Gregmal

https://nypost.com/2021/05/15/florida-records-quantify-number-of-defections-from-ny/ Dont fight momentum.

These are all pretty great businesses, or at least to this point in time, have been. I have investors who were Arthur Andersen Consulting(current day Accenture) and man, you want to talk about a compounder, Accenture is a total beast. Totally changed their lives owning those shares pre IPO; granted being an ACN partner means you're making like $700k a year minimum...but many of those dudes ended up with 7/8/9 figure fortunes. My understanding now is that growth is declining(almost negative in many areas) and also there's some cultural stuff as the older guys dont really carry their weight anymore. BAH has always kind of been the red headed stepchild. Definitely more government focused...pretty sure this was Snowden's company. Random small cap honorable mention would be to check out CRAI. Like that business and growth trajectory a lot although I dont own any unfortunately; took my eye off it for a bit and its run up. But still seems OK-ish in terms of valuation.

Haha yea well the preferred ultimately cost me having a 7s cost basis on a meaningful position vs 9s. Like I said earlier, took me a good few weeks, maybe more, to really kind of get into it enough to figure out a comfort level of how things are likely to play out with them in different scenarios. Ultimately, the crazy monetary policies have pushed everyone out the risk curve and MF is basically the new institutional T-bill. I see no scenario where any real estate does well where MF doesnt. I see no scenario where Sun Belt doesnt outperform coastal(some stocks may, but in terms of fundamentals I am talking about). What investor in their right mind wants to deal with eviction moratoriums, rent control/freezes, tax increases, lawlessness, and the "masks forever" lifestyle when you can buy into markets where businesses and people actually want to be and as a property owner you can just say "shits hot, rents going up 10%, dont like it? take a hike"? So this is ideally positioned. The entirety of it all with the preferred basically comes down to "can they tackle them on their own terms"? And I think the answer is yes. Its on their radar, if not their primary focus. The scenarios where they'd see a momentum implosion would be something like ....virus comes out of no where and governments shut everything and people think the world is ending....and that happened and it didnt kill them. From here I think they've got a handle on it and even kind of like that theyre being conservative and continuing to "keep the machine running" as they said on the call, just to have that extra liquidity lever. Even if theyre swapping out old preferred with new, the call period is now 2 years. Which gives you an idea what sort of time line they have, along with the noted $35M monthly becoming callable. As some of us discussed earlier on the "why dont they redeem more sooner" question, the answer is "they cant" because the call period hasn't rolled over. So my assumption is they'll be cranking out $200-350M preferred reductions for probably the next 3 years. After that, they'll have the "balance" Joel mentioned, and can discontinue issuance and likely issue a real traded preferred to take out the remainder of the legacy.

Its just another data point to consider. Its probably never wise to "pick sides" when investing. I generally prefer to go with the side thats going to make money, regardless of who's on that side. As some have pointed out, Munger endorsed Tesco. I also forget exactly what it was, but Im pretty sure he had an opinion on Bitcoin 10-20 bags ago too.

Eh 50% from its highs...still puts it at about +12% for the year. Plenty of people cant even do that yet they'll dance home calling it a "crash"!

Eh at 9.90 you get $10 worst case. But you get some free optionality while they run the hype machine. Wouldn't be shocked if everyone's favorite female fund manager starts pumping this too. Its probably not going to go to $15, and if it does Ill long be out before then. But these can and do sometimes rip on favorable coverage. 10.20-10.60 would probably be the target dump zone. If you can do that, or simply recycle a few fluctuations, its better than nothing. The other benefit is its a place holder with upside. If another idea comes along its totally dumpable. Cash is just total garbage so 1-5% over 3-6 months(maybe ever less) is an ok IRR for something with no downside so it works for me. On the company itself, yea, its insane x2. Thats the problem with the vehicles and the incentives. Typically, two dudes sit down with their lawyers to hash out a deal and theyre competing. With SPACs one guy wants to get paid as much as possible and the other guy just needs a deal, ANY deal. So you get stuff like this lol.

Looks like Dan Loeb dumped this. I have significantly more faith in what guys like Loeb, Tepper, Ackman, etc are doing then the guys everyone worships around here(Watsa, Pabrai. Spier, etc).... I could see Tepper going big on BABA. But Loeb is straight money so its if nothing else, an interesting move.

Rebought some MX. ~21.50

I love that space, but Ginkgo is not worth anywhere near $17B. I think their recent funding rounds were somewhere around $3-5B. Maybe if we're marking to market where all that stuff traded publicly in December/January you get to a number like that, but not now. That said, I bought some of this. Its a real nice setup. Ginkgo is one of the premier names in that space and could easily jump off the 9.9 floor if theres a sentiment reversal. A lot can change in 4-5 months.

If you like something and are passionate about it, it will come to you on its own through curiosity and exploration. There's definitely WAYYYY more value in $300 worth of classic finance/stock market books out there, ranging from Reminisces of a Stock Operator, to Market Wizards, and everything in between. Most can be had for under $20. If you arent passionate about it, dont waste your time and money. In terms of a style of investing, well...just my opinion, but everyone needs to find their own, and then let it evolve with the market. Trying to mimic someone else will leave you chasing your tail.

I'll just say this in an attempt to be helpful and perhaps save you headache down the line...but...if you "bought into a business" you already made a major mistake. There are businesses, and then there are asset plays. Seritage as a business doesnt work and is in any matter of expression, an utter failure as a business. It has never made profits and its NEOs have been failures who ultimately left or gave up. The only basis for an investment here, is as an asset play...not as a business. But even there, you can easily find similar situations at other companies which offer better profiles. Can anyone answer this simple question....how does SRG repay its debt? Do you think they refinance with a better or worse rate? Keep in mind they got the current rate when the 10 year was like 100 basis points higher and these sort of assets much more en vague + development costs significantly cheaper.

Yea...dont hold your breath. Its not really a secret Gates was said to be a sex maniac and that many firms, like the prestigious NY Times, purposely buried it. I'd definitely wager its the tip of the iceberg. Dont know if we'll ever get to see the iceberg, nor do I think anything comes of it for BRK...but the world we see is rarely the world that is.

Added a few shares of CPNG after hours. Still not really a material position and I still think tech has some ways to fall, but after spending a bit of time on it, I also think this is a very promising company and a reasonable proxy for SK growth. At the least its worth keeping an eye on.

https://seekingalpha.com/news/3695379-peloton-has-a-netflixlike-subscrition-shares-may-rise-4x-in-next-4-to-5-years LOL someone forgot to tell Mr. Parmesan that he's late to the bubble party.

The point is that the free markets are pretty awesome and that no one should be dictating to others what they can or cant do with their money. Ultimately, Robinhood was right about GME and right about HTZ. This fundamental issue, at least how I see it, is that the establishment, and elitists, are all fine and dandy with "free markets" their way. But then when they lose control they want to change the rules. Much like a casino operator once people figured out how to count cards. They are holier than thou but its an act because you cant be OK with gambling with asterisks when the asterisks are basically just conditions that allow you to prevent others from winning. "They" thought GME was worthless and then when others thought and wanted to buy it at $100 they said "no way". They "knew" HTZ was worth 0 and say "no"....and in both cases they were massively wrong. There doesnt need to be evidence it was a good or bad investment. Was there "evidence" TDOC was a good investment at $15 half a decade ago? Or Tesla at $40? At the end of the day people should be free to spend their money how they wish. A year ago you had no shortage of people lecturing from a pulpit about how everyone else needed to be doing things and the high majority of it has turned out to either be wrong, or at best, misguided.

There were a number of threads a year ago or so on the subject of Hertz, but I figured its worth revisiting. The main subject matter discussed here on COBF was the ridiculousness of Hertz being able to issue shares to retail investors while in bankruptcy. As was symptomatic of many things going on about a year ago, there was a tremendous arrogance with "the professionals", "the experts", etc. There was also this holier than thou attitude about how "immoral" and "unethical" it was. The underlying arrogance hinged upon a beyond a shadow of a doubt conviction that said preachers "knew" Hertz was worthless and retail investors knew nothing. And now it turns out that perhaps Hertz is going to be worth as much as $8 a share. And its just another reminder of how the experts and professionals dont know any better than the Robinhoods, despite the ruthlessness with which they mock and look down upon them. Arent the markets wonderful?

Key take aways from the call...(all my opinion of course) Expect net reductions in quarterly preferred outstanding. Again, not huge figures, but no one expects them to be doing this with FFO anyway. The majority of the progress will obviously come from asset sales. Preferred become callable at run rate ~$35M per month. ~$235M will be callable around the time HIW closes. New preferred are being issued really just to manage the liquidity. Not going to continue forever. New preferred are issued with a 2 year call. Key inferences....extrapolated from a curiously timed pause, and separately the words "substantial majority", It would appear you're going to see at least $200M of preferred called against the HIW sale. MF acquisition then likely figures in at least $175M net proceeds from remainder of office. Also kind of insinuated some retail and even MF is being shopped. Nothing thesis changing here. Potentially some thesis fortifying look throughs. Starting to see a time line and a strategy, although they continue to be coy about communicating all of it. Back half of the year should be fun.

Covered a bunch of my ARK shorts. Added to APTS and been picking at ALCO last few days.

Been traveling so havent had a chance to thoroughly go through everything yet but quick take is that theres nothing new in there however the read thru on an actual net reduction in preferred via issuance/redemption management is very encouraging. $300-$400M in MF acquisition guidance doesnt make me too happy if its largely related to existing office sales. Does work however if its incorporating the entire exit of office/proceeds which may be the case given the Aug 1 close date given for HIW sale. Difference based on my assumptions would be about $200M in preferred being reduced. Ideally I'd like to be around $1.5B on the preferred by year end, but that's probably wishful thinking and a '22 target. Wish they would just stop caring about replacing the declining FFO and just go for it. The market is hot right now and IMO whatever their longer term transformational strategy is with respect to asset sales, they could probably accomplish all of it in the next quarter or two given how hot the market for these asset are. But it seems they want to do it more gradually and avoid cutting the dividend.

Yea I mean it is always admirable(and optimal) to try to see the correct side of a trade or investment, irrespective of whatever "your" process is. When you are wrong enough, its ideal to revisit your process and see which inputs are faulty....so with all that said in some cases its understandable for folks to evolve as investors. Its a good thing. But the danger is in the delusion that can be created. Convincing yourself that 1) this time is different, 2) the mother of all breeding grounds for fads is irrelevant, 3) that just cuz you slap a recurring revenue theme on something that using a revenue multiple is OK, and 4) that covid did not pump these types of businesses to the moon in terms of peak profit/customers, as well as sentiment and status.....I mean those are some really friggin crazy bridges one needs to get over. And one must be really desperate or determined to continue crossing one outlandish bridge after another to still get to the place one needs to get to in order to justify a real "investment" in something like this. If you are trading the momo, thats different and all fine and dandy; but for a professional manager to actually convince themselves this is a great long term investment....IDK man..LOL thats embarrassing. If one thought it was a wonderful/super cheap business; where were you at $25? Its like Palantir....notice how everyone now loves it in the 20s after passing on it at $10? People always see what they want to see. This is what creates market cycles. These people better hope theres another leg of suckers willing to take it off their hands at higher prices, although personally I feel the bubble has already popped and is now just steadily and slowly deflating. The further down things go the more bag holders you have on top of you waiting to sell the next spike higher.

Low teens. Was hoping to get at least double that size but wasn't meant to be. Way I see/saw it was from $50 you have maybe 10% downside, or perhaps 20% in an armageddon situation. So at 25% or so allocation thats what? A measly mid single digit drawdown? But the kicker is, much like BRK at 230s, with a 10-20% drawdown you can buy the dip, guns blazing, knowing management has your back and is doing so as well, which just creates more value and upside down the line. My kind of setup.

Gonna need a snorkel soon.

Trimmed more BRKB. Exited LIT(GB).

Good things happen when you go to the front of the net. Is there anything to complain about here if you dont make valuation your primary focal point?

I think theres also the risk that last year stunted growth opportunities for new businesses, inflated pricing power, and forced people to take what they can get; all benefiting AYR. As things open up, and especially with blue wave, the initial thought is this benefits pot co's and AYR too which may be true. But it also encourages new competition, and if you add inflationary pressures to the mix, you could see negatives in terms of pricing power and then combine this with operational cost increases, its a big headwind. The positive is AYR is very much ahead of the competition. They've demonstrated excellent business execution. Perhaps not great, but satisfactory discipline with the acquisitions, and the valuation isnt crazy. Its just not a no brainer to me anymore.