Gregmal

After continuing the rounds of holiday gatherings it continues to amaze me the share of right and/or left hands that White Claw possesses. To which my only thoughts continue to be, Nicholas Capporella, what the fuck are you waiting for? A LaCroix hard seltzer announcement would probably double the valuation here overnight.

If the inputs are subjective, and the variables ever changing, then it’s no different or more reliable than any other product or paper put together on how to “beat the market”... But there’s nothing that will ever stop the Excel sheet crowd... it has zero to do with the math being wrong or right. It has to do with calculating things that aren’t linear or regularly constant in terms of their predictability. I mean Mr. Einhorn is still absolutely convinced that Amazon and Tesla can’t possibly fit into his 476 tab spreadsheet that justifies their valuations.. a decade later. And if you ask him, the “math” is telling him he s 1000% right... Dillard’s, was an easy way to use math to make money. But you can’t openly apply that successfully without applying something subjective in determining whether the idea fits the criteria for application. And even then, there was the spreadsheet crowd, totally fixated on “they’re got bad operating metrics”. Many of these folks are too married to their own preconceived notions and incapable of evolving with the markets. It’s to their own determinant not mine...but if you’ve cracked the markets with some mathematical formula.... more power to you.

The difference between the blackjack cheat sheet and applying some mathematical cheat sheet to the markets is that the markets are always changing. The 52 cards in a deck don’t. One persons 42% odds are another persons 66% odds in the stock market... and both can be wrong. Whereas a 9/4 against a face card has the same “odds” every time. I’d also add that even an indisputable %/odds(which is rare if not nearly impossible by itself) can change instantaneously, because of some black swan event coming out of left field, rendering the entire premise useless. Such as the for profit prisons a few years back. Over reliance on tone deaf/non malleable mathematics is probably the single greatest area of stealth wealth destruction for otherwise generally intelligent folks in the stock market.

Investing is just intelligent and disciplined speculating. Nothing more, nothing less. There is a thread of the wager inherent in any opportunity. If there wasn’t there would be no variance in rates of return. The Kelley criteria is no different than any other ideological framework. Choose and apply as it suites you. No successful market participant should be married and/or permanently divorced from any specific strategy.

This is abysmal advice. My wife got an MBA from Tuck and it literally changed her career. She went from earning ~$75K in a back-office roll at a reputable mutual fund shop to earning ~$300k in IB. She also made a ton of life-long friends and had the time of her life. Yes, a lot of MBA’s are not worth the money (anything not top-tier), and sure, the value of MBAs to a firm is certainly over-rated. But this is the dumbest piece of advice that people keep parroting Buffet on. (Sorry to pick on you about this, nothing personal). This is in the finance world. With that respect, you're probably right, which is why you always see financial people pushing MBAs or bragging about them. But like an MBA, financial industry people rarely have any value by themselves. Most dont create anything. Their bogusly expensive suites, flashy watches, nice cars and corner offices... all reliant on YOUR money. Much like MBA programs do. They tell stories and promote their importance to separate people and businesses from their money. An MBA or CFA, in a world of selling shiny objects is just another shiny object to sell people. Just like the suit and the corner office. Its why there's so many examples of finance people who earn 6 figure livings, losing their jobs and then not being able to find a job paying a fraction of what they previously made, esle where. Outside the financial industry, the designations, as others have stated here, are largely cover your ass mechanisms for the person whom is hiring. A friend is fairly high level at Lockheed Martin. She's currently enrolled in their MBA programs. She told me that once you hit a certain level there, they required you to have one. But they pay for it, and use a for profit school to secure it for you. Solely a check the box thing. The way to go if you are going for it, is how Castanza is doing it. I remember a few years ago, when interviewing a potential hire, some spritely kid, maybe a few years younger than I, whom went straight from undergrad to an MBA program. Of course mom and dad paid for it. The kid was fairly bright, but thought this "degree" made him more important than peers. And I remember thinking, you're 26 with no real experience and an arrogant sense of security that will almost certainly lead you into making mistakes. Whereas, you could have just jumped straight into the work force at 22 and by this time had an even greater(not to mention more valuable) catalogue of industry related experience, PLUS a ton of money in your pocket AND some valuable relationships/connections... but yea bro, you're hot shit cuz you bought an MBA from Booth...I hired someone else needless to say.

Great decision buying AMD. It continues to surprise me how some (only a few) companies can re-invent themselves. My son (who is in grade 12) alerted me about 2 years ago to what was going on at AMD; he and his buddies are into technology and he explained to me that AMD was a company on the rise. Alas, i was too busy thumb sucking to do anything about it. I use it as an example with him to how small investors can do well if they do what Peter Lynch advises: take advantage of what you see in your circle of competence. I was quite torn about selling it since my cost basis was so low. I like the management team and what they’re doing. I think they have been executing very well. Solid products, good growth in multiple segments and a really solid pipeline. But the valuation has gone bananas. 200+x earnings is too rich for me. But I’m definitely looking for another entry point. It’s hard to say whether this will trade at a fair value anytime soon. Thanks Excellent trade. What made you choose to sell at 200x rather than say, 150x? I am just curious because one area I would like to improve on is with handling these "non circle of competence" buy sell decisions. I can look at a real estate company and say, Im selling at 5% discount to NAV; easy. But holding AMD from 10 to 47 or whatever obviously involved some sort of valuation work and discipline. And like I said, since the earnings multiple was never really all that traditionally obvious, I am curious your thought process; if you dont mind sharing. Also, if you wanted to hang on or rebuy, in the future you can just utilize shorting long dated calls. If you wished to one day repurchase AMD at 30, just sell something like the January 2021 $30 call for $18-19. You get a little extra premium on your sale, are position neutral with no tax obligation yet, and if your bearishness is warranted you then just cover the call position into the decline effectively putting back on your long position- STILL with a long term basis.

I think the above is a great little tunnel to truly see both sides of the man vs machine debate. It is absolutely an advantage playing around with small cap companies where you know the location and/or names of most of the shareholders. If there's 10M shares outstanding and theres some funky trading activity, with a few phone calls and emails you can likely figure out whats up and start "timing" your next move. However, I would have to imagine, that there are some pretty good programmers out there that can utilize machine learning to size out the shareholder base to a certain degree of confidence as well. You can then calculate the odds of each shareholders activity and use filings/public appearances/etc to refine this, over time, becoming probably just as efficient(likely way more efficient) as any boots on the ground shareholder could be. However, again, the catch is that often, once patterns emerge and everyone catches on, they stop working. Which is where a good trader/investor again temporarily should have an edge. The machine one would think, relies on past data and trends/pattern recognition to front run the movements. Over time though the sheer volume of data will undoubtedly allow the machine to win. Human error will probably be the difference maker, and somewhat scarier, if the machine realizes it can manipulate price/volume to influence its results- it will. I could tell you how many times, just this week, where I saw huge flushes of volume and large orders lining up directionally, then, out of nowhere, a couple hundred share trade goes through and all of it disappears and the trend reverses. Everyone has an opinion on what works, and what doesnt. The easiest way to tell? Look at your returns... Of course theres still a large bunch of disgruntles who believe certain types of returns dont count, or $1 made this way or that way is somehow superior, but money talks. Rennaisiance has been the best. Period. When friends/family ask me how/what to invest in, I tell them to take a nominal amount of money and go buy whatever they think will be a good investment. More often then not, regardless of what they buy, they come to the same conclusion, this is just as much a mental game as it is a fundamental one. A lot of people dont have any grasp on that though, but its were the machine programs like Rentech will always have the edge because they can quantify emotional via data and then remove the emotion from it. Which even the best of us will never be able to do 100% of the time.

Added to NFLX puts, shorted some WING, and put back on a small bit of BYND short.

Value investing is hardly the only way to make money. Thats like walking into a garage and declaring a screwdriver the only way to fix things. Many smart guys just prefer it because it acts as a mental valium during turbulent times; thinking they know what the business is "really" worth.

If the malls are the Big Short, is BPY the AA tranche? Something to think about... While "They are kind of internally confused about it." is on the surface just a post from a guy supposedly quoting an intern, on the internet.... even a sliver of truth to that would have me shitting my pants if I was a holder of those securities. The pile of ???? regarding Brookfield continue to mount.

Yup, basically. As Ive long stated, I dont think Brookfield is a short. But when you look at the ridiculous run up in share price, the lack of margin for error, the completely opaque accounting, the fact that they're spending like drunken sailors, and the fact that when there is a dollar on the floor their behavior is only, maybe comparable to something along the lines of Brock Turner around a drunk girl....and yea, I dont want my safety net to be hopes and prayers that they'll take care of the minority shareholder.

Merry Christmas all.

Yea I would definitely concur...and advise, do not ever pay for an MBA yourself. If an employer deems it necessary they will pay for it. But fundamentally it’s a worthless degree trumpeted by financial people who like to swing around titles and designations in order to feel important and justify their worth. But it s really just a bunch of sound and fury, signifying nothing. So don’t get suckered into paying for it yourself.

I was more referring to the specific Norwalk property, but generally speaking, a tier one, shiny mall like this one, will still easily command a 5 cap or so. There is likely nothing in the portfolios of the names you mentioned that compare to some of the stuff the Brookfields and the Simons own. That said, I’m obviously in agreement on the risk angle. These guys are at least buying hard assets, but they’re spending like drunken sailors. I did have a good chuckle at the Cincinnati Bell acquisition today. It’s a fuckin free for all. And it only ends well if rates stay low for a while. Which I think they do. But I also don’t think we re being adequately compensated for the risk anymore.

GOOG is a whole lot closer to FV than where I bought it ((~$1050 blended). I sort of try to reduce positions when they approach fair value, although with GOOG, it’s a tough call. CTVA is my 3rd round trip this far. Yea IDK. I just dont think you can really ever get a "fair" value on something like that. Its one of the largest companies in the world, and covered by everyone. IMO on a relative basis its probably pretty efficient in terms of how its priced. So you dont ever really have an edge. I remember David Winters saying it reached fair value and selling(a guy with like 2% portfolio turnover) at like $1030, a few years ago. Now its $1350. To me, or at least what I tell myself, if that its an irreplaceable business, that should do better than the market on the way up, and hold up better on the way down. As long as it trades at a price I can cross a few bridges to rationalize, I dont ever see myself selling it. Just buying the dips. One of the few securities in my portfolio I have in that category.

Exited all but a few remaining shares of TPL. Love the company, but high 500s to almost $800 in a couple months works for me. Agree its probably wise to lighten up GOOG too, but I am incapable of selling it. Same goes for MSG.

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.

Added a little CTO. Always amusing how the brainiacs at these "institutional" firms can be so stupid. Yea...great time to liquidate your funds position; 3 days before Xmas, during blackout... LOL dopes

The WSJ article is not wrong in that the Malls are struggling. A month after the new premium BAM’s mall in Norwalk CT opened (It’s call SONO mall), another Mall in the adjacent town (Stamford Town center Mall) which had an Apple store and was where my wife bought her Rolex watch, announced the entire mall is on sale. I speculate one of the reasons could be that Apple and a couple high end stores are moving to the new Mall. I think for 90% of people just saying that the mall space sucks, avoid it, is good enough. But inside the investment arena, its actually pretty interesting in certain places. So B/C malls basically have no value. That hasn't changed and IMO won't. But Ive noticed now that new development, and high end locations are actually somewhat healthy and even thriving. Ive noticed in several places B mall anchor tenants leaving to take up space as just another tenant in a new development. The key element from what Ive seen is being at the best location in your area. If you are, all the stores still want space. So I wouldn't necessarily be too concerned, as a Brookfield development is almost always shiny, highly promoted, and typically in decent areas. Ive seen the progression of the mall you are referring to; my son loves the aquarium next door...my wallet, not so much. But thats an area that sees traffic and will draw people. Basically, it is my believe that the carnage in mall won't kill everything. It just changed the game. Companies used to be able to get away with multiple locations in close proximity. Now they seem to just want prime ones. But I dont think they will ever not want any. Location, location, location I guess lol. Real estate 101 currently doubling as "How to Survive the Mall Meltdown"

Kind of tangential, but do you have any familiarity with Tecnoglass? South American companies are tough...

Whoa whoa whoa... you mean to tell me that as an established fund manager with a real business you don’t live in a giant mansion paid for by extracting fees from people?? All jokes aside it’s refreshing every once in a while running into someone in the financial industry who isn’t a totally selfish piece of shit only concerned with stuffing as much money as possible into their pockets. Cuz it’s like 98.5% of them.

You can find a $1500 garage door and a $5000 entry door just as easy as you can find a $10,000 garage door and an $800 entry door. The prices will vary but if you shop around you can get to wherever you want on pricing on the hardware. Installation is always where people get fleeced. For certain tasks, such as something like this, I ve had much better luck ordering the part and having it shipped to the house, and then paying a quality handyman any variation of an hourly rate or a per day rate. ($40-$75 per hour and $300-$600 per day would be a reasonable range)

Ive said it before and Ill say it again, but Im surprised at how many people are in favor of the changes being made/suggested. Theres a saying if it aint broke dont fix it...Not only was this not broken, but it was glorious example of something so unique and largely uncorrupted. Was there much of anything that did better than TPL? With less operational risk? Yes the trustees were scumbags so that has to change. But transforming this from what it was, into an operating company who is making acquisitions, taking on risks, and burning resources on G&A? IDK, seems like an unnecessary risk to me. Additionally, water rights arent the easiest of businesses either...just go look at PICO and its history.

Or maybe, like everyone else who’s invested here, deep down, they just want a tax write off.

Maybe its over simplifying it, but my understanding of outflows has always related to ETF and funds and is as simple as the net of new investor money vs existing investor money. You have $1M of new shares issued but $5M worth of existing investors requesting redemptions... thats $4M net outflow. This wouldn't be something that applied to individual securities IMO.