ScottHall

Love this concept. Lot of my interaction on this forum was inspired by Andy Kaufman's run in Memphis.

Markets be lulzy sometimes.

Go get 'em tiger.

WAAAAYFAIR YOU'VE GOT JUST WHAT I NEED Um but seriously IDK. Cool real estate ops out there but haven't seen a lot of 100x yet... Been very lazy this sell off... only put a little dry powder to work. May miss out. We'll see. Oh well!

I'm kinda retired from posting here but I wrote something about this from an alt perspective just this morning so I figured why not share it. Probably wrong I'm just spouting off etc. etc. but maybe it's helpful in some way IDK. https://lizardbrain.substack.com/p/corona-cheesecake-and-testing-the farewell again friends <3

<3

I still do value investments but my style has shifted towards growth over the past five years. Giving value investors grief fun, but the style can and does work in some circumstances. It's just that most of its practitioners are not skilled at the art, which is unsurprising given the wide array of Xeroxes of Xeroxes that are easily read about the subject. It encourages amateurs who don't know what they're doing, which is valuable in that it gets more people into investing, but unfortunate because a lot of people let those early learnings stunt their growth. Nevertheless, value can be a successful style and my view is that its core concepts make sense as a base to add upon, rather than being the whole strategy by itself. Its principles make sense, but it's important to build on top of them and figure out where the heuristics of old are no longer so useful. The big problem with value investing is that many of its practitioners are essentially cultists who refuse to even try to adapt their style. It makes them intellectually lazy and, surprise surprise, they end up underperforming because of it. I've found a lot of value in creating my own style of investing. It's an endeavor worth pursuing, because it's harder to have unique insights if you copy & paste from the same sources as everyone else. Congratulations on your success with growth investing, it's an admirable achievement to improve your style by trying new concepts.

Multiples don't matter so much if war is afoot. The question is who will win and eat the other's lunch. I don't own WMT because they let Jeff Bezos build a massive head start but am open to changing my mind. War creates disruption and markets experiencing disruption can see large market share changes. If you believe WMT can capitalize on that by going on the aggressive against Jeff Bezos, cutting margins may not be that big of a deal depending on the narrative shift it creates. If WMT cut margins but revenue growth accelerated to double digits, the market may not find that so horrifying in the current environment. Some would say the Walton family cutting the dividend and reinvesting in their moat would make them "Outsiders."

Is anyone following this as a long OR short? The numbers this quarter were atrocious and the operating leverage is destroying earnings power. One franchise nearby has been operating for five years and is now for sale for $90k. Also, for better or for worse, some people now have strong negative associations with the Papa John's brand. As Rome burns, the management and largest shareholder are playing Game of Thrones with each other, and the company is reportedly trying to sell itself off. This is a business model that, when done well, generates goodly amounts of cash. The question is, can Papa John's comeback or will we see a wave of closures, with franchisees running away from reinvestment as they're watching their sales fall off a cliff? Even if they can get the franchisees back on board and maintain control over their "keys to power," Domino's is expanding rapidly with comps in the high single digits and isn't so concerned with internal struggles. Pizza Hut wasn't able to find any magic in the most recent quarter either, but it's not hemorrhaging customers unlike Papa John and I'm sure would love to put together a few strong quarters on another player's misfortune. The odd man out is Papa John, and a wounded company whose management seems more concerned with securing their own positions than with the company's overall health, makes for the easiest target in conquest. Papa John's kingdom is being ravaged by internal mismanagement and that has opened the company up to external assault. Strategically, their position does not look good to me. But it's an asset with scale in what is usually a very profitable line of business, and that could be interesting for someone looking to make a big splash in pizza, quickly. I have no position either way but it is a stock I am watching with great interest. If results do not stabilize, this stock could drop a lot more than it already has. This thread shouldn't be considered a buy recommendation, but it does exist to open discussion on what the best ways to take advantage of Papa John's missteps are. Rather than dumpster dive at seemingly low multiples with a tainted brand, the best play may be to acquire shares of one of the likely beneficiaries of Papa John's market share erosion. Domino's has a seemingly high multiple but its execution has been consistently on point and has a strong capital allocation policy. For Pizza Hut, you get a variety of other franchises too in YUM that might be interesting but kind of dilute the opportunity. To me, the American Carnage play is very real and I think delivery pizza is a big piece of that pie. It's an affordable luxury even the cash strapped consumer can enjoy, and takes advantage of an economy that has a strong bifurcation of results between people. There are barbarians at the gate here, financially and competitively. Something interesting is going to happen in the delivery pizza market. I'm just not sure how I want to play it yet. No position in any pizza stock yet but DPZ is probably the "favorite" to earn a spot in my portfolio right now. https://ir.papajohns.com/news-releases/news-release-details/papa-johns-announces-second-quarter-2018-results-and-updates

If reason doesn't work, try emotion.

It doesn't bother me if this becomes a travel advice topic, it's not a stock that is an urgent buy on valuation by any stretch but it is a good one to watch on weakness. My position - rather small unfortunately - has an average cost of just shy of $70. I would be a buyer again if that price came back. I've used Airbnb to get a feel for different neighborhoods in LA, and once around Coney Island. It has usually been a pretty good experience; the only complaint is that there was sand in my bed at Coney Island left over from the last traveler, because of the beach! But I've never had a particularly bad experience, and it is a fun way to explore new areas. That said I do understand the hesitance to using it, I felt similarly at first. Also I never rent single rooms when I do Airbnb, that is TOO personal for me. I want the whole place or not at all. I went to a bed and breakfast in North Carolina with a couple friends of mine. It was run by a sweet elderly couple, but there were other guests and creepy dolls decorating the place and my room in particular. We were almost out of the woods when at breakfast the next morning, one of the proprietors started telling us about UFOs and how we "looked like we would understand," while he loaded up some 1995-looking alien conspiracy website and gave us a list of important articles to read about the situation. It was ultimately harmless but that place gave me the heebie jeebies. It wasn't an Airbnb place, though.

An interesting piece of financial history about this stock. Joel Greenblatt talks about it a bit in his "You Can Be a Stock Market Genius" book because Marriott decided to separate the hotel ownership business and the management/franchise business. The story as I remember it is that he thought nobody wanted to own Host Marriott (the name of the real estate biz back then) because it was a fugly business with a lot of debt on it whereas the company this thread is about had the high margins, high returns on capital, and he figured that would be more appreciated by the market. He ended up doing pretty well on those Host Marriott shares, I guess the stock tripled in just a few months. That same business is still pointed out as a big contributor to the top line in the annuals. Here's a review of the book that has the situation described right near the top. https://whatheheckaboom.wordpress.com/2011/01/16/book-review-of-you-can-be-a-stock-market-genius-uncover-the-secret-hiding-places-of-stock-market-profits/

This is a hotel industry company that I am a big fan of. It has been a sleeper hit in my portfolio, one I haven't allocated as much to as I wish I would have, and it's one that doesn't get a whole lot of attention. Big boy in the hotel industry but the MAR business itself is mostly an IP company with high margins and which requires very little capital. I think of it as akin to being the McDonald's as opposed to the individual McDonald's franchisee. Collects management and franchise fees, incentive payments, that sort of stuff. Meanwhile investors put up the money for the actual hotel, in most cases, and take on the financial risk of ownership. Marriott does own some hotels, but not a ton of them. This is mostly a business that lives and grows on OPM. An associated question is, if Marriott doesn't own its properties, couldn't the branding and management just be changed and leave them SOL? Well, yes and no. To break a contract early (these contracts last decades) an owner has to pay several years worth of fees to MAR. So the owner has to really want to do it. Accordingly, Marriott's attrition rate is quite low and expected to come in 1% to 1.5% of rooms this year compared to new rooms clocking in at 7%. A business like that, which rides on OPM for its growth, with a historically "sticky" base of recurring revenue contracts which are pretty high margin, should generate robust FCF. And Marriott does exactly that. Just take a look at the cash flow statement. The interesting thing is what Marriott does with all of that cash it generates. Mostly, it buys back shares. A lot of them. Because of the relative stability of its cash flows, it keeps a leverage target and not unlike Malone companies, Marriott doesn't mind issuing lower-cost debt to retire higher-cost equity to go alongside with the share repurchases from the FCF it generates from its operating business. So as the company grows, not only do the buybacks from operating cash increase, so can the buybacks from the debt issuance in order to maintain the company's desired leverage ratio. Marriott bought in 29.2 million shares last year for $3 billion, and is targeting another $3 billion of capital return between dividends and buybacks this year; has already bought back 7.9 million shares this year. The lodging market is cyclical and Marriott earnings got hit in the last downturn, so that's definitely a risk, but the company should be able to weather through to the other side because its business model was designed to basically always spew cash; MAR generated FCF in both 2008 and 2009, for example. In the meantime the company should repurchase between five and six percent of its stock this year, and has a pretty strong pipeline for room growth over the next several years. Over the long run, if Marriott can continue to grow without need for a lot of incremental capital while shareholders increase their ownership of the business at a 5-6% clip on top, who knows what might happen. It's one to keep an eye on in event of any weakness at the very least. MRQ and 2017 annual PRs: https://marriott.gcs-web.com/news-releases/news-release-details/marriott-international-reports-first-quarter-2018-results http://news.marriott.com/2018/02/marriott-international-reports-strong-fourth-quarter-2017-results/

I don't get the bad reaction to alwaysdrawing. I agree with a lot of the points brought up, and think people are being too harsh. I don't see anything offensive about that contra view of Berkshire, part of which is similar to what I've expressed in the past. Berkshire is a great company but I'm not sure it's a great investment anymore, either, and sold my shares after the tax reform run-up. I might buy them back at some point because a lot of its businesses are "old reliable" and there is a place for that in a portfolio, but for me, doubtful to be a "core holding" on account of I like stuff that's a bit higher octane than Berkshire but with much better growth profiles. I see Berkshire as an occasional "role player" for my "team" of stocks, but not something I would build my franchise around. I could see it playing a bigger role for others, though, depending on their risk tolerance and what they're trying to do. One thing that I don't think a lot of investors appreciate is what sort of role a stock will play in their portfolios. Are its traits complementary to the stocks you already have or does adding it weaken the portfolio even if the stock itself is seemingly underpriced. It's something I have been thinking about more lately. I own Markel for similar reasons, it adds value for me because it's not another Google or Amazon or Facebook.

I am. I invested late last year after it finally clicking there's more to this business than most land traps. I did a quick back of the envelope calculation, and think they could perhaps hit $250m-300m in annual earnings in the next two to three years based on their water investments, at the expense of their lean business model (they have already added 2 dozen new employees, and I expect this to continue to rise as they add water capacity). In a couple of years time, I could see buybacks ramping up quite heavily, and the trust might split the subshares to create more volume to vacuum up shares. This is all contingent on improved activity in West Texas, and further infrastructure projects in the region, supporting increased production. The margins of the water business so far are quite astounding. I wonder what normalized margins will be, at scale? I added a little a few days back.