Gregmal

What is your expectation for EZPW? Seems with Cohn back in charge and paying himself well, no incentive to common stock value? So it's cheap, but seems the market doesn't trust him on account of his past actions, and the financing last year was probably also so expensive because nobody trusts the guy. Thanks! I'd concur with that assessment. I think saying the bar is low here is an understatement. The guy is a world class scoundrel. I was absolutely floored by the stock awards they hand out as well. But at the current prices, I believe that is well reflected. This company, even with its mismanagement, hasn't spent a whole lot of time trading below a 7 handle. The Cohen thing I think really seemed to be the last straw for many people. So my feel there was that you had a point of capitulation. I certainly wouldn't expect improvement as far as governance goes, but the buyback is important and if used should put a floor under this. And then, again because expectations are so low, I think give this thing a pop once its confirmed they've actually been using it. For a company thats exceptionally cheap, that'll move the needle. My tipping point to jump in a little was the glorious public beating Aaron English put on these guys during the latest call. No I dont think it will change these scumbags, but I think at least temporarily, everyone kind of has an incentive to at least get this back to the pre Cohen announcement levels. Many times Ive found that these hucksters like to remain in the dark and control the narratives. When they get called out like this, sometimes, there may be enough of an ego involved that it compels them to make minor(and usually temporary) adjustments to save face a little bit.

Gartman has had some absolutely epic moments and flip flops/embarassingly poor on timing calls, particularly during the oil crash in 2015-16. He is in many circles thought to be a contrarian indicator. One week he was making profound statements about we're definitely headed lower, only to mark the bottom, and then a few days later, profoundly declaring the bottom was in, only to see the bottom fall out...round and round for a good while. He's also one of those, "I'd be long emerging market equities but only hedged via mid duration sovereign debt, in yen denominated terms" kinda guys. A real goof. But yea, IDK know and totally agree with you guys, this stuff is getting kinda batshit crazy. Apple gapping up the way it has and continues to do. MasterCard, Now even GE +7% for no reason. I was long in the camp of "youre a dope if you think we're in a bubble", but the last few months have been displaying all of the signs and textbook markings of one. Whether in 2-3 years I sound bitter about getting it wrong like Gartman, as the party rocks on, IDK. But I think the moves in a lot of stuff is unhealthy.

5:0 (FTC vote against the merger ) is a pretty clear score in a soccer match and this is no different here. I don’t think this merger is going to happen. PACB’s board need’s plan B and that means a merger with another partner, even if they pay less. Its official. https://seekingalpha.com/pr/17738247-illumina-and-pacific-biosciences-announce-termination-of-merger-agreement Interesting how they basically get to an agreement with the UK regulators, and then our own regulators bizarrely, after presenting zero previously, kill the thing.... oh well. I got in at 6, got out at 5.40, had the timeline spot on, even the resolution in the UK, and then got burned by the regulators I completely underestimated. Cant win em all. In this market it'll probably be at $7 in a few days anyway...

I have seen few folks as consistently wrong and outlandishly stupid as Dennis Gartman over the years. He may deride those making money as "“young, brash, utterly naive, ill-educated, egregiously overconfident, neophyte-yet-fearless ‘investors.’” .... but Dennis is unequivocally "“old, brash, utterly naive, ill-educated, egregiously overconfident, and fearful’” Its like the guys who have been wrong just feel the need to get louder rather than look for ways to invest. While things have definitely changed IMO over the past few months, it wasn't long ago you could find TONS of quality companies trading at very reasonable valuations. That number has recently declined substantially, but that still doesnt mean there arent opportunities. I mean, even a 100% layup for these dopes would be Berkshire. I dont find it the most compelling investment at the moment, but for shits sake, it is undoubtedly a 100% better option than just sitting on cash. And I dont think anyone can make the case its "expensive". So what are people like Gartman whining about?

You are assuming that they are 100% long all the time, which is not the case with hedge funds. When the index went down 20% last year, they were probably down 8%. The index fell 5% last year, and the smart folks "only" lost 4%. Thats a big 90 basis points of outperformance during a bad year if it means sacrificing 20%+ during a good one. Overall, the industry saw its biggest annual loss since 2011, declining 4.1 percent on an a fund-weighted basis, according to Hedge Fund Research Inc. https://www.bloomberg.com/news/articles/2019-01-09/hedge-fund-performance-in-2018-the-good-the-bad-and-the-ugly

Or put another way, the "we dont try to beat the index" only became a marketing pitch after years of futility. If the mostly widely accessible, highly endorsed, liquid product, available to absolutely anyone, did 30%, and you did less, YOU made the wrong call. Now I say that lightly, because strategies change and no one gets it right all the time. In fact, I dont even think every fund manager, should consistently be expected to beat an index all the time, but performance like what many of these guys put up is inexcusable. And to make matters worse, they cant ever say "we were wrong". So instead they dishonestly move the goalposts around and pay healthy sums of your fee extracted money to marketing folks to come up with clever new spin and sales speak. I know plenty of folks who manage money and who dont always "beat the index". I know plenty of folks, who do. None of them "need" all these super fancy offices, and suites, watch, shoe ensembles to do their jobs. They dont need the fancy degrees from waspy universities either. In fact, I think the story of Bill Ackman is a pretty informative one to observe. He got caught up in his fame, his arrogance and ego became his undoing, his celebrity status and wealth became the product, and he sucked a big one. He then commits to get back to basics, downsized his firm, kept quiet, basically became simplified and long only...and voila, his returns this past year basically resembled those of many of the fine folks here who do those returns from home/normal people offices, AND CRUSHED "the market". I think a lot of the "highly complex" stuff is also just marketing bullshit. There s a line in the Big Short, something to the extent of "its meant to be that way to make everyone feel stupid"...and I think a lot of that applies with these funds. There are obvious exceptions...despite blowing up, the LTCM guys for instance probably warrant their weight in gold, as do others. But the majority are judge ultra advanced hucksters.

Because these same "hedged" funds, also get walloped and underperform big time on the way down, as was evident last year and in previous choppy years as well. Over the years, many "hedge" funds have evolved into largely long only or active in esoteric trading strategies, but certainly not hedged. If anything, as you insinuated, the "hedge" has just been salesmanned up to rationalize poor performance. You can justify doing 8% against 30% for the index when you did 10% vs -5% for the index the previous year, or something to that effect. It doesnt fly when you've underperformed the index by a huge margin for a decade. Further, in relation to 2019, it is also surprising given how, basically starting in q2, there was a noticeable capitulation amongst many of the smart money funds; the FANG stuff literally started showing up everywhere in the August and November filings. So somehow, even with the outperformers, these geniuses found a way to suck wind again. This, plus, assuming you didn't totally get played last December, everyone, period, no matter what "strategy" you used, got a 10% bump just holding onto the same stuff they owned for the first couple weeks of January.

I'm kinda mixed on this because I feel its(like everything) situation dependent. Spek is probably right though, a lot of the recent "fund manager wisdom" IMO stems from capitulation and is influenced by one of the greatest bull market stretches in history. I try to do a bit of both. I have a core of investments I literally never sell. I have additional allocations to those core positions that I allow myself to trade. Then I also have a percentage of capital that is purely for trading. It varies on a short term basis with regards to what works better. I wouldn't recommend falling in love with either strategy, just staying flexible and open minded. Earlier in the decade I made a lot more money on the buy and hold stuff. The last few years its been trading. This year in fact my core stuff was pretty abysmal, with the top 5 maybe doing half of what the S&P did. Whereas I did triple digits trading. Things like CLF did virtually nothing on a buy and hold basis, but generated solid returns via trading. MSG I held and even added to, but never sold a share, and it returned like 10% for the year. The flaw with this managers analogy with compounding, is that buying and holding is not the only way to compound capital. Not even close. I'd probably argue in fact, thats its easier to compound(ignoring taxes) just bouncing around to the highest conviction ideas. Theres something mentally, that prohibits valuation sensitive investors from ever being involved in a 10 bagger or 100 bagger. You will NEVER own a NFLX or AMZN or TSLA all the way through if you pay attention to those things. But, you can fairly easily, consistently(like on a regular basis) find ways to pick up a quick 3-5%, over and over and over again.

https://nypost.com/2019/12/31/steve-cohen-one-of-few-bright-spots-in-bad-year-for-hedge-funds/ "The average hedge fund this year is up 8.5 percent" How is this even possible? Just bouncing back moderately from last November/December should have had folks in low-mid teen return area. Would have thought for sure the returns would have been similar to what a lot of folks are posting in the 2019 returns thread. Truly incredible the degree to which "the pros" just completely fail.

Something I do, trying to capture and detail many different things of use to me both from an investing standpoint, and a life perspective, is document or remember how things happen and how I respond to them. One of the neatest is the Annual Letter to myself. We all love reading the Buffett Letters, as well as probably quarterly or annual letters from our favorite managers. It helps spark thoughts, puts things into perspective, and tracks the evolution of "something" that obviously is of interest to us. Also a great way to detail things like "am I on track with my "guidance" from previous years?" "Am I typically consistent or all over the place year to year?" "What do my previous forecasts look like and where were they right/wrong?" "What is my forward outlook?" "What did I do well, and what could I have done better?" Curious if others do anything similar.

Just wanted to bump this before I forget, if nothing else as a reminder to myself to swing back and do further work. Thanks to John for mentioning in another thread. Looks promising.

Are people really giving this guy a hard time about not CONTINUING to post about this? Thank him for being useful, ignore him for being annoying, laugh at him for being dedicated; whatever. You're entitled to nothing. Ive made money reading absolutely preposterous banter from people under the spell of stock promoters and Ive lost money following billionaires....everyone is responsible for themselves and their actions. Third parties are just pieces of the puzzle that makes the markets. Is he right?, or wrong? Is he trying to play me? Am I playing him? Is he misguided, or intentionally misleading? Is it useful, or are we being used? All in a days work....

Added a good amount of PCYO the past week, EZPW, added some CTO, got some GRIF today, and for shits, got into some $5 calls on TAST as there seems to be a reasonable chance this'll bounce over the next Q. Like last year, dont think I really need to do very much in order to do very well in Q1.

AYR Strategies in Canada, not Aircastle Limited on NYSE

There lies a problem with me. You have a CEO now that is a non-O&G operator. Not sure you want him sticking around for six months.. Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out. Everyone else is just going to let this comment go? "Management teams almost always have the incentive to put a company into bankruptcy". This is simply mind-boggling to read. I'm not sure where this poster works or what companies he follows but I hopefully have nothing to do with the same companies he follows. With certain setups, particularly heavily indebted companies with new CEOs/management teams, its a no brainer. Look at SD, EXXI, BTU just to name a few. Use common sense. You're "the guy". Comp is heavily issued in shares. Shares have a noose around their necks called debt. Your earnings, are crippled by interest expenses. You know theres a substantial chance that even if you do your job well, it won't matter. VS Restructure the debt, get issued new equity(sometimes as much as 10% of the newCo) and now have a clean balance sheet to work with(which also gives you the ability to enhance your "company" with acquisitions or financial gimmicks).

For those with a weak stomach and no tolerance for volatility... Pure Cycle For those willing to take a little risk. AYR Strategies

Sitting here watching the final tickers trend of 2019, I come to the realization we all missed the most obvious one....pot stocks.

There lies a problem with me. You have a CEO now that is a non-O&G operator. Not sure you want him sticking around for six months.. Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out.

Soooo.... after a long drawn out process, talks of simplifying the company, selling noncore assets, paying down debt, and buying back stock, OXY sells half billion of assets to HHC, who claimed to being trying to do the same type of things.... Perhaps Im a little skeptical, but I just cant stand how public companies absolutely refuse to ever "really" shrink the company.

What an awesome post Castanza, thanks. In relation to your trade, this has to be one of the best posts Ive ever read on this site and should really be a nice starting point/primer for anyone looking at the framework of the perfect investor. Take a fundamental understanding of a business, watch it play out, anticipate certain catalysts, holding through speculated momentum surges, and then flipping into the crescendo. Especially impressive allowing your understanding of the share price driver to trump your itch as a value guy to bail on a richly valued security. Value, momentum, and timing=$$$$$. Hard to fuse all 3 but when done, its a beautiful thing. Well done.

Started venturing into SPCE with some puts.

To truly answer the question, we can likely deduce the average value investor is not an Uber driver but rather a white collar worker who earns a reasonable amount more than the Uber/lyft driver. Therefor, the answer is Lexus and Acura’s.

I'd echo Subaru's and also add Mazda. Both are totally underrated, high quality yet affordable cars that dont get talked about enough.

Or.....enter black swan... not unheard of in the world of professional boxing. The fight is fixed and Mayweather takes a flop, and all of our observable data points were irrelevant. Those that wagered correctly, lose big. And then you get "the rematch", which pays Floyd and Conor for round 2! Often following the money/financial incentives is pretty useful as well. In which case McGregor's weighted odds would have been higher than the ones purely based around the data set above. Which one is the correct one? If this happens 100 times, what is the distribution? Subjective and interesting nonetheless.

In which case it’s really no more insightful than anecdotes like “buy low and sell high”. Giving greater weight to your highest conviction ideas is really just common sense. But it’s also again, subjective. Buffett, Icahn, and Tepper all have different top ideas. Some will do better than others. When all else fails, look at your results.