Gregmal

I guess to simplify it, while many who look at the threat to the investment thesis as competition from other litigation finance co's, I view the threat as moreso coming from the law firms. They make a ton of money, can do the work for whatever price they want, and because of the partnership structure of most of these firms, have the flexibility to charge the approach faster than a traditional company. That said, this, being the biggest threat IMO, is still not really something to worry about for the time being. Other litigation finance companies can pop up, but they dont have any data or sourcing advantages that the bigger guys dont have as well, which then begs the question, why would anyone go with the newer, lesser known funds, all else being equal?

With regards to litigation finance, what do you mean by a "maybe"? Some of my concerns regarding the future returns here revolve around the question of "what if the law firms start doing this on a contingent basis or taking more of the pie that the current setup allows people like Burford to grab?". As I mentioned in a different post, the bulk of the need here is people can't afford to pay the lawyers. Look at the Hulk Hogan case for instance. The edge goes away if the law firms start approaching these from an entrepreneurial standpoint rather than a fee collector position. But from what I've gathered, given their positions and culture(which is probably the biggest aspect at the top law firms), they just dont want to work unless the billings are guaranteed. Using the Hogan case for instance, where Peter Thiel apparently made a killing doing exactly what Burford and co do... from the law firm's perspective, they rather just take the monthly billings and a smaller cut, or turn down the case and lets say do work for a larger corporate client at $40,000 per month.... than go whale hunting for little up front cash. I bought a little more BUR and have been putting on positions in some of the other names as well(taking the basket approach) because I think for the short to intermediate term... returns here are safe. Compeition will not be a intense as people think. The Legalist's and Mighty's can continue to pop up, but the pie is very big and I think the more experienced players do have a competitive advantage. However longer term, I definitely expect that to change.

I think the point he is trying to make, is the same one he's been trying to make for AT LEAST the last half decade. And it s a point worth considering for ANY investor. But he always goes about making it in a way that serves his needs and justifies his lousy performance. As you even pointed out, he misrepresents things quite often, and just doesn't learn from his mistakes. I mean look, there are businesses out there trading at prices a rational investor should never consider paying. But that's fine, no one forces you or me or anyone to go buy them. There is plenty of $$$ oozing out of other opportunities...focus on that! Its just so off putting and dishonest IMO the way some of these guys act like "Oh Tesla is crazy...thats why I lost 20% last year...the market is out of control"... when thats just not really something that makes a whole lot of sense to me.

Congrats on what has so far(since the initial post) been a complete homerun(in a sector of complete dogshit as well). Nice work here.

So I still have a few more contacts I hope to speak with, but after the first couple, the consensus in regards to the above is basically: Top level lawyers dont sign on new clientele unless there is the expectation of 7 figure annual billings and retainers to match. These guys, and particularly the partners at the senior levels, aren't terribly interesting in passing up the above fees and four figure hourly billings on a maybe. Even if the maybe is substantial. Once you get to partner, you are already financially secure, and the objective is to position your associates and laborers in a way to maximize revenue for the firm partners. On the lower levels, there is just too much work to occupy ones time with projects, like many of these cases. This type of work has typically been reserved for ambulance chasers and sleazy class actions law firms. Kind of the lowest of the low in the world of the elite lawyers. I dont find these reasons to make a whole lot of sense when the IRRs are what some of these firms state. However this seems to be a culture thing and not something that changes overnight with the major global law firms. There is definitely room for disruption and a window to do it. I think eventually these guys realize this is low hanging fruit. But for now, you have the old guard kind of keeping the door shut because life is good and fees are both high and easily attainable. Bodes well in the short term for companies like Burford, IMF, LIT, etc.

Congrats to the bunch of people buying GOOG not too long ago on that dip under $1100. This is why its baffling people can't outperform if actively managing. You should not be managing anyones money; not even your own, if you cant/couldnt see the merits of GOOG from an investment standpoint. From early June this is up near 20%....

This guy just doesn't learn... "Einhorn: “For those that think the 2000 bubble was the big kahuna, consider Chewy, which went public in June 2019."" https://seekingalpha.com/news/3481765-einhorn-picks-chemours-dillards-scientific-games-pan-chewy Not everything is a carbon copy of some other event that occurred in the past couple decades. But I'm sure in 5 years, after his underperformance continues and assets dwindle down even further, we'll here about how he nailed it and see numerous victory laps when the market does finally correct and one of his highly touted 150bps short positions goes to 0...

Earnings for a company like this will be lumpy and volatile. Marking illiquid or non realized gains to market is never perfect. Somehow hitting a few home runs is a bad thing? These concerns, and the subsequent stock decline just seem like stupid, fabricated, "Wall Street" issues.

I can imagine our friend Dalal saw this coming... Some quick observations: - capex again ridiculously low (less than half of D&A) and now guiding for only 1.5-2b compared to 2.5b - they now included reg credits (111m) in the letter, while not disclosing this amount (216m) in the Q1 update letter. Apparently was more convenient for the optics this Q - the FY 2019 outlook is a joke Dalal was actually an astute and quite knowledgable GM shareholder for some time. Something must have happened, maybe he hit his head, got divorced, did some tainted LSD, and he decided to sell GM to buy Tesla... I'll happily eat my words if this thing goes to $400-$500, but we all know where this is really going(except for a few delusional institutional product peddlers and a bunch of retail investors).

No one saw this coming..................

This jerk off failed at managing money in one of the easiest environments ever... now he's running a bs newsletter....and people are bidding up stocks based on his touts? LOL suckers https://seekingalpha.com/news/3481080-home-plus-16-percent-tilson-tips-buyout-activity https://empirefinancialresearch.com/articles/snap-is-ripping-stock-idea-of-the-day-at-home-gabriel-gregos-takedown-of-bio-on-when-martin-shkreli-tried-to-stiff-me The only question anyone paying for his services or considering acting on his recommendations needs to ask is this... If you are worth listening to, why couldn't your fund make money?

From the most recent 10-K: "We have no insurance coverage for claims made under these warranties, and therefore we maintain reserves for such warranty claims based on historical experience." I agree with you that the warranty claims aren't likely to be a huge $ value, but the brand is somewhat tarnished. Yes and no, at least I think. Beckett used to be 1A with PSA being 1B. Beckett's grading became suspect for many reasons, but largely that they gave better grades to better customers. Outside of these 2, there is nothing to go by. So either all these vintage cards will take a huge hit, as there will be no credible grading authority, or the market will largely shrug and it will continue to be business as usual. I think it will be the later. We've seen a lot of this stuff over the years with memorabilia. Even recently with the newer issue stuff, people altering the game used memorabilia, it kind of makes noise, and then goes away.

Yea thanks for the link. Interesting. I could have told you some of those names. PWCC is also notorious for shill bidding and many other sketchy things. But they've also gotten so big, and because of the shill bidding, do put up auction results that are significantly higher than if you listed something yourself, and because of that they've kind of become the only game in town for these type of cards. I dont really think this will have any effect of CLCT though. Would be interested to see if they have any sort of liability insurance.

His neglect of BRK shares for the past couple years while off "elephant hunting"...

I think the actual issue isn't that they're not trained to think like MBAs but that most lawyers are fairly risk-averse (at least in the US). This is even more true if you're at one of the big law firms as opposed to hanging a shingle yourself -- there's significant self-selection happening there. So the big law firms with fantastic margins are full of people who self-selected away from the entrepreneurial option. This might be accurate moreso than the idea that they aren't entrepreneurial. I will also add, as what you stated kind of triggered it for me, but people who work high margin(nice way of saying -easy money-) professions, I have found, dont fully appreciate that concept of IRR's or things of that nature. Not to say that dont understand them, but I think when you charge $900 a hour and your partner spilt means you take home $3,500 a day for doing desk work(not to demean it but its still white collar stuff)... your business overhead is low because of the business structure... accumulating is easier than investing. Taking money out of the pocket just isn't something they are used to. Ive encountered tons of insurance and investment firm principals who when it comes to growing their business think exactly the same way. Sign up new annuity clients, take home $xx with 90% margins; thats the business they do.... But then you propose to these people, hey you could triple your office production by bringing in this segment of contractors, but it will require upfront sign on money... and the response is "that'll take me 6 months to recoup". And to me its like. "yea that's tremendous. Usually getting your investment back in 3 years is good, 6 months is crazy"... but to these people they think that is terrible and not worth the capital outlay. At the same time, as a lawyer, the $900 an hour cost to a client, isn't really a cost of $900. Sure if you take that hour of billable time and spend it doing something that isn't paying you up front, its opportunity cost. But that $900 an hour of "work" is stuff you've been trained to do and know how to conduct through a skillset. It costs you pretty much nothing to execute that work. So in relation to this stuff, I do find it interesting that the finance opportunity comes largely through IMF or Burford, because of the need to pay for litigating. When the litigator's true cost of this, is pennies on the dollar relative to what they charge, and something that if they wanted to, they cost subsidize through their in house advantages.

Good stuff and thanks for sharing. I am speaking with a couple senior partners at Chapman Tripp and Sparke in AU soon and I hope to pick their brains a bit about these sort of situations, so I have a better understanding from the law firm side of things. It was said in the other thread I believe that lawyers aren't trained to think like MBA's, but to be honest I think that's bullshit. There are plenty of lawyers who are entrepreneurial and one doesn't need an MBA(the most overhyped and useless degree in the world) to see $ signs. So I am curious why there isn't more competition or structurally different setups for funding these things. Law firms have great margins and should have zero problem reinvesting in their businesses for things like this.

I've trimmed an outsized position a bit on the recent move over $11, but this is still very much a core position with tremendous long term potential. Lourenco continues to be a monster. https://seekingalpha.com/article/4276128-cleveland-cliffs-inc-clf-ceo-lourenco-goncalves-q2-2019-results-earnings-call-transcript?part=single Lourenco Goncalves "Well, not today. I can say, never. We are always looking for opportunities. But these opportunities are far – few and far between. It's very difficult to exceed the returns of that and share purchased at this point. Remember, we made [indiscernible] decision to buyback stock. That was our – I explained that before I started. So we are always analyzing this M&A things, M&A possibilities. We are always going to analyze against alternative use of capital. We're not going to grow just be bigger. I'm comfortable with the size. I'm comfortable with what I'm doing. I'm comfortable with my industrial basis and I'm more than super excited about the fact that very soon we are going to be producing HBI. So I don't need size to feel better. I feel very good the way we are. And I feel even better if I start returning money for the shareholders in a more massive way. We're returning a lot, $300 million. I will research analyst calls today the buyback the buyback of another company much bigger than us. They acquired back $127 million. He called that a strong execution. I did not even know that buying stock was execution. But execution for me is operating and selling stock. But anyway if $127 million for debt huge company is strong execution, 134 is a miraculous execution. So we are returning a lot of money for their shareholders on that. Our dividend increased 20%. It's some may say, try to dismiss our dividend. They are only $0.05, they are just $0.06, well, and $10 that was the prevailing stock price and stock corrected, finally correct to a number that is too very low, but it’s a lot better than 10. Our use is 2.4%. So yes. So how many companies in our space delivers 2.4% huge on dividend. And this is growing. This will continue to growth. This money belongs to the shareholders. And especially the company like ours, with zero chance of having a balance sheet problem or like we had five years ago, risk of bankrupts and things like that. And 70 million share short, oh my gosh, I have already source of free money from this shorts. It's right there. They probably don't realized, but I continue to boil them like frogs in the pan full of water. It's as low but one day they don't realized that it's not a one pool it’s their death bath." and "We are extremely comfortable at this point because as soon as we have HBI up and running, our EBITDA minus $220 million is free cash. And what we do with the free cash in a company like Cliffs? You give it back to the shareholder through share buyback, through increased dividends, through special dividends. So that's what we're heading to here. We are not going to spend more than $100 million in cut backs a year after we have HBI done and up and running. And remember HBI needs –the HBI plant needs a lot less CapEx and are concentrating pelletizing pellets in the mind. So it’s a different anymore as far as maintenance CapEx."

Its becoming more hostile for sure, but there is nothing wrong, or illegal with one trying to buy other companies to protect their market position. I could start up a business and overpay for competitors with the intention of creating or protecting a monopoly. But at the end of the day it is not that simple and certain conditions have to exist for something to be predatory and a detriment to competition. Its hard to make the case that Pac Bio will be successful as a stand-alone business. Its easier to make the case that ILMN is a monopoly like player, but you can do that with or without PACB. Mr. de Souza even discussed recently how the PACB deal really just added a complimentary product, and that this isn't somewhere they currently compete.

Bought some of this right now lol. 19.4

Probably worth taking another stab after this, although Im holding tight. Dont really want anything to do with this other than to see the outcome and sell either way once its revealed. https://assets.publishing.service.gov.uk/media/5d307b9ded915d2fe8096fb8/Illumina_PacBio_Full_textP1_Redacted.pdf

trimming some CLF

Here we go again with this scumbag. https://nypost.com/2019/07/18/singers-2b-deal-for-qep-on-shaky-ground-after-bid-reduced/

Ive admired this for a long time but never owned it for the same reasons many here cite. However to play devils advocate, the concerns about "how can they justify the future valuation" or "where is the growth going to come from" are the same tried and true reasons Ive heard investors write off this and many, many other really great companies and investments. AMZN and ISRG are the first ones to come to mind, but there are plenty of others. Nevertheless these great companies keep finding ways to innovate and print money for shareholders. Also, there is a certain irony to people citing the above, mainly law of large numbers arguments, while many of those same likely load the boat on BRK....which faces the exact same issue to an even greater extent, but doesn't have the innovation these companies do.

Slowly wading back into MSB now that the small distribution announcement is out of the way. Such an easy seasonal trade.

Bingo. The tri-state area is not the same "NY" as Flatbush Ave. Yes, hence the: Except they already determined it was a blown transformer. They could be lying and it could be something more devious they are trying to keep under wraps, but most likely it isn't. So who is there to "hold accountable"? More likely just another politically motivation investigation, where they'll rail on the big bad corporation and utilize the talking points for political highlight reel material.