Gregmal

Over past week I converted some AYR to NVR+MSGE plus paid down some margin.

Just an updated that Ive closed this out. Was a great run, the company still seems to be in great shape, but the crux of my investing is based off grabbing easy money with margin and managing risk. This type of stuff always seems to trade more on momo than fundamentals, and I continue to be bearish on tech/momo stuff which there is definitely a correlation to here. My concerns with AYR really would come down to growing pains, too much expansion and subsequent competition, and now felling the pains of inflation. If I had to guess I'd say its still probably OK as a long here, but I dont have to guess and just rather book a nice gain and raise liquidity. Best of luck to all still here.

Heads up to my homies that there may be some ticker confusion inspired bargains today. https://seekingalpha.com/news/3692256-purecycle-falls-after-new-short-report-from-hindenburg-research

IDK, but my favorite part of this whole saga was when the "value managers" starting "taking a look" and seeing this as a long last fall.....After missing it(how do you "miss this", it wasn't hidden and was a popular IPO) at like $25....My understanding of the value investing doctrine is that part of the game is buying things that are out of favor and thus mispriced...not convincing yourself to like it and go long at its peak popularity.... I think, as was touched on a lot last Q4/1...there are and were red flags everywhere...including value guys capitulating and shorts being nonexistent.

Don't feel like starting a separate thread, but nice release here. https://www.alicoinc.com/news/detail/1359/alico-inc-announces-strategic-actions-to-increase So again, not the most exciting setup, but to me its a great quasi cash alternative(or free-2% carry if you've got some balls and some margin tolerance). Similar to FRP Holdings setup. You've seen the stress tested downside last year. Now there's material changes to the upside, and a proven management team. Alico has quietly taken some very positive and pro shareholder steps. The targeted ~40M annual EBITDA in a few years makes this compelling and still gives you a lot of free call options. And yea, there's started to be interest in the land. Which IMO is definitely not the best located land in FL, but FL land nonetheless and the soil they are situation on is ideal for building w/ high sand content. If, as alluded to by management, land sales start coming in(some already under contract), you could get a massive rerating here. Regardless, should see continued balance sheet improvement, cash flow ramp, and dividend increases. Just my 2C. Feel free to short it as well.

Any dip buyers here? Looks cheap on 2028 adjusted EBITDA assuming we can count on a pandemic like every 3 years.

Its hard not to laugh at how bullish the read through of this is for RE in general. My god.

You can either have a discretionary buyback, which is subject to blackout restrictions. IE 2 weeks before EOQ-a few days after subsequent ER. Stuff like that. Or you can have a 105b type which allows consistent repurchases within the guidelines of normal trading rules, IE nothing for first 15/30 last 15/30 of daily trading.

Nice little bolt on acquisition. https://www.hamiltonthorne.ltd/index.php/2021-press-releases/277-hamilton-thorne-announces-the-acquisition-of-tek-event-pty-ltd

Any way you cut it, homebuilders will be very busy, for a very long time. There is no credible bear case for something like NVR, IMO.

Yea....IMO this is set to go and still easily one of the better risk/reward setups out there. 2020 brought most companies to their knees. The Bakers made 2020 get on its knees and give a ........ So with that said, why does this trade at (still) $15-20 per share discount to NAV? Mid-high 60s looks like a cinch.

added to ALCO

Off the top of my head, I wanna say its close but BRK probably got more as a % of outstanding. However, get this... The Bakers definitely executed it better. There is also a very noted difference in liquidity and trading for BRK and FRP. Big Daddy Buff shit the bed in March/April/May...but recovered nicely. Meanwhile FRP was cranking buybacks the whole way and especially during all the pandemonium. The mid 30s prints weren't "real" or lasting here, so $40 or so was basically the floor and the Bakers got a good chunk of that. On top of that, BRK definitely had some effected businesses, but RE had the most uncertainty out of anything not airlines or cruise related...no problem for the Bakers...and yea they did this just to show off: Lease-up commenced in earnest in the second week of March 2020, and the building received its final certificate of occupancy at the end of September 2020. At the end of the quarter, the Maren’s residential units were 87.02% leased, and 82.44% occupied.

The link I gave is to the history of Spier's ownership. He has been a holder for years and got walloped in Q1 2020. Nothing wrong there, but its not as though he all of a sudden found a new position. Per the filings, the majority of his SRG is badly under water. Maybe he thought Jan '21 was a good time to all of a sudden tout the stock, IDK. Im not a mind reader I just try to connect dots and what I get here is that Pabrai traded it and Spier is a long term bag holder. I am not trying to be overly negative, I am just looking for a smoking gun. Where is the element here that the market is missing? Why does the opportunity exist? Believe me, I love these type of situations. But what everyone is looking at is stale and I dont see anything new. Thats all. I would love to be corrected.

^I actually kind of had the opposite thought yesterday. You are correct that 25% is a big deal...but its also not crazy given the pull ISS and those shops have. Theres no shortage of lazy institutional money that just blindly follow their recommendations. Its also trendy so say you're fighting for those initiatives even though theyre stupid. Separately, I was marveling at how Buffett and Berkshire have basically been cool with every administration Ive been alive for. The guy is, to quote Stuart Scott from his 90s SportsCenter days, "As cool as the other side of the pillow". They have no diversity whatsoever, they're nepotistic, they basically said "fuck ESG" in a very high class way....but its all very polished and gets the job done and I expect that to continue. They are world class operators and that seems to be the overriding theme with everything they do. Its very reassuring.

https://dataroma.com/m/hist/p_hist.php?f=aq So it does look like Pabrai owned it briefly, buying it in low 40s and selling in high 40s, and traded out of it...question(if you care) would be why? If so, this kind of puts a collar around where you'd expect the value range to be, if you are putting faith in Monish(I wouldnt be). Talking about billions in upside and selling for 15-20% seems a bit contradictory, no? Spier it seems has also traded it, but owned it consistently for years and was a buyer in the 40s many years ago as well. He's definitely a bag holder here. So at best, these guys are flipping sardines and avoided long term losses incurred by real shareholders via trading(while talking about this as a long term investment)... I dont follow either, but given the above, also find it curious that people are of the impression they bought during the crash, as if this reshaped the overall logic behind their involvement. Basically everything under the sun, even total crap has rallied from the covid crash levels. Going forward fundamentals will matter, A LOT. Spier was a SRG buyer at $40s in 2016/7. If he bought more at $14 some years later thats definitely no feather in the cap but rather a sign he's doubling down on whats been a loser. The fact that these guys copy cat each other isnt thesis validating either.

Yea I just checked and both Pabrai and Spier are long time bag holders who bought into this significantly higher, many years ago. If nothing else, they've already been pretty damn wrong here. The thesis in 2017 was basically the same, but the path to unlocking it was significantly better and outlook much rosier....Heck in 2017 these guys were paying a dividend, even though it wasn't close to being covered, and there was virtually zero reason to do so given the story and expectations of the investor base. That should have been a red flag in and of itself.

Or put another way, why wouldnt you just buy JBGS with like 4x leverage? You'd have the same type of upside and still probably less downside, with a much better company. What no one talks about is how this works? Real estate isnt rocket science. Everyone knows what the ideal picture for the final product looks like. Bringing in a new CEO or whatever won't change that. Although chances are, at this point, the new CEOs won't be better than the previous ones. Every company likes to paint the narrative that the "previous" guys(IE NEOs) were incompetent. But thats rarely true. Usually when something is new and exciting it attracts the best talent. And when its older and stale its doing the opposite. I mean shit, Gregmal, what would you do? Well gee, I'd start with the highest quality retail...grocery anchor....highest psf tenant....Whole Foods....then add some luxury MF, high end dining and shopping. Maybe a hotel and some office. Then splice off some out parcels for ground leases and NNN....the issue here is what does it cost, how long does it take, and where do you get the money? How do you not destroy value in the meantime? No one addresses thing and thats what will be the downfall. Frankly, I dont think Spier, Pabrai, etc know what theyre doing here, and the investment shares similar characteristics to some of their other failed investments.

Inflation would be devastating here, given all the construction and development costs still ahead.

Ha in my head I think of seeing a 20% decline and smile thinking of the Bakers and Old Man Buffett running buybacks at 10% annual clips. Whereas on same said 20% decline I see the ARKs, and can't help but think it correlates to noted slowdowns/disruptions/concentration lapses with postal workers, plumbers, Foot Locker sales reps, and Dominos delivery boys(or girls/its)...

The thing is though, time is money. If 80% are trash and they just need 10 good ones, why are they wasting so much time/money and fledgling along with the trash? This is the EXACT SAME failed strategy that was used at Sears! "Oh but theyre sitting on gold!"...well, stop sitting and start showing! The flaw in the thesis rests in simple logic. If there was a fortune in a small few, why are those sitting vacant/unworked on while you're developing 7-8 cap Bed Bath anchored stuff? There is really no logic to basically neglecting/hiding your good stuff while you bleed money and executives flee...is the ultimate plan that Lampert, Pabrai, Spier are banking on what? Just one day they lift the vail and ta-da! there's a half dozen $1B projects fully finished that no one knew of that were secretly developed for no cost? None of the thesis here really makes much sense. It hasn't for a while. And the 1/3/5 yr performance is a great indicator of that. The whole "hidden/secret" real estate value tends to work in the beginning of the cycle. It tends to lead to misfortune quite often, any time after that. I dont think anything is really "hidden" at this point. Considering everyone from Berkowitz, to Buffett has looked under the hood here. Now you just have a bunch of poor performing fund managers with sunken costs hanging on as their thesis drifts.

Cant complain about anything Ive read so far. Hopefully there is a minimum quarterly repurchase allocation that ramps with discretion. If BRK can buy ~5%(or lets say$20B) of its outstanding shares per year minimum, this becomes a big time winner under almost any circumstance if you have a 5-10 year horizon. , My fear would be that at a certain price, they stop altogether. Which I am sure some folks embrace, but also is ruthlessly ignorant of the fact that people have been calling the market wildly overvalued for almost the entirety of the past decade. At the end of the day, nobody knows for sure what characteristics or variables will be the true drivers, and as a result, flexibility in the approach is probably the best way to go. Hoarding cash in the current environment is more dangerous than hoarding Berkshire shares.

Maybe we're just crackheads for info. Going from the compactness of an SEC filing, to what could be compared to a kids picture book in terms of consolidated content, leaves me antsy. I agree to on being respectful about the effort that was put in. But Im sure Sanjeev also values and appreciates the input as to what people liked better.

Well, I am not unhappy. And to think just weeks ago we were joking about "how long til we're talking 3 caps?"...some market. Quick read through is "if" there was a need to sell, you could probably expect CPT to pay 3.5-3.75? Is that now being conservative lol? Good reason for an early afternoon Guinness.

For the specific asset I think they did. Just in general though BAM has done a good job calculating and managing risks. Whereas I remember buying and selling RFP in like 2013 and the main hype generator around the investment was "ooh Prem Watsa/FFH"...and now almost a decade later its like "oh wow RFP is on a tear!"...to like $12 lol which is still down substantially from those levels. And then Blackberry its like "oh well if you take his $30 cost and add in this and adjust for the converts, etc...maybe he made a bit of money"...after like half a decade. And then on top of it, you get these retail investor driven gifts, where everyone and their mother know you should be selling....and then there's Prem. And its just pathetic and something to appreciate not having to worry about with BAM. Bruce gets his number he's out. Plain and simple, cut and dry.