Curated Insights 2019.03.15

Buying into the timeshares Hilton Grand Vacations, Wyndham Destinations, and Marriott Vacations Worldwide

All of the timeshare companies offer some form of financing; in general, they offer consumer loans at low double digit interest rates. These are rather attractive loans, and they can generally be packaged up and sold into the ABS market at mid-single digit rates of returns. As of Q3’18, most of the timeshare companies had ~10% of their enterprise values invested into financing receivables that they hadn’t sold into the ABS market yet. I don’t think it’s appropriate to pull those receivable investments from the timeshare companies’ enterprise valuation calculations since they’re generally valued on an EBITDA calculation that includes earnings from those loans, but I could see an argument for why they should be deducted from their EV calculation (i.e. treated as a cash equivalent). Doing so would make the timeshare companies even cheaper.

The twenty craziest investing facts ever

Why am I using the Dow instead of the S&P 500? They’re effectively the same thing. The rolling one-year correlation since 1970 is .95.

If you had invested from 1960-1980 and beaten the market by 5% each year, you would have made less money than if you had invested from 1980-2000 and underperformed the market by 5% a year.
When you were born > almost everything else.

Dow earnings were cut in half in 1908. The index gained 46%.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.