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    Value Investing Tech Trends 2020

    June 28, 2020

    Value Investing Tech Trends 2020

    Tech Trends 2020

    Posted: 27 Jun 2020 10:58 PM PDT

    Frontline: Money, Power, Wall Street Docu-series

    Posted: 27 Jun 2020 08:50 AM PDT

    https://www.pbs.org/wgbh/frontline/film/money-power-wall-street/

    I found this 4-part frontline documentary series on the financial crisis to be incredible.

    Theres a ton of new and interesting background around the initial creation of CDSs and CDOs that werent in other documentaries or books (Too Big Too Fail, etc)

    Id encourage watching the first episode to anyone.

    submitted by /u/thomrdgrs
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    Explanation of Korean Net-Net (Li Lu 2006 Lecture)

    Posted: 27 Jun 2020 10:20 AM PDT

    Referencing this lecture he gave

    I'm trying to figure his back of the envelope math he uses for this Korean net-net. Based on the transcript from someone's notes:

    Example: Korean Company

    -60M market cap, pre-tax earnings of 31M, roughly 2x pre-tax earnings.

    -Book value of 230M, what constitutes book value? If you are an owner, look at: fixed assets, working capital, don't count on goodwill.

    -Basically you see with 60M in market cap, 30M in pre-tax, $240M in book value ($180M in fixed assets)

    -Of the 70M in current assets, it is all cash

    -Of 180M in fixed assets, they own 100% of a hotel, recorded 30M as book. Own 13% of a department store recorded as 30M.

    -Look up the department store, it roughly has a market cap of 600M. 13% gives you roughly 80M. So the book value undervalues it by another 50M.

    -They own 15% of 3 cable companies and a whole bunch of real estate.

    -Put it all together: Paying 60M, 70M in net cash, another 100M in stock, 30M in hotel with a value that has not been changed in last 10 years while real estate market has gone up in 10 years. Went to Korea, looked at hotel and department stores.

    -Checked recent transaction of properties in neighborhood, value is likely 2-3x what is on the book. But take what is on the book anyway, add 150M. Add that to rest and you get 320M in assets that you are paying 60M for and earning 30M annually from operations.

    So 70 in cash, 180 in fixed assets from the asset side, equivalent to roughly 240-250 in book value (no debt). Where does the 100 in stock come from? And if he's using the book value of properties at 150 (why is this not 180), how do you end up with total asset value of 320, more than what's on the balance sheet?

    Also, anyone know what Korean company he might be referencing? Might be just easier to look it up lol

    submitted by /u/kitedancing
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