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Christopher Bloomstran Profile picture
@ChrisBloomstran
May 20, 2021 • 4 tweets • 1 min read • Read on X
Investments are occasionally priced dangerously far in excess of value. Commodities and speculations as well. When prices rise to where only a fool would buy from you at a higher price, that’s the Greater Fool Theory. Here’s a proven method for knowing you own such an asset...1/
2/
3/
No Bid...
Don’t be the fool.

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More from @ChrisBloomstran

Christopher Bloomstran Profile picture
Dec 11, 2023
A $5.8 billion offer is at hand to take Macy's private at ~$21 a share, a 32% premium over Friday's $17.39 close. Bidders call the stock “undervalued,”down from $74 in 2015. The retail graveyard is full of turnarounds. Good luck. How bad is this one? Some stunning statistics: 1/
At the proposed buyout price the $5.8 billion offer values Macy’s at roughly 7x FY 24 profit. The retailer earns an apparent 20% return on $4.1 billion in equity (much less on capital given $5.8 billion in net debt). But how profitable is M really and where have profits gone? 2/
Over the last 25 years Macy’s reported $21 billion in profits. A quarter of those were distributed as dividends. Fully the remaining 75% of profit was spent repurchasing shares. At the $21 buyout offer the stock is no higher than 25 years ago!That’s $15 billion in bad buys. 3/ Image
Read 10 tweets
Christopher Bloomstran Profile picture
Aug 5, 2023
Berkshire reported 2Q results this morning. As always, there's more under the hood than the reported results. A few thoughts on what is a very mixed bag. BRK is a good proxy for the US economy. The industrial economy is weak, consistent with what other companies are reporting. 1/
For starters, operating income was $10.0 billion for the quarter, up 6.7% over 2Q 22 and up 9.2% for six months. However, properly excluding forex gains on non-US denominated debt, profit rose from $8.3 billion to $9.6 billion in the quarter, up 15.2% and 17.9% for six months. 2/
However, much of the increase came from income on Allegheny's acquired assets in October and from BRK's now 80% investment in Pilot, up from 38.6% (5 months consolidated and 1 month equity method). Higher interest income on a larger cash balance further drove much of the gain. 3/
Read 23 tweets
Christopher Bloomstran Profile picture
Apr 22, 2023
Ark Invest, the bucket shop EFT promotional “investor,” the one whose founder CEO told a CNBC audience a year ago that ARKK would earn 50% a year (correct if she said minus), is back with its 3rd annual Tesla “research report” with a fresh $2,000 price forecast by 2027. Amen. 1/
That’s a $7 trillion market cap, or a mere 21% of the S&P 500's current cap. MSFT, AAPL, GOOGL, AMZN and META have a combined $7.7 trillion market cap today, up from $6.2 trillion at yearend. From today’s $165 share price, $2,000 in 4.75 years is 69% per year. Makes sense. 2/
Zero mention of expected hyperinflation in the report. Cue the class action lawyers. Cue @SECEnfDirector. The bull case is $2,500 per share, 25% higher than the base case and a market cap of nearly $9 trillion, or 26% of the current S&P and up from 1.5% of the index now. 3/
Read 25 tweets
Christopher Bloomstran Profile picture
Jan 21, 2023
35 FACTS NOT LIKELY FOUND ON ARKK YET UNRELEASED 12/31/2022 FACTSHEET

1. Loss from 2/12/2021 Peak: -80.1%
2. CNBC Appearances Since 2/12/2021 Peak: 23
3. Cumulative NET Assets Raised Since 10/31/2014 Launch: $17.1 Billion ($14.5B in 2020 and 2021)
4. Assets at 12/31/2022: $6.0B
5. Cumulative Management Fees Earned: $300 Million
6. Market Value at 2/12/2021 Peak: $29 Billion
7. Dollar Loss Since Peak: $23 Billion
8. Annual Return vs S&P 500 Since 10/31/2014 Launch: 5.4% vs 10.3%
9. $ARKK Price 12/31/22: $31.24
10. Date Last $31.24: 08/22/2017
11. AUM at 8/22/17: $450 million ($15m @ 1/1/17)
12. Net Inflows Since 8/22/17: $16.9B (Out of $17.1 Since Inception)
13. Percent of ALL DOLLARS Invested in ARKK Since 10/31/2014 Inception Losing Money: 98%
13a. Yep
Read 8 tweets
Christopher Bloomstran Profile picture
Dec 25, 2022
Who could forget the C-Suite high jinks when Elon and CFO Zach Kirkhorn invested $1.5 billion in Bitcoin and added the titles "Technoking of Tesla" and "Master of Coin?" Since the March 15, 2021 rebranding, Tesla and Bitcoin are down 48% and 70%, respectively. Great fun.🎄 1/
While the Bitcoin position and the Tesla outside shareholders have suffered mightily, how have the INSIDERS fared? If you guessed considerably better you are correct. Collectively the brass at Tesla appear to have unloaded 126 million Tesla shares for more than $41 billion. 2/
While Elon's sales are the preponderance of that, selling at an average share price of $325 is pretty good when measured against the present $123.15 price. That's a current bid 62% below the average sale. Nearly all shares were gifts from the board, not bought out of pocket. 3/
Read 15 tweets
Christopher Bloomstran Profile picture
Dec 17, 2022
Unlocking this valuation genius. When offering to buy Twitter on April 14 for $54.20, $44 billion, the 3-mo T-bill yielded 0.77%. Today, at 4.20% (what are the odds), it’s reported Twitter is seeking a new equity “funding round” at the same $44 billion valuation. Fascinating. 1/
Given the purchase closed on October 27, solidly in Q4, curious as well if Twitter will open the interim books to prospective “investors.” As a public company, Twitter naturally wouldn’t publish financials until 12/31. It’s reported the money needs to be raised before yearend. 2/
I’m quite certain prospective investors will want to see the state of revenues. Conventional wisdom here on Twitter believes a massive cut in labor means huge margin expansion. Important when on $5B in revenues and $13B in debt, $1.2B in interest expense exceeds $1B in EBITDA. 3/
Read 4 tweets

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