No Nonsense Sirius XM November Thread

[MUSCLE13]

Wow, I read this and now realize you guys still don't know what EBITDA means. When I bought Disney heavy in August on the drop it went down to less than 12 times EBITDA in the mid $90s. At the time I posted here I stated I expected to go right back to 14-15 times EBITDA back to $120 by Star Wars release because Disney is growing EBITDA at a mid teens clip annually for the next 3-5 years and Star Wars is going to be the biggest movie of all time ($3 billion worldwide box office). Disney came back to $120 earlier than Star Wars release. It hit my EBITDA multiple price target so I remained disciplined and took profits. I still hold a position in Disney that I plan on holding for another decade, but I took my profits based on 14-15 times EBITDA. That was my target. It reached it.

When Sirius hits $5 on 20 times 2015 FCF per share I will take profits and remain with a core position. When Comcast hits $100 based on 11-12 times 2016 EV/EBITDA I will take profits and remain with a core position. I plan to hold hundreds of thousands of dollars in Comcast, Sirius, Disney and Charter for the next decade. I plan to hold 7 figures in index funds. I am protecting profits while investing in growth. I am a huge believer in index investing.

I think it is very plain to see that my investment philosophy is based on EBITDA, Cash flow, and John Bogle.

[user34615145]

I get it that when share price goes up, EBITDA (as previouslt reported) multiples contract. That's simple math. Since the stock had pulled back from $120 earlier this month, those multiples have expanded again somewhat. You sold then, based on timing those multiples as the stock appreciated and before it fell back. Doesn't matter if your target is based in EBITDA multiples, P/E ratios, stock price or whatever. It's a timing trade. It's a good trade. Own it man.

[MUSCLE13]

I get it that when share price goes up, EBITDA (as previouslt reported) multiples contract.

Incorrect. The opposite

[MUSCLE13]

Doesn't matter if your target is based in EBITDA multiples, P/E ratios, stock price or whatever. It's a timing trade.

Incorrect, its based on comparing current EBITDA multiples to a 3-5 year growth rate of EBITDA. It's a valuation calculation.

[user34615145]

Incorrect, its based on comparing current EBITDA multiples to a 3-5 year growth rate of EBITDA. It's a valuation calculation.

Dude. The are ALL valuation calculations. Stock price is a calculation of valuation.

Listen to yourself:

When I bought Disney heavy in August on the drop

Buying "on the drop"....hmmmm sounds suspiciously like timing.


then this:

I expected to go right back to 14-15 times EBITDA back to $120 by Star Wars release

Finally:

Took most of my profits on Disney already a couple of weeks back. It moved up alot sooner than the Star Wars release which surprised me

So that's all timing..

Let's recap: In August you bought in the High $90's/low $100's on a dip (great trade by the way), you expected it to run up $120 in a couple of months due to a movie release but it got there sooner so you sold in early/mid November. By definition that is "trading" not "investing for the long term". More specifically, if it was made in a taxable account, the IRS would deem it "Short Term Capital Gains".

When you have Short Term Capital Gains I don't know how you can claim you strictly are investing for the long term. It's a trade. A good trade, but a trade. You saw an opportunity to make a quick buck, you took it and it worked out. Congrats!

Edit #1: Btw, I was paying attention to you back in August and a lot of what you said about DIS and Star Wars made good sense, so I bought some shares back then too...probably not nearly as much as you - just a couple hundred shares but I still own mine...Out of curiosity (and greed of course) I want to see this Star Wars trade work itself out. So you see, you and I are not so unlike each other. Probably have a lot more in common than not. But I still own my Aug purchase so I guess that would make me more of an "investor for the long term" than you my friend!

[MUSCLE13]

Let's recap: In August you bought in the low $100's on a dip (great trade by the way), you expected it to run up $120 in a couple of months due to a movie release but it got there sooner so you sold in early/mid November. By definition that is a trade and if it was made in a taxable account the IRS would deem it "Short Term Capital Gains".

When you have Short Term Capital Gains I don't know how you can claim you strictly are investing for the long term. It's a trade. A good trade, but a trade. You saw an opportunity to make a quick buck, you took it and it worked out. Congrats!

I bought in the 90s not the 100s Brandon. I don't pay any taxes on a sale because it was all in an IRA, and all reinvested. Enough already........

[user34615145]

I bought in the 90s not the 100s Brandon. I don't pay any taxes on a sale because it was all in an IRA, and all reinvested. Enough already........

Even better my friend! Congrats on your trade once again!

Just to clarify, I said "If you bought in a taxable account" the gains from your trade would be considered Short Term Capiial Gains...it's a short term trade by definition...a timing trade by defintion (bought on the dip, sold ahead of the catalyst). So, regardless of the methodology you used (EBITDA/EV, FCF, PE, Tossing the dice, or asking a Ouija Board - take your pick) , there is no way you can claim that was a long term investment unless you are a fruit fly with a 24 hour life expectancy.

[midas360]

I get it. I remember when I started buying and selling stocks back in 1997. There was no website to go to just a 1-800 to call the trading desk to tell a trader what you wanted done. It wasn't long after that they offered online trading for $39.99 a trade. I remember placing trades every day from work. This was all right at the beginning of the "Internet Boom" too. I remember people would ask if I was a "day trader", "short term trader", "long term trader", "momentum trader", etc... I used to think, why does it matter? Then it hit me one day. I am an investor... a person who allocates capital with the expectation of a future financial return. The future could be seconds, minutes, hours, days, weeks, months, or years.

I guess the point is... we are all INVESTORS here. I could give a rats a$$ when you buy or sell your security as long as your making more money than you're losing. I don't care what methods you use to make that money. You could guess for all I care if it works for you.

I bought in the 90s not the 100s Brandon. I don't pay any taxes on a sale because it was all in an IRA, and all reinvested. Enough already........

[user34615145]

I get it. I remember when I started buying and selling stocks back in 1997. There was no website to go to just a 1-800 to call the trading desk to tell a trader what you wanted done. It wasn't long after that they offered online trading for $39.99 a trade. I remember placing trades every day from work. This was all right at the beginning of the "Internet Boom" too. I remember people would ask if I was a "day trader", "short term trader", "long term trader", "momentum trader", etc... I used to think, why does it matter? Then it hit me one day. I am an investor... a person who allocates capital with the expectation of a future financial return. The future could be seconds, minutes, hours, days, weeks, months, or years.

I guess the point is... we are all INVESTORS here. I could give a rats a$$ when you buy or sell your security as long as your making more money than you're losing. I don't care what methods you use to make that money. You could guess for all I care if it works for you.

There you go. THAT's what I'm talking about. Doesn't matter how how make it. But don't try and tell me your way is better and more pure than mine because you are a long term investor and then go make a 3 month swing trade. Sheesh! I'm trying to tell the guy he did good and he's arguing with me! Most people would just say "thank you for the complement" and be on their merry way.

[MUSCLE13]

Most people would just say "thank you for the complement" and be on their merry way.

It's spelled "compliment" Brandon not "complement". Different meaning. And I am not most people. We started conversing on message boards maybe a decade ago, and you still don't understand EBITDA. This isn't trading. This is not a casino. This is not reading a chart or a palm reading. When you buy a media stock you are buying it's future cash flow. You aren't buying a lottery ticket. Do yourself a favor and read Peter Lynch's book "Beating the Street" from the 90s. You will understand investing as opposed to trading (or gambling as I call it) after reading it.