Gregmal

Hi John, Traditional, WB/Graham inspired value investing, probably not. Agreed. However I consider investing to have multiple definitions. I consider using myriad angles, theories, data points, OR multiple combinations of all of those things to find exploitable opportunities, or mispricings, to be a form of investing. At the end of the day, making a buck is the goal. Then growing that buck. To me, value investing is just as much about exploiting mis-pricings as it is about anything else. So when a bunch of situations occur that to me indicate too many fat kids on one side of the see-saw, sometimes all you have to do is wait for them to get off. Not for everyone, sure. Hard to quantify, sure. Maybe skill, maybe luck, maybe we never find out. I've noticed, especially with some responses here, that some rather wear badges of honor "investing" in the tried and true, textbook ways, even if it means negative, or mediocre returns, than make money entertaining more unorthodox approaches. Different ways to skin a cat so to speak but many times, especially with the markets, pattern recognition is big. You have the fundamental analysis crowd, and the technical analysis crowd. You have some that try both. I try not to box myself in, but rather prefer a "go anywhere" approach, if the situation makes sense. This is a community and sharing potentially profitable ideas shouldn't be attacked. I've seen bozos with one post come here and post promo shit about penny stocks. And they get attacked, sure... I get that. But whining and sour grapes(over an idea that made money nonetheless) because the idea doesn't fit YOUR model of "investing" is stupid. No one is forced to follow, read, or invest. If people don't like it? Then move on... EDIT: I'd add, back to MDXG, as an investor, I don't know how this whole thing isn't fascinating to people. At some point probably in the next 6 months, there will be a massive amount of money to be made on one side of this trade, for fundamental reasons. Why wouldn't it be worth keeping tabs on or trying to figure out what side that money will be made on?

First off, I agree with your assessment Longhaul, and yes, good observation about SBC. Second, while unorthodox, pushback is one of the most valuable, parts of the due diligence process. Bruce Berkowitz labels this aggressive pushing of contrarian points "trying to kill the thesis". That said, there are a ton of sensitive babies here. I try to pushback, sometimes even with the counterpoints on positions I like, mainly because there are so many excuse making circle jerks going on here with the pop stocks like FB, FFH(although here we've had some good quality talks lately) and AAPL, just to name of few of the current ones. The investment process is different for all, but I mean, I thought my 2018 returns were kind of meh, then I see what others here are posting and it just kind of confirmed what I've long thought about a lot of the people here...I'll leave it at that. Third, this thread was amusing to me. Specifically Alwaysdrawing. I don't normally call people out on a personal level, but what a jackass. He's playing the concerned citizen, getting all outraged that I suggest an idea(a profitable one, which is a rarity on this site of late), ridiculing me and making embellished claims, some of which are a matter of opinion, and stating them as fact, and most egregiously, accusing ME of pumping my position, when I think my behavior in terms of posting my exact to the moment entries and exits here, was as transparent as I've seen on this site. And then weeks later, in a different thread, this jackass lets it slip he's just another short here. So in other words he was pumping HIS POSITON in a dishonest and nontransparent way. Good lord. I've already made my money here.... So I wish him the best.

Excellent, timely, read on the situation.

A lot of the stupid and redundant stuff is primarily CYA regulatory stuff.

http://knowledge.wharton.upenn.edu/article/apple-innovation-edge/ I guess I will clarify my terminology. Apple became what it is now, because of Steve Jobs' magic. Whether invention/innovation, AAPL has largely ridden the coattails of this since his death. There will come a point where they will need to do something new, and I don't think it s a sure bet that they will. At best, I think one should hope they kind of become what Microsoft turned in to. When Tim Cook took over, everyone was worried about what Apple could do next. It seemed those questions stopped once Buffett bought in. But to me at least, they haven't demonstrated the ability to do anything truly unique post Jobs. Everything has more or less been iPhone add ons, and their biggest venture, the electric car, seems to have been a failure.

Out today, some real research, basically supporting some of the drivers I mentioned. https://www.presciencepoint.com/wp-content/uploads/2019/01/Prescience_Point-MiMedx_MDXG-Long.pdf I no longer have a position, but it was so obvious after the delisting that at this point, the stupid retail money was on the short side. Had good laughs reading about people who bought puts and then couldn't get a bid when wanting to sell them. The share price has now more than doubled following "the worst auditor resignation ever!!!", which was supposed to immediately take the company to 0. Will be interesting to see this continue to play out.

I've never understood this style of shorting the market. It sounds like a good idea and is definitely sexier, but execution is quite difficult, and even then you are still basically timing things. It's quite interesting to look at many of the guys who became legends by shorting the housing crisis. Most of them haven't done too well since. Its not cuz they aren't smart or whatever, but rather the way they make their bets. I'd much rather just take the Tepper approach, where you shift your exposure. I think in mid 2009 he was levered like 3:1 at some point or something to that degree. Whereas when he's been bearish I've seen his portfolio at something like 40% equities. At least this way you still have something going for you if your macro views aren't playing out.

The problem with the compare is that what is -really- going on here is that Apple is harboring some delusional fantasy about being Netflix--they're insisting on dumping billions of dollars into a sub-scale me-too TV content strategy that, for all I can see, is mostly about satisfying the egos of a handful of 60 year old megadorks who are using the "net cash" as a pretext to ~discuss business opportunities~ with Jessica Alba. That's what is troubling about the story, not making content accessible cross-platform. When they made iTunes available on Windows, they did so from a position of strength. It was about expanding the size of a market they were dominating. In this case, they've already lost the fucking game, and now they're desperately trying to salvage something that resembles a defensible position. The problem with their Apple TV strategy is the Apple TV (and the HomePod), and making sure everybody on Earth is able to watch Last App Standing starring Fifty Cent from Google Chromecast will provide zero value to users and zero value to the company. Ding, ding, ding. We have a winner. If this was any other company, I think it would be clearer for many to see. Apple is not acting from a position of strength, and they aren't really innovating anymore. Many of the fanboys continue to believe they have a "secret" draw full of ideas and products that are going to be revealed in time; but I don't. This company has done zero to demonstrate they can innovate without Jobs. I mean they wasted god knows how much money, and even with stealing half of Teslas employees, got nowhere with the car. The TV IMO didn't move any needles. Yet people just think "it's Apple, they will innovate"... Yea. Apply that to any other company and you'd be labelled crazy. And what I think is the case now, and has been for a while, is that without Jobs, Apple is basically any other company with a really enviable cash hoard and head start in terms of market share. To their credit, the Airbuds or whatever were classic Apple. A cool little ear piece, that is wildly overpriced, and deviously designed so that the average person likely loses them 2-3 times a year and has to buy more....

First, this is people posting their returns on the internet, who cares. And two, based on what's provided I'd gander a heavy concentration in high beta energy names. Lastly, agree with you entirely on the last piece.

This is kind of how I see that aspect of it as well. I could look at BRK and even without Buffett, say to myself, these are businesses I want to own. The primary reason I see most people investing in FFH is Watsa. Outside of that, as I said earlier, there isn't much, and even on the insurance side, there's better insurance related investments out there.

How big was their VRX position? I didn't know about that one... I don't recall specifically, and to be 100% forthright I could be thinking of Francis Chou(who seems to mirror Watsa with his portfolio quite a bit) but I'm pretty sure it was FFH, but maybe 1-2 years ago I saw VRX pop up in the filings. It wasn't anywhere near the top. Perhaps when VRX had crashed and was in the 30's or 40's. But the thing that stuck out for me was the pattern. WTF is the obsession with these heavily levered problem child companies? Like, you're bearish on everything; OK. I get it. But then what the heck are you doing allocating money to companies that look like this??? SD, BBRY, RFP, SSW.... Thats the whole portfolio betting on companies that more or less constitute the same sort of macro bet. You don't get home run turn arounds, if the broader market is, as you say it is(ie overvalued and headed towards chaos). That is what I've never been comfortable with. I am ok betting on managers who express differing views than me. I understand others have a circle of competence where I don't. But for the past decade, I can't reconcile the logic used for the FFH portfolio. It just hasn't made sense and the results have more or less been what I'd expect given how out there they are.

I personally view FFH to be uninvestable. This is a company I have really wanted to like for a long time, but could never get comfortable with it simply because there are others who do what they do, but are better at it. The investment decisions for the past decade have been atrocious. Off the top of my heads its what? BBRY, RFP, SHLD, VRX, SD... probably more that I am forgetting, all of which fit the same theme. Troubled companies, with mediocre management, and TONS OF DEBT. The results have been as expected given those things. Not only have these been heavily concentrated positions, but they've collectively shown poor judgment and demonstrated a lack of an ability to locate good investments in a fertile environment. Going off of a comment by rb, how the f*** was ANYONE, let alone a professional, looking at the market in 2010 and calling stocks richly valued????? I can understand having macro concerns, or thinking trouble lays ahead, but richly valued???? "Oh gee, let me short the market with the S&P trading at 13x!" Pure stupidity.

After you strip out net cash (Cook says 100% will be used for buybacks), you get about $550B. If Apple Watch makes some medical breakthrough, you could see a plausible path to $100B in revenue. At 5x sales, that gets you $500B market cap. In the meantime, all the FCF from iPhone is returned to shareholders. Wouldn't be my base case. But it is plausible that this is still a good investment if iPhone goes into decline. There's a lot of if's either way. I wouldn't say it's possible and wouldn't say it's impossible, I just wouldn't predicate a position on it. While on one end a medical breakthrough and 100B in sales is theoretically possible, I think Apple's healthcare unit trading for more than twice the valuation of Pfizer is a bit of a stretch...

That looks like a note that would be attached to a pipe bomb sent to CNBC, and anybody whose pitch is so heavily reliant on projecting AAPL in 2040 is unhinged. I think that entirely misses the point. The Apple thesis hinges on a couple things, nominal NI growth, disciplined financial engineering, and no major acquisitions. The stability of iPhone sales is the key. The "oh they are getting into this, or that" angle IMO is irrelevant. Why? Look at all the public companies in those areas, heck even healthcare. Assume Apple can become a top player. More likely than not those earnings still mean very little against the current market cap. If phone sales can remain stable, and they continue to return capital to shareholders, then AAPL will be a very good investment. If they don't, or if they deviate from this, I wouldn't want to be near this.

I thought this was well done http://unemon.com/ResearchEasy/201901_AAPL/20190103_AAPL.html

I think there is quite a bit baked in right now, but don't disagree that there could be rough patches. That said I don't think today is worth getting worked up over. People bid up a challenged company because Buffett bought it and paid the price. Just because lower and middle class people stopped seeing the need to give Apple $700-$1000 a year for the same phone with a new color or extra inch of screen space, doesn't mean the economy is slowing down. In fact, it might mean people are getting smarter or spending that money elsewhere... Although, it does seem this is all pointing the data in a direction that will give the Fed pause, and may even lead to revisions in terms of their previously hawkish stances.

Fair enough. Personally, I prefer situations where all the information is well known. With something like XPEL, I assume there are market participants who know much more about the company than I do. If XPEL goes down 50%, I assume there is a good reason. If Apple goes down 50%, I know there is ~0% chance that intrinsic value has dropped 50%. This is the exact opposite of what I am saying. If you believe the market prices large caps efficiently, you buy an index or go searching in obscure places for an "edge". If you believe in Graham's Mr. Market analogy, you just wait until the market puts a stock on sale. My unpopular opinion is that a large cap is just as likely to be a bargain as a small cap. P.s. I have no strong opinion on Apple at current price but I think the bulls have a much stronger argument. I think AAPL is a "good value" here, but the same can be said for a lot of things. It's just amazed me how everyone just completely ignored obvious problems that were in plain view until Buffett came along, and then all of a sudden the stock almost doubled for no good reason and there were still folks saying it was "cheap" when nothing changed. Apples advantage IMO continues to erode. There is no real innovation occurring anymore, and I still kind of think the current valuation is predicated on people continuing to be stupid with their money, ie upgrading every 18 months even though they're buying the same phone more or less they just had. It seems folks are wisening up, and if they do, Apple loses a lot of its halo and a lot of its earnings. Right now there are a ton of companies trading at 10x or less, no reason it can't happen to Apple. Mr. Market might put things on sale, but there is also the chance that the perceived "sale price" is also now just the new price. At least until you find a catalyst, which IMO is moreso where owning a widely covered large cap is putting you at a disadvantage.

This is the great myth of investing -- that you need some informational edge or special insight. Sometimes the market just likes to offer bargains. Ben Graham killed this myth with his Mr. Market metaphor yet it persists. Maybe, but I'd rather own an XPEL or FRP where I know market participants are missing things than just hope and pray AAPL is mispriced for no reason. Like I said, better off just buying an index fund if that's the case. People said AAPL was a bargain at $200. Only two years after Carl Icahn, who is super notorious for pushing silly price targets for his activist companies, said fair value was about $200...

Thanks shalab, I'm just trying to create some data driven balance in this discussion. [Which, to me - honestly - is almost non-existent here right now.] - - - o 0 o - - - This reminds me dearly of the Novo Nordisk A/S situation in the autumn of 2016 : An earnings miss in a wonderful company & world leader, politics involved etc. Among Danes there is a saying, that a dog over the first few years of its life evolves a personality like the owner of the dog. A home-spun philosophy is gradually evolving inside my head ... - Investors [perhaps] invest in companies that are bolted together & wired the same way as the investor? Jeff [DooDiligence] owns both AAPL & NVO. Here is how Jeff recently has described himself: Coincidence? - Because this is to me also a description of AAPL. -We actually also have a special term for a person with such a mentality and attitude towards challenges here in Denmark : A bottle cork. [Fits perfect to the quote above.] - - - o 0 o - - - The above is also in the press release, but people don't see or read it. I am not trying to be abrasive in my asking of the following question(in reference to the bold), but to my earlier point, do the facts/data really matter with a company like Apple? All the information is out there, everyone's got access to the same things, and with the company probably being the most covered public company in the world, is anyone here(or anywhere else) going to contribute some groundbreaking data set to the table that changes anything? Nope...It isn't as though the market is "missing" anything with Apple. Your only edge is in potentially understanding the bigger picture better than the next guy and trying to connect dots that will help you see the true picture being painted. I have no position here but find the post by Scunny Bunny to be more helpful in getting a feel for this than trying to parse words or decode what IMO is a very misleading release(which by the way, there's already tons on here who are bending over backwards trying to rationalize this awful news and remain positive, aka thesis drift). COBF has some high quality minds but way too many here regularly miss the forest for the trees because of the "numbers/facts" OCD. The numbers and the facts clearly supported buying AAPL at $200+. Common sense interpretation of the big picture however, did not. What's cheap at 12x is still also cheap at 15x, which can also be justified at 20x if it's "high quality".... The facts and numbers can essentially say whatever one wants them to(just like Apple's guidance which by the way, I guarantee you they beat, which goes hand in hand with what some observed in regards to the playing games with metrics last quarter). People often make the mistake of confusing being right with getting it right. Getting it right with an investment is more important than being right.

Eli adding so much value!

Not picking a fight, just observing after reading your post as I think the thesis for many maybe what you indirectly describe. 1. You cite Iphone fatigue, lack of product innovation, stiff competition from Samsung yet you still use a 5s over and over and over it seems??? 2. You may not be buying a new phone each time but presumably the person selling it to you is? Your very likely an accessory to the upgrade cycle or process of many. Its very unlikely that person just stopped using a phone. They could have switched to samsung but if they are selling a 5s its unlikely they didn't like the product as presumably they had it for years. Your $100 is likely the down payment or partial payment for their new phone etc. It looks like your certainly part of the apple ecosystem. Not disagreeing, and these discussion IMO are the most valuable. I am certainly part of the "Ecosystem". I love all of it and have bought a MacBook Pro maybe 2 weeks ago. I am just saying, I go through computers maybe one every 5 years and I have only once in my life bought a brand new iPhone. I get the benefit largely of people buying the newest models and chucking away perfectly good phones that happen to be last years model(or 4 years ago model). My main point is that I just don't see how things don't eventually fall off a cliff when the "juice" IMO comes from the insanity that had people making 40K a year pushing $1000 phones every 12-18 months. Or even more disturbing to me, is seeing how many of those people break their phones every couple months and get a new one, but thats another story. I think eventually this dies down because frankly, I haven't really seen anything revolutionary in terms of reasons to upgrade from year to year and it appears that the end consumer may be realizing this finally, as well. So as a company I love AAPL. As an ecosystem it s great. I just think it s going to be challenging maintaining its status as a WS darling. I would also add that I kind of think AAPL falls into the category of "you're better off just buying an index" for 90% of normal investors. Everyone and their mother knows AAPL. Every firm with an analyst covers it. Maybe WB gets a direct line to Tim Cook, but does anyone else really have any sort of edge, or informational advantage/insight that is proprietary here? Most definitely not. Meaning you're either piggy backing someone else(not wise) or basing your conviction on numbers that everyone else in the world can see too, in other words meaning that the market is not really mispricing anything, and in fact just as efficient as it would be with an index fund... Reminds me of an episodes of Billions where they're holding a meeting and one of the lackluster PM's offers up AAPL. Ax goes "people don't pay us 2/20 for Apple"....

Apple has the potential to be a slow moving train wreck. Let's see, before Buffett, there were myriad concerns about lack of product innovation post Jobs, iPhone fatigue, waning iPad interest, and IMO some pretty stiff competition, especially from Samsung. All those concerns have done nothing but get bigger and more real, but then Buffett bought in and everyone dismissed all of that and the stock went on an absolute tear, fueled by euphoria and share repurchases. During this binge, China emerged as a major issue. Ignored by investors. And eventually, we'll see(I believe) that the entire crux of the Apple cult thesis will wane too. Essentially gross margins and the belief that coming out with a new phone every year and raising prices 20% would continue with the same insatiable demand is ridiculous. I love Apple products and have had them for over a decade. I use an iPhone 5s and every time I need a new one get a used one on Ebay for about $100. Break it, throw it, drop it in the water, put it in the microwave, lose it, whatever, I can get all the phone I need for the same price as a Motorola flip phone in 2002. Maybe cheaper. So to assume hundreds of millions of devices would continue to be sold, with marginal year to year improvement, fueled by mainly middle class and lower class people paying eye watering prices or carriers footing the bill(despite they themselves riddled with margin pressures galore); LOL yea to me, I don't know how anyone could expect this insanity to continue in perpetuity....It was a staggering run though.

I'm familiar with this space and a lot of the companies in it, and all I'd say is that when it comes to regulatory stuff, you are in the Wild West. While I think this goes through, it would be a big mistake to assume no/little revenue= no regulatory hurdles.

Good call. Big guidance cut, and now this POS is bringing the rest of the market down with it... Wish I had the fortitude to short this on the "I'll follow Warren" run up of $100 per share.

At least for one day, I've noticed probably what I'd refer to as the Mother of All January effects in A LOT of names that got the beat down last year.