Good afternoon,
Please note, as always, the below is not investment advice. Attached are the most recent returns of the Long Short Portfolio. It has performed well despite some surprises. Tesla was able to outsmart me, but I am still maintaining its position in the portfolio. Due to these surprises, I am working on a model that can be automated to better predict earnings per share results derived from historic correlations within individual stock's financials.
Also, I am reworking the CVS valuation. The above video is a motif of a metaphor regarding their opioid sales. I have never met or had anything to do with the actual Benzino’s, I wish them all the best. Simile, metaphor, whatever you want to call it, I found the video relevant because opium production is still chugging along in Afghanistan. For those of you who have been living under a rock, ( I believe we got most of the ones in caves ) 90% of the opium grown in the world is grown in Afghanistan. Prior to the US invading Afghanistan in 2001, Opium production decreased by 2/3rds that year, we got it back up, and then only left when the country was teeming with it at record levels.
To remove any doubt that we knocked over a country so people could pop pain pills and then kept our soldiers over there for twenty years while occasionally having them blown up to increase demand, we should convert some shopping malls into opium production facilities.
I used this metaphor not only because I have been told by industry insiders that pricing for the drugs, they receive are not standardized, causing me to believe this could be an issue with their cost of goods sold. This makes sense as a business practice for regarding Opioids, as the Taliban has been having issues with their FX hedging recently. The pharmaceutical company’s raw material costs are probably fluctuating which is necessitating the need for them pass on the variability of cost to their customers.
To clarify, I rewrote the FCFE and FCFF equations in the CVS model to account for notable incongruencies, evident when using traditional (Capital Expenditures – Depreciation) methods. It has come to my attention that my newfangled approach to this metric may be inconsistent with others’ models. Below is how experts account for it.
“Reduce the asset account on the balance sheet associated with the theft. For example, if cash was stolen, reduce the balance in the cash account by the amount that was taken. If office equipment was stolen, reduce the office equipment asset account by the total amount paid for the office equipment.
Reduce the accumulated depreciation account by the amount of accumulated depreciation on any depreciable stolen assets. For example, if you paid $500 for a copier that was stolen and you have taken $100 in depreciation expense, then reduce the accumulation depreciation account by $100.”
I am still looking for a way I can confirm that theft accounts for the inconsistencies I adjusted the traditional equations for. It is no excuse for the portfolio almost dipping to the amount it apparently takes to build a mosque in Boston, but one problem at a time.
Also, to all of you who have struggled with Opioid addiction while facilitating it. Please resist the urge to use. Below is some motivational music.
Warmest Regards,
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