Spekulatius

There is often a misperception that you are either a participant in the bubble and bound for doom, or you sit on the sidelines and wait to get rich after it implodes. The truth is there is very much in between, and there are many ways to dance and enjoy the party without blowing yourself up. There is also, often, quite a bit of time spent waiting/doing nothing while the party goes on. Why waste that time? As a BRK shareholder, moves like this one and RH, make my happy. If they were doing this with billions....yea that would change the profile for me. But taking shots on high probability trades is a good thing. Simply putting the Berkshire name behind something, has historically shown to be a valuation booster. I'd gander that is part of the reason this IPO is so hot. Monetize that more often! Yes, they can definitely monetize the Berkshire brand. This looks like a win and I think they can do even better participating in late round venture capital. I also see the opportunity for them to do creative deals and use Berkshires size to their advantage. If a tech startup has a promising product that is useful for Berkshire’s operating subs, make a deal and give them a contract (and hence immediate validation) and take a stake in them at the same time. Could be a win win and something other venture investors can’t do. In the end, this is a big enterprise that needs to evolve, or become a dinausaur...

Right now, deleveraging really doesn’t move the income statement much, because interest rates are low and credit readily available, even for very crummy credit. So deleveraging is a poor use of cash flow in most cases and not much value accrues to equity. This is very different than 2009/2009.

RIWI seems interesting. The examples in above presentation seem intriguing, but of course we need to assume they are cherry picked and we do not know how many of their predictions turn out to be wrong.

The pick and shovel plays like ILMN, BAX, BDX, A, TMO, CRL have been doing very well and don’t really require an in depth knowledge. THe alternative is to bet on track record and/management team. That’s sort of what I am doing with BMRN. I think it gets hard with biotech or device startups with no track record

Sold the remainder of my BAESY.

Added to ORI and a bit CVS

Monday’s and Fridays less productive? I would like to know what’s the difference to being in the office then?

The raised IPO price just means Todd pays 30% more. I am sure it would be a great stock to flip, but they have to hold it for 12 month, based on the filings. I don’t think there is a way to hedge this either. Well, I don’t worry too much about my son wasting his allowance either, at least not yet. It might work out just fine, after all it is just as difficult to time the top than to time the bottom.

You just need to look here to come to the conclusion that the rollout of the vaccine will be difficult: https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/vovid-19-vaccine-give-it-a-shot-or-mot/ I would think that they give first dibs to first responders (nurses have many mandatory vaccinations anyways), then essential workers and have mandatory vaccinations for school (unless they choose online). I would also think about talking to economist about a good incentive program. Maybe cash incentives? There is a risk that A homeless person gets three shots for cash, but I would rather have that than many of them being superspreaders. Time to think this through, imo.

Interest rates were low in the 50’s and 60’s too, especially considering there economic growth. The spending from the Vietnam war was one factor increasing inflation and interest rates. This is a Fiat System and it is build on trust. Once trust wanes, all bets are off. The Fed will lose control of the narrative, the USD May sell off, inflation will rise. Once the cat is out of the bag, it will be very difficult to get it back in. last time this happened we needed a Volker to ale some hard decision. We will see what happens next time.

Translation : many lawyers and probably no engineers have done due diligence. I am constantly surprised (I am just a lowly engineering grunt, mind you) how little due diligence is done on a technical level even for large acquisitions.

I think RV’s are more likely a fad than Peloton bikes in my opinion.

I noticed that and I was wondering what created the set up for that, I need to look back again. This is a really interesting analysis. It seems like if you double revenue and do a little better with EBITDA, the multiple expands by double. So a 2.5x in EBITDA translate into a 5x when the EV/EBITDA goes from 8-9x to 18x. Interesting thought process. Well, it works that way for the stocks that performed well - you pretty much need multiple expansion to get into the top performance tier. The fact that the market has seen multiple expansion during the time frame (2015-2020) also helped. The salmon producers probably started out a cyclical trough In 2015. I recall the industry had problem a few years ago. I also dimly recall that Einhorn shorted a Norwegian salmon producer at some point, which didn’t work out for him.

Snowflakes ticker $SNOW is a slang word for cocaine. I am sure momentum investors feel the same way.

Fun fact: There are 3 Salmon producers from Norway in this list of high performers. They are all clustered towards the end ?.

Thank you - the presentations and the Q&A was top notch. Highly recommended.

Very interesting. If this goes through, there could be big changes in partnerships. This industry is (imo) going to have some major shake ups over the next decade. Perhaps we will see new companies (Chinese) pop up. Two global manufacturers will not cut it long term. The supply constraint is already quite visible. Currently only two major chip manufacturers (Intel, TSMC). Not counting Samsung. NVDA was having some issues with TSMC negotiations. Highlighting both the positive and minuses of in-house foundry. Apple uses ARM license to manufacture own products. I believe they are also working in their own discrete graphics card for laptops. If NVDA takes over ARM this could cause issues for Apple. AMD is going to supply Apple in the near term with discrete graphics cards (in some models : likely to use Intel in higher end models). Apple said a few weeks ago they will move away from AMD in a few years. Intel with its corporate issues managed to put out the Tiger Lake chip. Also utilizing more outsourcing for chips. With all these mergers, the semiconductor industry which used to be extremely cyclical and competitive is becoming more oligopolistic. looks at consolidation in analog semis (Linear Tech, Maxim, ADI, memory , graphics ). Same with semi equipment suppliers where in some business lines, there is only one dominant supplier left ( lithographic - ASML, inspection equipment - KLAC). It has become a somewhat cozy business and the growing margins clearly show this.

https://www.businessinsider.com.au/fauci-takes-recommends-vitamin-d-and-c-supplements-immunity-boost-2020-9 Dr. Fauci says he takes vitamin D and C supplements and that they can lessen 'your susceptibility to infection' “If you’re deficient in vitamin D, that does have an impact on your susceptibility to infection. I would not mind recommending, and I do it myself, taking vitamin D supplements,” he said. “The other vitamin that people take is vitamin C because it’s a good antioxidant, so if people want to take a gram or so of vitamin C, that would be fine.” I do take Vitamin C and D supplements. I have been doing this pre-Covid (Vitamin D, since diagnosed with Vitamin D deficiency a couple of years ago), but In no way do I assume it is a super drug they will reduce my chance of hospital admission by 95%. In fact, I think additional Vitamin D intake likely does nothing unless you have been diagnosed with low levels of Vitamin D. There is even a debate if taking Vitamin D does anything at all if you are not deficient. spending some time outdoors in the sun is likely better, but then there is winter time. I expect a marginal impact in my case and think the risk reward is favorable. It might not be favorable if you have issues with your liver and high doses might even be toxic over time.

I would just add that from my reading of value investing literature, there is an emphasis on limiting the downside. growth investing looks with more emphasis on exposure to upside. now, how does a value investor limit the downside? you can look to all of the metrics discussed, such as low P/E, low P/B etc, look for a moat to limit competition, etc...all of these metrics can be debated as to how effective they are, but they simply are filters that value investors use to try to achieve some modicum of safety. probably the best filter is to invest in a great business, but this is in the eye of the beholder. Buffett once said that he thought Sees Candies was a great business since whenever some guy bought the product, he got a kiss from his wife/GF etc. so I suppose there are many paths.... Personally, I've noticed that it seems the way in which most people apply "value investing" philosophies, encourages continuing to stick with things that dont work. If you've held something for 3+ years and haven't made money, in a crazy blow out bull market like we've seen where almost everything under the sun is making money, you are just flat out wrong and should move on. Sure, it may "eventually" come around, but why wait for a perpetual disappointment to change its behavior, when pretty much everything else is going to reward you today? Blackberry is one that comes to mind in this category. You could have literally held anything else in that space and done well instead of sitting around, hoping and waiting for the tide to turn on a reclamation project..... Don’t all your REIT holdings fit this bill perfectly?

Considering they paid 32 billion for ARM in 2016, and in 2016 Nvidia had a similar market cap to ARM, I'd say both companies have had pretty different trajectories.. The ARM acquisition was certainly a failure, as the revenues haven’t risen much and earnings evaporated. It looks like a deal due to rising tech valuations bails SoftBank out, similar what happened with the Sprint sale. It’s a big positive for SoftBank unless they make another dump acquisition with proceeds.

Good points they securitized loans can still go back to haunt the Mortgage initiator. I do think it’s less likely now than it was back then, when liars loans were common. right now, that doesn’t seem to be the case at all. As for warehouse lines, I think the Fed has basically providing a put for the Credit markets. It is clear they will grease whatever wheel will get stuck on the economy and I think keeping mortgage lending intact would be a high priority. The other negatives (like the founder large cash distribution prior to the IPO etc) are bothersome and one for the reasons this IPO got of a rocky start.

Alta Fox Capital published the result from an impressive study looking at multibagger microcap stocks from 2015 to 2020. very interesting read and some of the stocks may be good buys even now: https://static1.squarespace.com/static/5aaacb57506fbe4636414126/t/5f5ba8c6bba8c27b79d66af7/1599842551653/Conclusion+Deck-+Makings+of+a+MultiBagger_compressed+(1).pdf

Anyone noticed that LAACZ has gone from “limited info” to “dark” status again on OTCMarkets. No idea why, as they published a quarterly report on 6/30. I noticed this when Fidelity pulled my GTC order a while ago. LAACZ flip flops from limited info to dark from time to time and Fidelity (and likely other brokers) will just pull any outstanding buy Order if they happens. https://www.otcmarkets.com/stock/LAACZ/profile

Well, they don’t keep the loans, they are mostly conformal loans and sold to FnF, so I don’t think there is too much potential for mischief there. As long as the paperwork is OK, they should be Ok, regardless of what happens to the loan. This is no different than any other mortgage broker. The positives are that RKT owns the customer relationship and they usually can get the refinancing done too because customer tend to stay with them (75% retention). That’s great news if they grow their servicing business. Then they probably can get into other lines. They claim to have a better software platform, but I don’t know if that’s true. I dealt with them when relocating a few years ago and decided not to do business with them because I could get better rates with a local credit union. There are various knocks on RKT - the various classes of stock, leaving the founder in control No matter what, the fact that the founder cashed out $3B+ before the IPO (cash out refinance so to speak ) and the fact that mortgage initiations are very cyclical and the IPO is very well timed. FWIW, a peer stock is PFSI and it has done quite well too and is worth watching, Imo.

Some thing died inside me, when I read about a $170/month gym membership. Best deal I had with a gym was a membership with 24h fitness, that was prepaid for 3 years and cost $800 (this deal was available in the slow time of the year in June/July typically) about 15 years ago. That was cheap, but the great thing about this was an extension option where after 3 years you could extend the deal for another year for $60. I extended mine for about 10 years Until I sadly moved in an area without 24h fitness. 24h fitness is not a high end gym, but the instructors were actually really good and classes were included in above. Even towel service was free. After that, paying $30/ month for NY Sports club (a much worse fitness studio) felt like a big ripoff. Now, I have a small home fitness studio, but I miss the motivational aspect of instructors. Perhaps there is a Peloton bike In my future...