Gregmal

Appaloosa, absolutely, like 1000% certainly, does use leverage, as do most major funds. Especially those who run credit funds and get involved in distressed asset investing(which is Appaloosa's bread and butter) Even the simple structure funds like Perhsing Square deal in swaps/OTC derivatives, which is another form of leverage.

Nothing solid. Its simple but do what you're comfortable with. Some people cant stomach any margin. So it would be silly for them to use it because that fear would weigh on your decision making process. One thing I like to pay attention to are look through leverage/debt ratios, and also types of debt. You also need to look at valuations(duh). I mean Berkshire has virtually zero debt and a massive cash pile with a reasonable, REAL EARNINGS supported valuation. I think one would be just fine with it levered at lets say 1.5x. Personally could probably sleep at 2-3x. BRK at 2x leverage is still probably safer than having 10% of your portfolio in GM or Ford, or something like that. So it all varies.

I just kind of went with what writser wrote as its in the ballpark enough that I didn't care to split hairs. I dont necessarily think its the best method for evaluating Burford.

Yup, almost always. If you can manage the risks involved in what you are investing in, its silly not to if you can borrow at 5% or less. Especially with real estate investments.

The hype picked up again moderately in mid December with a couple television appearances and conferences. At this point, at least with those whom Ive discussed the name with, it is wait and see. The changes that were said to be adopted are all great on paper, specifically the US listing. Burford is also a company that only reports twice a year, with much of the shenanigans coming almost immediately after their 6 months results came out. Next reporting date is in March, so still very much away from any(expected) news of material events. The biggest variable here is still Petersen. I was discussing this with a few folks privately way back when all the circus was going on, and its quite interesting how much effort Muddy Waters put into fabricating and weaving partial information or deliberately misinterpreted items into a story about the crime of the century when the biggest and most obvious question relating to valuation is Petersen. IMO Petersen is hardly a sure thing, and even if the outcome is fairly certain, the financial benefit is far from. You have the markings of that investment shrouded in secrecy, and a mountain of political uncertainty. Until it is monetized in one way or another, its hard to value it as a significant cog in the Burford equation. But yea, at 1.2x book, assuming the general business has not deteriorated and still is capable of attracting fee earning capital, you're probably in pretty decent shape here. It is interesting to watch the divergence amongst the litigation finance names. IMF, LIT, and BUR now basically all trade on their own and irrespective of each other whereas previously there seemed to be a lot of correlation.

The very tough part is being right. In the new 100 bagger book, the author discusses Monster energy, which was written up as a short on VIC prior to becoming a 100 bagger. In hindsight its much easier to see the path to 100-baggerdom, but how often would we invest in things growing rapidly and turn out to be wrong. If it's priced in and you are wrong, then your investment results can turn out very poor. One thing Greenblatt talks about is that he doesn't swing for the home runs. Is swinging for the multi-bagger opportunities the easiest path to success as an investor? Charlie Munger likes it that way, but how many of us can compete at that level? Theres balance and you need to approach these things differently based on your strategy. I have several different "areas of allocation" if you want to label it. A certain core is very boring and dry and in principle designed to just compound at reasonable rates with little risk of loss. Then there are moon shots. Then there is other stuff. If your objective is finding 100 baggers, you probably are best suited to take a Motley Fool approach were you own a little bit of basically everything thats interesting but have zero concentration(in terms of allocated cost basis) and then literally never sell. A $1M portfolio might have 250 positions and they all are started with a few thousand bucks. The premise being that you can only lose 100% of an investment but can easily make much more. Its a Wall Street fantasy/selling story that one can take a value approach and then just randomly see the light and put 20% of the portfolio into a future 10 bagger and hold the entire way through. Even Carl Icahn's Netflix bet, which was the closest Ive seen to something like that, in dollar terms, wasn't a huge allocation and he sold it way too soon. I won't mention Cathie Wood because some folks in the investing community dont think the dollars she invests count as much as other dollars or something. But she's on to something as well if you simply want to look at results.

The shovels seem to be ready and there is a clearer picture of the development plan. They are going about it in a very lucrative manner. Another company I own, Pure Cycle, is basically experiencing the same things. These type of sleepy hard asset companies often take forever to get going, but once things start buzzing, theres a lot of money to be made because value unlocks itself quite rapidly. I was quite disappointed to see the idiots at Consolidated Tomoka basically just blow out all of their land holdings wholesale style to anyone willing to take it. Tens of millions in value was destroyed. Whereas here, they are going about it in a way which lets them capture that value. As Mark Harding, CEO of Pure Cycle stated in relation to their land development: "We're really looking at users, builders on this thing rather than kind of sell it to somebody who is going to sell it to somebody. So we want to be a little bit more patient with that because we've got -- we really are monetizing the project very nicely, and I don't want to miss out on sort of undervaluing the commercial which then continues to grow in value because of what we're doing on the residential." JOE is doing exactly this.

NOOOOO! Cherzeca keep politics out of it! Now the thread must be moved!

I think Children's Place is a better comparison in terms of the business....but the balance sheet is awful.

I think the appropriate way to view this, and stick with me because we are in crazy times, but, it needs to be viewed as a long term investment. Doctoring the variables that collectively create your valuation “input” as defined by “how GRIF is valued by the market” is useful with respect to finding upside. But ultimately the ball is in their court and theirs alone. Removing the notion that if push comes to shove, they are sellers of stock rather than buyers, is important. And other than that, sellers all or parts of the company will do the trick as well. The other option is a share repurchase or tender. But as we write down our expectations and just view this as an investment.... it makes things much more simple(and likable). As a worst case they probably grow the NAV, let’s say 10% a year. BUT, as a shareholder in a discounted stock, you don’t get that 10%, as of now, you likely only get credit from the markets for 50% of it... so, we know have what I view as the most likely worst case scenario, which is that we see 50% of the $8 in NAV growth(assuming $80 NAV), and $4 a year on a $40 stock... not too shabby at all.

PCYO

Added to short positions on PLUG, WING, and a little SPCE. The poo poo basket.

This was the crux of my Trump rally thesis. 2014-2016 we saw margins maxed out as in the years prior almost all waste was purged. The only two levers left to pull in 2016 were tax cuts and perhaps the pro economy policy ticking up growth a little bit. I dont see anything else now.

Two more buildings purchased in Orlando. While I still totally dig this as a great place to park some cash, the more we see acquisitions, especially ones like this, the less likely we are to see any sort of game breaking event like a sale of the company or a meaningful buyback. So thats not to say, be bearish on Griffin, but if one had the odds of them selling the company or repurchasing stock(or any other narrative busting/valuation improving event) at say 35%, I'd say events like this knock a few more percentage points off that number.

With the emphasis on look. I guess a lot of Valeant investors also looked like geniuses until August 2015 :-* edit: I find it interesting that their super de luxe TSLA valuation modelTM https://github.com/ARKInvest/ARK-Invest-Tesla-Valuation-Modelwas not updated anymore since last May. I'm still looking for the first long investor who has done as much research as the people on the short side of the trade. One recent example: https://www.plainsite.org/realitycheck/tsla.pdf Which are all points and reasoning that continue to miss the forest for the trees and lead the geniuses to slaughter. First, how much research one does is irrelevant if it is 1) flawed, and/or 2) you dont make money on your investment. Its one of the most amusing things I continually notice with "the smart money".... How was Ackman's 300+ page HLF slide? Many of these guys take more pride in their research than their returns, which often beg the question, "why has the index kicked your ass for nearly a decade now?" But, outside of this, its really quite simple. Who's shoes would one rather be in? Cathy Wood identified, and has stuck with, what has to do date, been a home run investment. Her funds have crushed it, her business is on fire, and at the end of the day, if/when the story changes, she will have her decisions to make. OR the disgruntled and bitter short seller who has mountains of "research", massive losses and carry costs, woefully underperforms, and spends a good chunk of his time whining and making excuses about how everyone else doesnt get it; grasping at straws and clinging to comparisons like Enron or VRX to justify continuing his crusade? (Which by the way, despite VRX's fate, who was really the winner there? The guys like Chanos who shorted it at $60 and spent years getting hit with HTB fees and claiming "any day now" as the losses multiplied, and even after the big collapse really didn't have an IRR that justified the time and headache the investment ultimately presented? I have been and continue to be as bearish about Tesla as the next guy, but at the same time continue to be amazed by all the geniuses who just cant remove their emotion from the investment and come to terms with the fact that they have no clue what they are doing here. And I also think its shameful that these same clowns disparage someone who deep down, they probably envy, for nothing else, but making a good investment and running a successful business. But outside of that... I don't agree. Bill Ackman was also one of the most vocal investors supporting Valeant. What do you think the investment community would have thought of him if he would have sold his investment at the 250ish top? His returns would have been great, but everyone would have known his research process was flawed and he just had a lucky timing with his sale. Similarly, if Tesla turns out to be a 0 in the long term, but ARK manages to sell out at a profit, it would also be clear that they were just lucky. Maybe you would like to invest your money with asset managers that are lucky, but I prefer to invest with asset managers whose investment process I can trust. Buying and selling at the right time is probably the single most important element of the investing equation. RE: Ackman, nothing of his was flawed whether he sold at 250 or at 0; the story changed and he missed it because he became emotionally involved. Whats the difference between Andrew Left's return on VRX and Jim Chanos? About 3-4 years. So, timing. Its a pretty flawed argument, not to mention immensely arrogant to basically just assume that because your "research" leads you to a different conclusion than somebody else(forget the fact that they are sitting on a 10-20 bagger compared to either negative returns or no position for you), that they are lucky and you are right. I value results so I could care less whether one is lucky or whether I am capable of understanding their process. I manage my own money and that of others so I do not have to chose an asset manager to begin with. But for those looking for one, track record is important and one glaring warning sign is somebody who has been hooting and hollering and crying wolf now for half a decade, unable to see that they are wrong. Worse IMO than someone who correctly called a home run and then failed to monetize it.

1810.hk

Given the divergence BRK has actually starting creeping up my list of "attractive" investments the last few weeks/months. I hate the inaction and cash build, but given the circumstance, if anything, I would adjust the lens I look through and perhaps see it as a way to maintaining a modest, but impactful access point to investing if reasonably priced equities. Even if they hold AAPL to eternity, the huge cash surplus balances out the volatility in the portfolio, should there be any. I do think the above conversation reveals one thing; it may be great that companies are paying out more. Definitely! But at around 100% payout for the average company, the things RuleNumberOne has been harping on, like earnings and revenue growth, will really start to matter. Given that the future valuations will be dependent upon this...it is hard not to argue that we arent getting very much if any margin of safety at these prices.

Maybe a hair out of the comfort zone, but I would definitely explore a for sale by owner type deal given what details you've indicated. Bay Area properties are as liquid as money market funds.... Run a FSBO with a 3% commission for the buyer agent. This way you save 3% yourself, but have a motivated agent. You can basically then have your lawyer handle a lot of the typical real estate agent bs and do what you can, yourself. If you break down the numbers, assuming you've got a $2-3M pad(just guessing based on BA home prices) you're talking about saving yourself like $50k. So even if you need to pay on the back end to get to closing, I guarantee it would still be cheaper.

Ive had a lot of luck working with middle aged women, who left their careers to raise the kids, and then once the kids left high school and went off to college became agents. You can absolutely ask for CVs when scouting agents. The above described agents tend to be focused, professional, dedicated, and while financially secure, doing something they are motivated to succeed at as its often a reinvigorating process getting back out in the field so to speak. I'd personally stay away from early 20 something agents...mostly enamored by "work for yourself and make lots of money" marketing... as well as the big name ones who have so much business that they dont really care about any specific transaction.

I had similar thoughts last night when looking at MSFT, which I posted in another thread. The only flaw I'd say is that some companies do fund these things with debt. Maybe valuations have permanently moved higher. Its the supermarket sale dilemma. Just last week your box of cereal was $2.49 on sale. Now its back to $4.99. Do you wait to buy it? More often than not, you get sale prices again, but theres no guarantee and sometimes the price ends up staying higher permanently. You can always just stop eating cereal I suppose.

I looked at CLMT a while back and continue to mess with it a little in terms of putting together some positions; although none of any significance in size. But whats attractive IMO, especially if you dont really need this to perform immediately and arent married to seeing the whole thing through....theres a ton of juice on the options. You could sell some $3 puts and then some the $5 calls for August and collect about .90-$1 in premium against a $4.5 stock. Should the stock take off you miss the multi bagger but I dont know too many who would complain about making $1.50 on a $4.50 stock in 7 months. You could do a similar trade selling May $4 puts and May $5 calls against a long position and take in 70c in premium for 4 months...

AYR I thought of but it's weird. I think its got a pretty high chance of doubling. But multi bagging even over an extended period time is tough because their big edge is currently wholesaling. Which should clean up for a few years but is very much endangered if federally weed gets green-lighted because one of the main reasons you have opportunities AYR is exploiting is because you cant ship state to state or lets say, outsource production to the most efficient areas such as South America. Growing dope at $1100 a lb and selling it at $2900 only works because they cant haul this shit in from Vermont or fly it in from Colorado.

I'll add Atomera as well. Kind of an interesting little company that has a shot to be a 5G superstar depending on adoption of MST.

Adding color to XPEL, it was a multi bagger from prior, but what really added the gusto to this thing was the 3m lawsuit that took this to $1. Ideas otherwise Likely HTL- growing organically at low-mid teens, uplisting probably adds 20-30% minimum to valuation PCYO- you've got $2B(in todays dollars) in "eventual" asset value, only question being how quickly they got monetized EDIT/CRSP/NTLA- you basically have the entire CRSPR play/theme rolled into 3 companies with maybe $5-6B in market cap. The opportunity is probably 100x that number. Granted, real revenue/profits are maybe 7-10 years away. But by then, if this works, well... Probably not but has the potential Northern Dynasty- Pebble Mine probably aint happening Definitely but you'll never get it Buck Hill Falls - Shares conservatively worth $75, trading at $14. Maybe 1000 shares have traded in the past 5 years... RSRV- the best play on oil that you'll never be able to take a real position on.

I was looking at this stock for some year end dislocations, but there isn’t much volume. I don’t think their last acquisition indicates that management is selective about where to put their money either. Shopping malls in Jacksonville ? http://ir.ctlc.com/file/Index?KeyFile=401493134 The main driver right now, as you pointed out, is probably the volume. Any half observant investor sees that, yet Mr. Institution somehow just decided to blow out 250k+ shares in what seems to be a few days...genius. I wanted to double check my cynicism, but a look at the rest of the V3 portfolio was just as baffling and confirmed that these guys just have poor judgment. I am having a hard time reconciling the volumes, so perhaps the company took some of the shares privately, although Im almost positive theyre currently in a blackout, so not sure how that works. But what an idiot. They've been monsters repurchasing shares since Winters left and would have happily taken down those shares if this guy wasn't interested in packing up and going on vacation....I'm all for using 4% debt to buy as many shares $15+ below the low end of NAV. The Jacksonville purchase isn't totally out of nowhere. They already owned several outparcels at St Johns from another deal. Simon owns the other half and its a very upscale retail corridor. I can live with it at a mid-high single digit cap rate and their track record in Florida, which is very good. I'd rather they stick to Florida than try to be heroes buying crap like Party City and Joanne's up in NY and MA...I also think the property serves other purposes; mainly I believe it will be mortgaged in order to retire the convertible note in early March. Getting rid of that poison pill is huge and basically puts the company in play. Either way, at a $280M m/c and a few upcoming catalysts, its one of the few things not nosebleed expensive right now I justify chucking money at a little bit. So this obviously worked out on little basis other than just the stupidity of a "smart money institutional investor" guy dumping 5% of the shares inside of a few days...but on the subject of Jacksonville real estate, check out the attached flyer. I really dont get it. I would never in my wildest dreams pay this type of dollar for assets like this.....but plenty of people do. Theres also stuff like this https://wolferetailgroup.com/properties/7-eleven-4/ Pure insanity. But nevertheless compelling if you own a good chunk of this type of asset. EDIT: OM appears to be blocked in attachment, but property can be viewed here. https://www.crexi.com/properties/282906/florida-red-lobster?crexi_url_type=2&eblast_position=1&subtemplateId=15&templateId=50&utm_source=Internal&utm_medium=Retail_MarcusMillichap_VA_NC_IN_MO_MN_KY_OH_TX_CA_FL_IL_&utm_campaign=1_3_20_12_00 Red Lobster in Jacksonville- 5.5 cap RL32218.pdf