Spekulatius

FRFHF. Trying for Swingtrade To $480+. I am thinking we are closer to the bottom here than a top. I do expect a book value loss this quarter. Smallish position, will add If we get closer to the 52w low. I don’t like the stock that much long term, but I do like the risk reward for a swingtrade.

Sold my smallish SMTA Position for a marginal game, after disappointing liquidation guidance (or do I read this wrong?).

Yes, I see it in a similar way. His last really good deals with public markets was BNSF. Everything after that was private deals (BAC, OXY etc). In a way, he has done a great deal reinventing himself, as a private market investor. Even though he may have lost some edge as an investor, I really like BRK stock here and I don’t think he really needs to hit it out of the Park here in terms of investing in commons stock to do well. If he can just get a few good deals done in the next downturn, while his operating companies and resilient insurance ops put up good results, the BRK should outperform significantly in a downturn and do Ok in an upturn with overall very satisfying results.

Well, David Merkel (Aleph Blog and he knows insurance very well) has bought some and apparently thinks it’s not. https://seekingalpha.com/article/4292851-dissent-triple-s-management Their property insurance probably could be wiped out, but it’s only a small part of the whole company (health care insurance is the largest) and there don’t seem to be an Cross Company guarantees. So it’s possible that their property insurance goes into default. “ Russianbear” or whoever hides behind that handle is short and has written it up. I initially bought some too and then sold (for a small profit) as it’s too tough for me to get a handle on. The company isn’t well managed and hasn’t been as long as I followed it. They did make some changes in the health insurance business and ceded market share for better profitability. In addition, this is a Puerto Rico business....

1) Warren lost his edge in public markets in the late 90’s and I think he knows it too. He still has an edge in private deals. 2) He has become a closet market timer. This has to do with 1). That’s why most of his cash deployments will be in some sort of market dislocation, when there are pitches that are obvious to him. 3) It’s still a much better situation than FRFHF, where they lost their edge investing, but don’t acknowledge it.

I always look for posts from “Viking” regarding financials and “Own the rails” regarding what I would consider “inevitables”. “ajc” checked out here, but his posts on growth stocks were very helpful.

re GRIF vs CTO, I like GRIF much better. They do one thing (smaller warehouses) in a few markets reasonably well and trade to a significant discount to NAV. It’s easier to get this sold than CTO. I don’t own it (sold it for a quick swingtrade) but would buy this any time if it falls back a little.

I was impressed by the Dakshana foundation, until I read this in their 2018 annual report: $3.7M loss with $10.5M cash in a foundation????? To be fair, the foundation made ~+$1.1M the year before, but still.

The issue with a REIT conversion is that it comes with a huge tax bill usually, as assets need to be valued to fair market value. I could be wrong with this and don’t know about CTO specifically, but that’s what I heard in other cases where a change in incorporation was discussed.

It’s pretty close to these targets. Based in the press (from unnamed sources - ha) there actually isn’t any deal yet, just the promise of a kick the can deal - the Chinese buy some AG goods, Trump delays the tariffs. Better than a poke in the eye, but not a breakthrough. We will see where this goes next week. One comment # if a pattern keeps repeating, it’s probably not a good signal any more.

So I listed to Singh’s podcast and he talks faster than an annuity salesman. Apparently has has done dozens of things already at his young age, so it’s save to assume he won’t stock around. Current investor presentation appears to have plenty of grammar and spelling errors or maybe it’s just me: https://www.partech.com/about-us/investors/ (losing site or losing sight? Etc). Raised money using convertible debt and company is cash flow negative. Wants to build the Berkshire of software - another yellow flag. Just a grumpy man’s assessment. I will put this on my watchlist, it will be interesting to see how it does.

Yes, if you manage money for others and hold shares in noinfo stocks, you are between a rock and a hard place. As you stated, an individual investor can do as he pleases. I don’t like this rule either, that’s why I wrote a comment email to the SEC as well, but then again, if it causes forced sales, I am willing to take the other side and buy some shares at deep discounts to prevailing prices ( let’s say 30% below prevailing prices) and see what happens. ??

No Fidelity and Schwab haven’t walked anything back in terms of commissions. Fidelity does not allow buying noinfo OTC stocks, so keep that in mind, if you consider them. I believe Schwab has no restrictions on what you can buy , but I don’t have a lot of experience- I just opened a test account with them yesterday. I personally would close my Etrade Account if I were you.

Im just kidding... relax. Im just shocked at the prices people pay for investing advice. The buyer doesn’t pay for investment advice, they pay for advertising that comes from a possible news story with him having lunch with a semi famous person.

He has gotten excellent feedback as a seller on various ~$80 used computer monitors and for a $3500 30 min conference call.

Thank you Packer. Do you know anything about mortgage REITs? It seems like ABR is a mortage REIT paying over 9%. These REITs don't have real properties right? No, these mortgage Reits typically hold paper (commercial and residential mortgages), lever them up and live off spreads. Get something wrong like duration (easy to mess up with callable residential mortgages) or credit risk and you have a zero. So essentially these mortgage REITs have the same nature of lending business like the banks, but with a higher funding cost? The concerns you outlined seem to be the exact same concerns banks have. But WFC and BAC still seem to be investible by a lot of members here. When I look at mortgage REITs, what particular concerns should I have and look out for? Banks are diversified and regulated business. Mortgage Reits are one trick ponies and not regulated and cater to yield hungry investors. That makes the risk profile entirely different. It doesn’t mane that they are bad business, but I think most business that are designed as yieldcos aren’t great business to begin with.

Thank you Packer. Do you know anything about mortgage REITs? It seems like ABR is a mortage REIT paying over 9%. These REITs don't have real properties right? No, these mortgage Reits typically hold paper (commercial and residential mortgages), lever them up and live off spreads. Get something wrong like duration (easy to mess up with callable residential mortgages) or credit risk and you have a zero.

The problem with those kind of performances track records is that they outperform when the fund is small and underperform when the fund is large (from fund inflows). When you look at the total amount money gained and lost, CMGFX lost their customers money on average, relative to an index fund.

Farmers Mac isn’t really the same business model, it’s income mostly comes from the net interest margin, while the GSE would be 2/3 fees and 1/3 interest income (roughly) The GSE would have a more stable income stream, specially in a low interest rate environment. AGM stock only took off after interest rates came off from zero.

I think one takeaway from this is that technological prowess matter more so in the past for banks. In the US, I consider BAC and JPM the leader followed by WFC. WFC really was the best bank in terms of how they managed their branches, but I think this is now much less and advantage than it has been in the last. A lot of regional and small banks are going to be in trouble. A lot of the larger credit unions are doing well. I am member with a few and many have grown their balance sheet organically by ~10% annually since the Great Recession. They have certainly taken market share, probably from smaller banks. Credit unions tend to have very few, but larger branches, which plays well into going online and doing just doing the transactions requiring consulting in the branches.

Do you think the price improvements will go away & they'll start selling order flow? https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/press-release/Fidelity-Price-Improvement-Guide-Media-Advisory_02192019.pdf I really don’t care. I reviewed the price improvements I received this year va commissions paid and they were roughly 5% of the commission cost. (I do a lot of small trades when I scale in and out of positions). If you trade low priced stocks I low liquidity markets, then the price improvement matters, otherwise it has marginal impact. More important is that Fidelity pays higher interest on cash balances than most other brokers, except IBKR. IBKR is best from a cost benefit perspective, but I don’t like to put all eggs in one basket.

Bought a starter in PAYP (premarket yesterday) and also DD (rebuy). On an unrelated note, Fidelity went commission free today - yay!

I agree but Malone can always conjure something up out of thin air, like he did with Charter stake by attracting private investors. Also there is a possibility that Liberty Global (with a lot of dry powder) could play a role. I think this is a great deal for LILA, especially with some synergies in Puerto Rico that they should be able to realize. I would be careful about Malone swooping in as this could very well result in more shareholder fleecing.

FWIW, there is still a GSE trading in the public markets, which may serve as a reference - Farmers Mac: https://finance.yahoo.com/quote/AGM?p=AGM The valuation is pretty undemanding.

It’s left for dead, because there doesn’t seem to be any organic growth. They acquired Cylance is where all they’re neue growth is coming from, but with this new business are increased expenses. Their IoT business is actually down YoY. I don’t claim to be an expert, but a well managed software company should have positive operating leverage and with BB that is not the case. They need to show organic growth and positive operating leverage. Then, last not least, another thing I noticed is that their long term operating income target of 20-25% is low for a software company. I have no idea why this is the case, perhaps their business is inherently less profitable,or they set the target low.