focused1

Early 30s. In March 2020, I had just spent the last six months negotiating a NAV based financing deal to get a lender on the hook to fund new investments at significant % of our private equity fund’s NAV as dry powder in advance of what I thought would be a market correction. I was the first investment team employee and was all in on making this work come hell or high water hoping to get carry in the next fundraise when this all paid off. I spent two entire March days in a sweaty conference room pitching the lender why our private oil deals were worth multiples of what the lender thought they would be worth and walking through years of deal making rationale. The market crashed further that week and the financing deal never happened as the lender may not have even had their own funding locked up. My career track in PE torpedoed but I didn’t know it yet. The next day they announced that de blasio was considering a city wide quarantine and someone on the news said they might close the bridges. That sounded too much like a bad Batman movie for our liking. My wife and I decided to get in an uber to my parent’s house in the burbs and never returned to the apartment except to move out. The following week we put 100% of our cash pile (literally our entire net worth other than what was locked up in my PE fund at work- we had avoided making investments at the “top”) in Berkshire Hathaway shares sitting at the kitchen table in my childhood home. Our cost basis overall is just a little bit under $160. A portion of the gains since then paid for my wife to go to an ivy league business school with no debt at the end. We still own shares in retirement accounts that we bought from that time. Since then, my investments have been more focused in more under the radar companies because Berkshire is no longer the value it once was. Still an oil investor.

My favorite tool is openinsider.com but I always check the SEC website for companies manually and read the filing documents if I really care about accuracy.

my thought on this was always the following… 1). Never go anywhere close to anything resembling insider trading or the appearance of it. 2). If you have any role with the company whatsoever and legitimately see dollar signs and opportunity ahead then consult a lawyer on valid exclusions or carve outs under the law. if you can’t afford # 2 stick to # 1.

I think hertz is an interesting idea and want to learn more. The stock is recapitalizated post bankruptcy emergence and trading at lower levels than before, but they have essentially done a levered recap via buybacks. When you look at how they run the business; you pretty much know the 2050 warrants offer leverage on leverage on leverage (leverage from inside the OpCo that is earning a spread on cars purchased with a securitization, leverage from being a levered recap at the parent level with non secured debt, and leverage from the long term warrants that have various anti dilutive protections). And the management incentives are very equity oriented so you know they are going to try to make the free cash flow to equity juiced. This seems like it could be a chapter in You can be a stock market genius Baby needs some shoes?