Spekulatius

I think more restaurants fail for inconsistent quality and service than for food quality itself, much less menu breadth. What DTE is trying to do (many different cuisines from one kitchen ) sounds very complex and would be highly skill dependent.

I owned a bit of QFSOC in the past (had two roundtrips with small gains) but the H1 report looks bad and the buildings they own (some of which are empty for quite some time) are giving me the willies.. They also don’t really generate any cash despite having no debt and quite a bit of net cash. It’s been a real dog.

I would probably looking to join a local Real estate investment association and start networking. Another option would be a real estate crowdfunding platform. I am bit leery of the latter, because I am not sure hat would happen if any of those platforms would run into financial difficulties. This might be a good question for folks knowledgeable in real estate like BG2008, especially if they are local to you.

As follows 1br $1600-1700(towards the lower end you can take your pick of high quality tenants with 700+ credit scores), HOA $330-$350, taxes ~$4700, market value currently ~$160K per(pre 2008 sales where mid 200s) 2br $2200-2400(same as above wrt tenant quality) HOA $400 or so, taxes $6500, market value currently around $250-270k (pre 2008 300s) Here's the reason those numbers work though.. theres ZERO market for $3000 per month and up rentals here. So under $2500 and especially $2000 per month is super competitive. This is just a specific community I have multiple properties in, but by and large those numbers are in the ballpark for what I look for. Again I would reiterate that the way I am investing in the stock market, I need to be consumed by it and its heavily taxing mentally. So with these, Im not looking to have ridiculous returns, but simply have something simple that takes care of itself and does better than the passive 3-5% I'd get elsewhere putting in no effort. I also try to stay disciplined and avoid concentration risk. I'd like to get a few mil face value of properties; ie something that spits off a decent chunk of cashflow, but also something that is reasonable enough in size to offload to a local HNW investor if I ever wanted liquidity and found selling more attractive than the alternatives. Gregmal, thanks for sharing these numbers. Based on the high tax rate, it sounds like you are somewhere in NY burps, perhaps Westchester county or LI. Have you seen any impact of rent regulation on property values there? I had a holding which had some NYC properties which marks their properties at market and based on my calculation, their property valued were reduced by ~7% since rent regulation became effective. We have an acquaintance in our town in MA who rents real estate who lower end multi family units and claims he makes a double digit cash return on those. He does some handy work himself and services like snow removal and for others he has a guy (he has a full time job so this is just a side activity for him). This is an area that a bit distressed still and rents are low (<$1000), so the units are pretty cheap. He doesn’t get a whole lot of price appreciation so far, but a high cash return. Different strokes for different people I guess. CA was totally different - negative cash return (even when not counting in mortgage amortization and just mortgage interest) and any buy was a bet on price appreciation.

DTEJD1997, it seems that the local hubs really matter. Apparently our local USPS hub really sucks. We also know that our package sat at the local post office for 2 days (per website tracker ) and the truck drove by our house without delivering. It doesn’t explain the whole thing, but it does add up, if they are late one day at every step. And if you have a slow hun at the sender and at the receiver, you get the results we have seen. We are a bit out there (~35miles from Boston) and most of our packages are from Amazon ~ 2/3% FedEx and ~1/3 Amazon and packaging typically take 3 days. Apparently the warehouse / logistics point is too far to make it the regular 2 days. We lived in Long Island, NY before the Amazon was crazy fast, virtually all packages were less than 2 days, many delivered within one day and we sometimes had oders submitted in the morning delivered the same day afternoon. So both locations show a big difference, especially considering that Amazon has been working on faster delivery in the meantime and tries to push 1 day, yet in our location they are still far from that. This goes to show how difficult it is to create a consistent service in the logistics business in a country as large as the US.

Anecdotal for sure, but USPS is totally screwed for packages. We received one package that needed more than 3 weeks from the Midwest and another small one that took more than 3 weeks from CA to MA. The latter one actually took 1 week to move from Springfield, MA to our house 65 miles away. I have received another package shipping with FedEx from CA to MA that took 3 days. Why does USPS even bother?

PINS seems to be a victim of tax loss selling. Recent insider sales (to be expected after lockup) don’t help much either. I bought a few shares today towards the close. If they can keep growing at a decent clip, paying 8.5x revenues isn’t too bad.

Going to the firm first is probably the right idea. I think official complaints can be filed with the Finra: https://www.finra.org/investors/have-problem/file-complaint I think in most cases, it is always a good idea to file a complaint with the regulating body if you want to make sure to get traction. No company can ignore these complaints, because it is easy for prospective customers to look them up (even though most wont do so).

I have casually followed distressed debt from the 2015/16 crop of E&P bankruptcies and the recovery rates were mostly awful. Gladly I just looked, but never played in that sandbox. I bought some midstream debt during the 2015 energy credit meltdown and it went very well (OKE debt was paying north of 9% back then and was BB+ rated and never even close to being distressed). There is nothing like this around right now, not even close.

Yes, that was in 2008. I remember that time well. I had just started a short in WFC when a few days later the short selling bann was announced and the stock gapped up like 20% although it closed at a smaller gain that day. There was a long list of stocks on the do not short list that were considered financials and much confusion whether one needed to close these (one didn’t). I closed it at the end of the day, which cost me some. the whole thing just goes to show how shorting can go bad, even if the thesis is wrong - the whole outcome is extremely path dependent. I basically gave up on this at that point end just occasionally buy puts (mostly index puts) if I feel like hedging.

I agree that reducing volatility and generating cash on a market downturn (which is what short are supposed to do) adds value, but it’s just so hard to do. I have followed Hampton and Cohodes and one should note that Cododes’ fund blew up in 2018, even though he had goo shorts in the right sectors, because the short sell ban screwed him. He is still pretty bitter about this and Goldman Sachs (he claimed they screwed him). Many other short sellers also below up one way or another. Hampton does shorting, but he uses tiny positions with dozens of stock to reduce single exposure risk which I don’t think is very practical for an individual investor. He has stories about obvious frauds Lernout and Hauspie going to 10x while it was clear to them that it was a fraud. You can listen to these war stories on the Jolly Swagman podcast.

I am sure there will be trade deal with both the EU and the US, but it won’t be free trade. The UK is going to protect their farmers (which I think voted for the Tories), so that going to make a deal more difficult in particular with the US. I thought SD’s comments about Scotland splitting away were a joke, but apparently Scotland voted very differently from the rest of the UK for their own nationalist SNP party, who wants to remain the the EU and split from the UK: https://www.bbc.com/news/election-2019-50779402 It is conceivable that they push for another vote to either remain or split from England. The U.K. could look like Yugoslavia when it’s all said and done. Maybe not that likely but who knows.

So tomorrow’s meetup is on. Might be a timely idea to discuss some tax loss candidates. Mine are DD, TAST and PINS. See you tomorrow!

The election has removed much of the uncertainty and the prospect of a very left tilted or hung parliament, that’s why the GBP us up. Even the Eurozone likes the outcome since the Euro is up against the USD and stocks are up as well.

A bond guy will always tell you that equities suck. Nothing new here.

There are pockets even right now, where liquidity is an issue. Failing retailers and mortgage MBS for failing malls are two pockets where liquidity has been disappearing.

I know this is a short term notice but we are trying to pull off another meetup before this year concludes. We plan on meeting this Saturday the 14th at 9am at the Panera in Needham, MA. 120 Highland Ave, Needham, MA 02494 We usually try to grab the room in the back corner with french doors. Let us know if you'll be coming. This is the "Highland Ave" exit off off Rt 128/95.

This $15B “normalized“ FCF estimate would be after taxes and interest cost . It’s a number from a CS report.

Stunning performance. Stock up 60% since mentioned. The old saying that the less posts the better the performance is once again true. I looked at this and didn’t buy either, although it did seem interesting. Time window until liftoff was just too small for me to get in.

BRKR would be hard to replicate. They are the leaders in many specialized analytical fields where it takes decades to build up competence. They do have competitors in most, but those tend to be smaller. Also, my understanding is that Bruker is mostly a rollup, starting from analytical solutions like Nuclear magnetic resonance. They have been acquiring niche companies for a long time. Similar companies are A (Agilent) and PKR (Perkin Elmer), but they are more in life sciences. All those companies have a high margin service business as well. I would think that all those would be very hard to replicate, as there are many different niche products that each require specialized know how to build in addition to having a customer base that used these products for a long time and isn’t likely to switch. I personally use Agilent and to a lesser degree Perkin Elmer products. I have used Bruker products a few years ago. Users tend to stick with a product family for a long time, often spanning decades.

Yes, the $15B normalized FCF is about correct. It’s clear that Comcast wants to offer multiple products to their customer - broadband, cellular (as an MVNO currently) and streaming service. Same in Europe where they offer Sky TV via satellite, streaming and also broadband in some countries (Italy being a new one).

So revenue run rate in Q3 is $168.7 M or roughly $676M/ year. I guess it would be interfering for me at < 10x EV/EBITDA or ~$7B Market cap. Now WORK’s revenue is growing quickly so if the shares stagnate or fall and revenue continue to rise, it could get here pretty quickly one way or another. I also wonder what the moat is. Communication within the company isn’t really a moat. A moat with SAAS begins when a product is going to be integrated in business processes (tie in with ERP etc). It would be really cool and powerful, if one could use Slack as a hub to do all sorts of things with an DRP system, but due to the diversity and complexity of these systems, that wouldn’t be easy to do. Just being a better replacement for email won’t cut it, imo. I haven’t used Slack and my trailing edge company (in terms of IT) probably won’t use it either. We have got skype, but it’s doesn’t have the same sort of functionality. Slack seems more like Discord which is mostly used within gaming communities.

Just out of curiously , since you apparently work in IT, which SAAS companies do you think have a moaty product offerings? I thought this applies to NOW and WDAY, since they are somewhat integrated in ERP system and those thing are harder to detangle, once they are used for business processes.

I agree, I bought some in the low 30's but was stupid selling in the high 30's even though I believed it to be cheap. Always tempting to take a very quick 25%. And it's getting very tempting to get back in and definitely would with another 10% discount. Your free cash flow estimate around 14 billion? Yes, the FCF estimate is ~$14B. basically EBITDA and FCF for Y2020 estimated were reduced by $1B because of aforementioned investments. I believe this caused the pressure on the stock. I bought most of my shares around $32 in 2018 and sold some off at $45-47, now I bought those back at $42-43. I am inclined to further increase my position on weakness. The stock doesn’t get much respect, even though it had been a great compounder historically.

Podcast episode from scuttleblurb discussing ADS: https://podcasts.apple.com/us/podcast/scuttleblurb/id1443244539?i=1000459218424