Gregmal

You arent missing anything. I think this is a great short, at least in terms of a hedge. If we were at these prices, and not in a pandemic, I wouldn't go near this as a valuation short. But right now you'd be hard pressed to find a better setup. Takeout risk is always there, but at this valuation, and given the fact that previously, they've refused to entertain this, I think it is unlikely. The constant selling by insiders is an embarrassment and has been going on for years.

Yea I am struggling a little with this one. I really like it. Across the board. The assets, the management; both to me, top notch. But, despite trying, I cant really argue or find flaw in any of the points you've raised. They are entirely valid and make sense. The only items I can point to are perhaps the static nature of the cash, and the ongoing buybacks. The 82,000 shares repurchased is a BIG number for this company compared to anything we've seen previously. This would also explain the significant volume increases we've seen. I've lightened up a tiny bit to reinvest in ESRT, but still hold the majority of my position. There's definitely less upside here than in other stuff, but I've also tried to keep in mind that it probably also carries significantly less risk than most of the other stuff I'd contemplate putting the proceeds into, given both the cash and the management. For me personally, to the extent that I continue to earn, ie make money, as a younger dude, I will need to deploy it somewhere. Patience with RE right now is probably prudent, and as such I am currently taking the approach of letting this one be and then as cash comes in deploying it in the stuff I would be tempted to sell this and buy. Or, if swapping things, staying on the same risk plane, ie conservative to conservative rather than being a pig and selling something like this to buy something of substantially higher risk in search of a home run.

Good interview. I like Zell and he's got some insightful things to say. It is true, outside of the net lease market, there's not really any transactions occurring. It might be perplexing or scary at first, but I think the answer is relatively simple. Once a month the rent comes due. These assets trade on their cash flows. Until it is determined that the revenue streams are either a) permanently lower, or b) back to normal, most people, both on the buy side and the sell side, dont really want to take the risk of making a mistake.

Of course this will be ignored by all the blabbermouths who attacked folks for bringing up such possibilities....Because gosh darn, it took away from our zombie apocalypse narrative... I didnt see it either. ;) Ive been busy over redigging the holes to move the goal posts to retroactively prove what antibodies and these stories have told us. ::) Looking back in the thread I took some pretty good heat for this. Im for one glad this info keeps coming out. Good to see. Yea, the way its shaping up, the ones who proclaimed themselves right about everything after like 2-3 days are going to end up having been wrong about literally everything.... ironic.

Of course this will be ignored by all the blabbermouths who attacked folks for bringing up such possibilities....Because gosh darn, it took away from our zombie apocalypse narrative...

Thats not what Im saying at all. Posting an opinion from someone on Twitter isn't a fact. Thats all. Frankly, Ive always been of the opinion that the majority of people on Twitter are total losers. Specifically ones that sit around all day commenting on stupid shit like memes and raising controversies that dont really have any purpose, POTUS 45 would be the grandest example of this, but 95% of Twitter users fall into this category. Its a way for little people to feel important. Very, very self inflating being able to # and tweet @ important people like celebrities and media personalities too; a cheap lotto ticket shot at your 15 minutes of fame. On a separate note, https://www.telegraph.co.uk/news/2020/05/05/sweden-says-coronavirus-cases-likely-country-early-november/ But hey, IT NEVER, EVER, EVER, EVA, coulda been in California or NY in January or February....

Only things engraved in stone tablets count, right? Because it's the medium that matters, not what is written, if it makes sense, and who said it and what the original source is and the fact that it can be verified elsewhere, right? I mean, I thought you'd like that I also enjoy Trump's favorite medium and source of information. ...as you write this on an internet forum, much higher in the hierarchy.. ::) Im not saying or disputing any of that. Just pointing out the irony of telling a guy to bring facts when the bulk of the stuff you post are Twitter links and opinions or skewed interpretations from biased people. An indirect way of giving legitimacy to you own opinion(unless you feel different then the messages displayed in what you post).

If you have any facts to share on COVID19 or the response to the crisis, go for it. Otherwise, you're the Trump propaganda bot. Liberty I know this is 2020 and all, but Twitter links arent facts either. Nor are the tweets themselves.

I sold out the (small) position I lazily entered a couple weeks ago. I just really dont like the smugness of "no interest in buybacks" after touting $90 NAV and currently facing what could ultimately be a crisis of confidence. Even if you arent out of your mind about the idea, at these levels, I tend to think its either going to work out in a big way, or just kind of be a waste of time. I dont see anyone looking at VNO at $40 and saying, "mistake of a lifetime". Perhaps this is what happens when you have a million different debt instruments and preferred issues, but take a stand as a shareholder for Christs sake. The only other time Ive heard something this preposterous was from Schwartzman at BX at a least his rational made sense. IE, if I have 50% upside in my equity but can put up 1% and start a $30B fund collecting 2/20 annually, the ROI just doesnt make sense. I dont see VNO with anything like that going on and just think its silly to ignore repurchases in a world of levered 15-20% returns being the target after taking on massive development risk. SPG to me at least offers a much more diverse approach to the development game. Say what you will about a "mall" but the dirt is located well and across the world rather than in just one market. Prime areas, IE the majority are next to major highways or transportation hubs in tier 1a/b cities. If, for whatever reason(and I dont think this will happen but who knows) NYC becomes out of favor, SPG can still do the same things redevelopment wise, maybe even more profitably as the implications would imply a shift in demand to elsewhere, whereas VNO is kind of fucked. I think looking at any of these companies its now just as, if not more important to look at what they "can do" with their properties rather than what they currently do. And then of course try to figure out how much "doing" all that is going to cost and on what terms to the current equity.

Nah, just another 5-10 bagger missed by arrogant dipshits who likely owned brick and mortar furniture shops because they traded at single digit pe multiples and an online growth retailer didn't "make sense" to them...

No idea other than these things do get whacked pretty hard during end of world scenarios, just not as bad as "value" stocks... In must admit, I continue to be quite amused seeing names like this go ballistic. I am not ballsy enough to own any them, but its justice for all the schmucks who have now spent the greater part of a decade arrogantly lecturing and deriding people who invest in these names with sarcastic jargon about "oh this time is different" and "yea 100x sales! this will end well"...Not talking about David Ei....anybody specifically, but it pleases me seeing the arrogant finance twits continue to be proven wrong.

We can mention that one from one of the women, but I believe the more damaging accusation was this one from Ford as reported by The Guardian: "led her into a bedroom, pinned her to the bed and groped her, attempting to remove the bathing suit she was wearing and putting his hand over her mouth to stop her from screaming before she was able to escape." They investigated that didn't they? Or at least held hearings...now though, they dont want to and no one who was screaming for hearings and investigations is doing so now.... they've exposed themselves as frauds. Remember that stupid and sexist rallying cry about "believe all women" or something? Not anymore? Or just not when the guy you want to be president is accused?

Yea, I dont know but the frauds and hypocrites have been revealing themselves in full color with Biden. At least I've been honest. I could give two shits about how awful a person Trump is or how Biden is a corrupt creep but I could live with him in the WH as well. But the fake contempt people disgusted by Trumps behavior are now showing its all just blabber as they excuse and downplay and rationalize the very same issues with Joe...The #metoo frauds like Milano. Believe all women except when its inconvenient to you, right? Tara Reade doesn't remember what she put in the Senate complaint. She goes out of her way to draw attention to Biden in her complaint filed with the Senate but then doesn't even mention the assault? She complained that he made her uncomfortable and so she was assigned a new spot where she would be away from him. What else are they going to do, reassign Biden? First she went to law school, then a Biden staffer, then a singer, an actress, a cat lady. Her history doesn't point to stability -- drama, yes. Singer, actress -- attention getter. That said, it doesn't for certain mean that she is lying. Those people do exist though and instability and drama are red flags hallmarks. So she is a mix between Julie Swetnick and Christina Ford.... While your response is a reasonable one, people dont get to play this card. Not after how they behaved with the Kavanaugh allegations. Not after the incessant whining about quality of character with Trump. The presumption of innocence was destroyed by liberals over the past 4 years. You dont get it back because your guy is running. Trump is a narcissistic clown, and Biden is a world class establishment creep. Those are our candidate for POTUS. At least lets treat them the same and stop pretending this is a case of Jesus running against Hitler. Try as they might, the Conservatives cannot wash their hands clean when they find one witness against one Liberal. Clinton, yes, there were more cockroaches in the kitchen. When we find another, then another, and another, with Biden we will then know we have a creep. Not even close yet. He's almost 80 and he has been in office for decades and all you've got to show for it is a single complaining woman who cannot remember what she complained about in her report. Yea, well, this happened about a dozen years more recently than when Kavanaugh supposedly pulled out his pee pee at a frat party....

More ESRT

Yea, I dont know but the frauds and hypocrites have been revealing themselves in full color with Biden. At least I've been honest. I could give two shits about how awful a person Trump is or how Biden is a corrupt creep but I could live with him in the WH as well. But the fake contempt people disgusted by Trumps behavior are now showing its all just blabber as they excuse and downplay and rationalize the very same issues with Joe...The #metoo frauds like Milano. Believe all women except when its inconvenient to you, right? Tara Reade doesn't remember what she put in the Senate complaint. She goes out of her way to draw attention to Biden in her complaint filed with the Senate but then doesn't even mention the assault? She complained that he made her uncomfortable and so she was assigned a new spot where she would be away from him. What else are they going to do, reassign Biden? First she went to law school, then a Biden staffer, then a singer, an actress, a cat lady. Her history doesn't point to stability -- drama, yes. Singer, actress -- attention getter. That said, it doesn't for certain mean that she is lying. Those people do exist though and instability and drama are red flags hallmarks. So she is a mix between Julie Swetnick and Christina Ford.... While your response is a reasonable one, people dont get to play this card. Not after how they behaved with the Kavanaugh allegations. Not after the incessant whining about quality of character with Trump. The presumption of innocence was destroyed by liberals over the past 4 years. You dont get it back because your guy is running. Trump is a narcissistic clown, and Biden is a world class establishment creep. Those are our candidate for POTUS. At least lets treat them the same and stop pretending this is a case of Jesus running against Hitler.

As to the above two posts: On valuation, its tough because of where we currently are with the CRE market. My assumptions I try to leave generalized. If I can tell the man is fat, thats good enough here given the circumstances. The entire company per the stock market was worth $14 per share/~$5.75B EV pre-COVID. We know for certain it IS NOT worth that now. So then the question is, how much less? I wasn't an investor at $14 and wouldn't be now. I am a believer in the asset and think much of this is just time arbitrage. If push comes to shove I just needed to get comfortable with 2 things. 1) That the value of what a buyer is willing to pay TODAY, would be much more than the current EV. 2) Things will normalize in 3-5 years and pre COVID valuations will probably need to get bumped because of monetary policy and lower rates. Both those things bode well for me here. The problem with using cap rates for a hard figure is that you dont have sufficient post COVID data. Many properties in various parts of the CRE market are still no bid. Its by and large getting better. But the only thing that is moving and at least comparable to preCOVID is some of the net lease stuff. What is appropriate for run of the mill NY office today? No clue. Again, less than pre COVID. By how much? I highly doubt 30-50% less. Their "other" properties are nothing special. Not bad, not good, just kind of a revenue streamer that insulates the trophy property. The figures you use are fine as a framework. But I'd also mention that with one of a kind stuff, the figures are rarely right and often not optimistic enough. One racist tirade and the LA Clippers estimated value increased 5x. There is likely no shortage of suitors for the Empire State Building. Model it out conservatively, sure, but I would expect to be surprised positively if and when that ever plays out, which for the record, I dont think will be anytime soon. The Observatory I would definitely think is a sub 5 cap, maybe even sub 4. SL Greens knockoff to me is irrelevant. The moat is the asset. The Empire State Building is The Empire State Building. Its a clever use of space and attempt at additional revenue for SL Green, but theres no shortages of cool buildings or things to do/experience/spend money on in NYC. Over and over, its even touched on in the ESRT presentation, people come to NY with the Observatory on their check list of things to do. The Yankees were such a great idea they followed with the Mets. But the Mets are still the Mets which just arent nor will they ever be The Yankees...if that analogy makes sense. The main takeaways I would have here is that 1) no I am not "thrilled" with this operationally or in terms of overall quality of the non ES assets. Its not the best investment ever or a top tier ship firing on all cylinders. Its just an incredibly timely investment with very remarkable upside in a bunch of rather conservative scenarios. 2) Simplicity is your friend here with things like this or pupils mention of PGRE. Go look at what VNO just dropped today(or SPG when they release). I dont want to deal with that shit if I am making an investment in any size(I own both but ESRT > VNO+SPG for me)...Just soooooo many different moving pieces and things that can shift. Give me a top tier trophy property and a handful of OK ones any day over that. 3) management is very conservative and will allocate capital responsibly. There is upside with that. 4)This is basically just a very high quality, event driven, discount to NAV play.

Yea, I dont know but the frauds and hypocrites have been revealing themselves in full color with Biden. At least I've been honest. I could give two shits about how awful a person Trump is or how Biden is a corrupt creep but I could live with him in the WH as well. But the fake contempt people disgusted by Trumps behavior are now showing its all just blabber as they excuse and downplay and rationalize the very same issues with Joe...The #metoo frauds like Milano. Believe all women except when its inconvenient to you, right?

The problem with this "the bottom is right around the corner" thinking, is that it keeps you glued with false hope in an otherwise bad investment. Fairfax has been pretty much exactly what it is today for as long time now. And since I joined this place, theres been a massive opportunity cost for many because they keep finding new ways to convince themselves that "its only a matter of time" before this outperforms...as if its a given. I do agree though, the GOOG and XOM purchases are encouraging. Stop trying to be a genius and just keep it simple.

https://nypost.com/2020/05/03/crowds-gather-to-buy-new-air-jordan-sneakers-in-atlanta-after-lockdown-lifted/ LOL, business as usual...

They lack voting rights and require a k1, so I immediately wrote them off. I just own the common.

Its not so much the underperformance, thats part of investing. Ive typically been critical of some of the decision making, or lack thereof, but can live with it because his is still pretty damn sharp and when he talks he seems consistent and often is in the right place. IE stocks are cheap if rates stay low. Big tech is where the future is, etc. Berkshire is loaded with world class people as well. But there also gets to be a point where you have to question what one is saying/doing and what they are doing/saying. So if stocks are cheap if rates stay low, why arent you buying stocks? And if rates are low why do you continue to be massively overweight banks? If you admit "missing" Google, Amazon, etc...years ago, what prevents you from starting to buy them now(or years ago)? If you are incredibly bearish, why do you continue to hold the most economically sensitive companies? If $135B is "not all that much" under certain scenarios, what implications does that have on the rest of the portfolio? And yea, with that comment, you can guarantee the "hoard" is only going to continue to grow. If nothing was attractive back in March, but all the companies in need of capital found it and on better terms, is this not another acknowledgement that maybe the landscape is changing and that there is currently a surplus of cheap capital still waiting to be put to work? Look at the bond market in April; holy fuck. I mean its cool and great and all to have this idea of being a pay day lender or loan shark to the biggest companies in the world, but at the same time, what company in their right mind is dying to do a deal with Berkshire when by now I think both his words and his actions clearly indicate that Berkshire will only do a deal with you if they are ripping you off. Sure you will get desperate companies like Occidental, or Seritage, but for the most part I think he's too anchored to the past here. 08 happened and the playbook changed. Now, if quality companies have liquidity problems, the Fed is there. Greatly eliminating Berkshire's pool of potential deals and muddying what remains in the pool. And then even for that, there's a massive supply of PE firms and whatnot, with tons of cheap capital too. If Google can take some of its cash and make a few hires, and start a PE arm, there is no reason Berkshire cant. Not in any crazy speculative sort of way but in a way that brings in people to scour the horizon for new and exciting businesses. This is how you get into tech and biomedical fields. Every interesting biotech Ive looked at the past half decade...."early investors"...Gates Foundation, Google Ventures. It seems Berkshire is and has been very much in denial about the continued erosion of their advantages and relevance. Warren, more than anybody should know that you have to invest to grow. And instead he's hoarding and banking on businesses in secular decline. But at the same time, I get that, regardless of what he does, people will do mental gymnastics to justify it. My favorite is still "its too small to move the needle for Berkshire"...Like "oh yea, awesome. What a great business"..."Yea, but its too small. Fuck it"...This is an appropriate attitude from a capital allocator? Or the other side of that...He has to buy in size. So take the field of "big enough" companies. Then eliminate ALL of tech. Anything having any relation to ANYONE he's been friendly with because we're scared of the appearance of insider trading or whatever the absurd excuse was with Gates... then look at what's left? Well not very much and hardly anything attractive. No wonder we are where we are.

Probably no one. His tone was pretty much what I expected going heavily short into the weekend. Furtures should be down nicely given the markets knee jerk reliance on short term narratives of late. But on a larger scale, I was disappointed. Most investors, earn our future dollar because we recognize past mistakes and adapt. Buffett to me, seemed like a bewildered old man. I know its heresy to most, but whatever. He has broken his own rules over the past decade... only to end up costing shareholders because of such lack of discipline. AAPL worked, but IBM was bad, and missing the FANG stuff is a huge opportunity cost as well. He's admitted as much but then when the time came to buy into these business he decided to stand pat with Wells Fargo and Coke...yea, so much for reputations and decency! The tune from value investors for a while has been reliance on old cliches about how "this time isn't different". The truth is that no, this time isn't different. Because it started changing a long time ago. I think its reasonable to say Berkshire is impaired. They own businesses that got taken to the mat and the referee is currently counting and at 5 or 6...Insurance may very well be a bright spot. But banks, airplanes, and all the old economy stuff is on the ropes. The best selling Coke products during the pandemic are the Dasani water...yea, if you haven't got Covid yet, go drink some liquified sugar so you develop diabetes, and die when you get the virus! I admire the man greatly. But I also think its time to call a spade a spade. He has failed to get with the times and his investments since the GFC have been largely dismal. I have tried speculating on what is the reason, but at the end of the day it doesnt matter. You dont need to be a buyer of Amazon to see e-commerce booming, nor do you need to buy Tesla to see old auto is done. But you cant sit there and acknowledge these trends and admit your mistakes while continuing to invest in airlines, traditional auto, and bricks and mortar business. Nor can you be the worlds largest owner of banks while previously ackowledging the very real possibility of continuing ZIRP. Are we predicting deflation? Because theres a way to make that bet. Same for inflation. But with Buffett, he's continually, year after year, made the excuse for doing nothing. And thats not a reality I think most have admitted is costly. I often hear people say "follow what he does, not what he says". Well, I also hear people say "the markets are where they were in 2019". Well, Buffett and BRK are were they have been for a while, much further back than 2019... nothing has changed. There is just a convenient story to tell in 2020.

https://nypost.com/2020/05/02/texas-strip-club-wins-court-order-letting-it-open-with-restaurants/ LOL

GM fits the gap too.

Musk's greatest ability as a CEO is controlling the narrative. Too many CEOs are oblivious to this, or call you crazy when you suggest its part of their job. But as we've seen here, those "billions" in capital raised? Stem from something, and its not something you see at other car companies like GM, F, or FCAU. There was a certain point too, where I came to the conclusion he even controlled the short seller narrative, like a puppet master. The bear traps into earnings blowouts, the car registration numbers, etc. He's a magician; probably the best Ive ever seen at working the capital markets in terms of public market CEOs. He seems to time his capital raises pretty well too. Usually after fidgeting numbers enough to provoke short sellers into doubling down on their bets, usually at exactly the wrong time.