The Successful Use of Capital Can Bring Much More Value to Investors

一個讀後心得，商業周刊的報導：儒鴻，現在來看，儒鴻做的東西都是對的，但一開始有多少人注意到它，一開始洪鎮海花很多的錢去開發產品，賺來的錢都投入下去再研發，沒有做這些，也不會有後來的大量訂單以及穩定的客源，也不會有現在的高成長，高Margin，以及高報酬率。

In hindsight，儒鴻一開始做的事情，沒有辦法視為是好的business，花大量的資本去維持獲利成長，但現在來看，他做的事情卻是對的，因為這些花費建立起很高的barrier to entry，尤其是當他達到規模之後，其他的公司很難跟他硬拼。所以洪鎮海在2000年初所作的決策是很有前瞻性的。

身為一個價值型投資人，一開始也不會注意到這樣的公司，但過去十年，儒鴻替股東創造了很大的價值，也可以說它是價值投資，身為一個投資人，miss掉這樣的好公司，真的很可惜，也是一個錯誤，但從中可以有一些資本運用的想法。

固然ROIC可以代表一家公司的競爭力強弱，高ROIC代表這是一個Good Business，但單看絕對數字是會被誤導的，就如同COH或是宏達電一樣。相反的，低ROIC不代表公司未來就不好，一個新公司，通常都需要很大的資本投入，去維持它的成長，也通常會有較低的ROIC，但如果可以像儒鴻一樣，一開始的低ROIC轉換成高的ROIC，那就是真正的Good Business。

真正的重點，應該在於公司怎麼去運用它的資本，有的好公司投入的資本都很少，但有的好公司投資的資本很多，但賺的卻更多，所以看深一點，公司到底是盲目擴張，還是有目標有計畫的建立sustainable moats，後者是可以帶給投資人超乎想像的價值的，看到儒鴻是個例子，台積電也是個例子。

檢討錯誤-COH: A Company with A Declining Moat in A Competitive Industry

很久沒有update了，找到新工作，所以忙了一點，也偷懶一點，但看到有人回信給我，知道自己不能偷懶，也不能忘記初衷。

有很多新想法，但我想先檢討一下錯誤，檢討錯誤是很重要的，錯誤是寶藏，我也犯過很多錯誤，但唯有認真檢討才是打開寶藏的鑰匙，這邊引用一下Charlie Munger的名言：Tell me where I'm going to die, that is, so I don't go there.

現在要檢討的錯誤是我之前推薦過的COH，或許現在要說錯才太早，但我覺得應該八九不離十。COH曾經讓我賺很多，但後來因為2013Q2業績不如預期，股價大幅下滑，賺的幅度變小，儘管沒有虧錢，但我認為這也是一種錯誤，僅管買進價格夠低不至於虧錢，但在整個投資想法上出現了很大的瑕疵。

當初會買進COH是因為他過往的紀錄超級好，ROIC非常高，也有品牌能力，加上價值吸引人，所以在50元附近買進。經過一番的研究之後，了解COH所遇到的困境：美國市場因為KORS以及其他興起的業者，侵蝕掉COH的市佔率，雖然COH有很優秀的CEO，但無法改變這個頹勢。

過往的紀錄好，儘管表示公司有一定的競爭力，但如果公司的Moat是往下走，這就是個危險的投資，ROIC高表示產業很不錯，所以會有很多競爭者想要進入，這時候關鍵就在於公司的Moat是否sustainable。COH的問題在於公司在產業的浪頭上，而且又是平價奢侈風的領先者，所以ROIC高，但經過實地訪查以及果果的見解之後，發現COH的設計其實沒有獨特性，也沒有質感，久而久之消費者認清之後，就會轉向有質感的皮包，也就是說，儘管COH的ROIC高，但他卻無法產生消費者的忠誠度。其實這狀況跟宏達電一樣，兩家公司同樣都是在競爭激烈，進入門檻低的產業，而競爭力不夠穩固。

體認到這一點，要做的正確事情是要賣出公司，特別是當股價大漲的時候，而自己還是被自己的Bias所牽動，也就是：有部位就認為自己是對的，唯有保持客觀理性的態度，才不會受傷。

另外，要學會去分辨什麼是真正持久的競爭力，什麼是Surfer，Surfer不一定不好，好的Surfer可以賺很多，但要懂得何時下車，真正的原點還是在公司的競爭力。

Disclosure: COH賣掉囉

註：有興趣的可以去Download這個報告，

MEASURING THE MOAT

這個csinvesting是很棒的價值投資blog，裡面有很多豐富的資源，可以follow一下。

魔球2.0 - The Rays' Way

魔球算是過去二十年在美國大聯盟最流行的經營概念，不僅僅對棒球界，也對企業經營帶來新的想法，不過在過去八年，有一個新的概念興起，就是The Ray's Way，中文還沒有名稱，就暫時稱做為"光芒道"，或是魔球2.0(不是野球太保那種)。

這個新概念，其實是由坦帕灣光芒隊所發展出來的，而這個啟源其實跟投資也有關係，因為這是由光芒的老闆與GM所推展，而這兩位人物，都是投資銀行出身的人，老闆Stuart Sternberg是高盛的合夥人，而GM是Andrew Friedman，做私募基金出身的。

金融業出身的人當大聯盟球隊的老闆不是頭一回發生，像紅襪的老闆John Henry是避險基金經理人，David Einhorn是紐約大都會的少數股東。而光芒隊之所以會這麼紅，是因為光芒隊創造了跟運動家隊同樣的魔球奇蹟。

熟悉美國大聯盟的球迷都知道運動家的魔球，就是以統計數據客服小市場球隊財力不足的難題，透過計量分析來創造球隊的長期競爭力，而運動家的魔球也推動了sabermetrics的興起。而光芒隊所做的其實也差不多，球團也運用了計量分析，不但如此，還有一個新概念，就是The Extra 2%的概念，他們認為，勝負基本上是50-50的機率，但如果你可以找方法多個2%，長期來說，你的結果就大大不同，其實這個觀念也跟價值投資的觀念差不多。

有興趣的人，可以去看The Extra 2%這本書(剛好台北市圖書館又有)，這是一本非常棒的書，有些價值投資人也推薦看這本書。內容介紹光芒隊在新管理階層接手後，在薪資有限的情況下，如何從一支萬年爛隊，變成過去五年平均勝場數91.6場的強隊。方式跟運動家隊差不多，就是依靠選秀，培養年輕球員，簽別的球隊所忽略的球員，以及利用新老闆在投資銀行的方法做球隊的交易。而除了提到提升球隊競爭力之外，還有提到如何讓球迷回到球場的過程。

而在最近運動畫刊，就有光芒隊的專題報導，裡面也有Extra 2%的觀念，例如一般觀念都認為第一個好球數要搶到，但光芒隊卻是以2好1壞來作為球數領先的條件，在去年他們在2好1壞出現的比例是大聯盟第一。

另外，還有介紹光芒隊培訓投手的方法，特別是他們培養投手的系統跟制度；熟悉棒球的人都知道，投手是棒球運動最重要的一環，在我過去看大聯盟的歷史，過去20多年只有多倫多藍鳥隊1992-93是靠打擊奪冠的，其它冠軍球隊的投手陣容都是當年度數一數二，不管是牛棚或是先發。

光芒隊的老闆體悟到這一點，但礙於球團Budget有限，無法簽下超級投手，所以他們就想辦法去培養自己的投手，最重要的是，他們在培養年輕投手不躁進。有些球隊為了戰績考量，常會把年輕有潛力的投手提前推上大聯盟，因而造成這些投手提早受傷，或是還不夠成熟，無法如預期的達到該有的潛力。但光芒隊不一樣，對於年輕投手，一進去先強化身體，手臂以及肩膀，並規定年輕投手一年只打一的層級，什麼球種不能投，像所有年輕投手一開始都不准投cutter，而投球局數跟投球數都逐步增加。

這樣做的目的，主要有兩個，一個是耐用度高，報導指出，在大聯盟要得到冠軍的一個指標，是隊中有四名投手上場先發30場以上，過去五的球季只有15支球隊達成過，其中12支球隊進季後賽，而過去五年的世界大賽冠軍，都有四名投手先發30場以上，而光芒隊也是其中一隊；其次是即戰力，光芒隊的投手不但耐用，且年輕，而且成熟度高，看一下他們去年先發投手的情況就知道。

	Age	W	ERA	GS	IP	H	SO	WHIP	SO/9	SO/BB
James Shields	30	15	3.52	33	227.2	208	223	1.168	8.8	3.84
David Price	26	20	2.56	31	211	173	205	1.1	8.7	3.47
Matt Moore	23	11	3.81	31	177.1	158	175	1.348	8.9	2.16
Jeremy Hellickson	25	10	3.1	31	177	163	124	1.254	6.3	2.1
Alex Cobb	24	11	4.03	23	136.1	130	106	1.247	7	2.65

我覺得光芒隊的成功，主要在於他們的觀念正確，管理階層知道自己沒有錢留下或簽下明星球員，能靠的就是年輕球員，所以他們最核心的理念，就是一定要培養一群年輕投手，可以不斷的補充投手的流失，而且這些年輕投手一上大聯盟，就一定要是即戰力，這種觀念造就了他們過去五年的成功。

光芒隊的成功，不是偶然，而是他們管理階層願意接受事實，但不是跟事實妥協，而是找方法取得競爭優勢，不斷的改善過程，專注於過程的完美，成功就是這樣來的。

張忠謀反指標效應

上一篇關於台股短期的看法，看起來是蠻幸運的，短線上台股真如預期反彈，可惜上禮拜五自己的操作出的太早，少賺了許多，但投資本來就是這樣，調適好心情就好，而且也只是短線的看法，最終還是要回歸趨勢。

禮拜五台股的強勢，主要是拜台積電所賜，難得一件的台積電漲停板，似乎為台股帶來一絲陽光，但背後卻可能烏雲罩頂，原因也是台積電，而且是我們的半導體教父。

如果有在follow張忠謀的人，大概會知道他所說的景氣方向，會跟股市是反方向，也就是反指標，而在東森57台之前也有談論過這個情況，我也觀察個幾次，的確是有這個狀況，但為了印證，這邊就想蒐集個資料庫，來作為比較正確的判讀，也可以拿來印證。

先說這次的結論，4/18那天，張忠謀說：最好的一年來臨，這是看多的觀點，以過去幾次的經驗，股市會有一個下跌的波段，所以，手中有部位的，應該要找時間點賣出了。接下來就看一下過去的記錄，這記錄可能不完全，時間也有限，未來會再陸續蒐集。

就過去四年的例子來看，張忠謀的言論對股市而言，等於是很有效的反指標，看多三次，三次中有兩次是往下，一次等於持平，而看空六次，股市只有一次往下走，其他都是往上，很有效。

不過還是要注意，資料數不多，還需要再補充多一點，所以未來會有新的update，這樣可以對張忠謀講的話做比較正確的判讀。但就目前來看，因為張忠謀而在禮拜五跳進去的人要小心，以他在上禮拜四的言論，我會選擇站在賣方。

當然這種指標不是只有張忠謀這樣，這邊也不是要貶低張忠謀，我非常尊敬張忠謀，他對台灣的貢獻絕對很多，沒有台積電，我想台股會更爛，而沒有人預測景氣是準的，郭台銘也有同樣狀況，去年七月Bill Gross說股市已死，結果美股創歷史新高，所以預測都是以不準居多，這次我們也可以看看張忠謀效應是否存在。

Coach (COH): A great business which you should look into

I am not a fashionable guy and never follow luxury brands. But I know Coach is an affordable brand. So when Coach's stock is suffering, it arose my attention.

Summary:
Coach (COH) is a fashion-goods company with a long history. In the past decade, COH increased its EPS 31% per year thanks to its presence in Asia. Even with this high growth rate, COH employed little capital and continues to return excess capital to shareholders. Its management is respectful and leads to the success in Asia. The company has suffered from economic headwinds in 2012 and emerging threat from Michael Kors, another fashion-goods company which offers the same products as Coach. Economy is improving this year and Michael Kors is not a threat which Coach is unable to handle. At current price, Mr. Market is thinking moderate to low growth for Coach and ignoring its expansion in Asia. 6% earnings yield and increasing payout will offer good return to shareholders.

Investment Rationale:

I think many people are familiar with Coach so I won't take too much space to talk its history and business. In a nutshell, Coach is an well-established brand. It has a long history, founded in 1941, and clearly a leader in handbags and fine accessories. Handbag is its major product, accounting for 65% of its net sales. But right now, it is transforming itself into a lifestyle brand, not just a handbag brand, by broadening its product offering into outerwear, shoes, jewelry, watches, eye wear, and fragrance. 

Coach is aggressively expanding into international markets. Coach is famous in Asia. Its international business grew from 9% of net sales in FY 2000 to 31% in FY 2012, a CAGR of 32.7%. Even in Japan, a country of lost decade, Coach is able to grow 32.7%. Coach is expanding fast in China, where its store number increases to 96 in FY 2012 from 5 in FY 2005. All these meet its strategic initiative, aggressively growing international business. Coach carries out a multichannel strategy, including retail stores, factory stores, wholesalers and internet. 89% of its net sales is from retail and factory stores.

Due to its international expansion, annual revenue growth over the past 10 years is around 20.8%. CAGR in the past five years is 12.8%, slowing but still quite high number considering the period includes the Great Recession. Thanks to China, Coach was able to make a small gain in 2009. 

Usually, high-growth companies require lots of capital and sacrifice their margin to fuel their growth. Coach's operating margin indeed is declining, from an pre-crisis average of 36.7% to an post-crisis average of 31.3%. But Coach requires little incremental capital. Its employed capital only increases by 18% in the past five years while its earnings is up by 56.5%. Its CAPEX need is low so Coach can retain a lot of cash flow. What Coach has earned has become its free cash flow. And Coach distributed these huge cash flow to its shareholders. 

	Net Income	FCF	DVD	Repurchase	Total Payout
2002	85.8	51.9	0.0	9.8	9.8
2003	146.6	164.5	0.0	49.9	49.9
2004	261.7	381.0	0.0	55.0	55.0
2005	388.7	221.3	0.0	265.0	265.0
2006	494.3	462.9	0.0	600.3	600.3
2007	663.7	638.4	0.0	150.0	150.0
2008	783.1	748.7	0.0	1,336.6	1,336.6
2009	623.4	568.9	0.0	453.8	453.8
2010	734.9	908.6	94.3	1,150.0	1,244.3
2011	880.8	885.6	178.1	1,098.0	1,276.1
2012	1,038.9	984.2	260.3	700.0	960.3
Total	6,101.9	6,016.0	532.7	5,868.4	6,401.1

In addition, Coach can turn over its cash very quickly. Though Coach's turnover of inventory is long, it essentially receives cash much faster than it pays. Furthermore, its turnover of inventory is getting faster.  Thus, with high margin, returning cash to shareholders and efficient asset turnover, Coach has been enjoyed high return on capital employed. Its ROCE is average 41% in the past 10 years and ROE is also 40% as Coach has a negligible amount of debt. 

	Receivable days	Inventory days	Payable days	Cash conversion cycle
2002	13.1	209.5	34.8	187.8
2003	12.7	208.2	38.9	182.0
2004	12.6	193.6	45.2	161.0
2005	12.9	184.5	58.5	138.9
2006	12.9	187.2	64.8	135.3
2007	13.4	188.3	67.9	133.8
2008	12.3	172.7	66.2	118.8
2009	12.2	156.2	55.3	113.1
2010	11.0	148.5	44.9	114.6
2011	11.1	141.9	40.5	112.4
2012	12.2	145.2	43.0	114.4

All these indicate that Coach has a moat and is a typical company favored by Warren Buffett, requiring little capital to grow its business. Its moat comes from its branding power, which attracts loyal customers. 

In addition to strong business, Coach has a stable and competitive management team. Its CEO, Lew Frankfort, is a veteran. He joined Coach in 1979 and was named Chairman and CEO in 1995. So Coach's international success is pretty much directed by Lew Frankfort. He was recognized as one of the 30 most respected CEO globally by Barron's from 2005-2008, and 2012.  Reed Krakoff is Coach's executive creative officer, an important position in a fashion company. He has served as the role since 1996 and worked for several design houses.

However, the stability of management may face challenge next year as Lew Frankfort will step down as CEO. He will remain the post of executive chairman. Fortunately, a seven-year veteran in Coach, Victor Luis, will become the next CEO. I believe that the company's strategy will not change dramatically under Luis as he is credited for international expansion for the past seven years. He led the success plan in Asian markets.  Nonetheless, the transition of CEO is still a risk to be taken into account.

With competitive business, strong brand and credible and stable leadership, Coach is definitely a great company. But the stock price has been declining since 1Q 2012, which may offer a good price for a great company. However, I still have to see what has happened in Coach and whether the problems are structural or temporary.

Its top-line growth reached peak in Q1 CY2012, and since then dropped from double digits to single digit in Q4 CY2012 at only 3.8%. 3.8% is the worst number since the Great Recession. The downtrend is primarily due to its declining comp. store sales growth in North America. In the latest quarter, Coach recorded a negative SSS growth of -2.2%. The sliding sales led to the anemic earnings growth, 4.2% and 5.4% in previous two quarters, respectively.

In the latest earnings call, the company blamed the disappointment for the macro headwind caused by fiscal cliff and Hurricane Sandy, and intensified competition in women's handbag. Is the company's reasoning justified?

Historically, fashionable companies can somehow defy economic headwind as they have brand power. Consumers interested in luxury goods are also more affluent. Comparing Coach's peer performance can tell us whether Coach is especially weak last year.  The selected peers are based on COH's proxy statement.

Comparable store sales YoY%

Apparently, COH's peers had been through some slowdown in the fourth quarter. A few companies recorded positive same store sales, like GPS, LTD. AEO and ANF saw sharp slowdown. But for high-end luxury brands, like TIF and GES, SSS was negative.  

However, we have seen an upstart, Michael Kors. And there's no secret that Michael Kors is seen as the biggest threat to Coach. Both companies offer nearly the same products. Prices are also alike. And right now, Michael Kors is gaining Coach's market. Women are talking about Michael Kors is selling the hottest handbags and Coach is losing its design edge.

Michael Kors is definitely the threat to Coach. But is it the threat that Coach can not deal with? I don't think so. Even if in North America, Coach is losing its customers to Michael Kors. I think this is normal for a emerging player in the market. And don't forget that Coach has also been hot before. With branding power, Coach has some customer base. Furthermore, Coach has a much higher brand awareness and footage in Asia. Coach is an established brand in Asia while Michael Kors is still in the early stage. Coach is still growing in emerging markets, where people's purchasing power is expected to grow further.

When I start to study COH, it traded at around 13x TTM EPS and 11.5x Fwd EPS. On 4/10, COH jumped 2.57% to 51.21, a fairly-valued price. This price is not depressed price. But you pay a fair price for a company with established brand, competitive management, friendly-to-shareholders policy, and expanding emerging-market business. This is not a bad deal and lower price will make me more excited to buy.

Disclosure: I am holding the long position of COH and will buy more if the price goes lower.

北韓與禽流感入侵台灣？

昨天台股重挫，雖然說是因為補跌，但補跌的跌幅似乎多了一點，感覺像是北韓進攻台灣，還有大陸禽流感傳到台灣，不過實際上如果真是如此，應該是每天都無量跌停。

但實際上，我實在是不懂為何台股要如此恐慌？而冷靜一點想，現在的下跌反而是短線做多的機會，或許禽流感是個不確定性，兩韓戰爭其實對股市是利多，怎麼說呢？

簡單說，就打與不打的問題，如果兩韓開打，以歷史經驗，凡是戰爭開打，股市往後都是往上居多，所以開打對股市是利多，如果不打，不用講，一定是利多。

而回歸到會不會打的問題，基本上，我是覺得不會打，因為北韓的既定模式就是這樣，吵一吵之後就沒事了，而畢竟新官上任三把火，為了鞏固政權，北韓新領袖想要大吵一下也是可想而知，但除非他是真的失心瘋，要不然真的打了，對他也只是兩敗俱傷，自己的政權也會沒有，看看伊拉克的例子就知道了，所以如果他老爸有提醒過他的話，他應該知道該放手的時候就要放手，但他是不是比他老爸還瘋狂，這就很難說了。

所以台股跌成這樣，實在是過度恐慌，沒有道理可言，不管怎樣都是利多，就算開打了，重創南韓經濟，而將南韓是為貿易與企業競爭對手的台灣，也是利多，怕被飛彈射到，看看日本比台灣更接近韓國，跌幅也沒那麼慘，所以，台股這樣慘，投資人應該趁機會去撿便宜，也可以買一下韓國的ETF。

不過這也不是說台股就一路長紅，只是屬於短線的看法，也順便紀錄一下，未來回頭再來檢討看對不對。

Shining STARZ (STRZA)

以後推薦美股，會以英文來寫，主要是希望有更多的人可以一起來討論，至於台灣的朋友，做美股的話，英文也應該看很多，我寫的英文也蠻台式，所以就從這一篇開始吧。

Today I will show a good value play, Starz (STRZA). 

Summary:
Starz is a provider of premium video programming, offering films and original programming. It has been owend by Liberty Media Corporation, John Malone's media investment holding company. LMC spun itself off and the parent becomes Starz. After spinoff, Starz becomes a small-cap company and institution investors may have to sell their shares due to their limitation of market capitalization size. Thus, Starz currently offers very attractive valuation, earnings yield of 9.4%, FCF yield of 10.4%, and EBIT/EV of 16%. And spin-offs can historically offer better return. Starz has stable and rising subscriber base. It is also equipped with strong balance sheet and cash flow. Though original production is still in infancy, its CEO, Chris Albrecht has a lot of successful experiences in original programming and HBO. John Malone's track records and potential M&A target are also a plus.


Investment Rationale:
Prior to 2013, Starz is owned by Liberty Media Corporation, whose chairman is the well-known media dealmaker, John Malone. Starz is not really being spun off, which is a tricky part. During August 2012, Liberty Media decided to spin off Liberty Spinco, whose major business is the Old Liberty Media not associated with Star LLC. So, in reality, the original parent company, Liberty Media Corporation, changed its name to Starz, and the new Liberty Media (LMCA) became another separate public company. This spin-off finished on January 11, 2013. 

To be honest, I don't know why Liberty Media spins itself off, not spin off Starz. Maybe it's about law or tax. So if anyone has any insight of this, I would very much like to hear.

Ok, this is the spin-off. Usually, spinoff creates a very good value play as institutional investors with market cap limit needs to sell the smaller spinoff. And more focused structure and strategies create higher value. But what about the company?

Starz is a provider of premium video programming. According to it 10K, Starz provides premium subscription video programming to U.S. MVPDs (Multichannel video programming distributor), including cable operators (such as Comcast and Time Warner Cable) , satellite television providers (such as DIRECTV and Dish Networks) and telecommunications companies (such as AT&T and Verizon). In addition to acquiring content from other media companies, Starz also produces its own original programming.

There are three business segments, Starz Networks, Starz Distribution, and Starz Animation. Starz Networks accounts for the largest proportion of business, 78% of sales in FY 2012. Starz Networks offers premium subscription video programming. Its generates revenue from distributors. People who subscribe Starz pay a fixed monthly fee to distributors, which then pay Starz based on the rate stipulated in the agreement. The agreements with distributors are generally multi-year ones and Starz can raise the rate based on  CPI. So its revenue is stable, visible, and immune to inflation. Starz Networks are commercial-free.

Starz Networks offer three channels: Starz, Encore and MoviePlex. Offered contents include recently released and library films, along with original series. Starz has exclusive long-term agreements for films theatrically released with Sony (through 2021) and Disney (through 2015). It also has long-term agreements for older films with other major studios. Its original series include Spartacus and The Boss. Target group is those aged 25-54 with income of 50,000+ annually. 

Starz's financial number is not fancy but stable. Top line grows only 3.6% annually from 2008 to 2012. But thanks to its stable programming costs, Starz is able to grow its operating income and bottom line. Its operating margin is quite satisfactory at around 25% for the past two years.

Number in thousands

Starz does not need a lot of capital to maintain its business as its programming and production can be paid by its operating activities. Basically, Starz is a cash cow. Its operating cash flow has exceeded net income. It has a debt of 540 million. Starz has a very good balance sheet. Based on its net income, it can pay off its debt within 2-3 years. Even if considering Starz still has to distribute a special dividend of 1.2 billion to New Liberty Media in 2013, Starz has sufficient ability to pay off this with its large cash of 749 million and ability to borrow. Furthermore, Starz has mentioned in its 10K that it intends to use its cash to buy back shares.  

Based on its current number of outstanding shares, 120.2 million, Starz's earnings per share is 2.1 and FCF per share 2.3. Hence, based on its current price, Starz has a earnings yield of 9.4% and FCF yield of 10.4%. Turning out, Starz traded at only 10.54 times its 2012 EPS. On the other hand, its EBIT is 405 million while its enterprise value is 2,450 million. Its EBIT/EV is 16%. With stable business, visible revenue stream, strong cash flow, I believe Starz can make a satisfactory return at this price.

After looking at its financial numbers, let's turn to its management. Starz is currently led by Chris Albrecht, well-known in media industry. Albrecht joined Starz in 2010. He was the former chairman and CEO of HBO and worked for over 20 years. He is the man who transformed HBO and television landscape. HBO used to focus on movies. During his tenure in HBO, he has created several successful original series, including "Sex and the City," "The Sopranos," "Six Feet Under," "Deadwood," "Band of Brothers," “Curb Your Enthusiasm” and "Entourage." He is credited for the rising HBO. Right now, under his leadership, Starz has also developed many original series and is following the path of HBO.

Since Starz is following HBO's path, how is Starz compared to its competitors? In addition to HBO, Starz also compete with Showtime, owned by CBS. All of them offer premium TV and have the same business model. Business of Showtime and Starz is only in United States. Only HBO is aggressively expanding into other markets. In US, Showtime has the most number of subscribers, 76 million, followed by Starz, 56 million. HBO has 41 million subscribers in US but 73 million in other countries. Showtime is the clear leader in premium subscription service while Starz is trying to catch up.

	2012	2011	2010	2009	2008
Starz	56.0	52.8	51.0	47.5	49.4
YoY	3.2	1.8	3.5	-1.9
HBO US	41.0	39.5	39.4	41.0	40.9
YoY	1.5	0.1	-1.6	0.1
Showtime	76.0	73.0	67.1	61.3	58.7
YoY	3.0	5.9	5.8	2.6

As for the contents, there is not too much difference in film offerings, I believe, as all three networks sign output agreement with major studios. However, only Starz has no sports and boxing events broadcasting. And Starz's original series are still in infancy. Looking at the following table for currently or previously running original series:

Starz is still weak on original production. There are no hits yet and the number of production is much smaller than HBO and Showtime. The number of average viewers of Spartacus, so far the most successful series produced by Starz, can not be compared to like Game of Thrones, True Blood, Homeland, etc. This is not to say, however, that Starz is unable to produce top series. It needs talents, time and experiences. And don't forget that Starz has Chris Albrecht. You can not rule out that Staz will produce a hit like Game of Thrones.

Turning to valuation, as HBO and Showtime are owned by media conglomerates, it is hard to compare them to Starz, the only independent premium program service. Compared to other cable networks is still useful. 

Clearly, Starz is cheap compared to Discovery, another John Malone's spinoff, and AMCX. Starz is even cheaper than the owners of HBO and Showtime. And it is reasonable to assume that HBO and Showtime should be traded at higher premium than their parents. Starz's business is not deteriorating and subscribers are increasing. Its balance sheet and cash flow are strong. This kind of valuation is attractive.  

Furthermore, as mentioned, Starz is the currently only independent premium programming service provider. It is a potential target for large media conglomerates which would like to take a slice in premium programming. And this may be the reason why John Malone makes this spinoff.

Risks are the unproven production capability and the loss of subscribers. Currently, Starz still has stable and rising subscriber bases as it offers a competitive price with Showtime. However, if Starz can not produce more top series, it still runs the risk of losing subscribers. But with  Chris Albrecht under the helm and the mild success of Spartacus, Starz should be able to gain more ground. And its price offers plenty margin of safety.

Disclosure: I hold the long position of STRZA.

David Einhorn--獨樹一格的價值型投資人+德州撲克高手

繼之前介紹過Bill Ackman之後，今天就來介紹另一位價值型投資人，David Einhorn，正好在本期的今周刊裡面友介紹到這位David Einhorn，並稱他為華爾街的空頭總司令，我想這一點絕對需要澄清。

在他的投資生涯中，一直都是"淨多頭"的投資部位，儘管他跟其他避險基金經理人一樣，都有放空部位，但他不是純放空的投資人，只不過令他聲名大噪的，都是他放空的calls，而不是作多的calls，其實他分享很多做多的標的，稱他空頭總司令只是媒體渲染，各位不要誤會他是像麥嘉華或是盧比尼那種一看空的人。避險基金有這種只放空的經理人，但David Einhorn 絕對不是。

也因為如此，美國媒體發明了一個形容詞，就是Einhorned，每當他提到他看不好某一檔公司時，華爾街就會說這家公司被Einhorned，像去年他就看空CMG，華爾街日報就講出這個形容詞，不過CMG沒有如他所說的往下跌，所以跟其他投資人一樣，他還是會看錯的，而且也不少。

David Einhorn實際上是個價值型投資人，但卻是有點自成一格的，這可以從他的投資哲學看到：

Our research process reverses the analytical framework that most traditional value investors use. Many value investors determine whether a security is cheap. If it is, they seek to determine whether it is cheap for a good reason. A typical process to identify opportunities is through computer screens that identify statistical cheapness, such as low multiples of earnings, sales or book value combined with rising earnings estimates. Then, they evaluate the identified companies as possible investments.

We start by asking why a security is likely to be misvalued in the market. Once we have a theory, we analyze the security to determine if it is, in fact, cheap or overvalued. In order to invest, we need to understand why the opportunity exists. (*Why is the security studied misvalued? What contributed to this misevaluation? What has happened?)

老實說，我也不太懂他這個研究過程是怎樣進行的，但是要注意的是，David Einhorn是以misvalued 來看待一家公司，而不是只有undervalued，所以他會作多跟作空。

在有名之前，David Einhorn的經歷並不算顯赫，雖然是康乃爾大學畢業，但他不是一開始就要從是投資相關的工作，而他的工作經驗也不是在那種大型的華爾街公司上班，畢業後第一份工作是在Donaldson, Lufkin and Jenrette 做分析師的工作，做了兩年他覺得好累，每天過著7-11的工作時數，做的很不快樂，之後離職就到了一家小的避險基金公司Siegler and Collery上班(由此可見，想要成功，不需要在大公司上班)。

在這家Siegler and Collery上班，是Daivd Einhorn投資生涯中的啟發點，他在這家公司學到了價值投資的方法，他提過說最重要的是學到下列三樣東西：


- To understand the nature of the business,
- The economics of the business compared to reported earnings,
- Are the managements’ decisions aligned with shareholder interests?

未來在他創立Greenlight Capital之後，他都是以這三種原則作為他研究公司的主軸，我認為投資人在研究公司的時候，可以把這三個原則記起來，當作是你的投資流程之一。

當然，這三個原則看起來簡單，但做起來要花非常大量的時間跟精神去閱讀文件，投資人不要以為這邊閱讀文件是看券商報告，以David Einhorn所描述的以及他所做過的公司報告來看，他所閱讀的文件跟巴菲特差不多，都是公司的SEC filing，與財務報表，僅此而已，但重點就在於你有沒有讀的很詳細，David Einhorn的優點就在於，他很用功，當他對一家公司有興趣時，他會把該公司幾乎所有的filings讀過一次，去找他所需要的答案，為什麼他要這麼的用功呢？他自己有說過：

The market is an impersonal place. When we buy something, we generally do not know who is selling. It would be foolish to assume that our counterparty is uninformed or unsophisticated. In most circumstances, today’s seller has followed the situation longer and more closely than we have, has previously been a buyer, and has now changed his mind to become a seller. Even worse, the counterparty could be a company insider or an informed industry player working at a key supplier, customer or competitors. Some investors believe they have an advantage trafficking in stocks that have minimal analyst coverage. We need to have a better grasp on the situation than the counterparty does.

也就是說，他是要全然的了解一家公司之後，他才會出手，不是一知半解那種，投資人可以看他對於Green Mountain Coffee Roaster (GMCR)所做的presentation，就知道他的用功程度。

GMCR的報告可說是經典，跟Bill Ackman對賀寶芙做的報告是一樣的，我相信投資人都可以從這份報告學到很多研究公司的細節，而關於今周刊以"摜壓"的字眼來形容David Einhorn對GMCR所做的報告，這邊還是要幫他申冤一下，摜壓是以賣出大量持股賺取短期利潤，有點操弄股價的意思，但David Einhorn是放空，沒必要把價格越壓越低，第二，GMCR的放空部位，他持有了一年多也都沒回補，況且他是長期投資人，不在乎短期的利潤，他自己有說：

Greenlight believes the traditional investment horizon is too short because equities are long, if not indefinite-duration, assets. When we make an investment, we usually don’t have any idea how long we will be invested. If the downside of an opportunity is no short-term return or “dead money,” we can live with that. We are happy to hold for more than a year before succeeding. The trick is to avoid losers. Losers are terrible because it takes a success to offset them just to get back to even. We strive to preserve capital on each investment.

這是非常正確的投資觀念，也與巴菲特的投資原則一樣，避免虧損，投資人可以記起來。

當然，在他發表對雷曼兄弟的看法之後，他的影響力也變大，任何他說的話，都會對個股造成很大的影響，他在Herbalife的Concall上只問了三個問題，就HLF的股價瞬間大跌，也讓它股價從此一蹶不振，他偶然提到GM，結果GM也是馬上重挫，後來才發現他其實是看好GM，之後馬上就反彈。這些例子都顯示了他的影響力，但並沒有證據他是會操弄股價的投資人。

而他也會看錯，之前DELL看錯，讓他認賠出場，去年看空AMZN跟CMG，結果股價都往上走，對蘋果的看法目前看起來也還沒成真，所以他還是人，不是神，任何人都會犯錯，但他也是強調margin of safety，來彌補他犯的錯誤:

Our goal is to make money, or at least to preserve capital on every investment. This means securities should be sufficiently mispriced, so that if we are right, we will do well, but if we are mostly wrong, we will roughly break even. Obviously, if we are massively wrong, we will lose money.

以上就是David Einhorn的介紹，有興趣進一步研究他的投資人，可以透過網路去找關於他的訊息，另外，也可以看他自己寫的一本書，Fooling Some of the People All of the Time，這本書是寫他在20世紀末期作空Allied Capital的過程，重要的是他前面幾章，介紹他的生平與投資觀念，非常重要，後面的內容非常的技術性跟艱深，但可以知道他所花的功夫，有興趣的人可以到台北市總圖去借，沒想到圖書館有這一本。

最後，不管是巴菲特，還是Bill Ackman以及 David Einhorn，我們都可以學到，成功的投資人會做以下的事情：

1. 集中投資
2. 深度研究
3. 價值導向

順帶一提，David Einhorn是德州撲克高手，巴菲特是橋牌高手，想成為成功的投資人，可以去學一下撲克技巧囉。

價值投資的好幫手-LEAPS

之前有提到過DELL，我在買了之後，一月份就宣布會被買下市，LBO的訂價是13.65，這個價格遠比我認為的價格低很多，之後不但大股東Southeastern 反對，連著名的投資人Carl Icahn也來攪局，這傢伙是有名的Active Investor，二月份還跟Bill Ackman在CNBC Live的節目吵了三十分鐘，非常經典。

Carl Icahn買進了他自稱是"substantial"的DELL股票後，就馬上寫信給董事會，很巧的，兩位外部大股東算出的價格是22~24，不知是否串通好。

現在看來，Dell的下市案應該是告吹了，而以兩位大股東的估計來看，還有蠻大一塊肉存在，基本上，Dell是有低估的情況。

當然，萬一所有人都亂搞，股價要跌回10元以下也是有可能，如果以14元買進，漲到目標價22元，是賺8元，如果亂搞跌到10元，賠了4元，1:2的Risk/Reward只能說一般。

在這種情況下，有一個工具，可以加大報酬率，且可以減少損失，這工具叫LEAPS。LEAPS的英文是Long-Term Equity Anticipation Securities，不要這名詞所搞混了，簡單講，就是長天期價內的買權，如此而已。

LEAPS就是要你去買一檔個股的最長天期的選擇權，以個股來說，最長天期的是兩年後一月到期的契約，所以假如我要做Dell的LEAPS，就是去買2015年1月到期的買權。接下來我們看一下LEAPS是如何運作。

在Dell的情況下，我們已知了兩個價格，一個是LBO的價格13.65，一個是兩大股東算出的價格，我們就訂在22，我自己的估價也差不多是在22。另外，3/18日Dell股價為14.17，兩年後到期，Strike price是12元的的買權價格為2.5。

我們買進LEAPS之後，如果Dell是依照大股東的要求，漲到22元，那我們到期後執行的獲利就是7.5(22-12-2.5)，如果是LBO，基本上應該是虧損，因為很快就到期了，所以是虧了2.5，如果都亂搞，LEAPS最多就只有虧2.5。這樣來看，我們的風險報酬比是1:3(2.5:7.5)，比買現股還要高，而且不要忘了，如果DELL一直跌，現股遭逢的損失更多，但LEAPS就是2.5元的虧損。

另外，LEAPS也可以看成是一種leverage，怎麼說呢？買進履約價12元的買權，就等於是12元都是借來的，而權利金2.5就是你所付出的利息，年利率約是10.4%((2.5/12)/2)，似乎高了點，但是不用還本金。所以基本上LEAPS就是借錢買股票，而且是有下檔風險保護的。

當然LEAPS這麼多好處，就乾脆所有錢都來買LEAPS，不過別忘了，LEAPS還是Leverage，看錯了損失還是很大，因此，最好還是不要占總部位太多，而且當你要買LEAPS的時候，你要很有把為你所算出來的價值是對的，接下來就是讓LEAPS來幫你加大獲利。

對LEAPS有興趣的人，可以去參考Joel Greenblatt的書，You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits，這是一本非常好的書，很多避險經理人都推薦必看，可惜沒中文版，有機會再跟大家分享。

究竟是貪汙誤國還是無能誤國

在各國股市追求新高之際，台股還處於掙扎狀態，直到最近才有破8000的新高，但馬上又跌下來，令人失望。

過去12年，我們台灣很厲害，先選了一個貪污的總統，再選一個無能的總統，所以我們以及台股經歷了失落的12年。常有人爭辯到底是貪污不好，還是無能不好，我想台灣的過去12年提供了很好的案例說明，而一個國家的元首，等同於一家公司的CEO，儘管有再多的外在因素(高漲的石油，歐債風暴，美國金融危機，財政懸崖，颱風，地震，水災，車禍，酒駕....you name it)，公司好不好，CEO還是要負最大的責任，國家也是一樣，所以我用一些數字跟指標，來看一下到底是貪污好，還是無能好。

這次比較的指標如下：
實質GDP
就業人數
出口
通膨
台股

由於目前無能總統的任期還未結束，所以成長率會用年化的數字來與貪污總統來比較，另外，還會用同樣任期的圖來比較，同樣任期是4.5年.。

接下來我們就一個一個來看

1. 實質GDP

資料來源：主計處

註：貪污總統統計期間 2000Q3~2008Q2

        無能總統統計期間 2008Q3~2012Q4，2012Q4採用主計處預估值

實質GDP年化成長率：

貪污總統(8年)：4.03%

無能總統(4.5年)：2.61%

從實質GDP來看，兩位總統上任後都遇到景氣衰退，而後無能總統的反彈速度很快，受惠於開放大陸與全球經濟超乎預期的復甦力道，而貪污總統的成長速度是緩步往上。而在激情過後，無能總統開始發揮無能，GDP零成長，最後在同任期的時候，被貪污總統趕上去。

儘管無能總統還沒做完，但以GDP的表現來看，貪汙跟無能差不多，數字上貪污稍為好看一點，所以GDP：

貪汙勝

2. 就業人數

資料來源：主計處

註：貪污總統統計期間 2000/5~2008/4

        無能總統統計期間 2008/5~2013/1

就業人數的情況要恭喜無能總統，目前看起來表現不錯，創造的就業速度相對來說比較快，在第一任期總共創造了40.5萬個工作機會，平均一個月9.1K，相對於貪汙總統的創造26.2萬的工作，算是步錯的成績單。

在貪汙總統第二任期，總共創造了63.1萬個工作機會，平均一個月是1.3萬，等於是速度加快，而無能總統目前還不錯，速度也是加快的，每個月創造1.3萬。

以就業來看，無能總統的表現是優於貪污總統。

無能勝

3. 出口

出口總值

外銷訂單

資料來源：經濟部統計處

註：貪污總統統計期間 2000/5~2008/4

        無能總統統計期間 2008/5~2013/1

從兩個指標來看，出口在一開始都是遭遇到不景氣而滑落，但因為無能總統所遭遇的不景氣較深，反彈也比較大。而兩者在同樣任期的情況下，貪污總統表現比較好，甚至在第二任期，開始一飛衝天，而在無能總統的第二任期初期，卻還在停滯。再從每年的成長率來看：

出口

貪污總統：7.3%

無能總統：2.8%

外銷訂單

貪污總統：11.3%

無能總統：3.4%

貪污總統的成績要好很多，而且第二任期是關鍵，但已無能總統目前第二任期來看，要敢上貪污總統在出口上的成績單，不太樂觀

貪汙勝

4. 通膨

資料來源：主計處

註：貪污總統統計期間 2000/5~2008/4

        無能總統統計期間 2008/5~2013/1

通膨部分，基本上是越低越好，看得出來無能總統創造的通膨是要高於貪污總統，甚至以年增率來看，無能總統是1.08%，貪污總統是1.03%，很明顯的，貪污總統做的是比較好。

貪汙勝

5. 台股

台股看起來，似乎是無能總統在位期間表現比較好，但主要是因為第一任期上半段表現比較好，之後的表現不如一開始，似乎也是反映了經濟的狀況，以每年的報酬率來看，台股股民在兩位總統在位期間都很可憐，貪污總統是0.04%，無能總統還是負報酬，-2.22%，從股市來看，我想是不相上下的爛。

從以上五個指標來看，貪污阿扁總統以三勝一負一和領先無能馬總統，當然，因為任期還沒做完，馬總統還有機會頒平，可是實際上，目前為止展現出來的成績，不但沒有比阿扁總統好，反而還是落後，這種成績單，我想在民營企業早就要被fired了，真是符合無能，如果這樣走下去，無能就是馬總統的歷史定位之一，真要擺脫這個歷史定位，在未來的三年，真的要有很大的進展，目前來看，看不到希望，只能等哪天馬總統睡醒了開竅了，而以台灣過去的12年來看，你能說貪污比無能恐怖嗎？

以領養代替購買

好久沒寫部落格了，實在沒啥ideas，又再找新的投資標的，所已懶了一陣子，果然，前幾天被小果"善意的提醒"，現在就寫一篇無關投資的。

昨天小果剛好分享一篇九把刀的文章，十二夜的故事，生平知道九把刀這個人，但也只看過他的那一年我們一起追的女孩，再來就是這一篇十二夜，什麼是十二夜？就是流浪狗在收容所過了十二天就必須"解決掉"的意思。

看完這一篇後，很感動也很鼻酸，也是我生平第二次為"狗"而哭，第一次哭遠在我小學的時候，被一隻躺在路邊的家狗撲上前來而"嚇哭"，從那之後到去年為止，我看到狗的第一反應跟九把刀一樣，遠遠的跳開，不管是大狗還是小狗，只要接近我，我的自我防衛機制就會啟動，狗狗恐懼時會豎起尾巴，我沒有尾巴，所以只能豎起我全身的汗毛，能離多遠就多遠。

直到去年八月，我的怕狗人生才有大大的改變，全都是因為小白。

看到這隻狗，任誰都會想要認養，當初小果一直想要養狗，但去寵物店看了很多隻，也沒有真的下手買，但偶然的一天在建國花市遇到了小白，想都沒想的就登記排認養，結果一個月後，我就有一隻狗了!!!!!!!這算是我人生最大的驚喜。

這的很感謝上帝，我的第一隻狗個性很好，很活潑，看到其他狗它都會很熱情的跑過去打招呼，然後原地轉十圈，在快樂的跑開。

平時小白也不會亂叫，除了要出去之前會很快樂的叫兩聲，打針看醫生它都乖乖的，也不會哀嚎，平常最喜歡的，就是食物跟睡覺，最喜歡躺著睡覺。

當然，現在偶爾會亂吃垃圾桶的東西，也會被我飽以老拳，但一個小時後小白又會跟我抱抱。

就如同九把刀說的，小白在我們下班回來開門的時候，都是一直吐舌頭跟搖尾巴加上轉圈圈，似乎有一年沒看到我們，可是明明我們才離開幾個小時。

現在我還是不敢相信我面前有一直心臟會跳動的小狗，而現在的我居然也會跟其他的狗玩，而我現在也很難想像以後沒有小白的日子，養過狗之後才知道狗有多麼的可愛，小白真的改變我的一生。

言歸正傳，狗狗雖然也有很多麻煩，像清理大小便，散步等，而像小白可能未來有心臟病，現在有支氣管炎，鐵定是一大筆醫藥費，但狗狗帶給你的快樂，是無法想像的，而且就像布袋戲裡面的角色北狗說的，狗是忠誠的朋友。

想要養狗的人，盡量去認養，因為有很多狗搖著尾巴等你，運氣好的話，也會跟我們一樣遇到這麼棒的一隻狗，已經養狗的人，我們都要對狗狗負責，狗狗雖然不會講話，但它們的心絕對都是向著你的。

最後，我很幸運，遇到生命中最重要的人與狗，小果跟小白。

Undervalued的DELL

最近完成了一篇報告，算是學習Bill Ackman的方式去分析公司，當然還不到他那種功力，不過也是跨出第一步，而研究的公司，就是最近傳言要被買下市的Dell，有興趣的人可以去看一下。

這篇報告是在12月底開始弄的，而我自己也買進了DELL，但我是沒有預期到會有這種傳言，買進只是因為它是非常undervalued，所以要放比較長期的。

簡單說，DELL的評價很低估，儘管它的PC事業群業務衰退很快，但可以持續產生現金流，而現金可以拿來做購併，並開始要配發股利，而企業面那一塊發展的還不錯，去年雖然下半年企業的IT支出有顯縮減，但DELL的表現不輸給其他競爭對手，所以它是有undervalued的情況，至於買下市，就等著它怎麼發展了。

你該集中投資還是分散投資？

我想投資人常常會聽到基金公司或者報章媒體說，要分散投資(diversification)，才可以分散風險，所以要做好資產配置，區域配置，產業配置，其實這大部分都是銷售話術，因為你分配越多，就代表你買的基金產品越多，基金公司賺到的管理費也越多，最後連名字長到都記不起來的產品也買，風險沒有分散，反而產品很分散。

不過，這不代表分散投資不好，它有某些好處，如果可以投資一堆相關係數是零的資產，納就真的有風險分散的效用。我想投資人都會面對這個問題，到底要集中投資還是分散投資？我覺得這問題應該是結果，投資人應該要問的問題是：你一天可以有多少時間花在投資上面？而你願意花多少時間花在投資上面？

雖然巴菲特對於分散投資有以下的評論：

Any portfolio encompassing one hundred stocks (whether the manager is handling one thousand dollars one 

billion dollars) is not being operated logically. The addition of the one hundredth stock simply can't reduce 

the potential variance in portfolio performance sufficiently to compensate for the negative effect its inclusion 

has on the overall portfolio expectation.

但我覺得這兩種方法不是絕對的二分法，也沒有娜一個是絕對有效，有沒有效完全看投資人自己的屬性。

一天願意花六小時以上的主動型投資人(不管你的身分是甚麼，我相信一般非投資行業的上班族也可以拉出六小時在投資上，如果你真的喜歡投資的話)，那你就應該集中投資，好好研究符合你自己投資原則的標的，知道越多越好，且時常去思考巴菲特所說的：How much do I put in number one (ranked by expectation of relative performance) and how much do I put in number eight?
而不用去做甚麼diversification，這對於主動型的投資人只是一句口號。

而如果真的時間不多，或是只想讓自己的閒錢有增值的空間，但又不願意或是不喜歡花太多時間在投資上，但就真的要去分散投資，但投資產品自己還是要花功夫去了解，買菜的時候都會貨比三家，更何況是金額花費更大，風險也較高的投資呢？

巴菲特論資本報酬率

最近在重讀巴菲特的年報，看到1978年的年報中，有一段描述Berkshire的紡織業，雖然不多，但這些話可以學到某些判斷一家企業好壞的重要因素：

Earnings of $1.3 million in 1978, while much improved from 1977, still represent a low return on the $17 million of capital employed in this business. Textile plant and equipment are on the books for a very small fraction of what it would cost to replace such equipment today. And, despite the age of the equipment, much of it is functionally similar to new equipment being installed by the industry. But despite this bargain cost of fixed assets, capital turnover is relatively low reflecting required high investment levels in receivables and inventory compared to sales. Slow capital turnover, coupled with low profit margins on sales, inevitably produces inadequate returns on capital. Obvious approaches to improved profit margins involve differentiation of product, lowered manufacturing costs through more efficient equipment or better utilization of people, redirection toward fabrics enjoying stronger market trends, etc. Our management is diligent in pursuing such objectives. The problem, of course, is that our competitors are just asdiligently doing the same thing.

The textile industry illustrates in textbook style how producers of relatively undifferentiated goods in capital intensive businesses must earn inadequate returns except under conditions of tight supply or real shortage. As long as excess productive capacity exists, prices tend to reflect direct operating costs rather than capital employed. Such a supply-excess condition appears likely to prevail most of the time in the textile industry, and our expectations are for profits of relatively modest amounts in relation to capital.

這兩段我覺得有很重要的重點，是企業的資本運用，巴菲特很強調的衡量一家企業或是管理階層的好壞，是投入資本的報酬率，而非成長率的高低，在1977年的年報當中，他有說

Most companies define record earnings as a new high in earnings per share. Since businesses customarily add from year to year to their equity base, we find nothing particularly noteworthy in a management performance combining, say, a 10% increase in equity capital and a 5% increase in earnings per share. After all, even a totally dormant savings account will produce steadily rising interest earnings each year because of compounding.

通常ROI越高的企業，都會有獨特的競爭優勢，讓他們得以享有高的資本報酬率，而資本報酬率還可以細部的拆解，去理解一家企業他的資本運用強項到底在哪，在這邊巴菲特有提到這一點，而這觀念很像是杜邦公式。

企業的資本運用，主要會是資本支出，營運資本與購併活動，這也是巴菲特在capital turnover所提到的兩個重要項目，fixed asset以及investment in receivables and inventories，即使買進的固定成本低，但因為需要大幅花費在營運資本上，加上margin低，使得資本報酬率低，這也可以得知，資本報酬率，是由資本周轉率與margin所組成，而資本周轉率，主要是看固定資產與營運資本周轉率。

而一家企業，要提高它的資本報酬率，除了提高margin以及周轉率之外，另一個方法就是降低分母-資本，也就是多餘不用的資本，可以用發放股利或是share buyback的方式降低資本。

由以上，我們可以知道，margin高，不一定ROCI就高，margin跟周轉率高，也不代表ROCI高，因為你所花的資本可能也很多，或者是保留太多的資本在公司。

這邊我舉三家公司的例子來看，Apple，IBM以及Herbalife(HLF)，儘管HLF最近的議題，但他的財務數字真的很棒，所以我還是拿來做一下比較。

三家都是ROCI很高的公司，以過去五個年度平均來看，都超過25%：

AAPL: 29.48%

HLF: 41.12%

IBM: 30.86%

很意外的是，AAPL不是最高，而且是一直以來都是相對較低的，雖然它的Net margin是最高

AAPL: 21.2%

HLF: 9.9%

IBM: 13.2%

很意外的是，HLF margin最低，卻有最高的ROCI，在來我們看一下Asset turnover，可以稍微代表capital turnover

AAPL: 1.05

HLF: 2.23

IBM: 0.9

可以看出HLF想有較高的ROCI是在於他有高於兩倍以上的資本周轉率，而IBM很低，再來看一些資本周轉率的細項：

                                   Receivable     Inventory     Payable     Fixed Assets    Cash Cycle

AAPL                             10.29            107.94         4.45            15.73             -35.34

HLF                                36.03                2.98       11.29            16.31             100.25

IBM                                  3.62              19.41         6.55              7.04               64.01

HLF的應收周轉率特別高，這跟他的business model有關，而且固定資產的周轉率也高， 

最後的問題是，既然AAPL的margin跟資本周轉率都比IBM高，HLF雖然有最好的資本周轉率，但其margin是最低，簡單說，其實高margin，資本周轉率不低，現金轉換能力強的AAPL，營運能力很好，但為何ROCI卻是最低？問題就在於AAPL不給股利也不做buyback，這邊看一下total payout ratio，就是cash dividend加buyback，除以net income

AAPL: 1.7%

HLF: 79.6%

IBM: 125.3%

過去五年的資本成長率

AAPL: 756.9%

HLF: 42.8%

IBM: 17.7%

由此可見，AAPL持有太多的剩餘資本在帳面上了，也就是AAPL是unfriendly to shareholders，這也跟賈伯斯的主張有關，但實際上太多的現金拉低了AAPL的ROCI，而太多的現金目前來看沒有促成更多的創新，儘管其營運面是很好的，但卻對股東很不好。

而ROCI絕對高低只是其中的一面，其趨勢也很重要，持續往上是最好，至少也要維持在一定的水位，這就表示公司或是管理階層在資本運用跟企業營運上市有非常好的表現，像IBM這種的公司，也值得長期投資。