SteveGalbraithHerringCreekCapital:Alongandashort

GrantsInterestRateObserverFall2013ConferenceOctober22,2013
Valuationbaseduponnormalizedearnings
DoesntownaBloomberg
SouthAfricanproblems:
o Terriblecurrentaccount
o Highestmiseryindex
o UnemploymentlevelsonparwiththePIGS
o GINIindexrating3
rd
/4
th
highestintheworld
o However,CDSspreadsnotthatwideandequitydoingOK
SouthAfricahasseenamassiveinfluxofleverage
o Loansarenowstartingtogototheupperclass
o HasanegativesavingsratebutunliketheU.S.hasnosocialsafetynet
o Retailersmarginshavedoubledbecausetheretailershavebeenofferingatonof
credittocustomers
Theseretailersarestilltradingathighvaluations
o 50%ofthepopulationsincomegoestoservicingdebt
o 25%ofthepopulationneedstodeclarebankruptcy
LongCCL
o Isthispermanentlybrokenornot?
o Analystshateit,only20%recommendit
o 3companieshavehad80%ofthemarketshareforyears
o Takes24yearstogetshipcapacitytothemarketandsupplygrowthisslowing
o Hasneverhadlessthan100%booking
o Modelhasalotofoperatingleverage
o NewCEO
o Has6headquartersandotherwastesofmoney
o Alltimelowonaperberthbasis,belowreplacementcost
o Willearn$4.50$5/shareinafewyears
o Becomingabigemergingmarketsplay