Gregmal

Those order and backlog numbers are stunning. Sun Belt homebuilder on absolute fire? Dont pull my leg now! Who'd have seen that coming? Anyhow, painfully averaged up on the pullback in APTS. Still think there's probably $20 per share or so of upside over the next year or two given the profile of the company and especially the leveraged balance sheet. APTS - nice idea here Greg - thanks much! No problem my man! If you are bullish on that region the portfolio is incredible. Boner worthy even. Probably one of the most misunderstood and under recognized REITs out there. Similar in a lot of ways to CLPR. The majority of the mortgages are long term and fixed rate. Collections across the board have been incredibly strong. MF properties are class A in every sense and newest amongst any public company. Unique development pipeline and strategy....and of course the preferred shares, which are almost unanimously detested but quite genius in their purpose. Probably worthy of a thread but quite a lot to cover and Im somewhat lazy.

Any idea why this wasnt nearly as popular a couple months ago at half the price?

Those order and backlog numbers are stunning. Sun Belt homebuilder on absolute fire? Dont pull my leg now! Who'd have seen that coming? Anyhow, painfully averaged up on the pullback in APTS. Still think there's probably $20 per share or so of upside over the next year or two given the profile of the company and especially the leveraged balance sheet.

Thats probably true but often times you want to be picking the lowest hanging fruit and with time being money, no one wants to hang around for the next half decade waiting for that last 20% or whatever. A $15B valuation on this is not crazy, but its also not cheap. The C conversation was viewed as a catalyst. This is the move. Ive kind of reverse exchanged this into MSB(another HK position). Another dynamite inflation protected royalty asset. Once TPL fails to catch another high I'm out.

This is probably one of the best examples of that old trading rule about how if you want to sell, wait until the day it doesnt make a new 52 week high, comes in handy. Where it stops? Who knows. But regardless, the day it doesnt make a new 52 week high will undoubtedly still produce a better sale price than if someone simply pulled out their approximate Excel sheet derived NAV or PE multiple...Been a hell of a ride.

I guess what I'd say is that you need to apply a balance to everything because nothing in an investment is one dimensional. With the SSS example, maybe the price improvement doesnt occur because the issue really isnt SSS at all? The key is to always be aggressive with challenging your thesis. If you have a SSS thesis and SSS isnt the key that unlocks the value than there is a good chance you are focusing on the wrong variable. Go look at the crypto thread. Every $10,000 up or down theres a new wave of people coming in and challenging various "fundamental" issues with the thesis....except....the thesis has very little to do with much of what they are talking about! When people miss the key pieces and get wrapped up in things that arent really a prominent driver of the value....eventually the onus is on a hungry investor to figure out that the reason they're off is because they arent focusing on the right things."Ive watched BTC go from $3,000 to $55,000....what am I doing?"...If you were skeptical for a long time and it went against you then obviously you were skeptical of the wrong thing! Look at Amazon. For two decades traditional value investors made up excuses about valuation and PE....with hind site those weren't the metrics you needed to be looking at with Amazon. Google was widely regarded as a terrible investment and one of the most overvalued IPOs ever! Now its a value investor favorite? Why were these investing gurus on this earlier? Because they sat around quoting Buffett and Munger, etc, and being snarky, condescending assholes to people who got it...rather than asking themselves "what am I missing"... The best example of a full circle, IMO is the Griffin Industrial thread. Griffin wasnt really all that different years ago in terms of its assets and execution strategy. Earnings will inflect didnt matter either and neither did discount to NAV, heck not even a white hot industrial market mattered either...it sat there, doing everything "roughly" right for years...turns out that the issue and key to unlocking value was management. There was a wide perception that management didnt care about creating shareholder value. And nothing really changed with that, in a visible way, for a long time. Then, all of a sudden, it did. And the stock did over 100% bottom to top and they now can tap the markets for $100M cash when 2 years ago its market cap was like $175M! Narratives drive valuations and inputs are hugely important. Once you are able to hone in on or figure out which ones move the needle, you've got a huge edge. So again, bringing it back to BH....Significant discount to liquidation value, Horrible broader market sentiment, I dont follow the trading at all..but Id gander its somewhat illiquid(so classic overreaction to both upside and downside are possible), at which point the setup presents itself and basically, "if the world doesnt end I make money"....yes, even if Sardar keeps being Sardar, you can clean up. It sounds easy and it often is, but it takes a lot of practice and rigorous thought process to get there mentally...at least Ive found. I mean David Tepper has been timing the markets for 3 decades and there's still people who arrogantly will tell you that timing stocks is impossible or that trying to do so is foolish gambling...which is fine and all, but even that thesis; evaluate it. Warren Buffett employs a buy and hold strategy. Warren Buffett is a human. So its possible he just has a different strategy and its also possible that he is just wrong. And if either or both of those statements are possibly true, than why remain so invested in peddling a faulty narrative? Do what works for you!

^^Wow, awesome post. I love this kind of discussion and its totally worth having and evaluating, to each their own in terms of assessing the playing field and ultimately getting comfortable. I know from just reading the board, Sanjeev follows BH. It seems to be something not only within his circle of competence, but something he is comfortable with. From there its really just taking what the market can give you and waiting for the fat pitch. The key when applying a trading edge to your investments, you need a yo-yo. What I mean by this, is that if I am expecting or trading off a catalyst ABC....I need my investing instrument to respond accordingly. When I flick my wrist, the yo-yo reacts the way I want it to. If you're betting on a restaurant with an improving SSS thesis, well, if you see improving SSS, it would suck big time if your stock didnt go up! Which means you likely missed some variables and part of the narrative elsewhere. Broken yo-yo syndrome. For me, my yo-yo was in the real estate spectrum. If time passes, things normalize, more stimulus occurs, vaccine gets announced.....there's a mammoth mispricing! What you dont want, is to be investing on a thesis where your underlying vehicle misses the boat. Think of all the guys back during the GFC who claimed to have called the crash, and then you find out they lost 50% or whatever. If this, then that...kinda thing. So its not so much BH, IMO...or SPG/MSGE/ESRT etc, its about seeing a setup, and then having everything else fall into place in a vehicle/instrument that you feel confident in you ability to assess and even stronger in its ability to generate a return for you as your catalyst plays out. GME is a perfect example of the market not being efficient. The dude Roaring Kitty saw something, it kinda played out, he was right in a big way. Not to say there arent plenty of total tards in that name....but the point in fact being very "value investory"...stick to your circle of competence, wait for your fat pitch, and the rest often takes care of itself. I think often people, especially smart ones, utilize Buffett and Munger type lingo as a way to excuse evolving or seeing other angles to things. Speculating, investing, gambling...who gives a hoot what you call it? The end of the day the goal is to make money and ideally as much of it as fast as possible. And utilizing judgment or sequencing of events to determine catalysts has been one of the most consistent ways Ive been able to put myself in positions where its possible to "get lucky". If the deck is stacked in your favor, its profitable to play the game...even if its gambling...see Beat the Dealer. Even in regards to technicals....front running is 100% ILLEGAL...but if its playing out in the public markets in a way that you can do it legally, is that any different? So I think while Sanjeev calls it investing, you can deconstruct the thesis as 1) SOTP value is immensely disconnected here, 2) things would have to get significantly worse to justify this price, 3) if things at the company level improve its a very high IRR type of setup, and 4) the backdrop of the markets as a whole are pretty awful right now, so even if all else remains equal, I can win on sentiment improvement.

The time to own it was 12 months ago when I bought it for $50! ;D And I was out by $120...that takes care of management risk! Cheers! How do you know what the right price for this management risk was? Why $120 and not $100 or $150? This is not a cheeky question, I think this is a challenging consideration as it relates to this company. If there is management risk at this level, it is difficult to calculate how to factor that in where to sell it at or whether to buy it at all. An investor told me recently they were more comfortable with the management risk of this company now - even though the price is higher than the 2020 lows - because late in the year the company/Lion Fund II purchased so many Biglari Holdings shares. And the other day another Form 4 was filed and they purchased more shares bringing their recent total purchases to over $15 million I think. If Sardar's plan is just to screw everyone out of all the money - then these purchases are dumb as they deprive him of money that he could swindle to himself. The point being, he is having the company buy all of these shares for a reason - and according to this argument - that maybe makes the management risk more tolerable. All of the Biglari Holdings/Lion Fund purchases of Biglari Holdings own stock the last few years - also make his incentive payments nearly entirely bound to the share price of Biglari Holdings - so the straightest line path for him to make significant sums in the near future is to drive the price of the stock up - if he can. I'm not saying this argument is accurate but I am saying I can understand why investors are more comfortable holding it now when the company has recently been purchasing all of these shares on the open market, versus last year at a lower price but when the company was not buying it - which could add to the risk that he had other schemes to appropriate money to himself that did not involve driving the share price of Biglari Holdings higher. I just think these are interesting questions and am curious if you had thoughts. You're trying to understand management's behavior...that's a mistake right there. When I bought the stock, I bought it for 1/4 of book value after accounting for the potential bankruptcy of SNS and discounting any debt that would be recourse to the parent company. If the biggest risks are accounted for, the likelihood of it returning to at least half of book value was very good, as those assets were not impaired, nor were they related to SNS. Once it got to a little better than half of book after calculating for SNS bankruptcy (I thought he might let it actually go), I sold out...no consideration for management's decisions going forward, his plans to screw or not screw over shareholders...it just wasn't relevant to my estimate of intrinsic value in the worst case scenario. Cheers! I am not at all talking about NBL0303 or anyone specifically, but this board and many others are littered with people who dont know how to trade. Ive found catalyst driven trading to be one of the most consistently safe ways to pick off outsized returns without a long term correlation to the "market". I'd probably sum up your BH trade as value inspired, but the catalyst, given the distress you bought it under, was simple. Time. 3-6 months out, it would have been nearly impossible for the stock not to rerate. I dont know how more people didnt take advantage of the vaccine timeline either. For the past year everyone under the sun had basically said, late 2020 early 2021 we'll have a vaccine. Vaccine basically equalled 50-100% upside and it wasnt hard to see given as late as October many banks, restaurants, and RE were trading at or near 52 week lows despite being pretty damn close to the end of this plandemic. One of my biggest gripes with value investing is that the rhetoric is often dated and continuously encourages people to be scared of everything and always overemphasize every stupid little risk. I dont follow BH cuz I think Sardar is a scumbag but nice job picking up free banjamins...the best trades or special situations are the ones where the risks and fundamentals really dont matter....when fuckstick Sardar cant even mess things up, its safe to say the deck is stacked in your favor.

I will refrain from discussing the political aspect so as not to offend certain people who like to report everything I post....I'll just leave it at.... bought more today at 227.

^The above is completely standard operating procedure at almost every firm these days. Especially KYC and AML stuff. Everyone is in full blown over your ass mode. That said, they are "required" to ask those questions. You are not generally required to answer. Or give satisfactory answers. But they need to show they "tried". Its all very predictable and par for the course. Same goes for the new "trusted contact" rule.

Sold MAA. Had discussed this one with many folks in later half of Q4. Said it was a super conservative, no brainer Sun Belt play and you could get 10-15% 2021 return with your eyes closed. Got it in 2.5 months. You're welcome. From here I think there's less ripe risk adjusted fruit.

Took a bit off the BTC holdings and bought a few Michael Jordan autos(real, hard signed ones, not NFT junk).....is it real yet? #asset allocationFTW

Its almost as if WS is working for us to create the ultimate product to sell short. Keep em coming.

Amazing how little changes in the course of a few weeks or months, right? Just kidding. I think often times people mistake volatility, or a stock moving around a lot...for fundamental developments. Always look forward to hearing your perspectives on some of these unique companies. Too many people focus exclusively on the income statement or balance sheet....but that stuff is boring to me because everyone has access to the same stuff. What separates the outperformers from the rest of the crowd is being able to see how everything fits together and forms a narrative(IE the intangible stuff that the "Excel only" crowd has trouble grappling with)...which will ultimately determine the multiple or valuation a consensus of investors are willing to pay. You seem to do a good job capturing that element of the investment thesis with these sort of companies. Keep it coming!

I think Loop is a little bit of a conflicted actor....what I'd look at is the historical returns associated with post deal spacs. They are pretty brutal. The May 2020-now phenomena is probably IMO short lived and certainly unsustainable simply from the basis of how many spacs are now out there. Chart the number of spacs launched by year starting in 2015. In no uncertain terms a bubble. Mean reversion is inevitable. That doesnt mean the pre announcement and pre deal close window still cant be an amazing hunting ground for opportunity though.

That was a factor in me buying shares. It improves my attitude about the money/time spent there. I did add quite substantially (with options) last week. Yea I added a bit after the earnings selloff as well. Thought about the options but ultimately given apprehensions about where we are with the overall market I figured slow and steady adds vs peddle to the metal. Shorted a few of the June $300 puts as well for ~$10. Still some reasonable juice on those in exchange for locking in some shares on a pullback. That would probably be my ideal way to play this. Just write puts 10-20% below the market and get your $20-30 per share a year if not exercised.

Indeed...its basically a subscription business masquerading as a low margin retailer. I dont think they make lots of money on tires either, but they benefit from making their membership a necessary part of peoples lives. Gas too. Whatever they need to do to get you to their properties as often as possible. Tangentially, a model in some ways fairly similar to Coupang...which I think is probably worth keeping an eye on.

Jeez, calm down there rat clown(or whatever the avatar is supposed to be)....no need to be so aggressive! I dont see anything Ice77 posted that warrants your hostility. Why cant everyone just get along??

You're welcome. March_Investor_Presentation_FINAL_2021.03.01.pdf

Doesnt SSTK own a whole library of digital crap? Perhaps some value investor could write it up as the new SOTP story...$100,000 price target/ thesis is basically GAAP accounting forcing them to obscure their treasure trove of assets. Im all for BTC because its the literal definition of legal front running. But this other shit is really kind of insane.

Bought a bunch of the 2023 $110s earlier in the week. Already got a number of mortgages; 3.25% on my primary, mid 4s in my investment properties. All 30 yr. On stocks/REITS I mainly have things I think do well regardless, IE multifamily, hard asset owner, low/no debt, but also a few more speculative names so the bulk of my position in the TLT puts I think of as a hedge. It also could just work regardless, without anything blowing up but rather the trend we have seen since vaccine announcement in November...continue. Treasury spread to REITS as of a couple months ago was obviously unsustainable. Great start to the year being super long BRK, long Sun Belt, long specific recovery, and short ARK+covid fads. I think it continues. I agree a hyper inflation move is a risk, so pointless to outright ignore it.

Inspired by LearningMachine and my man Cardboard, and also an obscenely fat real estate portfolio....I recently bought a nice chunk of longer dated TLT puts. Solid insurance I view it as.

Didnt see anything extraordinary in the release today...which at this valuation, nothing catastrophic = great news. Chart looking mighty bullish, definitely some catch up to do here with respect to the recent rally. Bought some more this morning. All around a pretty great recovery play here IMO.

I like the name and agree its a solid longer term hold. What I meant for 25-30% of book was simply at the time I was going through these(several months ago) there were a number of Canadian REITS and RE companies dirt cheap. Trading between 25-50% of book or NAV. Which usually signals big issues but I couldn't really find any that warranted such pessimism and in addition many of these have on going buybacks and pay dividends so I'm all good with that. Cheers

You got close and I presume, the others and/or fundamentals may have swayed you. But on a short term swing the only important metric is risk/reward and narrative. You said it yourself, 2-6% downside...so throw the fundamentals out the door unless you plan on holding post deal close. Next, how long until deal close? Was/is a nice setup here and in some others that are similar. Deep diving into long term fundamentals doesnt really make sense for a short term trade with a hard floor, at least IMO. Frankly, I'd argue that 3-4 month window til close is catalyst rich as they'll be running full promo mode to get everyone on board.