Spekulatius

Concur 100%. That is a main reason why longs respect short sellers like you, and think little of Hempton and of course Left. You present a fair criticism of organic growth which could lead to valuation downside. Hempton on the other hand, screams fire in a theatre or worse, is planting false information on Cafe Pharma boards, and feeding it to any media that will print it. Hempton has been right with his short positions far more than being wrong. He certainly is somewhat promotional, but I think he picks his targets well. I think he is right on VRX as well, maybe for the wrong reasons. The company has so many vulnerable spots that close scrutiny very likely will uncover many failings. The vulnerable spots are aggressive accounting, high debt load, rolls business model, aggressive incentives for management, weak and overexposed shareholder base, questionable distribution models, price gauging and probably other that I forgot.

Macy's actually has not grown that much. Since 2007, they have grown revenues from 26 billion to 28 billion annually in 2014. Adjusted for inflation, that is negative growth. Add a bit top line pressure from online sales to the mix and it does not take much to see Macy's shrinking, even in nominal numbers.

Where are people going to shop if this actually happens? Or is the thesis that people just aren't going to shop any more? 1) Online 2) Specialty stores 3) Outlets

I think the lower crude prices have a lot to do with the weakness. Newer airplanes with newer engines are more fuel efficient, but with kerosine prices down 60%, who cares. It's cheaper to fly the old birds that are mostly depreciated. While RR may have a huge backlog, the customer still can push out deliveries in many cases (at least that is what usually happens in these cases, where the customer ordered something , but does not really need it when it's build). Some or RR's problems are certainly homemade, but since many other companies in aerospace have weak numbers, I think there is more to it.

Aircraft manufacturing has been a minefield recently, so I would be careful stepping in here. The goodwill write off does not really change the value of the business other than acknowledging that the energy distribution business is impaired, which is not exactly big new. I do think the goodwill write off very likely sets the stage for a bad earnings report.

Any examples of a quick realization of real estate assets in retail. I recall efforts in JCP, TGT and Sears. TGT and JCP did not happen at all, Sears took a long time and in a way did not separate at all yet.

Anybody has a view on SRG's valuation? As I understand it, SRG owns some good real estate, partly through JV with other Reits, 88% of their rent income comes from Sears still, even though the rent that Sears pays is very low. However, the structure and the agreement with Sears is so complex (put pack option for Sears, lesser termination fees, redevelopment costs unknown) that I can't come up with a reasonable way of valuing the. Like SHOS, SRG is tied to Sears, so not a true spinoff in that sense, just a separate corporate structure tied together still. I am not inclined to buy, given Sears track record with spin offs, but I would like to hear some views, regarding valuation.

Shop online, Pick up in store makes no sense to me. To win, the B&M retailers need to emphasize the service aspect, as well as the touch/feel/try aspect. They cannot compete with online retailers on price and convenience any more.

I sold my UTX on the day RYCEY released their bad news. Something is clearly happening in the aircraft industry and it does not look good.

Compound growth is amazing when it works and there actually is growth, but in a lot of cases something bad happens along the way. The owners of Sperry Rand, Burroughs, Control Data, Wang Computer, Prime Computer and Digital Equipment did not get that rich if they held on. If the native Americans selling Manhattan in 1626 had invested the $24 received with an 8% return, they would now have 118 billion dollar, which is not too bad. I doubt many have been able to get such a return over 290 years compounded.

I sold a few shares to harvest tax losses. I am pretty convinced that RR is a good business, but we may indeed be going into a dos cycle, potentially caused by lower fuel prices, hat make operating older aircraft economical. I don't really know, but my rule is to sell, if fundamental move against my position much more so than expected, and that is certainly he case with RYCEY.

How is an MBA going to help if there is a technical problem? While IBM sales force traditionally has been considered their strength, I think ORCL salesforce nowadays is probably better and more aggressive, possibly because Larry is breathing down their necks.

I compared this to CBL and it's almost a mirror image in terms of valuation and asset metrics. sales/sqft: CBL: $371; WPG: $361 Unlevered cap rate: CBL: ~9% ; WPG: ~9% Occupancy: CBL: ~92%; WPG: 91% Above are approx. numbers but close enough. Both stocks have been hammered this year, so it's not just a matter of Mr Market hating WPG. I think the difference boils down to which management one likes better. So far, I think I like CBL better. FWIW, CBL has just authorized share buybacks for $200M, which is almost 10% of the market cap. It's clear that they would need to sell properties to finance this, but if indeed their stock is far below NAV as they claim, then this is a good way to increase NAV/share.

The GP is a a leveraged bet on NS and specifically on NS growth and that is where the money is. Any additional unit of NS that they are going to be able to issue will generate IDR's that flow to NSH without NSH having to expend any capital. This makes the GP so profitable if it can grow. While Palantir is correct that it's officiant to issue NS equity at accreditive terms, I think there is a good chance that this will change going forward and then NSH will be able to grow again. The risk is that NS might have to cut it's distribution, which will have a severe impact on NSH (I think NSH will see almost twice the reduction in cash flow percentage wise). Then it get's nasty for the GP...

I agree with your valuation. Saying you want to buy more in a public forum is contradictory in itself. If you want to buy more, you do it, you don't talk about. Fact is that he is already choking on what he has, as do most other institutional stockholders who own this. Buying more in this situation would be suicidal if it does not work out. Not many natural buyers left for a stock like this.

If business is so bad that the revenues shrink 10% annually, my bet would be that they would start to generate losses in a couple of years. It's really hard to shrink costs by 10% annually. Imagine would it must be like to work in such a company. There won't be any decent talent left after a couple of years, which will just accelerate the decline. You can't just do a simple excel model to get an idea what a future in such an scenario would look like, you need to think through the reality would it means to continuously downsize, to have a workplace without any perspective for the employees, which means that you can't really hire or even retain decent talent. You will be left with those that can't get a job anywhere else or that don't want to move or don't care. Even as it stands right now, IBM is already in such a situation more or less right now and I think it is part of their problem.

The issue with track records is survivorship bias, but and related to that the asset size. Survivorship bias that when a fund does well, it will grow in size - if not, it will be closed down and the track record will be buried. Also this means that funds that do well, probably start small and tend to be big when the blow up, so even if the cumulated return from the start would have been good, this is irrelevant because in aggregate, the investors can well have low money. I don't mind as much that Ackman makes mistakes, but trying o have other people pay for his mistakes (like with the Gotham Golf case) is a totally different issue and in my opinion indicated ethical flaws. I think this would be enough reason to never invest with someone like Ackman because I am no inclined to think that personal traits like they are likely to change. Icahn is tough too and everybody knows it, but I think he has treated the investors of his fund in a straightforward manner. I could imagine to invest alongside someone like Icahn, but someone like Ackman would be a no no. I am surprised that he is held in that high regard in this board.

Gotham Golf was a huge holding of Gotham Partners, losing money and going bankrupt. Gotham partners than was gaining control of another real estate entity that was cash Rich and made an attempt to merge them against the will of the other owners. It indeed was a holder of preferred stock of CashRichCo that was suing and gaining enough support from the bankruptcy judge to block the merger. Gotham Golf failed and Gotham Partners reputation went with it no the fund went downhill. The attempted merger was a clear attempt to disown minority and debt holders and I find that very ethically challenged. FWIW, I know this story from someone (message board acquaintance) who held the preferred stock at that time and was involved in the lawsuit - not that it matters. Ackman seems like such a nice guy, but given enough money involved, he will roll over people, if it is to his advantage. That is why I take pleasure, when he gets screwed over by obviously smarter folks, like with the HLF short investment. He makes bold bets and some of them work out spectacularly well and some of them go bust spectacularly. In some cases, it seems to me that his research is clearly lacking, given the size of his bets. VRX seems such a case, where he got in late, HLF and JCP are others. After all, it's other people's money he is playing with and he will make out fine regardless.

Agreed, but the biggest issue for me is that Ackman is ethically challenged. Just look at the old history of Gotham partners and Gotham Golf. He drove his first fund into the ditch and my guess is that he will do it again.

A single line life insurance company would very likely trade at a very low multiple. I think the same playbook has been tried by activists with HIG a few years ago and it went nowhere. It's not easy to pry out a piece of an insurance company, because insurance is heavily regulated and as I understand by each state they operate in individually. So you look at a regulatory nightmare if you want to spin off parts of AIG. I think management is better focuses on running the various parts better , rather than ripping the holdco apart.

I was tempted to buy some, but then I really don't like to invest in lesser quality Real estate at almost any price and decided to abstain from the stock. instead, I purchased some VTR instead, which is not as cheap, but has a much better growth record. I do agree that the market moves, as they relate to interest rates, don't make any sense. I will keep WPG on my watch list for now.

This is one of my larger positions, but the stock has been a dog. The financial results were pretty much as expected and I think they will overcome the loss of thee GM business. They have made decent progress restructuring the balance sheet and paying down high cost debt as it mature, but what I overlooked is that they have really long dated Trups (Maturing in 2040) and referred stock (paying 7% and 8% current and attached to Libor) that they have to pay substantial premium to face value to get ready of them, which hits the book value. So management , while boasting he almost $30 tangible book value, has recently started to publish and adjusted book value (accounting for he liability from the Trups and referred, which is way lower and hers around $23/share, not so much about the prevailing price/share. The bull case is that this is a fast growing and low cost online bank, but on the asset side, I am not too excited about owning a car lender. In any case, the story takes much longer than I thought to play out. Second opinions welcome.

I think looking at the reputation of the people involved in such a deal is paramount. Personally, I avoid investing in nothing where the folks involved are questionable, although I think in this case that was priced in. This could have gone either way and the fact that it went wrong does not necessarily mean it was a stupid bet. I do think that the market is more efficient then some believe in this board.

I think the split is BS and won't provide much LT value. It's not like life assurance Co. trade at premium valuations. This is just a good for a quick puff, nothing more. While I do agree that AIG looks cheap, one needs to take into account that AIG has a history of under reserving (they had a large reassessment for their property line just a few years ago), so it may not be much cheaper than other insurance companies like MET for example.

I like Amex for the extra perks provided. For example you can elect to have primary car insurance for $25 (I think) fixed fee, if you pay the rental with Amex. This is primary insurance that goes in front of your own and even works in foreign countries. Very cheap compared to buying insurance at the rental desk and equivalent in coverage. Also, you get to double your insurance for items purchased with Amex up to two years. Very handy when buying laptops and the like. I can attest that using their perk is easy - my wife's laptop died after 22 month (manufacturers warranty got expired) no they asked for an estimated on the cost of getting it fixed and then quickly sent a check. They did not care if we actually repaired it or not. They do provide great service every time I called and had an issue. I think this is one company that is truly customer centric.