gwladysnight
Player Valuation: £10m
No they won't when they can get a sub 2% loan by borrowing against their assets. The higher your net worth the easier and cheaper it is to borrow money.
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No they won't when they can get a sub 2% loan by borrowing against their assets. The higher your net worth the easier and cheaper it is to borrow money.
catcherintherye
Player Valuation: £80m
You seem really angry here. Can I ask why? We are just having a civil conversation and I dont believe anyone has been rude to you?
To answer each point. I'm not sure I've ever referred to myself as a financial wizard. Can you point out to me where I have?
I'm not really aware where I would get a loan below 3% without security. Rather than being needlessly insulting, maybe you could share that information? I have a mortage at 2.5 % but that was with quite a large deposit up front and the property as liquidity.
Which bit was embarrassing for you? Asking you to explain where you can get a commercial loan at under 3% without security is embarrassing? A bit lost with that.
I buy and sell stakes in businesses yes. You are aware people trade over both much shorter, and longer periods than 3-6 months. Why would you find that so surprising?
In terms of due diligence, I like the Piotroski as a screener. I have an 8 point checklist too. If I can be getting 8+ on one and most of my checklist I'll move forward. I tend to prioritise PE, with Shiller PE to take account of inflation. Alongside this, I like ROIC and ROIC to WACC to be positive. I'm also a big fan of the DCF method of valuation. I'm not going to go into detail about the method I would use, it revolves around Cash and growth. It gives me an idea of my entry point, which I want to be well below the intrinsic value of the business. Finally I'll read the 10k, and make sure I'm familiar and confident with the management.
I think you've misunderstood on me saying I'll grow a business I didnt say that. Businesses never grow that much in that time. I'm surprised you've thought that a possibility. Business can grow 20% yoy and with a leverage of 4-5 x that gives me an 80-100% return on borrowing at 7-8%.
It works for me. I dont have an enormous amount of capital currently so it really suits where I am. I can fully respect you might disagree with the use of debt, but theres really no need to say I am lying. Likewise it is also wholly untrue to say it is atypical of how a number of investors into businesses would operate.
Obviously I'm more than happy to discuss the rational of each decision I make and why I do it, but let's not conduct the discussion in a nasty manner eh?
catcherintherye
Player Valuation: £80m
Yes I'm sure that is also true.
But in world where inflation is about to grow, many are not worried about a 7% loan that can be repaid by the autumn. If you can grow capital at a higher rate than 7%, than it's profitable.
catcherintherye
Player Valuation: £80m
But one day Abramovich might die.
It's not recommend to lend from an individual over an institution.
gwladysnight
Player Valuation: £10m
You get funnier and funnier.
In your initial post you said you could fund the investments yourself. Now you are saying you don't have much capital so using debt is fine.
catcherintherye
Player Valuation: £80m
As I stated, I could fund the investment myself, but I can make more investments if I utilise leverage. I'm not sure why that's either controversial or amusing?
Next you will be telling me that people dont invest in businesses over a 3-6 months period mate!
Anyway we are getting side tracked. A rate of repayment of 7% is not prohibitively high and is certainly not atypical with something wealthy individuals would be happy for their businesses to take.
I happen to agree with you that using such lenders is far from ideal, but can also see why it's not inconsistent with the thinking of high net worth individuals.
catcherintherye
Player Valuation: £80m
Hes a bit of an odd one. Doesnt seem to listen very well and gets a bit narky.
It's a shame as I'm sure hes not a stupid bloke at all, but what can you do?
Hopefully most readers can see that borrowing money at 7% is not actually that atypical for investors, and why that might be the case. I'm not sure it's that complicated to understand.
gwladysnight
Player Valuation: £10m
You really do know what you are talking about do you.
If we were only borrowing the money until the autumn then the hypothesis that interest rates may rise sometime in the future is completely irrelevant.
What shows your complete lack of knowledge though is the ridiculous assertion that the money can be repaid in the autumn. We are borrowing from Rights media against future TV revenues. They do not get paid in the autumn.
The TV deal is broken down in to a number of different components.
Each team is paid an equal share payment we received £31.8m
Then you have a merit payment depending on where you finish in the League we received £16m for finishing 12th
Then you have a facility fee that depends on how many times you are on TV we received £19.6m
Then you have an overseas TV payment we received £55.8m
Then finally there is a commercial payment of £5m that all clubs receive.
The equal share is paid in instalments throughout the season the facility fees are paid as and when we appear on TV and the merit payments are received when the League table is finalised.
Whatever Mr Moshiri & Mr Usmanov do with their money & assets means pretty much jack to the majority of Evertonians.
These guys deal in Billions & are very very sucessful at it.
Its not the greatest subject for us mere mortals to even be debating.
The club is virtually debt free , a World class manager at the helm and a state of the art stadium in the process.
Yet someone wants to make hay over interest rates.
Lets just leave that side of it to the people who know what they are doing.
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catcherintherye
Player Valuation: £80m
I appreciate you noting that I know what I am talking about. Fair play, it takes a big man to acknowledge when someone who has a differing view has got it right.
The point about interests rates is not really related to how long we are borrowing for. They are different points.
Why is it a "ridiculous assertion" that the money "could" be paid back in the autumn. Of course it could be paid back then. It might not be, but it could be. That find that such a notion ridiculous sort of underpins your ignorance on this mate.
I know how the TV money works. However Football clubs lose a lot of cash flow over the summer months, with no fans in grounds etc (obviously that's a bit different this year but the point still stands).
As you've been decent and acknowledged I know what I'm talking about, I will say this, youve clearly got a lot of good knowledge. But you are a bit scatter gun in how you present it. Try to read what you're saying before you write it, and ask does it make any sense. As sometimes some good points you make can get a bit lost.
All the best.
catcherintherye
Player Valuation: £80m
That's it.
It goes without saying Moshiri knows more about money than me. I actually agree with the fella, that I'd rather we didnt take a loan out. But what I can also see, if it's very consistent with how high net worth individuals operate.
There are lots of reasons to say why Usmanov is not formally involved (and may never be) but I'm not sure having a credit facility is one of them.
And yes, Moshiri I believe pumped another couple of hundred million in recently. I suspect we will see a pattern of lending the club money then diluting into shares to strengthen the balance sheet.
evertony
Player Valuation: £40m
The Knicker factory and the bistro get bought and sold regularly in Coronation Street within 1-3 days so it must be possible
It’s one of his private Jets than James is flying home on
Make of that what you will
Make of that what you will
catcherintherye
Player Valuation: £80m
Is that so?
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