言, 12月份的選擇權還有一星期, 財政懸崖目前也沒有個定數, 我覺得當下應該減少一些部位, 靜觀財政懸崖的結果, 明年開年再逐步加碼佈局. 大家還是先安心過新年吧.

 
CAT product demand is driven by global economic growth, construction activity, commodity prices, government spending on infrastructure, and end users’ access to capital.
It’s lagging currently, partly because of its relatively weak exposure to agriculture (drought depresses crops yield and heighten food price) compare to peer like Deere.  On the other hand, mining and energy exploration has been held back by lower commodity price.
I like CAT the business and company in general, it is definitely one of the best among its peer group.  But my enthusiasm for CAT is temporarily dampened due to Macro headwind.  (Short term skeptic, long term bull)

The revenue streams are strategically diversified, less than 30% is from North America, (the good recovering economy), revenue stream may continue to weaken, unless 1) spending on infrastructure, 2)urbanization, 3)mining, 4)construction, 5)Capital Ex Investment, pick up, which are entirely possible.  The reasons could include government stimulus spending, economy picking up around the world.
Revenue and Net Income have been increasing dramatically at least over the past 3 years, but Operating Cash flow has stayed relatively range bound.
This company operates on rather high leverage historically, and as a result the Return on Equity for last year has been spectacular.  The current ratio is 1.4 with about 40 billion of Total Debt, the company has raised more debt capital since last year, and the Total share outstanding has increased from 628 to 666 million shares.  The average nine years ROE has been about 33.89%, but that could be skewed because we went through the construction boom from housing and infrastructure both domestically and abroad, urbanization of emerging markets, and commodity boom for the past decade.  The company has nevertheless, demonstrated uncanny ability to meet obligations, as well as expectation of revenue and income growth.
Buffett once said, he would rather buy a great company at a fair price, then a fair company at a great price.  If we simply take the Net Income reported at face value, couple with the current consensus 5 year earning growth rate analysts predict, the fair value could be somewhere around $101.2/share.  Please proceed with caution and an appropriate margin of safety as always.
 

** 有個習慣性說什麼做什麼. 前一篇說有提早收到聖誕節禮物(大獲利)要趕緊買個機票出去走走, 所以也就買啦, 準備明天去北海道旅遊嘍, 會有幾天渡假不在, 個人po文會又慢點嘍.

Dollar-Yen(美元-日元滙率) 之前相關文章:
- 2012/6/21 – Run Forrest Run!
2012/6/25 – 阿甘等你一起來慢跑
- 2012/10/25 – 阿甘也跑太久了吧
- 2012/11/18 - 美元-日元滙率中期獲利點
– 2012/11/21 – Run “Forex” Run !!

** 個人有點可惜的是, 當看到這個中繼形態後又分析思考了”太久”, 而失去了再加碼續跑這短線性突破的機會 :(   不過還好的是, 如前一篇所說, 留了很小比例去跑一下, 也還算是可以了, 不貪心 :)   目前可以考慮等到約圖中的獲利目標區間二, 得小心隨時的大回調訊號的出現.

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