thepupil

yea, but then you have 1-2 people to hang out with whenever you want. it's like an extension of one of the best part of college. living with the bros....to each his own...potentially makes for better socializing with similarly situated women as well. "hey want to pregame at my 3 bedroom with a balcony that i share with 2-3 similarly eligible people...bring your friends" lands a lot better than "hey come to my studio"....anyways, I'll stop telling you how to live your life, but just something to consider.

I just looked up my NYC apartment which i rented from 2011-2013. It's a 2BR available for $7,500 / month. the living room was cut in half to create a 3rd bedroom. A reasonable trio would split this, $3,000/mo $2,500/mo, $2,000 / month or something like that ($3K gets the en suite, $2.5K gets the real bedroom / shares bathroom, $2K gets the fake bedroom share bathroom). (the $3K guy is getting the best deal but paying the most)...it was a doorman building / pretty nice. It was $5,100 15 years ago, so has only gone up by 2.5%/yr, less than inflation and less than low end junior comp at banks / HF / etc. NYC housing is affordable if you have a great job (a hedge fund job certainly qualifies) and are willing to room up which is fun when you're young. are you only looking at studios / 1BR? you don't have to spend $4K...that gets you half of a luxury 2BR which is way too much for someone just outta college.

curious why this vs shorting an unlevered ETF? or puts or something else. not straightforward at all to me to do it this way.

nope. my IBKR accounts (2/3 of assets i control) are up ~4.5% and SPY and REITs are up 9-11%. my fidelity accounts (the other 1/3) are up 8%. my 401k's and stuff (currently all TIPS) are up 8%-9%. Trust (which basically just owns global indices minus fees) and I don't control is up 8.5% or so. mediocre year so far. I've not been particularly excited about my portfolio for like 2-3 years. think generally have bought things at okay-ish discounts but actual value coming in a little shy of underwriting as my (mostly) real estate oriented stuff continues to grapple with money having an actual cost. feel like most of my ideas are pretty stale...been some small wins here and there but nothing too additive...the last few sell-offs (Iran / Tarriff / etc)...I've generally way outperformed as market fell, but then not really taken advantage of the bounce...there's a younger more aggressive version of me that would have rotated/found a way to make more on the way up...but that hasn't been me of late....i also just take less concentration/risks generally....i'm playing a little scared because...i don't want to give up the last ~6 years of wild gains over which my NW has like quintupled (inheritance + compounding + saving + a little bit better than mkt returns)...

1. I didn't really talk until i was 4 and was reading at a college level by 6th grade (alas! my relative intelligence / achievements plateaued early). I let my sister do all the yapping for me. this likely comes as a surprise to many here on COBF as now there's little i love more than the sound of my own voice. 2. If you haven't already, I'd have him tested for the "certain diagnoses" which you reference (autism?). How you choose to handle/what you do with whatever diagnosis is is up to you, but why not at the very least, seek as much information. Our friends' son was diagnosed at 6 and they feel strongly they wish they knew earlier as it relates to educational choices they made. their kid is in a school where he's thriving and he was previously not. they can afford it and are glad to have that knowledge. I may be misreading it, but I perceive skepticism of such a diagnosis in your writing. I understand the aversion and it seems like the whole mental health industry overdiagnoses, but I'd seek as much information as possible. 4 is pretty old to not be talking a lot.

Realassetsvalue actually found the earnest money amounts which is really low (just ~1% of asset value) I'd regard that as bullish in that the buyer didn't walk away from a HUGE amount of money indicating some gigantic issue...Like let's say there's a $30 million issue. It'd obviously be rational for buyer to try to retrade or walk away from $1.5-$3 million. a $30 million issue would be okay / is quantifiable. next buyer can price it in. now...of course there's no way to actually know. More on the RIverside Apartments sale contract: Riverside is under contract to the Beitel Group, which is the family office of a family that’s made their money in multifamily real estate. The inspection period is through June 4th with target closing date of July 6th with $1.5m earnest money deposit due 2 days after contract was signed (May 8th) and $3.0m due at the end of the inspection period. Given the small earnest money deposit, the fact that we’re still early in the inspection period, and that the buyer is a savvy multifamily operator who will rely on debt financing to close, this isn’t yet a done deal but they will have done their due diligence and hopefully know what they are getting into.

a) the buyer decided to not proceed following inspection. I assume the building has greater than underwritten deferred maintenance, or, at worst, significant structural issues. Whatever the problem is, the buyer forfeited the earnest money in order to avoi buying the building. I didn't find disclosure of the deposit amount. b) I don't know. They've stated they're getting rid of all employees and liquidating. this is the last thing (assuming the otehr 3 close of course). IF those other 3 close, you'd have like $100mm of PF short term debt @ ~7% (matures in november, can be extended to June 2027, but at a price) so that's $7 million of interest. I'd assume $2 - $10 million/ year of grift / m&A to more or less take all your cash flow. I'd assume carry neutral. they'd have to really pillage ya to have negative. I doubt it takes 24 months. The market for multifamily is deep, liquid, and robust. As long as there's something not insanely wrong with the building (there is something wrong), I'd imagine they remarket it for a few months, get some stink bids that reflect whatever is wrong and it gets done in like 6-9 mo's. they marketed it in January, were under contract in May and then it just fell through. c) the remaining asset is 1,222 unit apartment building, Riverside Alexandria, 1971 vintage, bought in 2016 for $244 million, was under contract at $280 million ($230K/unit, low 7's cap). Three buildings on 28 acres. It generates about $20 million of NOI. but that may be a little lower now. Occupancy has been marginally falling. the DMV has one of the highest unemployment rates in the country and is more or less in recession. This is one of the last buildings to sell from a REIT where a PE firm picked the best assets to buy and this is one of the excluded assets. This is not a high quality asset and is in one of the least desireable markets in the country (the DC area) from a near term economic momentum perspective. that's why this had a 7 handle on it and why I'm being greedy and wanting to create it at a 9 handle. Like basically every apartment building i ever look at online, it gets terrible reviews. I almost put no stock in online reviews of apartments for investment purposes because if you beleived them, every single apartment building in the US is about to collapse, is infested with rats and cockroaches, and has numerous theives, drug dealers, etc. then you look at the data and it shows stable occupancy and rents...o @realassetsvalue has a good writeup with background as a well as a subsequent updated from May https://realassetsvalue.substack.com/p/elme-communities-nyseelme https://substack.com/profile/41080885-real-assets-value/note/c-258451179?r=ogi7p&utm_source=notes-share-action&utm_medium=web https://ir.elmecommunities.com/news-events/press-releases/detail/73/washington-reit-completes-the-previously-announced

ELME's largest and most important asset's PSA just got terminated, sending the stock down 22%. Assuming the other 3 sell (which are past inspection periods) and 5% t-costs? very rough here, using @realassetsvaluewriteup as an initial guide 1.80: 8% cap myeh, not much room for upside assuming sale @ some discount to prior contract 1.48 : 9% cap probably have nice upside 1.24: 10% cap back up truck, put as mcuh as you're comfy putting in one building, would have to have something really wrong with the building to not sell above here. any thoughts?

does it matter? could be the best company in the world and it doesn't make sense that someone who's comfy with 1-2% positions has a 50%+ position.

what are the consequences of selling? what's your basis as a % of market value does it have a listed options market? are you a candidate for the numerous wealth mgt solutions for this? how many years of savings does it represent? Are we walking like "I have $20K of SaaSco and save $50K / year" or "I have $2 million of SaaSco and save $50k / year?" Why hold it? if you're not comfortable with a >50% position, then why have it?

agree on Elon complex, valuations look dumb my stupid little mutual fund trade notwithstanding. on memory, it’s tough for me to agree in that earnings have absolutely exploded and that for these to trade at “intrinsic value” assuming this only last a couple years they’d probably have to trade for like 3x earnings which isn’t really realistic for mega caps so they trade to like 8….like with hindsight Micron at $100B in 2023 was trading for 1x 2027 earnings, so with hindsight we know that it was well below its intrinsic value (unless they never earn another $1 or estimates are way off). they’re shifting to longer term contracts which one experienced person I k ow says that always marks the top of the cycle but does lengthen the period of supernormal return. in other words, they might be worth 50% or 60% less on a true PV of earning, but are we really THAT confident the supply response will destroy earnings THAT quickly. I am not. The difference in supervycle length of 1 or 2 years is like a few hundred billion of earnings. and then the leaders as you say are potentially worse businesses than before from all this, but also like no one else can muster the scale of resources like they are… I’m more in the wishy washy useless Howard marks camp “be a little cautious / don’t go all in on any one view” with that said yesterday was amazing, market down 2.5%, portfolio up 1-2%. Let’s have more of those please! One of the tensions to manage is if you think the market leadership /stuff at the top is a little optimistic, then you might be cautious on market and think everything goes down….or you could have rotation into other stuff…I just stay mostly invested / root for rotation, but obviously if it all goes down the. Hedges/cash whatever would be better. Can’t predict that. Yesterday felt more like rotation and it was glorious. Who knows what tomorrow holds. Given the degree so many invest passively, I’d think eventually everything goes down if the big stuff does.

This is probably the most lucrative thing Greg could do. Announce $5 billion allocation to SPCX. Berkshire goes down 10-20% and share repo window opens wide

+1 Berkshire needs to deploy like $40B/yr to stand still on cash, they need to deploy like $200B or so of excess cash. not even clear (yet) that Berkshire is a net buyer of stocks YTD. it's nothing.

one thing I haven't seen discussed too much is a goal of portfolio simplification. they were net sellers of $10 billion of stocks in Q1 (from Q), completely exiting 16 stocks, going from 40--->26 (quick AI search result). Would i prefer a berkshire that owns $30B or $50B or $60B of Google, researches the company well, interacts with management in a real way, learns stuff about what's goinng on in the world from that diligence/ownership to one that owns 16 meaningless stock positions managed by a mediocre market neutral financials PM that happened to charm Buffett (which is who Todd Combs was)....of course, I'd prefer that that, it's not like he sold 50 cent dollars to buy Google. now in reality that's not how it went down exactly. Todd left, he blew out of todd's portfolio...the alphabet deal came together over weekend, goldman called Berkshire and berkshire took it down. but in substance, we have a Berkshire that has a still small, but more material position in a leading business rather than a berkshire that owns a bunch of meaningless positions....even if it's not particularly "cheap" this is also marketing. you're showing that you're good for 11 figures over a weekend at a very reasonable / commercial discount. it's also not wildly off from an index like position in alphabet, not that Berkshire is direct indexing....but there's like 6 stocks that matter Apple ($70B) Amex ($47B) Coke ($30B) Japan (trading houses) ~$30B Alphabet ($30B) Energy (CVX/OXY) ~$30B

this is wild. from a U.S. attorney.

Left found guilty of fraud. Not entirely surprised but saddened by this news.

our robust and completely useless discussion here compelled me to short a bit...made some beer money shorting COST for 10 days, +11% vs mkt, yay.... sometimes you just have to touch the stove...just to feel something

Funny part is he wrote that in 1998, then a lot of those stocks had bad returns for the next decade or so….i demand a revisiting of the revisiting lol

so i get what you're saying....but if someone asked me, without having a week or a month or a year to study the business and predict what the next 10 years of COST's revenue/EBITDA growth might look like....I might just might take into account its history of 1992 to present where its bounced around from 7-11%...like we have 34 years of data. i think that data has some informative value as to the future. to be clear, i think one could make an intellectual argument as to why COST's record justifies it trading where it does or why go forward might be better/worse than past or whatever....using their superior insight/prescience/deep study of business / whatever....but this exercise is by no means completely divorced from financial data and numbers (IMO). at an extreme, if COST traded for 500x, we wouldn't just say "well it's a good business"...just like value boys would never demand a 15% FCF yield or someonthnig ridiculous from COST i think the initial #'s are a first pass or set the hurdle one must clear.....like obviously the market is saying this is a great biz w/ long duration of earnings compounding ahead of it...so as a potential owner you have to get confidence in that (using all the qualitative stuff) AND get some sense for how much you're going to get paid if you're right or lose if your wrong [this last piece i don't understand how one can do without the recent, future numbers and some range of potential future multiples] to gregmal's point, COST is actually such a consistent business that it's very easy to throw numbers in the spreadsheet and swag things... anyways...way too mcuh ink spilled for me today on a stock i've never touched. 10 yr rolling periods, 1992-2002,1993-2003 and so forth

so what do you all propose as an alternative? DCF? (P/E is a shorthand DCF) TAM based analysis (like: assume COST inevitable takes x% of y% of affluent peoples spend at z% margins, discount to present, two step DCF? no quantification of risk/reward and just own forever? educate the PE focused simpletons as to how one might frame the risk/reward of COST... to be clear, almost nothing i own has a low PE or is an operating company...i don't sort by PE to pick stocks....but i just don't understand how one wouldn't consider the price paid relative to T12, 1y fwd, 3y fwd, 5 yr fwd 10 yr fwd earnings, exit multiples, etc in thinking about a stock.

lol at the NVDA example...I mean, yes, when earnings go from $10B to $200 billion in 5 years, P/E (of any kind, trailing 1 yr, 2, yr) doesn't matter...that hardly seems relevant.

how do you know it was a mistake though? if the stock is below where you sold in 3 years and your other investments have OP'd it, was it a mistake? I mean we never really know what's a mistake. we can only act w/ information we have today. i don't think anyone here is claiming an "edge" regarding analysis of COST because of its optically high forward (and trailing) PE's. People are expressing a valid concern regarding a de-rating given it's re-rated positively for 16 years. and bulls are free to counter that when g > r justified PE is infinite and that COST above all business probably has the potential to have a g > r for a really long freaking time (probably not infinite). it's very easy and most definitely not an "edge" to avoid COST because one requires a higher earnings/FCF/whatever yield and one doesn't want to drawdown if multiples decline...or you can say "de-rating bedamned...still growing at high rate and will do so "forever" so wake me up in 20 years at high returns....(or 1,3,5 years if multiple stays flat or keeps going up)....i don't think either person possesses an "edge" regarding the biz.... is anyone really saying they have an analytical edge? or are they just expressing timidity regarding the multiple. the two are very different things.

well it's funny because you express this in terms of value boiz being complete idiots for caring anything about valuation, when from my seat you bought a high quality, growing business, and sold it somehere in the orange zone which seems like an astute and reasonable and valuation sensitive thing to do....doesn't exactly sound like you're chomping at the bit to buy in the red zone. my stylized graph of valuation risk for COST...this is my life's greatest work.

I couldn't resist some 30 yr TIPS for mom's IRA today at 2.85% real...selling one of my more rate sensitive stocks at ATH's to buy....it's tough because i still think that this stock is cheap on a 5-10 yr basis and will probably do better than the bond, but i just kind of have to buy long term inflation protection as it gets cheaper and am coming from a place of owning little bodns at this time. @2%-4% CPI = 5% to 7% carry from cash + principal accretion if trades to 5% real yield, 33% downside if trades to 4% real yield, 20% downside if trades to 2% real yield, 20% upside if trades to 1% real yield 50% upside 0% = ~90%

so here's a fun one...this is the rolling 5 year change in forward multiple from 2010 to present (ie starting in 2015 what was the change in forward multiple from may 2010 to may 2015, june 2010 to june 2015) etc. since the GFC, there has never been a 5 year period in which increasing fwd multiple was not a tailwind to COST investors, which is why value investors and rich people can have had this debate the whole time. the stodgy pocket protector value guy can say "well it won't always be like the last 5 years"...and the rich guy can say "you said that 5 years ago too and i'm richer today than 5 years ago"....it's evergreen. the median/avg/min/max = 30%,33%,4%,75%....so in your typical 5 year period, you've had [roughly] a 5-7% tailwind from multiple expansion....of course your string that together for 16 years and you have a fwd multipl that goes from 18x to 50x.