Gregmal

Sure we got say things like "worst case scenario Warren, is basically like France or Germany"...but lets not forget there is a reason the US economy is far superior to anything in Europe, and there is a reason US markets get premium multiples to Europe. So worst case, Warren erases a lot of that premium, and IMO theres a long way down. Wealthy people are fleeing France because of their crooked tax schemes orchestrated by the government, and Germany has basically confiscated residential real estate through price controls.

Well, with any other company, this would be called a red flag, at best. Berkshire gets judged differently though for some reason. Maybe they'll try to salvage the mark to market by taking it private again! The last big elephant!

I'd still probably spend the same amount of time on investing...I'm an addict. David Winters said it best when he called inviting a "global treasure hunt"...but yes, to answer your question...we'd basically become France...where June-August offices are mandatorily closed and it would be illegal to respond or even check work emails between 6pm and 6am. How boring...and how opportunistic for those of us that dare work, or enjoy what we do.

I agree about political risk and have tapered, and continue to taper my portfolio to be much more neutral by the time we get a handle on the Democratic nominee. Japan comparison has always fascinated me, but I think its unlikely, some of the reasons in the blog post address why. But whats important to consider with Warren, is not really what the actually policy does to a business's fundamentals, but the effect it will have on the market. Maybe nothing tangible materializes, but that still doesnt mean we couldn't/cant see multiple contraction.

I don’t own NFLX, but I am customer and think neither Disney + nor Peacock is real competition. The only real competition for NFLX right now is Amazon video. It would consider NFLX as a long of they were FCF positive, but they aren’t - they use $3B in cash annually right now. They do gain a lot of customer and it is sort of understandable , since they need to pay for content upfront, but I would rather stick with business models that generate FCF and can grow at the same time. NFLX right now can’t, but I don’t think it’s a great short either. You've mentioned your concerns on MSGN, but for the sake of some Friday night chat, you have any thoughts on SBGI or FOX? Im digging around in those and they look good so far. Recent piece on CNBC(I forget exactly when) basically stated sports and live TV would soon pivot to being a desired asset to streaming co's. Those two kind of own that space.

https://seekingalpha.com/news/3513163-ad-supported-peacock-streaming-may-come-free-cnbc Yup, no competitions concerns here. Just keep raising prices and signing up international accounts...

http://brklninvestor.com/blog.php Good read about how silly all the bubble talk is.

I put on a quick trade here today. It seems this has lagged everything, including some of the stuff mentioned above regarding its larger holdings, not to mention the broader market. The stock traded at levels we know they were buying back stock at, into the Q3 close. While I am sure Warren doesnt fret what others think or are saying about him, I am sure he 's not totally deaf or blind, even at 90+. So in other words, I think theres more negativity baked into this than necessary, and that Mr. Market could be pleasantly surprised by whats reports, in which case, Im looking for a relatively risk free $5-10 a share in short order. As always, I could be wrong, but in that event, theres worse things to own.

Either way, I think the situation has gotten interesting. First my speculation and subjective 2c. Stocks trade in ranges, until something material happens. They're also obviously influenced by macro/broader movement in asset price direction. So GRIF has basically done the mid 30's to high 30's thing now for a while. The range has narrowed, higher lows to me seem evident. 35 as a bottom turns to 36, and the upper end adjusts as well. Whereas, lets say HHC announcing a strategic review catapults the stock into a new trading range, GRIF hasn't really had any material events. On the other end, the consistent evidence of undervaluation to me is not immaterial either. I would think the upper end of this range should probably hold for now, and shares are just waiting for a more definitive push to launch higher. I'd certainly be a short term, speculative buyer again around $37-$38 in light of the recent news, otherwise am cool holding the modest amount Ive got. The other thing I'd focus on is exposure. Dillard's isn't a slam dunk trade at $55 on its own. Neither is the short interest by itself. But in the 50's, during a period of favorable buyback activity, it's more appealing. Once you start seeing talk about Dillard's, and short squeezes, and the shares start getting a little zippy, you've got the receipt for a great trade. In its own little way, you can see GRIF becoming it's own little cocktail of successful ingredients. The exposure is definitively happening, albeit slowly and in ways you only see with thinly traded micro caps. But the tell tale signs are there. Eyeballs are on this more now than probably anytime prior. Otherwise, Gabelli has been a seller, but still owns a ton. The family supposedly has a few eager sellers. Either they're idiots, or they keep an eye on their investments, and in which case, probably cant help but notice what the underlying assets are currently going for. I wouldn't be in this exclusively for a sale, but again, the ingredients for a home run cocktail are all there...

Put on a little weekend trade with BRK @214.

Part of me is absolutely in the Foreign Tuffett camp with this. Its one of the main reasons O&G is generally a pretty solid no-no zone for me. TPL I can get comfortable making a bit of an exception because it has other things going for it as well, and as we are seeing, a pretty dedicated long term shareholder. I like the mandate to buyback stock. Except they haven't been doing this lately. I like that it is a trust and not a corporation; just cash checks dont write them...except now that is changing and with the water biz they are at 20 something head count IIRC. So because of the above and its place as an O&G play, Ill probably have an internal position limit cap. However between the sheer magnitude of their land holding, royalty revenue streams, and basically just a lack of shares outstanding...I can get comfortable to a degree. Haircut the hell out of their revenue and O&G growth and then just assume they are run as they have traditionally been. As Valuemaven mentions, that, plus the convergence of all the other good stuff and hopefully a return to share buybacks, allow time to be your friend here.

Solid numbers today https://seekingalpha.com/pr/17682859-texas-pacific-land-trust-announces-third-quarter-2019-financial-operating-results Ive started rebuilding this position under $600 as its come back in. This once mysterious and hard to value company seems to becoming a little easier to value as the revenue numbers continue their ascent. Curious if anyone else still follows or if this is now a forgotten favorite of yesteryear.

The owned MPC acreage and subsequent build out plus servicing is a major component. Basically the spark that lights the fire. However that only constitutes 5,000 homes. The company has acre feet capacity for 60,000 SFE in Lowry. This is a fast developing area with multiple existing projects ongoing and more on the way. Here is a site plan from Lennar. https://www.lennar.com/images/com/files/new-homes/4/17/4967/spf/Adonea%20Site%20Plan.pdf So yes you need to do some discounting, but if you wall off the 5,000 homes for Sky Ranch, you still have, between now and 2081, roughly 55,000 potential taps at $30K per, that then convert to ~$1500 per in annual recurring revenue. That really the upside that can take you to infinity and beyond. Sky Ranch basically just de-risks the entire investment. Without Sky Ranch, this would basically be PICO(minus Harding, who is head and shoulders above anything PICO ever had).

For those of you who like hard assets, discount to NAV RE plays, here you go. No, this isn’t like Howard Hughes, where you need a timeline of “decades” after oh so sure of himself Chairman hedgefunder took the company to market hoping for a sale, no this isn’t JOE, where a decade from now you could still be waiting for your regional land holdings to gain traction, no this isn’t CTO, where you have to wait a half decade only to find out that the transformation has occurred and that the company was actually given a higher valuation BEFORE management went and monetized everything in the name of closing the discount to NAV. And no, it isn’t PICO either, which is a good thing. Elevator Pitch on PCYO: Woudnt you like to control the exclusive water rights to a major Denver sub? What about also owning a 5000 home MPC with commercial/retail capacity? How about using the control of the later to enhance the former? Bring in competing business and builders? They can pay for the water too. And whats not used we can monetize via water services for frackers. Pure Cycle, in their own words: Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area and Colorado Front Range in the United States. It operates in two segments, Wholesale Water and Wastewater Services, and Land Development Activities. The company offers utility services, including water production, storage, treatment, wastewater collection and treatment, irrigation water treatment and transmission, construction management, billing and collection, and emergency response services, as well as bulk transmission services to retail distribution systems. It also develops raw land by constructing infrastructure, including over-lot grading, wet and dry utility installation, storm water facilities, roads, parks, and open space and other community improvements; and delivers finished lots to national home builders, as well as commercial and retail pad sites. In addition, the company engages in the oil and gas leasing business. It provides its services to wholesale customers, which include commercial and industrial customers, and local governmental entities that provide water and wastewater services to their end-use customers. The company was founded in 1976 and is based in Watkins, Colorado. So why this is interesting here is almost by accident. Pure Cycle’s main asset is the Rangeview Supply just outside Denver. The company for much of its existence provided vertically integrated water services and sometime prior hooked up with a developer looking at turning out a nearly 5,000 home MPC. Well, shit went south and almost by accident Pure Cycle founnd itself with the right to a project who’s entire 930 acre base, was in a foreclosure auction. So Mark Harding, a key man here(CEO and face of the company), decided, lets do this. PureCycle purchased the entire lot, which is not only able to support 4000-5000 homes, but also a reasonably sized commercial/retail zone. The parcel was purchased for just over $7M at foreclosure and today is easily worth 3x that amount today, but that is moot because its being developed and Harding has patiently planned, and wisely teamed up with a trio of homebuilders(KBH, Taylor Morrsion, Richmond American) to really get the ball rolling. So that’s the back story and between 2011 and last year, you kind of had your period of “getting things moving”…however homes have now been selling for the past year, are expected to continue closing at about a 16-24 per month clip, and with that, the gravy train only continues to accelerate. Through various development agreements, Pure Cycle makes money in phases, and in two different ways. The first, which in the beginning is not all that material, is on a margin on homes closed by the trio. Right now about $20K per. This, especially once phase 2 kicks off, will increase, but for now simply putting warm bodies in homes is the objective. It is not immaterial and also worth mentioning that the company incurs much of the infrastructure cost up front, and then once the homes get filled, reimbursed through a muni bond issuance. The first $13M or so may be issued by the end of this year. The second, and more lucrative, it’s the water tap fees and then recurring revenue. The multi phase project pegs at least ~4500/5000 homes. The initial tap fee for water and sewer is $31,000 per home which high margin(that only gets higher), and then recurring service fee of about $1,500 per year, per home. So you’ve got a few other businesses here, oil and gas/fracking, whatever. Those make money too but I wouldn’t and don’t care too much about them. Pure Cycle’s main driver, the development of Sky Ranch, is live, and moving and unlike many other situations, much more in control of their destiny. We aren’t talking about bumblefuck Montana either, Sky Ranch is less than 20 minutes from downtown Denver and 4 miles from Denver International. Phase One is probably going to be wrapped up within 18 months, and I would expect a phase two announcement by year end. The entire project, barring severe economic disruption, should likely play out over the next decade with blended economics indicating roughly $20K+ per lot profit to Pure Cycle plus the $30K tap fee, and whats more, is that competing communities are already in the mix, which just accelerates to momentum of water sales given Pure Cycle is the ONLY provider in Lowry Range. Conservatively I think this should double within 12 months. You’ve got a longer term hedge fund owner keeping tabs, and Mark Harding(owner of 3.5% or so of the equity as well) guiding the ship. Interests seem aligned and if you’ve watched the recent season of Goliath with Billy Bob Thornton, you’ll see the necessity of water to areas like this(kidding). There really isn’t anyone who doesn’t want this to happen, so at this point, if you dont think the economy implodes tomorrow, it may be of interest to you to check this out. Heck give Mark a call. The situation is off the radar but primed to transform PureCycle into a recurring revenue machine and over time close the discount to NAV(which is huge).

At the current valuation, even a partial sale should substantially move the needle. I liked this a lot more when the margin of safety consisted of a NAV around $10B and an EV around $5B; clean and clear. So yea, the idea that the sphere's could now eat up $3.6B of that....gives me some pause. But I think the risk of sphere 2 is lower and largely predicated on sphere 1 and its success or failure. Theres still few better assets to be in.

Ive noticed the above as well. For whatever reason it doesnt seem to be a widespread concern, but Ive run into people that I wouldn't issue an overnight payday loan for 10 points, that have unlimited AMEX charge cards.

This is a pretty good deal as warehouses in Lehigh are worth $140/sqft. They are paying less than $20 for the land. Let's say that construction cost is $60. They can create this for $80-100/sqft and create $40-60/sqft of value for the warehouse. How do you reconcile Lehigh Valley being a land-constrained, tough-to-build market with GRIF buying land for $20/sqft in a clean sale, being able to build for $60-80/sqft, and having that be worth $140/sqft? In many markets, which I assume is the case here, you have to factor in a risk premium to the developer. IE, its not as simple as it is on paper. Even with entitlements and whatnot, you dont just buy it, snap your fingers, and have a facility built. If you buy the land, and successfully develop it, more often than not it is not unreasonable to have a 30%+ premium now added.

Not for nothing, but I learned pretty quickly that one is significantly better off assuming that EVERY person they encounter in the financial industry is a total piece of shit. Ive now been in that biz(tangentially) for a while, and to this day, out of everyone Ive ever met, can count on one hand the number of people who would put people before dollars. It is what it is.

So Fairfax tries to be as clever and cutthroat as say, a Brookfield; they just suck at it, among other things...

Trimmed GM, CRSP, GRIF. Still holding positions but looking to continue tapering down the margin balance into next year.

Just bagged my first deer of the archery season this past Wednesday. 68lbs of lean organic free range meat for the freezer. If this is the only deer I get (unlikely) it will come out to $0.88/lb. Plus three glorious hours spent in the beautiful fall foliage instead of sitting behind a desk mashing a keyboard. Man I feel like we could be friends! My weapon of choice is a fishing rod, but yea, its almost therapeutic. Nothing like the outdoors.

The short thesis has been around forever. And like many other "competition" and "valuation" based shorts over the past decade, its been a disaster. But will be correct in the long run.

Fad, unsustainable popularity blitz, it’s all subjective. $6 healthy popcorn bags was cute marketing for a while, but eventually people moved on. Same thing here. Try it, it tastes just like a burger works for a little bit, but then people realize it’s just ultra processed junk, and move on. All while competitors rush in looking for their piece of the gold rush. Meat isn’t really even that unhealthy, and by far and away, the most unhealthy stuff people can put in their bodies is the ultra processed stuff. This trading at $150 a month before lockup was too good to be true.

https://seekingalpha.com/news/3510630-beyond-meat-minus-16-percent-discounting-ipo-lockup-expiration-worries Discounting!?!? No way! You mean that consumers dont want to continue to pay $6 a bag for non proprietary, salted popcorn when compeitors change $2.50? Whoops, I mean non proprietary fake meat! Except BYND charges $10 and peers charge $5. Whether Amplify(BETR) and their popcorn or Beyond and its fake meat, investments often rhyme and repeat and pattern recognition is typically the key to extracting value. This was such an obvious fad.

Haha Im sure I could give you a run for your money in terms of exhibits of patience and stocks Ive been sitting on quite awhile, but that's not a competition I think either of us want to win. One of which has earnings tomorrow which may be the end of my investment if Mrs. Barra does not start inspiring. But what you discuss in the second half of your post is a unique market characteristic that Ive noticed shares similarities with another company I have owned(and yes sat on, and waited patiently with for quite a while) Global Self Storage. Ive had discussions with Mark and Tom about this exact dynamic that happens to be occurring in Lehigh Valley. The areas we all know all love, high density, urban, etc, theres no supply and nowhere to buildout. Tertiary or key secondary markets are tricky, but if you find there right ones, you're golden. The ones where permitting and entitlements take forever(your moat), supply is thus limited and if you own there already, you get to raise prices way faster than normal while building out existing facilities...as your competitors are faced with the reality of having to either move out further into unfavorable and more rural markets, wait an eternity to get the green light from foot dragging bureaucrats, or make you an offer you cant refuse. I'd definitely say this is one of the areas I am excited about with Griffin. Core market expertise is crucial for companies like this.