Interpretazione dei bilanci

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Mauboussin su utili negativi e mancato ammortamento degli investimenti in intangibili:
Capitalising intangibles and indeterminate losses

il paper:
https://www.morganstanley.com/im/pu...pectedreturnoninvestment_en.pdf?1618411268606


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ginopelo

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Has Charlie Munger Made a Mistake With Alibaba?

Charlie Munger ha sbagliato? Io penso di no. Recentemente, è stato seguito da Pabrai e Spier.
Seguo gli sviluppi. Sarà interessante la prossima trimestrale, e i prossimi 13F.

C'è da dire però che Aswath Damodaran tra Tencent e Alibaba ha scelto Tencent sostenendo che la figura di Jack Ma proprio perchè carismatica possa richiamare troppe attenzioni dal PCC
 

zakzakit

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C'è da dire però che Aswath Damodaran tra Tencent e Alibaba ha scelto Tencent sostenendo che la figura di Jack Ma proprio perchè carismatica possa richiamare troppe attenzioni dal PCC

In effetti potrei valutare, anzichè un incremento in Alibaba, un ingresso in Prosus. Il fatto è che ormai il mio portafoglio è sostanzialmente definito e non ho molto spazio per incrementarlo, nè molta voglia di vendere qualcuna delle posizioni che ho per acquistare qualcos'altro. Ho notato che sono un discreto stockpicker quando acquisto, ma uno pessimo quando vendo. Inoltre un piccolo investitore può ottenere ottimi risultati anche ignorando totalmente le azioni cinesi.
 

ginopelo

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giusto per complicarti la scelta ;-)
Bridgewater al 30/06 aveva lievemente incrementato sia la posizione in Alibaba (che rappresenta il 2.06%) e Tencent (per un tot del 0.09% del ptf)
 

zakzakit

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Trimestrale di Alibaba (q2 2021 vs q2 2020, in $, per azione):
1) Fatturato +38.6%
2) Utile -79.9% (con elementi straordinari)
3) Cash flow -29.7%
4) Situazione finanziaria cash = 3x debt
5) Valutazione P/S 2.6 vs media 5y 10.0, P/E 17.2 vs 38.0, P/CFO 10.9 vs 23.0

Confronto con Amazon:
1) Fatturato +14.6%
2) Utile -50.5%
3) Cash flow -39.2%
4) Situazione finanziaria cash = 0.7x debt
5) Valutazione P/S 3.9 vs 3.9, P/E 67.2 vs 134.1, P/CFO 32.3 vs 30.6

Su queste trimestrali Amazon è invariata e Alibaba è ulteriormente scesa. Il mercato evidentemente giudica la riduzione dei margini della prima un ritorno da valori sopra la media e la riduzione della seconda una continuazione del trend discendente.
Continuiamo a seguire.
 

ginopelo

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intanto da BABA nel Q3 Monish Pabrai è uscito, mentre Charlie Munger ha praticamente raddoppiato arrivando quasi al 20% del suo ptf
 

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la trascrizione di un'intervista a Mauboussin:
Transcript: Michael Mauboussin - The Big Picture

un passaggio su quanto possono essere fuorvianti i bilanci:

MAUBOUSSIN: … I think the one that — I mean, accounting changes, but I think the really big one is this rise of intangibles that you pointed out. And just to give — well, first of all, let’s go back a little bit even further in history. Back in the 1970s, tangible investments, so tangible, physical things …

RITHOLTZ: Think factories.

MAUBOUSSIN: … big factories and (inaudible) …

RITHOLTZ: (Inaudible).

MAUBOUSSIN: … machines …

RITHOLTZ: Right.

MAUBOUSSIN: … drills, all that, right? Those were twice the level of intangible investments, and intangible, by definition, nonphysical. So, think now branding or …

RITHOLTZ: Patents, copyrights, software.

MAUBOUSSIN: … yeah, software code, all this kind of – OK, right. So, two to one, tangible to intangible.

At the time we wrote the book, so-called 2001, 20 years ago, they were – the first version of the book, they were at parity. And our — our estimate is, for 2021, that intangibles will be more than two times tangible. So, in the last 20 years alone, they – you could sort of say they started the race basically neck and neck, and now it’s much, much more intangible. So why — why is that important, like why do we care about that?

That’s important because tangible assets, the way the accounts record them, is they’re capitalized on the balance sheet, right? It’s a — it’s property, plant and equipment, which we then depreciate over time. So, it does show up in the income statement, but primarily in the form of depreciation.

By contrast, intangible investments are fully expensed. Now the most famous of these is research and development, and we’ve known that. And since the 1970s, the FASB decided that — that R&D should be expensed. And there’s debate about — there’s been debate about that for a very long time. But now, R&D is only a quarter of total intangible investment, so there’s lots of other stuff that’s going on that’s all expense. So, what does that mean all things being equal? The answer is earnings are a lot lower than they would otherwise be.

I always like to point out that, you know, great companies like Wal-Mart, great companies like Home Depot, for the first 10 or 15 years they are public, had negative free cash flow, right, which their investments were bigger than their earnings, so they had positive earnings. Was that a problem? No, it’s fantastic, right, because their investments had very high returns on — on capital.

And so, — and, by the way, Walmart, for example, its first 15 years, tripled the performance at the stock market, right? It crushed it. And when you do the — that’s a substantial compounding advantage, right? But the problem is now, we’re — we’re — we’re conflating investments and expenses on the income statement, and we don’t see that we can’t unpack those things.

RITHOLTZ: And just to — just to jump in. Places like Wal-Mart and — and Home Depot, and those — they’re buying land, they’re putting up new stores, they’re expanding, so that sort of tangibles does show up on the balance sheet.

MAUBOUSSIN: That’s right, that’s the whole point. So, they’re — they’re — and, by the way, even Wal-Mart — Wal-Mart, for sure, was an early user of technology, right? If you read Sam Walton’s book, which by — everybody should. It’s fantastic. I reread that memoir just last year. It’s just awesome.

You know, they were early users of technology, so they were early intangible users. So, well, but you’re exactly right, the vast majority of their investments were physical. You can — you can kick it, and so on and so forth, whereas other — other companies, that is not the case. So yes, so that, to me, is a — that’s a watershed change, and that’s why earnings.

Again, if you’re focusing on cash flow, these things become much less important because we’re getting to the ultimate rude answer. But if you’re simply using multiples or some sort of shorthand, you’re going to dismiss this very significant development.

RITHOLTZ: So — so people love to point out how expensive the stock market is and how pricey, that we used to call them FANG, but now with Facebook, I don’t know what that look anymore. But if we look at the top 10 or 20 technology companies or — or the top 25 percent of the S&P 500 by market cap, those appear to be pricey, but these are all companies that have massive investments in intangibles. So, it’s Google, it’s Apple, it’s Netflix, it’s Microsoft, it’s Facebook. Go down the list. It’s Nvidia.

All these companies are – they own software, they own patents, they own processes. Does this imply that these pricey technology companies — I left out Tesla from the list — are — these so-called pricey tech companies that have so much sunk into intangibles, are these perhaps less pricey than the average stock analyst believes?

MAUBOUSSIN: If you’re using traditional multiples, you get a very different picture. And, you know, we recently wrote a report called — it’s called Classifying for Clarity where we talked about — argue — we argue that certain things should be restated in the statement of cash flows. And we use our case study, Amazon.com, right, so one of these companies. And Amazon backed our calculation or our estimate. Is it Amazon’s intangible investments in 2020 were $44 billion?

RITHOLTZ: Astonishing.

MAUBOUSSIN: And you — their — if you amortize, if you’ll be able to schedule and amortize it, it still comes out to $19 billion of net profit increase. Now, Amazon’s profits last year were about $20 billion. So — so just if you accept this adjustment …

RITHOLTZ: Double the profit.

MAUBOUSSIN: Right? Now, if — you know, you — we could quibble about the details of it …

RITHOLTZ: Right.

MAUBOUSSIN: … and so on and so forth, but basically, that is it. You know, that’s exactly right. And the EBITDA numbers don’t quite double, but they close to double. And so, now the flipside of all that, that’s, you know, the earnings are better, but let’s also recognize the investments are a lot higher than what is reported to. And so, I always say the job of an investor is to understand the magnitude of investment and the return on investments to understand future profits.

And so, for a company like Amazon, they’re earning a lot more than people at least what they would seem to report, but they’re also investing a lot more. And so, you know, there’s still lots of judgment as to whether those investments will pay off, and so on so forth, but you’re exactly right. It’s a very distorted picture, you know, without commentary.
 
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dalla solita newsletter, nella bella intervista a Christopher Bloomstran su stock based compensation e FB:
https://business.columbia.edu/sites...ds/Graham Doddsville Fall 2022 Issue 46_0.pdf

Silicon Valley learned how to use stock options in the 1980s. Options weren't really a compensation tool prior to that. I've got a history in one of my older letters on the evolution of how stock options and share-based compensation came into being and evolved. In the 80s and 90s option comp was not expensed. It was contentious, I saw the harm in dilution, and eventually Warren Buffett railed against it.
Ultimately the accounting profession saw the light that if you're giving away shares, whether valued under Black-Scholes or if you hypothetically run all your expenses, not with cash by paying but by issuing new stock to pay your vendors, there is a cost. So now it's an expensed item. The number of shares outstanding drove materially higher during the 1990s. The majority of that was Silicon Valley giving away huge percentages of the company each year to the employees and executives. Only later did they get around to masking dilution with repurchases. Done right, if you're buying your company shares back and you don't have a better use for the capital and the stock is trading at a discount to what we'd all call intrinsic value, that's a great capital tool to be able to shrink your share count accretively. You're adding value and not taking advantage of anybody or anything, but if you're using the share repurchase to offset the dilution that comes from giving away the company and you have no regard for the price that you're paying, well that's a destruction of value, you might as well take a giant pile of money, put it on a table and light it on fire. And that's what most companies have done over the last decade or two because we've not had an undervalued stock market.

If you're the CEO of a public company, you're on the job for four or five years, you have a window to get rich, you may have come out of engineering or marketing, you don't come out of the capital allocation department thinking about how to optimize the balance sheet, what the share is worth, whether you should issue, whether you should buy back. You're not trained in the art of business valuation so you lean on your bankers to tell you if it’s a good or a bad deal to go into an acquisition, but generally it's going to be a good deal for them because you’re paying them a fee, and it’s a good deal for you because it makes the top line bigger and that makes your compensation bigger.
Too often, share based comp is now done through a lens that incentivizes short term thinking. I think far too often, especially in the tech world, Silicon Valley, some of these folks running these businesses still have a venture cap mindset where they're thinking about funding rounds and they don't have a regard for what the share actually represents, which is the ownership of the company by all of your shareholders and what the business is worth. They think about ownership and how easy it was to have been given shares to be the CEO of a private business before it went public. Giving the ship away is just commonplace in that world.
Here we have Facebook blowing up and so...yesterday afternoon, I looked at Facebook's share repurchases over time. I wanted to see how much they've given away and bought back despite little change in the share count over time. It turns out they started buying the stock back at the beginning of 2017. From their first share repurchases through Q3 here this year, you've got $112 billion repurchased against $144 billion in profit. They spent 78% of their profits buying the stock back and 50% of their cash flow from operations. Now, when you get on most companies' calls or you read their adjusted EBITDA disclosures in their press releases or investor decks, not in the Qs, but in the press releases and decks, they'll tell you that share based compensation is not a cash item, so you really ought to ignore it. It makes my blood boil. Well, Facebook winds up paying something like 250 bucks a share for their average repurchases. The repurchases in 2021 were done at $330 vs. $97 today. That’s share based comp done badly with an eye toward getting yourselves rich, no regard for the shareholder and really no regard for the price you were paying for the stock, "Hey, we don't need the money in the business. We're cap light." What do you do with it? Do you pay a dividend? Do you go invent a bunch of stuff with R&D?
Very few contemplate how disastrous a repurchase is when it's undertaken at a price that far exceeds the underlying value of the business, and so who knows what the value of Meta or Facebook's going to wind up being. You guys tell me if there's a moat in the business, I've never found the moat, I get durable advertising revenues, but I'm not sure I get the platform. Now I don't mind a business paying me profit as dividends. I don't like paying taxes on dividends in taxable accounts. But if you don't have a better use for the money, I'd rather you not create a use for it by making bad acquisitions or simply buying the share back even though it’s not cheap but because some consultant told you it is returning money to stakeholders. Give me the money. I'll take it and I'll find places that make more sense, right?