Gregmal

I hope this is true and it probably explains at least some of the action today. On the other hand, I think such an explanation is potentially a bit simplistic / lazy. ~25% of shares outstanding traded hands today and another 25% is in the hands of a few large holders whom I assume didn't all sell (Renaissance, Blackrock, D3). Shares traded today at an average discount of ~15% for a deal that is supposed to close in a few months. Surely these shares weren't all owned by frustrated dentists who decided to sell them during lunch break. Also, the dollar volume was relatively low - if this was really such a no-brainer trade I'd expect that 'smart money' would snap up today's volume at far higher prices. Just playing devil's advocate but a third rate nanocap stock like this also likely isnt on the radar of much "smart money", period. Add in the reputational issues and utter disaster the past year has been, and I think I can at least get comfortable with rationalizing the discount. I'd also add that many deals since Trump took over have traded with out-sized spreads. This isn't uncommon and all these things put together, kind of warrant it. I'd have expected something closer to a 10-15% annualized discount though. Then again I'd never have expected the types of spreads we saw with Cabela's, BRCD, etc, either.

My thoughts are that this has been a perpetual over promise under deliver type of company and management, that briefly showed a tremendous amount of promise only to again implode. This was about a year ago and you've got plenty of shareholders underwater and likely throwing in the towel which IMO is probably the main reason for the excessive spread. Well, that and I would guess some concern that this is just some stunt and won't close, but that would be fraud...

Deal announced today 1.72 per share, closing is Q4. Current price 1.49 which represents over 30% IRR. Anyone else looking at this? Don't see many threats to this closing.

https://www.cnbc.com/2018/06/27/madison-square-garden-approves-plan-to-explore-spin-off-of-sports-busi.html Printing money. Probably the easiest investment I've ever come across.

Reduced a couple days ago but still holding a decent sized position. My thoughts are that this quickly went from a no brainer to a great company at a fair price. Thus reducing position size to a more modest holding makes sense. That said it is still a great business with excellent management. One thing I've learned in the current market is that it's easy to run through(or out of) good ideas if you get too picky about valuations(how many people sold GOOG/AAPL/etc ages ago because they "got ahead" of themselves?). Given this is a company that following it's warehouse sale is also sitting on a massive cash position, I am more than comfortable owning their unique collection of assets while also having a free call option on what management can do(if anything) with the cash. This is much more optimal to me than just sitting on a pile of cash myself.

If you think general contracting isn't hard then you've never done it. I spent years building up the skills in all aspects of the home to the point where I started building custom homes. It is hard. Don't compare a general contractor to a duct cleaner or exterminator. Certain types of GC's operate like this. Homeowner calls about a new front door and a new deck. GC calls a specialist who does doors and windows, and a carpenter for the deck, and gets quotes, marks them up 30%, and gives invoice. Far different than the guy who spent 5 years in trade school and builds the door and deck himself. These types of businesses IMO are easily where one without any qualifications or skill set could focus on and make a decent wage. I know a few tree removal guys. They work two days a week to make the $1200 they need too get by and then coast the rest of the time, turning down jobs so they can paddle board or go hiking.

I think the most people who fall into the category or dumb/lazy have been able to make good money in landscaping/construction/housing related gigs. Many of the lazy, comfortable silver spoon raised kids I knew who didn't want to get real jobs ended up doing variations of these things. Air duct cleaners, exterminators, landscaping specialists, mold/water damage remediation "specialists", general contractors, all more or less charge obscene prices for services that are neither hard, nor expensive. An exterminator is basically a guy with a GED and a generic $35 spray tank filled with $15 solution you can get at Home Depot. He charges $250... A power washing company charges you $400 for a guy with an IQ of 80 to hook up a $250 machine to your water supply and point it at your house. Gutter cleaners, driveway refinishing, tree removal... I guess this is why housing is so important to the economic ecosystem.

Gas stations and liquor stores. Many Costco's don't have either, and IMO these are huge markets that won't be penetrated by others anytime soon and present a huge growth option. Particularly IMO the liquor stores. I was floored to find out from a friend that Costco bottles the same stuff used by Grey Goose or Macallan and then sells it at half the price under their Kirkland brand. Selling 18 year Scotch for $39. Gas prices can't be beat either. Both will continue to get people to their stores.

I've recently added some YE $50 C calls. I think this is due for a good bounce.

Sounds a lot like Regus, which is valued at 1/10th of that...

This is nice, but I don't think many would be surprised by this type of stuff going on at a company like RICK. I don't own the shares any longer for the simple reason that the valuation is no longer compelling. At $7-$12 a share, you've got little to no downside barring some catastrophe. You'll get buried from all the FCF this business spits off. At $30? Its probably slightly overvalued like pretty much everything else in this market. Which you could argue means it's more overvalued because something like RICK should naturally trade with a bit of a built in discount.

Trimmed a bit yesterday. Still like it but not a core position after the big run. Wish they had held off on the capital raise a little longer, otherwise, very pleased with their execution.

Or simply well incentivized. With many companies, especially in the financial sector, and few good years of gunslinging and the embracing of risky behavior can make traders, managers, and executives millionaires many times over. You only have to make your fortune once, and when it all blows up, shareholders eat it. The folks whom caused the blow up usually walk away in good shape.

Haven't been there in a while but Southern Hospitality in NYC was always a favorite. Hunt & Fish Club is my wife's favorite; food is great, the atmosphere is cool and you always run into famous people. I'm a burger and Bud Lite guy though so not my first choice. Never had a bad time though.

The jump for the decade covering 30-40 seems crazy. Not much growth in income, say 50k to 35 and then another 70k by 40, yet net worth increases nearly ten fold. That's odd.

Just curious what you consider reasonable. I know this varies substantially.

So according to you, he should simply "put an outrageously large one time payment together" (that likely represents a lifetime of saving+patience+discipline+foresight+risk taking+luck, that may or may not be repeated in the future) without thinking it through...just because...he's crazy smart and figure out to make money back in the future? And also because "kids are more important" ? Except the law is pretty straight forward in most cases and generally ignores the dollar figures; instead focusing on percentages. For instances a wealthy young man can find a hot piece that dropped out of college and stripped/waited tables prior to their getting together. He goes on to make millions. She still likely gets half assuming no prenuptial agreement despite the fact that she'd never come close to earning more than $25 a hour... Sometimes you just have to bite the bullet and hope for the best. Also, not that I'm advising it, but if you have private/illiquid/hard to value investments, I'm sure an intelligent accountant/capable lawyer can find a way to "mark these to market" in a way that most normal people, let alone a housewife, won't be able to really contest. Then just divy up the easy to value stuff fairly and don't liquidate the private stuff in a conspicuous way.

Sounds about right. I think that buying a nice waterfront home (high & dry if possible) anywhere in NW Florida is a much better investment. I would definitely agree. Buy the actual real estate. I've looked at JOE for a long time. I actually thought to myself about 6 months ago,"hey JOE is starting to look interesting". That said, it's basically just a larger CTO, with lower quality assets, in a less desirable area, with the same problems, and a decade plus of catching up to do. It's at best just a good trade vehicle here. I don't think you have much downside and you have Berkowitz implementing an aggressive buyback at your back. So trade the fluctuations, which is what I think any competent owner of this(outside of Bruce) is doing. The Kerrisdale thesis is basically just an updated version of Einhorn's short, and the SA article is basically just a wordy reiteration of the hopes and dreams that have gotten Fairholme stuck in quicksand.

https://nypost.com/2018/05/14/mark-cuban-supreme-court-just-doubled-my-teams-value/

Promotional emails labeling it the top stock pick for 2018 and calling a $50 target by National Inflation Association may have something to do with it. I'd research National Inflation Association(NIA); whom they have previously been affiliated with, and what they've been accused of doing, before diving into anything they suggest.

Appreciate the condescending reply - the tone immediately made me realize how everything I wrote is silly and outright stupid. Can you please send me a list of your investments so I can just clone you? Network effect is probably in the top 3 requirements for a store of value asset. Bitcoin is currently winning the network effect game. Once again, I'm not a zealot and my opinions will grow as facts change. I hold some of the smaller coins in crypto as an effective hedge on bitcoin losing its current network effect status. And great idea with the interest earning crypto-asset. Must be nice to be able to just come up with million/billion dollar ideas on the spot and not act on it. I would advise that you create this - but I hate spending time giving advice to people who don't want to follow it. In response to Jurgis, the answer is, I don't know. But I also don't know why gold? vs why silver, vs why palladium, vs why granite? vs why limestone. I don't really need to know or understand to know that they have a value in the market. The internet and tech in general have shown to be a way of the future. Internet real estate, which takes the form of domain names, has shown to be just as valuable as tangible dirt and soil real estate. Why? again I am not an expert and do not know. The only question one should be concerned with, has to do with whether it is sustainable. I have started to believe it might be.

Agreed. Merry Christmas all.

I sure hope so. I'm buying more under $9K, under $5K would be ideal. Just curious, but how are you determining your price points to add? There is no real way to determine an intrinsic value, so is it just based on regressions or prior trading ranges? I can't give you an exact value, but if Bitcoin becomes what I think it will you will have 7 Billion people who want to own and use those 16M-20M coins (depending on how many you think are lost). I don't know if the price in 10 years is $500K or $25M, but it won't be $5K unless my thesis on bitcoin is entirely wrong. If that is the case then you probably shouldn't buy it at all as $0 would be my best guess. I've been buying on the dips since 2014 and it has served me well building my position. I think the real runup is going to be in the 2020s. As we go from way less than 1% of people using/owning bitcoin to 20-40%. Facebook has over 1 Billion users, what happens when a billion+ people want Bitcoin? I still think that there is plenty of time. This drop will be one of many along the way. I tend to (kind of, as I'm not a full blown believer in this but see it's merits) agree with your assessment. However, that isn't necessarily what's opened my eyes to following this a little more closing and even gotten me considering a small position. It's this. Never have I really seen Wall Street HATE something like I have with Bitcoin. It is and has been loathed. However I feel like despite this, Bitcoin has become super popular. And now, IMO Wall Street is on the cusp on embracing it for the simple reason that Wall Street eventually finds a way to LOVE anything they can make money selling. There are not many Bitcoin ETF's or products. Funds have little to no exposure to them. Most banks don't have access to it or trading desks to support it. This is all on the cusp on changing, which I think should create a massive tailwind for the next 2-3 years. This current manic move has simple wet the appetite of a lot of people; it has them paying attention now. So your demand will start increasing substantially and on top of that all the institutional products that will be getting involved simply because they can sell it to people and make money will be significant. The small float(21m or whatever but said to really be maybe 50-75% of that) could send this to the moon. Especially if some of the new products coming out allow people to short this.

I sure hope so. I'm buying more under $9K, under $5K would be ideal. Just curious, but how are you determining your price points to add? There is no real way to determine an intrinsic value, so is it just based on regressions or prior trading ranges?

I think without question the bigger risk is with the guy running his own business. Plain and simple, if the guy loses his business, he loses everything. If one loses his portfolio, he would still typically have his job which provides income. Add in the current environment in which big box retailers and online shopping are annihilating most small, main street businesses, and personally I think it's a tough sell to take on the risk of being a small business owner right now unless you are very well financially situated. As for portfolio concentration, I think it's optimal to own a lot but be concentrated in very few, high quality opportunities. For instance I have investments in 20-30 different companies/products. However about 70%of my portfolio is invested in 3 companies. I think it was Bruce Berkowitz who said something along the lines of "diversification will just lead to average results" and that "only a couple great ideas can make a big difference in one's life". I think both are pretty accurate and good to remember.