Gregmal

If opioids was the only problem to figure out, than maybe ENDP but especially TEVA would be very interesting. But I am not sure what to think about their generic part of the businesses. I remember years ago generics traded at the premium (growing new market etc), but it seems this business never lived up to the expectations and in the last 2-3 years its economics resembles more oil&gas or shipping, than some kind of sustainable competitive low cost manufacturing. Maybe this is/will change, but I just have no idea how to handicap this question? Yea I honestly don't know. Much of the sector has just been flipped upside down the last few years. Were the valuations prior reasonable? Or is the system really broken and therefor the entire universe of players needs to be reset? When an entire sector gets bombed Ive always found it prudent to start sniffing around. A bunch of these companies have lost like 80% of their value in a couple months. Largely for issues relating to the entire field. I've started looking around at a bunch of companies but that's really the million dollar question. VRX was just the big noise maker, but structurally many of these companies operated similarly, with huge leverage and stale portfolios of products. Regarding opioid issues, outside of what Ive already said above, you'd also have to think that if the objective is to get large settlements, there would be a noted effort to seek resolution that didn't involve bankrupting companies....MNK can be the headline "we took a hardline and Bk'd one of the bad guys" sacrificial lamb, but if all of them follow suit no one will get any money.

I'd been looking at this space, and the big 3(TEVA, MNK, ENDP) and last Friday decided to buy a little ENDP and TEVA for shits. As much as I wanted to buy MNK, its just such a garbage company riddled with self inflicted wounds, horrible acquisitions, and questionable offerings. I think Endo probably ends up a 0 as well, although Par IMO is potentially worth as much as all of the current EV. Obviously this isn't including any opioid related liability. Which I still can't really handicap, because Im not quite sure what these companies did wrong here? Market their product? If anything people should be suing the FDA...

Taking DDS for a ride @59

They should try to sell a version with some booze in it, it may just work. I've long hoped(despite not having a position yet) that they'd try this. It would certainly help correct the ridiculous nonsense and slander this company has had to put up with. It should tell you something when people describe White Claw, overwhelmingly regarded as the best spiked seltzer, as "basically La Croix with booz"....And yet, Capporella hasn't acted.

Been debating buying a few $35 calls. Stock seems to have some support around the $40 mark.

Yea I agree the dividend isn't really relevant, just one of the few noted data points from today. Although ironically, again, agreeing its not relevant, at 3.5%(not including any special dividends), its like double what plenty of people are getting to park their asses in bonds....all because they can't stomach volatility... amusing to me.

Why is the stock down 15% today? Been on the go today operating from my phone but all I saw was the special dividend and continued plummeting of Iron Ore. Company did ~300M Ebitda at 2015 low prices.... despite the drop from $120-$80 we're still nearly double those levels. Maybe I'm missing something though. Who knows?

Dividend plus 4c special announced today, as has been previously alluded to on the calls. Market of course didn't care and sent this back to 2017 levels. Added a bit here today. Great older article of the God of Steel http://investigations.debtwire.com/savior-ceo-how-heavy-metal-frontman-lourenco-goncalves-ditched-retirement-to-bring-cliffs-natural-resources-back-from-the-brink/

To further pile on the tennis ball analogy - you know what tennis ball and what brand you like to buy because "at some point, you played tennis and tried different balls on different courts and you wind up choosing certain types of balls for performance." Ulta is that playground to chose. Keep in mind that the world keep making 15 years old girls every year. Every year, they start using make up and there is an experimentation process. Back when I was 18, I thought "who wouldn't drink Budlight?" I thought that way because I have seen hundreds of football games on TV and I have seen thousands of Budlight ads. At the time, I took it for granted. But there is a customer acquisition cost to every Bud drinker. I was slowly brainwashed and I thought I was just getting a free football game on TV. I'm in my 30's and still think that. Although it took me a while to move on from Natty Light, the original hard seltzer, before hard seltzer was a thing.

CLF

Depends on price point. Under 500K is moving nicely, probably in the 0-5% range with added supply from a few Ryan Homes projects coming online. Over 500K and especially 600K, is no man's land. Taxes are just way too high. Commercial is very, very area dependent. Some ghost towns, some newer developments seeing nice activity and demand.

Greg, To me, you've got this wrong. Why do you think that Mr. Jain & Mr. Abel are paid by Berkshire USD 18 M each annually [as far as we know, so far]? I mean : USD 18 M each for "delegation, bordering to abdication" [ref. Mr. Munger]? To me, it simply does not work that way anymore at Berkshire [and hasn't for a long time]. Yes, cyclicals are cyclicals, but then cyclicals aren't really all alike. I mean, there are stand-one-cyclicals, and then there are cyclicals-under-an-umbrella [, perhaps under the Berkshire-umbrella], and their operating conditions with regard to access to capital during a full cycle aren't nowhere near similar. Indeed I'll admit there is some hyperbole there to make my point. Everyone is terrified but they still find it OK to buy BRK...why? I think because they(hopefully) understand the business well enough to be comfortable owning it in a drawdown, and have seen how that story plays out before. BRK isn't the only security that's ownable, and I think a lot of the dilemma for most is a combination of fear and just not knowing enough to own a business without certainty. I remember when I first started out, reading a book, I think it may have been Minding Mr. Market or something like that, where the example Im shooting for came up. Essentially stating that investors often leave much by the way of returns, on the table because they rather be sure before doing anything. And that there is a very inverse relationship between certain types of certainty, and the types of returns one achieves. Another example of this is Cornwall Capitals play of Capital One during the subprime crisis in (I think) 2003 or so. Todays scenario is no where near as uncertain, but I constantly run into people who act that way which baffles me. Ive definitely seen reason to get more cautious the past year or so, and definitely want to be weary over the next 18 months. But "global growth" and "recession" fears to me have been for a long time, and continue to be poor reasons to earn 0-2% annually on your money... But yes John, in regards to your specific point, I think Berkshire is A-OK with Jain and Abel and if anything, am of the personal opinion that they will do better AFTER Mr. Buffett passes the torch.

This is the gift and the curse of investing in this space. But reading between the lines, these guys have the firepower to get though this. Additionally, from just the articles you posted and the arms length knowledge of this business and similar ones like vaping... the "entrepreneurs" that they are talking about giving the head starts? LOL...convicts, high school only educations, basically 30 something year old garage band buddies with an affinity for pot. Think Half Baked. Think the jerk off's in your community who finally have made enough money to be comfortable and decide they want to open restaurants.. You could give these guys 10 years head start and once you open the doors to guys from GS or any mid tier investment bank; anyone with a clue how to operate a real business or access capital... nature will take its course.

Priced in? It depends, like I said, housing a year ago was definitely priced in, and then it didn't happen and some things utterly exploded. But then there's the issue of "what if there actually is a recession?" and I think that comes down to valuation, and where things are in the cycle. There are two cycles. The economic one, and then the market cycle for any individual or group of equities. We may be in inning 7 or 8, sure. I agree if we are talking about economic expansion. But some equities have been well ahead of that or even permanently penalized because of past events. So I think there are a lot of companies, BAC, WFC, GM, etc's of the world, that arent terribly far off in terms of valuation, from where their cyclical bottom may be. Im probably in the camp of Marks philosophically. Where are we generally speaking is quite easy to assess rather then "when exactly" it will all start/end. Political risk though I 100% agree with. Donny losing his mind a little more could be bad, Certain Lefties getting in next year could be catastrophic, so one needs to stay nimble. But if things don't go haywire, and we just get a regular old run of the mil recession, I dont see much to be scared of investing in certain names. Are 20-30% pullbacks possible? Sure. Is that a big deal if your are ready for it? Not in my book. The part that is really exciting? If lets say BAC has 30% downside until the next bottom, and Im there with bags of cash to throw at it, how big a position can I get, and how much upside then do I have going forward if now we're talking about being in the 1st or 2nd inning of a new cycle and these once hated companies are now proven, durable, and market leaders?

I also think being a macro guy is poisonous because your beliefs at the top trickle down and influence your ability to analyze at the bottom. If Im a guy looking bottom up, I do my analysis and have the various scenario skews and then assess probability and risk/reward. But Ive noticed that most macro guys can't do the same. Instead, they'll take their macro views, and then taint the fundamental analysis of individual companies, with those macro conclusions. The danger is, when you're wrong on macro, then that will likely translate to you being wrong on everything else. Again, look at Paulson, Einhorn, Bass, etc. These guys arent just wrong, they can't even hit the broad side of a barn and their returns arent just bad, they're f**** terrible. Whereas with individual investment companies, I can get the company analysis right and not even care about macro, and still make money.

This is actually something I wonder a bit about. My current thinking is that this is more likely to be a temporary situation than not, the reason being that normally when you have a shortage of something but a lot of demand for it, yes its price can go up like crazy at first but then over time the high price attracts new supply and that brings the price back down to earth. I don’t see why something similar cannot happen to things like, say, quality businesses via increased/improved entrepreneurship over time. That being said, it may take quite a long time for this type of “cycle” to fully play out. Today’s Bloomberg Odd Lots podcast was pretty interesting: https://www.bloomberg.com/news/articles/2019-09-02/why-one-of-the-oldest-investing-strategies-has-been-doing-terribly?srnd=premium The guest (Chris Meredith, Co-CIO of O'Shaughnessy Asset Management) talks about some similarities he sees in the business/investment environment today and the 1920s. In each era, he notes, seemingly expensive growth stocks hugely outperformed other stocks, and not because there was a stupid bubble but because the growth companies (GM, Sears, etc in the 1920s; FANGs and co. today) actually lived up to the market’s lofty expectations. He then notes that value investing started to make a comeback sometime around 1940-50 as other businesses gradually caught up with those industry leaders in terms of technology, and that we may be heading in that direction today. I think this somewhat relates to what was discussed above re: how the lofty valuations of great companies — even if they are fully justified — can gradually deflate over time as the supply of such companies increases through things like imitation, technology diffusion, and the invention of better alternatives by new entrants. Yea, I kind of see some parallels and I think regulation could ultimately be what causes the valuations to readjust. But on the other side, GOOG, AAPL, FB, etc I don't see as outrageously expensive. The Saas stuff is ridiculous. Much of biotech is hugely at odds with what is implied by big Pharma valuations. There s a lot of stuff all around that doesn't make a ton of sense in relation to other stuff. But one area where I think it is harder to overcome this is because of the massive increase in wealth inequality(in other words, control of the resources) it's harder for ... "normally when you have a shortage of something but a lot of demand for it, yes its price can go up like crazy at first but then over time the high price attracts new supply and that brings the price back down to earth"... to occur. Yes the roaring 20's saw similar wealth gaps, but todays environment I think makes it difficult for competition beyond a certain level. To the extent we have some of the big tech monopolies, that at the same time have tentacles stretching into many other business areas, I see that stifling the success of new entrants. Unless you're a Silicon Valley type which most of us are not. That said, I have and continue to see plenty of areas to make money for the normal investor. I am hardly a macro guy, and frankly wouldn't consider myself smart enough to justify spending time in that arena either. Ive seen so many people who clearly are intelligent enough to play there, still be so friggin hilariously wrong with their macro reads and predictions, that it makes me question why anyone bothers when they can just spend time studying the over 10,000 publicly available individual companies and make easy money that way. And by easy money I dont mean get rich quick, but kind of just being a singles and doubles hitter with a .400 OBP vs being Kyle Bass or John Paulson and hitting .150 with a few grand slams...

Cheap money and lack of quality assets is a recipe for....significantly greater appreciation and duration of "cycles" than anyone can predict. Look at the Canadian housing market, specifically in areas like BC where Asians with unlimited wealth keep on rocking and rolling. Even Buffett has said something along the lines of, if the rate on the 30 year remains 2%, stocks are very undervalued. Its supply and demand. There really arent THAT many quality asset options out there and money printing has just allowed the people with assets to need to place more of it somewhere. Another thing I'd point out that is truly amazing to me is the unemployment rate. We're at 4% and considered full employment, EVEN WITH Amazon destroying retail, 90% of mom and pop businesses 6 feet under, outsourcing abundant, and automation gearing up as well. I would have expected things to be much worse.

I always come back to the same things, kind of touched on above. Much of the market is already pricing in scenarios much more severe than just a run of the mill recession. Its not like autos, housing, energy, banking, etc, etc are trading at 52 week highs and 25x PEs...I mean look at what we just saw with some housing stocks. I recall about 9-12 months ago chatting here with some about companies like NVR, and LGIH...how they were priced for death and if death didn't occur it was impossible not to see massive rallies here. And NVR is up like 70% and LGIH basically doubled and guess what? They're still trading at pretty modest valuations...Nothing says the same isn't possible for many in the above mentioned sectors. Is it really all the farfetched to see BAC at $40+ or WFC at $65 next year? But further contradictory, if indeed all believe the slowdown is here, why does nearly everyone on this board own BRK which has a massive composition of cyclical businesses? What cuz Warrens got $120B of cash? At 90 some odd years old, you're essentially making a bet that a recession and massive plunge will occur in such rapid order that a guy statistically on his deathbed not only has the time to deploy all that capital, but to see the investments through... I don't know about that. I think all would be well suited to step back off the ledge.

A little more brainstorming and thesis murdering attempts on my part the past few days have yielded the following: Knicks/Rangers contracts are of no worry to me period, but to everyone else, you've got until 2035. Islanders are after 2030, Devils are 2024. However, for those concerned about Dolan negotiating with....Dolan, 15+ years from now, I suggest you look up the history with the Buffalo Sabres. Long story short(its a weekend, I don't feel like writing the entire novel, nor would the wife allow it lol), the Sabres were always seen as the largest risk to exit. Additionally, they are owned by an ambitious, entrepreneurial fellow named Terry Pegula. Pegula has long sought to own or create his own RSN. He also owns the Buffalo Bills. The contract was up sometime around mid 2016. After MSGN split from MSG. What happened? The team at MSGN not only extended the Sabres on a longer term than the previous deal, but also walked away gaining the rights to much valued Buffalo Bills content.... Not bad. Separately, I always wondered, but didn't care or find it integral to my investment enough, to track the exact allocating of the previous MSGn authorized buyback of $150M. This was deployed after the stock briefly turned south of $20 in late 2017. The stock to my recollection very quickly rebounded to levels north of $20, and that was that. I did the back of the enveloped on the math and it appears the company was not willing to execute very much of that, which is why their total authorization is currently way higher than the $300M new announcement. What can I infer? 1)That under $20, the company is willing to buyback a lot of stock, but they are very disciplined over that number. 2) That the company in 2017 verified running a brief strategic review in order to feel out the market and potentially sell. So the same board that authorized that plan, and the same one that just promptly and proactively launched this one, are doing so based on informed and fairly current knowledge of EXACTLY WHAT THE PRIVATE MARKET IS FOR THE COMPANY. In addition to that, I dont think its a coincidence they made this announcement half an hour after the YES deal closed. I think they were very involved in the ongoings of the major RSN deals that took place between FOX and Disney, and have their finger on the pulse of the market for their assets. So.... all the more reason to look at $16 as kind of no brainer territory. But that's just my opinion. Hopefully this insight is helpful for those interested here.

Pretty funny stuff from some unique characters that Im sure many here have bumped into from time to time. Ones batshit crazy but brilliant and the other is an all around scammer. Ill let each make their determination as to which I'm talking about. If you've met them you already know... https://nypost.com/2019/08/30/investor-who-was-once-fbi-informant-files-25m-defamation-lawsuit-against-rival/

I’ve never really thought of Twitter as a source of information. Are you following news sources (i.e. WSJ, FT, CNBC, Bloomberg) or something else? David If you're looking at smaller or less followed companies, simply searching various forms of that companies name/tickers/info on Twitter is actually extremely useful. A more streamlined Google search IMO.

I'd add microcap club to the above list but also mentioned that meetings plus investor conferences plus regular contact with other investors sprouts more ideas than anything else. Another very valuable strategy Ive found is peer groups. Say you are a guy with a fancy for real estate companies. Go to the 10K and find the companies peer group. Then go to each of those companies 10K's find the peer group. This can take you to some pretty interesting and unknown places. Some times I'll go back to annual reports from 5-10 years prior and do the same.

Entered the abyss. Bought a little TEVA and ENDP. Looking at a basket approach as it seems everyone thinks this is the end of all of them. Very small spec position.

My recollection is that this has been a disclosed risk since prior to the spin off in 2016 or whenever it was. Its somewhat standard verbiage in those situations. Unless something new came out which I am not aware of. In either event I would think it really would only be the problem of shareholders of record on the spin date.

Haven't you heard? We're having a recession! Let people give away their stocks and then watch them complain for the next decade about how everything is too expensive...