Spekulatius

Maybe the tax basis is so low on the spin's assets that the tax hit makes a spin off more attractive? Does anyone fault Malone for spinning off assets instead of selling them? Spek, are these really crappola businesses? Next time you pump gas, check who makes the gas terminal. It's almost certainly GVR, which has a very high market share (>50%). Matco Tools operates in a pretty comfortable oligopoly that includes Snap-On Tools. SNA earns over 20% on tangible equity. There are probably concerns about the automotive business being in secular decline once electric vehicles take over, which is perhaps the main risk to these businesses. That risk notwithstanding, why are these bad businesses? You are correct, FTV’s business aren’t bad I do think that DHR dental business looks suspect, but that has nothing to do with FTV. Spinoffs are tax efficient, that’s why they are often preferred over selling.

Beware of crapolla spinoffs from well run companies - WPG, REZI, GTX, KTB etc.

They should try to sell a version with some booze in it, it may just work.

It’s probably not the dividend (which imo is too small to matter) - the blast furnace steel producers are absolutely getting wrecked (maybe from high iron ore prices, see US Steel or Stelco) while the electro steel/minimill player like Nucor or Steel Dynamics (which are using scrap as input) are doing better. I think there are some secular trends at work.

Why is the stock down 15% today?

Referring to your earlier post, have you ever seen a recession that was priced in? I agree that top down doesn’t work. Analysis of individual companies prospects is where the money is made, but at the same time, the prospects are dependent on the macro environment to some extend. Or one can take the Howard Mark point of view and just try to assess broadly where we are in the macro cycle and go from here. Most would agree that we are more likely late in the cycle rather than early. My own thinking is that there are a lot of political risk too, our current administration, as well as the election in 2020 represent a risk of a substantial paradigm shift with unclear, but most likely adverse impact on the market. Then we have Iran, Brexit and a host of other things like trade wars and crummy start ups to worry about. It isn’t clear to me they any of this is priced in the market they is just 3% of its high and at a historical high valuation. Average valuation is a skewed number as there are certainly quite a few of stocks with low valuations around. but then again, if the broad indices are selling off, it seems to me that this means that at least for mid and large caps, pretty much everything will sell of, perhaps simply because Indic selling is indiscriminate. So my point is that this is a time to be more opportunistic than bullish and simply wait until Mr Market gets one of its fits again and presents great opportunities like in late 2018. I am inclined to believe, that those opportunities I’ll very likely represent themselves, perhaps in the near term future.

RV’s are supposedly a good measure because strong RV sales indicate a lot of consumer confidence (since it is large outlay for those who tend to buy them and it’s totally discretionary ) as well as easy to obtain credit (most are bought on credit). I think boats are similar and their sales also have weakened recently.

This is actually the trend that is working against makeup industry right now. There was a very strong 4 or 5 year makeup-heavy cycle driven by social media. But the trend now seems to be towards more natural makeup (e.g. VSCO girls). I am so out of touch with these trends that I had to google half the terms (VSCO, Tik Tok, scrunchie). Based on the pics , I think the 70’s make a comeback. Definitely far out of my circle of competence, although I do know a thing or two about the 70’s.

Reddit has a collection of hedge fund letters that are posted there. I have found it to be an excellent source of ideas and co comets. I agree with Gregmals peer analysis. If you find an idea, look at the peer companies in the same business.I often find some I like better. Also a trick I have found is in google charts there is a list “People Leo watch”, which can be illuminating.. Twitter is great - you start to follow some folks and then find out who they follow. a lot of investors are 90% there for fintwit. Then there are blogs. The Long term value blog is sort of inactive, but his blog roll is one of the best: https://longtermvalue.wordpress.com/

Well, there is worldreginfo, which I have found useful in some cases: https://www.worldreginfo.com/

With retailers, I find moats to be a bit mushy. But there are clearly retailers who exhibit moat-like qualities. One surprising thing about Ulta is that it has more active rewards members than Starbucks. If you look at their growth this quarter and the negative growth at the brands, it is pretty clear that Ulta is still taking market share. But anyway, I think this is a good starting point: Source: https://insight.kellogg.northwestern.edu/article/the-secret-to-ulta-beautys-success-joy/amp Thanks, great article and really helps with understanding what ULTA is about. It seem sort of e-commerce resilient this way. Another thought is that the increasing self awareness regarding looks related to Instagram and other social media platforms in particular is helping ULTA or similar companies.

You know what Venezuelans said about Chávez early on: “ He runs the country like his hacienda”. The problem with the tariffs and the game of chicken that is played are the knock on effects on confidence. Now China is slowing down, Europe is slowing down and now the US is slowing down as well. How much of this is trade war and how much is just the long economic upturn petering out is hard to know. I don’t think that interest rates and rate cuts at this point are going to make much of a difference, rates are already too low to matter, imo.

What makes you think that the FX headwinds don’t persist. I think the Euro is pretty fairly valued here, with limited downside, but a lot of EM currencies could really hit the skids if we get a recession or even an economic slowdown.

I don’t know, the CEO didn’t seem that confident in the latest earnings CC. I feel they make have ridden some fads recently (those upstart brands, that failed to deliver) or perhaps they are the fad. I don’t understand the moat with their business (no surprise as a middle aged male).

I think the IRS clause is pretty much in any spinoff filing. It seems like standard boilerplate. I am not in MSGN, but I add a bit in MSG. I think Dolan will come to his sense on the Spheres. MSG is ultimate where I think the value is, but MSG has a long duration contract with MSG they guarantees them a profit, unless ones assumes doomsday scenarios. After the contract expires, the value of MSG is very much in question. I think the idea with the whole spinoff was to put some debt into a cash flowing entity (MSGN) then put the cash into an asset entity (MSG), so it can develop Dolan’s toy project (the Spheres) without risking the store. I don’t think the arrangement doesn’t make all that much sense unless something else happens (the sport team get spun off too) and if the Spheres don’t happen, what is the $1B in cash for on MSG balance sheet. Maybe other assets/arenas? Anyways, added a bit more MSG on Thursday, but feel I need to understand this better before going in knee deep. FWIW, Murdoch agrees that FOX is too cheap as well and just bought $16M personally.

Considering what happens on the other side of this is one of the scariest parts of the rate conundrum. WSJ articles will start referencing convexity a lot more frequently. Yeah, it’s a one way street. Once we are in that zero or negative interest rate hole, we can’t get out of it, without bankrupting virtually the entire financial system.

Sounds like negative interest rate is a surefire way to destroy the banking system. I guess we will find out if US Banks follow the zombie apocalypse if their Japanese and European peers. The US banking system has less competition, so It won’t be quite as bad , but I could see a world of permanent sub 10% ROE and valuations below tangible book.

It’s time again, I think. A group of us will be meeting on Saturday Sept 7th, 9am, at the Panera in Needham 120 Highland Ave, Needham, MA 02494. All are welcome. This is the "Highland Ave" exit off off Rt 128/95. Pls rvsp , so We have an idea who is coming :-) This date didn’t get much traction. Meeting postponed.

Probably a brokered transaction off the exchange. The flat price ($41) above market indicates such. Your full service investment bank is happy to help you.

The guy's an ass clown. China never confirmed that negotiation for a new trade deal have restarted after Trump tweeted that “China wants to do a trade deal badly”. I guess Trump probably just wanted the markets to stop tanking after he had been overzealous bashing China and ordering companies to stop doing business in China. https://www.cbsnews.com/news/trump-china-trade-latest-trump-says-china-called-u-s-trade-team-twice-and-wants-to-make-a-deal-as-companies-are-leaving/

Fixed price contracts for large construction projects are a disaster for the industry, just look at FLR.

I wish puts were cheaper, but with a VIX if 19, puts are a no- go for me, so I raise some cash instead. I do share the aforementioned concerns.

Actually Long Island felt quite conservative when I lived there, at least some parts oft it. Now Stony Brook is a different matter.

I believe they most Chinese believe that their government has done a good job. For once, the for average workers have increased tremendously, it’s not just the super rich, average Joe have seen double digit increases in buying power. They have slowed down, but they still far exceed what US or European worker bees get. https://images.app.goo.gl/k4Ej4ZLE4U83uECt7 I think it gives them goodwill to fight for a while.

Bought a few hundred shares of 4624.T too. Looks like you can only get a fill when the mood in the market is a bit shoddy. I also gave back all my gains in 9142.T (GARP railroad stock) after they published a 5 year roadmap plan with more Capex even taking up debt. There was also an activist investor in it to no avail. I guess just scraping the bottom of the barrel avoids much downside. Lately, the Japanese stock market has been a bust for me. Isamu Paint (4624.T) is the only position I’m am holding right now.