Liberty

Lot of non-sequitur here. 25,000 engineering jobs don't matter because Seattle isn't bigger than NYC on the basis of one company being based there? How does any of that follow? NYC will be fine, but it's still a self-own, brexit style.

I never said these other things, you said them. I just posted a list of numbers, and everybody lost their minds.

Apparently they do, and aren't as attractive as they think they are, because they won't get it even after offering it, and if they hadn't offered it, someone else would've gotten it.

Why are you taking personal that someone cites the drawdown since peak? Why do you feel you have to defend it and attack others and invent hypothetical situations that didn't happen? Isn't drawdown-from-peak a valid way to look at a big crash? Why always have to shift the context to one that makes it sound like it's up a lot rather than down a lot? If you made lots of money good for you. That's your reward. You are in a very very very small minority of people. Almost all the attention and money went into crypto way above the current level, and many bought on credit because of FOMO and lost more than they put in. It was similar with the dot-com bubble, by the time everybody was jumping in and the big bucks came in, it was a lot nearer the top than the bottom.

https://www.amazon.com/Shadow-Divers-Adventure-Americans-Everything-ebook/dp/B000FC1RSC Great book on sale for less than two bucks right now. I'm currently reading his new one, Rocket Men, and that's great too: https://www.amazon.com/Rocket-Men-Odyssey-Astronauts-Journey/dp/0812988701

Scope insensitivity. Yes they have lots of workers. But they'd have added a whole lot more on top of that and invested a lot of capex, rather than just rent office space (and when you build, you tend to stick around longer than if you just rent). Of course the city's not killing itself, but that's kind of an extreme statement that is easy to tear down. The more nuanced reality is it's definitely losing on this deal and sending a bad signal to other companies that they probably shouldn't go there unless they want it to become a huge ugly mess. It also sucks for the 70% (or whatever) of locals who were glad about this, and for all those who could've gotten good jobs out of it, that this is going away because some people are worried that too much economic growth will make real estate go up or that engineers don't eat out in restaurants as much as other people for some reason (real argument by a politician this morning). I'm sure other cities will be glad to receive these tens of thousands of high-paying engineering jobs ¯\_(ツ)_/¯

You're right, I misread the 4-deep quote, I thought you were the person I replied to replying to my reply. So you're saying that crypto was also a huge mistake? Because these two were huge mistakes, and them being down this much isn't just short term volatility and the chances of them bouncing back to their peaks anytime soon is pretty slim. Oh, were you trying to shame me or something? How about you share some of your huge mistakes instead? It's the best way to avoid them, by removing resistance in acknowledging them, so that we can do it faster the next time. btw, I lost about 20% of my initial investment in Valeant, but that was after it went up around 150% and then back down to that level, so it was quite a ride. I lost a higher % in FTP, but I'd have to look in my notes to know exactly how much. I certainly learned a lot about jockey vs horse and about commodity businesses in that one.

https://www.reuters.com/article/us-paymentprocessors-fees/visa-mastercard-mull-increasing-fees-for-processing-transactions-wsj-idUSKCN1Q41ME

I didn't say gambling is bad. I said it's different from investing, and that sayings/strategies/rules of thumbs that apply to investing don't necessarily apply to it. If I had those odds offered to me, of course I'd take the bet. Offer me those odds, pretty please. Problem is, the odds for crypto are unknown, and they're likely not the ones you made up for that example. You're confused. I didn't apply that framework to it, I said it didn't apply.

Yeah, I was posting the numbers showing how much various crypto coins were down since their peak. But you're the ingenious one, citing a common value investing saying with regard to something that can't be valued conventionally (what's the IV based on the discounted future cash flows of this? can you value invest in gold or oil or US dollars/Yen/Euros? What's the return on capital there?), and for something that is clearly not just random short-term volatility. When something is down 98%, it needs to be a 50-bagger just to get back. If the thing you're tracking is moving by that much up and down regularly enough that it can be considered just short-term volatility for that instrument, you're gambling, not investing. I don't think the same things apply to long-term investors and long-term gamblers...

These types of incentives are apparently the norm and other companies making substantial investments are getting them, it's just not front page news because it's not Amazon. And they need to do it because cities and state compete with each other for these valuable prizes, and if high-cost (high tax) areas don't sweeten the deal, they'll lose almost every time to low cost (low tax) competitors, and yet it can still be win-win to give tax breaks because of the multiplier effect of having something like 25,000 high-paying jobs for the long-term in an area. It's not like the city is handing over a cheque for the whole amount on day one. It's more like "over years and years, we'll let you keep more of what you earn than you otherwise would've, if you produce the results". Doesn't sound so bad to me, if you want your city to be competitive. 25,000 jobs and a big company HQ would certainly have broadened the tax base by a lot more than those incentives would "cost", and probably almost in perpetuity, rather than just over whatever period was looked at when the media compile their numbers.

Long term value investor cites short term price fluctuations as indication of long term thesis success/failure I just posted numbers. I didn't make any comments. You did that.

???

"We don't want all these high-paying jobs to make the price of housing to go up in the area." *Invert. Always invert.* "Why stop here? The best way to make housing prices go down is to remove other large employers with well-paying jobs from the area. In fact, I'm sure by letting infrastructure fall into disrepair (a shrinking tax base tends to do that, ask Detroit) we can further reduce prices..." https://www.nydailynews.com/opinion/ny-dont-scare-amazon-away-nyc-20190212-story.html

Guessing the next time they announce something, the loud minority of NIMBY voices will be drowned out by the in-favor majority that stayed quiet this time because they thought it was all just noise and that the deal was done.

Interesting note in the filings: That's some nice vulture investing, if they can successfully restructure it. Accounting wise, looks like it'll have some negative impact on margins, but hopefully it'll create a bunch of value over time. h/t @JerryCap

It was discussed at the AGM. Seemed like Mark is as-always uber-conservative and his instincts would have him just never take any debt and pile up cash, but he seemed to open to the idea that at some point, too much is too much and unless there's a way to deploy it at the right hurdles, it's better to return the excess. On one hand, it might seem like a signal that there's no elephant in the pipeline, at least in the near-term. But they've also said that to better compete with PE, they'd probably lever up elephants, so bagging one might not require that much cash. With their balance sheet and FCF, they should have no problem accessing capital (recently increased the size of their revolver and they can always issue more long-term debentures) if an opportunity arises, so I doubt the flexibility is much reduced.. I sent them a question about it. We'll see if they reply in the next Q&A.

Via

Q4: https://www.csisoftware.com/wp-content/uploads/2019/02/Q4-2018-Shareholder-Report.pdf Revenue: +21% Adj. EPS: +33% Full year 2018 acquisitions added up to $523 million ($631 million with deferred payments). That's decently close to all their FCF There's also a special dividend: "$20.00 per share special dividend both payable on April 5, 2019 to all common shareholders of record at close of business on March 16, 2019. Constellation invested $603 million in acquisitions during 2018 at rates of return that we believe will be attractive. We are optimistic about our acquisition pace for 2019, but we feel that we have capital in excess of our needs and should return the excess to shareholders."

Yet that's not what has happened in the past 15-20 years. The difference between incomes and house prices has been bridged by increasing debt. So if we're to get back to the income/salaries trend, a significant correction (or long stagnation) would need to take place.

Looks like in the US, "debt service payments as a percentage of disposable personal income was 9.82% in Q3 2018 which was the lowest percentage since at least 1980." Meanwhile in Canada, looks like we're at record highs, and that without a lot of the interest-only HELOCs and other similar instruments popular in the past decade, many wouldn't even have made it this far.. Via

Historically, on average, real estate appreciation has pretty much followed inflation with a little extra, no? And there are all kinds of maintenance costs that people often forget to factor in when they cite how much they've made. Most of the return seems to come from leverage, which is fine, but we shouldn't forget that carrying a lot of debt can be a problem (price can fall, hells angels can move next door, houses can have expensive problems, etc). Tax free is nice, but a lot of people invest in tax-advantaged accounts too, and the friction to buying and selling tends to be relatively high, if you're not someone who knows real estate well and can bypass a lot of the fee-takers. To me, buying a house has a lot of non-financial considerations too, so looking at IRRs vs renting is only part of the story. Some people want to be real estate investors and don't mind flipping houses and moving every few years. Personally, I have no interest in that.

I remember a few years ago when the numbers sometimes came out at like 8PM or more... ¯\_(ツ)_/¯

You know the photo is staged when she wears high heels on the factory floor. Was there any expectation that it wasn't staged? As in, a photographer sneaked in the high-security ITAR-compliant factory and just happened to catch in a candid moment the COO of SpaceX admiring some hardware on the factory floor? ;)