Gregmal

AAL, CTO and more GOOG

I like this, but think with the recent fireworks that the likelihood of one of the big tech companies taking this out are basically nil now. Whereas prior I thought the odds were quite high.

GOOG, GOOG, GOOG

My spider senses in terms of where we are in the market cycle only start tingling more when we try to make value proportions out of companies like Uber

I need to cycle back into refineries again. I bailed from MOC (at a small profit) and like Buffets former pick of PSX better, as it is better run (imo) with better capital allocation. It’s not cheap enough me to buy though, so I got some DOW instead. CLF‘s dividend raise is supposedly trying to bolster confidence, but the yield is too small to matter and won’t support the stock, imo. Yea PSX and MPC are the ones I like. They're small, as are a lot of my positions, so I don't have to give myself grey hairs worrying about aggressively managing it. I try to find levels where things get interesting to build starters, and then just scale in on further pullbacks. Agree on CLF, but if you listen to the calls, Goncalves has talked about his preferences for capital allocation. Given dividends are way down the list, I think this bodes well for what is being done with the others. They already ripped through about 10% of the shares outstanding since October if I remember correctly.

More CLF. Mexico tariffs? F you market, says Lorenco Goncalves, lets raise the dividend 20%...

Mary Barra and the GM board have overtaken the fellows at CTO as championing the title Chief Asshole of the Underperformance Division of my portfolio. Only because she/they continue to be so diligent about it.

Greg, well said. I think this also demonstrates how much a few massive companies (like Amazon) completely dominate the averages. It is like we are having a rolling bear market in some industries and sectors and it is being masked by the averages only being down a little. Yup. And I'd even go as far as to say that many market darlings such as Disney, Google, etc are not "that" pricey either. Interesting times for sure. You can buy global powerhouse businesses for single and low double digit multiples and even some darlings for 20x. Yet so many people sit here acting like there is nothing to buy. VIC has polled low single digits for "many" bargains now for like a decade. Makes you wonder wtf people are looking at. Even the mother of all "market" stocks, BRK, is pretty darn inexpensive.

Yea this is why I find the whole "stocks are very expensive" rhetoric to be lazy. Sure some of these things have issues, but there are a ton of high quality companies around at very reasonable if not downright stupid cheap prices. Add refiners, airlines, Semis, real estate... The market IMO is largely only pricy if you lazily look at basket numbers for the indexes or are talking about SAAS stocks and a few other tech sectors.

I'm a big fan of CVS here. Boneheaded acquisition aside. I'd throw Bayer into the ring as well. No position there.

https://seekingalpha.com/pr/17528684-mimedx-announces-comprehensive-board-refreshment-plan-cooperation-prescience-point Fraud going to zero, right?

While I dont disagree with much of the sentiment, at least on an academic level, what I think is flawed is the notion that equity risk is high relative to future returns. Granted, no one knows the future, but people have been saying this for at least the last half decade and returns have been more than adequate. There is little reason this can not continue to be the case. At least not any more reason than there is to make the case that it can not continue.

Yeah I can understand this approach. But I don't think not following it is because you are fearful. I mean, I see it more as a hedge. For example, say you do have these loans or financed products, phones, lawn mowers etc. How do you handle a down market? To me it's disadvantageous to have a large portion of your capital tied up in monthly payments that need to be met before you can allocate that money to investing opportunities. A good example would be in real estate. If we were to have another housing market crash (hypothetical) if you are young like myself I would doubt that a bank would give out a loan to me if they saw I had tens of thousands of low interest loans tied up in student debt, vehicles, lawn mowers, etc. To me it's not necessarily about being afraid of the worst. But I feel it gives one the ability to be more "risky" when opportunities arise. But both methods obviously work well. And you could probably argue that your method is the better one. I dropped out of college after my sophomore year because I didn't love what I was studying, I had lost some of my scholarships (GPA standard for hard sciences is a bit high...avg mech-eng GPA is 2.8). And the industry was a bit cyclical. So not wanting to be 50-60k in the hole like everyone else I went and worked as a driver for UPS (took a lot of shit for that lol) making 65-85k a year. Paid off my loans in one year and then finished college online while driving. Took me an extra year and a half to finish school, but unlike my friends I'm debt free, have two new vehicles paid off (with 10 year warranties) a steady job and the ability to invest. I think too many people are stuck in the mud when it comes to life flexibility and which paths to take. Especially my generation. People act like if you don't finish college in 4 years or before you turn 22 you're screwed. Thanks for the alternative perspective though Greg. Cheers! In regards to some of your questions, the big thing, to clarify, is not transferring your net worth or assets from a higher quality one, to a lower quality one. So it's not so much having all these monthly payments as being a burden, it is simply delaying what it costs me today, and then paying fractional pieces of it out of future cash earned. I think the mortgage example is a no brainer. It is not unreasonable to double ones money in 7 years investing. So if you could potentially take $500K and turn it into a million while paying your $3000 monthly mortgage out of future earnings... why wouldn't you do that? That $3,000 per month saved gets you $252,000 after the same 7 years(and even if you are investing it you are compounding it from a much lower base). Or the car; if you have $500,000 invested, why turn that into $450,000 to buy an asset that eventually turns into zero when you can fund it with future earnings. The market can crash and blow up and whatever, but that doesn't really harm me as long as I have the ability to earn/work. And not that I'd advocate it either, but as we saw a decade ago, if you can't pay your mortgage the worst case scenario is that it just gets repossessed and then you are free and clear. Regarding banks giving loans in your example, and this is just me extrapolating from what I've seen, but when economies and markets are bad, they don't make new loans to anyone regardless of their financial profile. Or at least its much harder. But, they are much less likely to pull existing arrangements if you are in good standing. As such, I take almost every offer that bolsters my liquidity. I have $25K cards(Amex Blue Preferred) that I use solely on maybe $500 in groceries a month and get 6% cash back. Or the Costco Citi card for 4% gas. Multiple chase freedoms with the 5% back categories. So I have like $200K in available credit and maybe use 1-2.5% of that monthly and pay it in full, and then try to keep my non mortgage and auto related deferred expenses under 10% of that as well. If the market blows up? I can then use all the available credit to play the no interest for 12-18 month balance transfer game. The key driver in my logic is that the earlier you start accumulating wealth, and faster you can get it as high as possible, the easier life and decision making becomes. Returning mid single digits on 5 and 6 figure wealth does pretty much nothing for anyone. Returning mid single digits on a few million? If you are a fellow who can live within their means...You can do quite a bit with that. And if you can get double digits investing 7 figures? The world is your oyster. Either way, grow your pile of cash as early and as fast as possible so that your investing actually matters. Avoid shrinking it at all costs.

Lucky kid. Couple months ago one broke $50K. https://www.ebay.com/itm/1979-O-Pee-Chee-Hockey-Wayne-Gretzky-ROOKIE-RC-18-PSA-9-MINT-PWCC-PQ-/401730414298?hash=item5d88ffa6da%3Ag%3A9rsAAOSwR7xcjHS5&nma=true&si=DxHys7%252BZQwXD9MxOXIrK3becCTI%253D&orig_cvip=true&nordt=true&rt=nc&_trksid=p2047675.l2557 Adding Dustin Johnson to the mix would make it quite the party. The guy is quite wild from what I've heard. And it would certainly make the $21K almost a bargain for that type of experience.

Yup. I've traded ARKG at times for exposure to the genomics stuff, but with all of the ARK ETFs, I can't help but think that these were created for the sole purpose of capitalizing on the easiness of marketing a dot com like portfolio during a bull market.

I'm in a similar circumstance to Shalab and agree with others that I'm relatively averse to debt...I get a get good night's sleep every night, no matter what Trump, Trudeau or the rest of the world do. I have a mortgage at 3.29% and a car loan at 1.9%...other than that no debt...not credit cards, no line of credit, nothing! And the only reason I have a mortgage and car loan is because of the low interest rates...I have enough in investments, cash, etc to pay the mortgage and car loan off several times over, but am growing it at 12%+ annually. I put everything on my card each month that I can to get the points, and then it is paid off in full every month. The reason...I remember how tough it was in the first few years of Corner Market Capital...I was in debt after a couple of years, burning through what investments I had, and sleeping well each night was tough! Slowly things started to turn...and I decided I never wanted to be in that position again. I still live relatively frugally other than the $21K winning bid on this year's lunch and golf with Wayne Gretzky at Fairfax's AGM, and save more money than I spend each month! Cheers! That must have been an awesome experience. Tangentially related note, one of my better investments over the years has been PSA graded Gretzky RCs. The PSA 9's have gone up nearly 10 fold in the past 5-7 years. Not scalable because of the limited supply, but a nice ROI out of what is basically a hobby.

It depends really on what I consider my personal "coverage" ratios. I will borrow money all day at a 5% rate or lower. Give me all the money in the world if that's my hurdle. But I have to have certainty that if shit hits the fan I will be able to repay this. My home? Why would I tie up all the money I had in my mid 20's, in an illiquid asset that I never plan on selling, when I can borrow at 3.5%? Why would I take $50K for my car and forgo that money being invested for the next 5 years, when I can borrow at 1.7%? Heck I am so dedicated to invested that even my snow blower I took 12 months 0 interest financing for. I've seen quotes about never interrupting compounding, or how the more you invest the better off you will be, well I live that to the extreme. The key thing here though, is risk management and being 100% honest about the necessity of what you are buying/borrowing, and whether or not you can afford it. I'm not a fan of being scared of everything. My entire life I've heard people make excuses not to be in the stock market, or not to make investments. More often than not, in fact, almost all the times, those fears are really just excuses and owning businesses and being invested would have worked out for them.

I agree with a lot of what you said but I take issue with your over simplified cynical generalization. Nobody thinks we are owed anything or being treated specially. Every investment we make is a bet on the future behavior of the controlling parties, whether its management or controlling shareholder. We do expect to be treated fairly. What happened to fiduciary duty? I don't want to turn this into a TOO thread, but what pissed people off was the bait and switch. Brookfield posted as a strategic sponsor and have people spent two years invested with them. Now that things are much improved, they decide to take advantage of the low stock price to get a bit more return. They changed narrative and bent facts to justify their low bid. They have totally forgot about their fiduciary duty as the GP of the partnership. Saying self-interest rules the day, you have no clue why people go into investment thinking they are owed anything is not conducive to the discussion. Every single investment we make, we think we are owed at least ethical behavior. Otherwise, theoretically every management can bankrupt a company on purpose and get themself a better deal out of the bankruptcy process by siding with the vulture fund. I just think that the expectation to be treated fairly or expecting management to have ethical behavior, especially in the financial world, is setting oneself up to be taken advantage of. In the choice between ethics and dollars, I can count on one hand the number of people I've met who will always put ethics first. Out of the rest, some are just better at convincing others they will, but will ultimately chose the dollar anyway. The latter is kind of what Bruce Flatt seems to be.

While interning at a small brokerage firm in my early 20's, I saw two guys, each making $1M a year plus, get into a fist fight over who was responsible for paying a $75 ticket charge. When it comes to money, people are animals. Especially in the financial world. I have no clue why people go into investments thinking they are owed anything or going to be treated specially. Self interest rules the day, whether its Fast Eddie plundering Sears into bankruptcy, the Oracle of Omaha refusing to put capital to work via buybacks or paying dividends almost solely because he wants to make one last big acquisition for legacy purposes, or BAM and their subs forcing a below market takeover through. Even if you do find an awesome and generous manager, you'll never get hurt being skeptical. You will get flattened thinking Fast Eddy has your back though.

Got some FRPH at the close. $46.70 Ill take all day

Sold 10% of my BX. Still cheap, but I think short term its overshot.

I dont disagree. I just have zero confidence in Barra doing anything remotely useful in terms of capital allocation. She is ruining whatever benefits may come from running the business in a respectable fashion. The CEO of a public company should not be clueless when it comes to handling that side of the company.

This is just the gift that keeps on giving.....

Dead link, deserves a bump? https://www.businesswire.com/news/home/20190122005513/en/Elliott-Management-Sends-Letter-Board-Directors-eBay 75-100% upside is a rather bold claim. Are you buying it? It's not going to be a small feat to restructure management and re-adjust their algorithms to make sellers happy. I remember not too long ago Elliot claimed NXP was worth $135 and then a couple months later sold out at 92.

Work a couple more years and then get a municipal job and just invest my own money and live life.