Thought of the Day

A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.

But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices. 

Warren Buffet, 1997 Letter

B2W: a Shit that was Once Sold as Gold!

B2W, an internet retailer company, originated of the merger of Submarino and Lojas Americanas in 2006. Since then, its price has dropped from an average of 80,00 to just 6,00, a stunning drop of more than 90%!

That is, B2W price has to go up more than 1.200% to go back to the level that it was traded in 2007.

Is Bovespa a Bargain?

Bovespa is reaching now 3 years low and is at the same level as it was in middle of 2007 (5 years ago).

So it seems that Bovespa is trading at very attractive prices. Is that true?

Thought of the Day

There are two kinds of businesses: The first earns 12%, and you can take it out at the end of the year. The second earns 12%, but all the excess cash must be reinvested - there's never any cash. It reminds me of the guy who looks at all of his equipment and says, 'There's all of my profit.' We hate that kind of business. 

Charlie Munger

ELPL4 - Eletropaulo

Market is indeed very crazy! It was so in love by dividends and energy companies that just now they realized that the price revision would have a great impact on earnings! If revenue drops 10%, earnings will fall a lot more!

That's my best prediction of what would be a recorrent net income for ELPL. And dont't forget the huge demand of Eletrobras, about 1 billion.

What Parisotto would say?

My shopping list

These are the prices I would pay for the stocks below:

BVMF3: 8,85
AMBV3: 45,00
ITSA4: 9,50
BBDC3: 21,00
GOAU3: 16,00
RAPT4: 9,00
POMO3: 4,50

The future's not ours to see

Orbe, an asset management, had Hering (HGTX3) in its portfolio since 2006 to the beginning of 2008. Since they sold it, Hering has been a spectacular growth, both operational and in price, as you can see below (numbers are approximated):

Revenue                 225%
EBIT                      650%
Income              >1.000%
Price                  >1.500%