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The Big Short Thread


sancho panza

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The more I look at Snapchat, the more I hate the stock. The last quarter was the first that daily user numbers dropped, by circa 2%, to 188 million.

This is versus WhatsApp, which although not directly comparable (...your dick pics don't disappear once sent!), has over 1.5 billion daily users.

Whilst the user numbers were growing, it would've been a sensible takeover target, but if they drop again for Q3? Still has a market cap of almost 12 billion, madness.

It's probably an interesting target for some of the bigger tech companies below 5 billion US, but you just never know. 

I still can't see how it's a viable business or how it makes money.

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59 minutes ago, azzuri82 said:

The more I look at Snapchat, the more I hate the stock. The last quarter was the first that daily user numbers dropped, by circa 2%, to 188 million.

This is versus WhatsApp, which although not directly comparable (...your dick pics don't disappear once sent!), has over 1.5 billion daily users.

Whilst the user numbers were growing, it would've been a sensible takeover target, but if they drop again for Q3? Still has a market cap of almost 12 billion, madness.

It's probably an interesting target for some of the bigger tech companies below 5 billion US, but you just never know. 

I still can't see how it's a viable business or how it makes money.

This is just like the Tech bubble Mark 1.I remember the punters queuing up at the local bank-before internet usage was wdiespread- to get the prices on all the darlings of the day.I'd held some of those companies for a year or two or three due to the fact we used to get a tipsheet called Techinvest.

We knew those shares had no revenues but when the madness of crowds grips a crowd,you don't try and stand in the way.

I was in my investing infancy at the time and didn't short-it wasn't really available to retail traders anyway-but we sold before the peak and missed the exponential phases for more than a few of our holdings.A year or two later they were worthless.

The figure I'm most interested in on a balance sheet is the revenues.It's the least fudgeable from what I can see,you may have a different view Azzurri.Yeah sure they can bring some revenues forward but on the whole it's about the most truly representative figure on the accounts.

Look at some of the SA miners,where market cap is below revenues.Unusual,but a value flag to me.

WH Smith market cap is £2.3bn over revenue £1.234bn -lowish debts,but despite the sales talk,a business that is exposed to margin compression.

 

Snap is $11.94 bn over revenue of $824mn.it's margins may be high but it's hugely exposed to it's tech literate user base discarding it.Same as Twitter.Whatsapp imo is a different beast and much more widely used especially for things like international telephone calls.

Snap started life at $29 USD feb 2017 and is currently $9.35.Solid and I mean solid, chart downtrend.It''s a classic low revenue high P?E tech stock and from what I can see it's not technologically revolutionary.

Maybe short the next bounce to the 20 week.

59 minutes ago, azzuri82 said:

The more I look at Snapchat, the more I hate the stock. The last quarter was the first that daily user numbers dropped, by circa 2%, to 188 million.

This is versus WhatsApp, which although not directly comparable (...your dick pics don't disappear once sent!), has over 1.5 billion daily users.

Whilst the user numbers were growing, it would've been a sensible takeover target, but if they drop again for Q3? Still has a market cap of almost 12 billion, madness.

It's probably an interesting target for some of the bigger tech companies below 5 billion US, but you just never know. 

I still can't see how it's a viable business or how it makes money.

It doesn't

https://www.investing.com/equities/snap-inc-financial-summary

Edited by sancho panza
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22 minutes ago, sancho panza said:

This is just like the Tech bubble Mark 1.I remember the punters queuing up at the local bank-before internet usage was wdiespread- to get the prices on all the darlings of the day.I'd held some of those companies for a year or two or three due to the fact we used to get a tipsheet called Techinvest.

We knew those shares had no revenues but when the madness of crowds grips a crowd,you don't try and stand in the way.

I was in my investing infancy at the time and didn't short-it wasn't really available to retail traders anyway-but we sold before the peak and missed the exponential phases for more than a few of our holdings.A year or two later they were worthless.

The figure I'm most interested in on a balance sheet is the revenues.It's the least fudgeable from what I can see,you may have a different view Azzurri.Yeah sure they can bring some revenues forward but on the whole it's about the most truly representative figure on the accounts.

Look at some of the SA miners,where market cap is below revenues.Unusual,but a value flag to me.

WH Smith market cap is £2.3bn over revenue -lowish debts,but despite the sales talk,a business that is exposed to margin compression.

 

Snap is $11.94 bn over revenue of $824mn.it's margins may be high but it's hugely exposed to it's tech literate user base discarding it.Same as Twitter.Whatsapp imo is a different beast and much more widely used especially for things like international telephone calls.

Snap started life at $29 USD feb 2017 and is currently $9.35.Solid and I mean solid, chart downtrend.It''s a classic low revenue high P?E tech stock and from what I can see it's not technologically revolutionary.

Maybe short the next bounce to the 20 week.

It doesn't

https://www.investing.com/equities/snap-inc-financial-summary

I've never really thought about it like that but you're entirely correct. You can defer a sale from one quarter to the next or even to the following financial year if you've banked the cash, or bring it forward, as you say, but eventually it needs to show up somewhere sooner or later.

And due to sales taxes / VAT / fuel duty / insurance premium tax / whatever, because the government taxes a gross sale like this almost everywhere you look, it's the least likely to be gamed.

Profits / losses can be shown or hidden by any number of accounting tricks. 

 

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14 minutes ago, azzuri82 said:

Think the bounce might be gone? No way it's getting back over 10usd, surely?

Like I said,there's a two year chart and the charts I've grown to like tend to go back 15 years plus,so you can see how the different indicators you use interact in certain/different market conditions.

I wouldn't trade a chart with such a short timeframe and where we're already circa 60% off peak as I prefer longer timeframes with more open air beneath the stock price and the floor.Think Wile e Coyote and you'll get my drift.

Edited by sancho panza
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3 hours ago, azzuri82 said:

I've never really thought about it like that but you're entirely correct. You can defer a sale from one quarter to the next or even to the following financial year if you've banked the cash, or bring it forward, as you say, but eventually it needs to show up somewhere sooner or later.

And due to sales taxes / VAT / fuel duty / insurance premium tax / whatever, because the government taxes a gross sale like this almost everywhere you look, it's the least likely to be gamed.

Profits / losses can be shown or hidden by any number of accounting tricks. 

 

I’d argue the cash flow statement is more important. If you don’t generate cash, then you have a problem.

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2 hours ago, Castlevania said:

I’d argue the cash flow statement is more important. If you don’t generate cash, then you have a problem.

Yep, fair enough, cashflow is indeed king xD

Even more so with the breakneck speed of growth expected by startups in the 21st century. For mature businesses, however, this shouldn't really be an issue with competent, seasoned managers in place.

Of course, these days, with all the short-term thinking that goes on in boardrooms up and down the country, it's probably rarer than it should be.

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8 hours ago, Admiral Pepe said:

Can anyone recommend a platform/broker for a small time player to place some long dated puts, both on UK and US companies?

My UK broker has just pulled their options trding side.

Interactive Brokers allow to access most things.US long dated I think are particualrly attractive.UK options have large spreads and lack liquidity imo.

https://www.interactivebrokers.co.uk/en/index.php?f=1338&gclid=EAIaIQobChMIpbbmoa_A3QIVr7vtCh0asQgVEAAYASAAEgLtWPD_BwE

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1 hour ago, azzuri82 said:

 

Interesting find Azzuri.
Marketwatch has revenue up from $2.64 bn in 2013 to $2.93bn 2017.Free cash flow lower than two years ago.Looks ripe.

https://www.marketwatch.com/investing/stock/cbrl/financials

Share price up 200%.

image.png.3b761a501b168b5c6bb18dd46db5254c.png

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  • 2 weeks later...
sancho panza
On 27/09/2018 at 22:27, azzuri82 said:

See - https://seekingalpha.com/article/4207869-tesla-will-overwhelmed

Also, it seems Musk IS being charged by the SEC and as a result TSLA shares are down around 12% in after hours trading. xD

Tesla is a great trade,I just can't fathom a sensible entry point on the chart.Musk played with fire with those tweets and he's done well to get away with so little formal repercussions

Edited by sancho panza
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sancho panza
On 11/09/2018 at 12:55, sancho panza said:

Time to update the short list.Comments,opinions and ideas always welcome here.Weightings are varied ie some minimum,some slightly higher,as ever DYOR if you get involved.

Working towards Facebook/Domino's/Netflix/Boeing/Starbux/Denny's next year.

 

 

Currently Short

Barratts

Redrow

Bellway

Taylor Wimpey

Rightmove

Prudential

Restaurant group

Travis Perkins

Inchcape

Glencore

 

 

 

Currently short

Barratts

Redrow

Bellway

Taylor Wimpey

Rightmove

Prudential

Inchcape

Glencore

WH Smith

 

Losses/Stops tripped

Reckitt

Redrow-reshorted 

Restaurant group

Glencore

 

Profits taken

Travis Perkins

ITV

Barratts

 

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44 minutes ago, sancho panza said:

Profits taken

ITV

What are the thoughts on ITV becoming a takeover target?  Is it just media hype or worth buying a few for the ride up?

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sancho panza
1 hour ago, stockton said:

What are the thoughts on ITV becoming a takeover target?  Is it just media hype or worth buying a few for the ride up?

DYOR natch,but it's chart is in a downtrendf.If you haven't read the rest of this thread, I basically pick sectors that are facing fundamental challenges eg Builders/Traditional Media,Bricks n Mortar retail and then use chart work to assess entry points.

You've got to ask yourself who's watching ITV these days,me and Mrs P don't and whilst I'm middle aged,she's in her 30's(middle aged to some maybe).Same as the dead tree press is a busted flush,so is mainstream TV.EA's busted flush,only people that visit them are over 50's.Everyone else uses the web.

ITV may get taken over, but I'd only buy on the off chance a lot lower down personally.

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We're all wrong about Estate Agent's prospects.................apparently:

Sutton property expert says fears of a Brexit house price plummet are 'unfounded' after acquisition

A Sutton based property expert has said fears of a 30 per cent drop in house prices after Brexit are unfounded, after acquiring a Cheam and Mayfair based estate agent.

Centro PLC said that their acquisition of Christies Estate Agents reflects ongoing belief in the property market in the run up to Brexit next year.

The combination of the two family-run businesses is estimated to achieve turnover of over £1,000,000 from residential sales, lettings and financial services within Centro Group.

Centro says its All Things Property banner will boost the residential market activity with its property ownership and commercial sales, lettings and consultancy, and particularly, residential block management.

Christies’ Director, Andrew Richardson stays as residential sales director and all Christies’ staff members join Centro.

Ray Harwood FRICS, Chairman of Centro, commented: “When we founded Centro nearly 30 years ago, our vision was to get exactly where we are today.

“We are satisfied the transition will move us on to our realistic short-term turnover of circa £5,000,000, with a strong asset base of three times that figure.

“Our new and existing clients can rest assured that the availability of Board Directors at the face of each activity will not change”.

https://www.yourlocalguardian.co.uk/news/16957775.sutton-property-expert-says-fears-of-a-brexit-house-price-plummet-are-unfounded-after-acquisition/

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51 minutes ago, sancho panza said:

DYOR natch,but it's chart is in a downtrendf.If you haven't read the rest of this thread, I basically pick sectors that are facing fundamental challenges eg Builders/Traditional Media,Bricks n Mortar retail and then use chart work to assess entry points.

You've got to ask yourself who's watching ITV these days,me and Mrs P don't and whilst I'm middle aged,she's in her 30's(middle aged to some maybe).Same as the dead tree press is a busted flush,so is mainstream TV.EA's busted flush,only people that visit them are over 50's.Everyone else uses the web.

ITV may get taken over, but I'd only buy on the off chance a lot lower down personally.

Many thanks @sancho panza I have followed the thread from day one im just a lurker, seen ITV mentioned here and on other sites so thought I would ask the question.

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sancho panza
2 hours ago, azzuri82 said:

SP, another chart that looks like dog shit: Dropbox.

 

Meant to psot a recent tesla chart t'other day.Impressive MoM fall

image.png.391d3e036f35871c2e39f5ede421c079.png

 

 

Dropbox is in full on fall mode.Not really enough history for me and I do worry with some of these smaller techies that one of the big boys will swoop in with a cash offer

image.png.dc52d1c446c902b6be1181636a5c0f45.png

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sancho panza
On 03/10/2018 at 15:15, stockton said:

Many thanks @sancho panza I have followed the thread from day one im just a lurker, seen ITV mentioned here and on other sites so thought I would ask the question.

No worries,it's bounced a bit since I sold,and I am tempted back in but there's a few more to run the slide rule over

Rightmove-I got a small position opened a month or so back and it's dropped handily since,jsut weighing whether to wait for the bounce.

image.png.1116f3c282d02991416000dfbce2186c.png

Inchcape dipping nicely

image.png.b3f2fb77fc62fc5cd7b00ddb6db46bed.png

 

Persimmon riolling over,really nice long downtrend since June

image.png.9fc306ff918175ae96541734c0354b24.png

BKG too............

image.png.e28138c679890edc5834eac5b7120f44.png

 

 

Couple more on the radar

image.png.0bc45f594e848935373cf5c158f06ec0.png

Putting recent fall into context

image.png.9cf4e59646f80d33b482df57565d2091.png

Ashtead

image.png.15004dc4eae21b197ce63e96d8415dc2.png

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sancho panza
On 03/10/2018 at 11:46, sancho panza said:

Currently short

Barratts

Redrow

Bellway

Taylor Wimpey

Rightmove

Prudential

Inchcape

Glencore

WH Smith

 

Losses/Stops tripped

Reckitt

Redrow-reshorted 

Restaurant group

Glencore

 

Profits taken

Travis Perkins

ITV

Barratts

 

Forogt to mention

Current shorts

Galliford Try

Profits taken

Land Sec

 

Gott stop psoting from memory

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12 hours ago, azzuri82 said:

SP, another chart that looks like dog shit: Dropbox.

 

I can see a lot of the tech stocks ending up like below xD

DpAT4Z9UYAAjA-c.jpg:large

Edited by Admiral Pepe
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12 hours ago, Admiral Pepe said:

I can see a lot of the tech stocks ending up like below xD

DpAT4Z9UYAAjA-c.jpg:large

Absolutely. Snapchat mentioned above has dropped circa 30% in the last month, and about 75% since the IPO.

Likely become a takeover target at a couple of dollars for Facebook.

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