thepupil

Oh yes, economics absolutely apply. I’m just saying it’s different than other commodities given the ratio of that which is above ground to being produced. Gold has responded to big supply growth in the past (digging deep here but I recall the Spaniards encountering this issue when they raped the Americas of gold/silver and experiencing inflation (because of too much money which was then gold and silver)). I think a similar thing happened in the California gold rush. Here it is. My AP Euro teacher would be so proud right now: https://en.m.wikipedia.org/wiki/Price_revolution#Background My point is it’s not as pure of a commodity supply/demand dynamic like a consumable(food, o&g, etc). That’s all. I’m not trying to say economics does not apply. For the same reason, if gold were below its cost of production, I don’t think it would be a good argument to be long of gold, because if no one wants to buy the cubic Olympic swimming pool of above ground gold, the cost to produce it doesn’t matter.

The supply of above ground gold is much larger than the amount mined every year (since gold is durable and rarely lost/destroyed and has been mined for 1000’s of years). Gold price is more driven by changes in demand than changes in supply (vs a mix of both) unlike say a consumable hydrocarbon or almonds. Here’s a source that estimates 197K tons ever mined vs 2-3k / year https://www.gold.org/about-gold/gold-supply/gold-mining/how-much-gold

one of my favorite investment managers said to me once, "the return per unit of risk ended up being okay, the return per unit of stress however, made this a very bad investment". no position in Fannie/Freddie (though i guess indirectly via PSH, but I don't even know if Ackman has a material position). Good luck to you all.

https://www.alicoinc.com/news/detail/1352/state-of-florida-approves-option-agreement-with-alico-to Always great doing biz with the government in a business friendly state. Another $14m straight to the bank. Not this first transaction of this nature and I'm expecting more of this in the future. Stock is wildly undervalued. party like it's 2005, what's next some TRC? And yes I'm aware that ALCO has changed drastically since its land bank value trap days, Trafelet drama and all that stuff.

This saddens me as well. Always liked Picasso; will hold off on further commentary.

I think the option to pay in stock is good from a credit perspective as it gives OXY a way to issue equity in bad times and probably allows OXY to argue that the interest on the prefs need not be included in any kind of credit metric, just a speculation, no basis in fact for this, i feel like 5XEBITDA would know this.

Appreciate the ripple commentary guys, the company seems like a good SPAC target!

https://www.bamsec.com/filing/156459020052144?cik=1067983 see page 21, 9/30, berkshire valued the pref at $8.1B and the warrants at $1.5B 6/30 this was $7.8B (roughly same on warrants) 3/30 this was $5.5B ($2.3B on warrants, higher because of higher vol input i guess even though their likelihood of being ITM was lower in March) Right now, I'd guess the pref is worth par (OXY 2049's yield 5.5% so 2.5% pick up for being subordinated / not transferable / not cash pay seems fair = 8% = fair = pref worth par), too lazy to value the warrants. the callability in 10 years at $105 caps how much more than par the pref can be worth, making it have less convexity than a long duration fixed income investment. because of this and the subordination, i could hear an argument for lower (80-90 cents?) but who knows.

one thing I've wondered is whether or not Berkshire would be helped or hurt from a regulatory standpoint if BNSF / BE floated 10% public stakes, which would put a market value on them. the conventional wisdom would be that a 10% float stock would trade at a discount to peers, though I'm not sure that's the case as the float would be big enough to attract a liquid diversified but high quality shareholder base (10% of BNSF would be a $12-$16B company), you could probably build a decent shareholder register quite easily, and the governance concerns with a minority stub, in my view would be mitigated by the berkshire brand / very understandable capital allocation policies (BNSF distributes cash as it can, BE retains earnigns) would the market look on Berkshire differently if instead of owning these 2 businesses privately (worth about $200B in my view: UNP + 2x book for BE = $200B, $150B if you're feeling conservative and value-y) Berkshire owned 90% of them and 10% floated freely. they are already SEC filers with independent capital raising ability. tax consolidation would still exist above 80% ownership IIRC. would Berkshire as a business benefit from this?

does anyone know of a good primer on Ripple Labs / XRP. <---this is probably the wrong word, as when i google "ripple labs primer" I mostly get crypto hyper promotional things and the pitch for why it is changing the world. i'm looking for something a bit more...skeptical/where the aduience is dumb non tech saavy / crypto ignorant investors like myself. I have about 10% in Tetragon Financial which has 7.5% of NAV in Ripple Labs 2019 Series C at $10B. this gives me a 70 bp look-through position in Ripple Labs. since TFG trades at 40% of NAV, Ripple Labs can also be seen as about 20% of the market cap of TFG, so on the upper bound, I have 200 bps in this cryptothingamajig. I recognize they have a website with lots of stuff, but really I'm looking for some kind of reasonably saavy neutral party / external investor who has commented on "why Ripple Labs is worth $0" or "why Ripple Labs could be worth $50B". if there's anything that comes to mind, would be most appreciated. I'm not going to put too much time into it because it's not a huge part of the thesis, but if I can shamelessly piggyback off someone else's commentary in terms of deciding whether this has 20% chance of being worht $0 or 80% chance, it'd be helpful. https://ripple.com/content-library

Ultimately I think PSR risks breaking the bond between regulators and the monopolies / oligopolies that are the railroads. Buffett won't say it as directly, but that's pretty much the gist of BNSF/Berkshire's view on PSR. Why mess up a cozy high ROE business for more earnings, particularly as the US swings more democrat? https://www.railwayage.com/news/matt-rose-less-is-not-better/

100% of the membership interests of Burlington Northern Santa Fe, LLC outstanding as of February 21, 2020 is held by National Indemnity Company, a wholly-owned subsidiary of Berkshire Hathaway Inc. LC, BNSF is 100% owned by National Indemnity (10-K quoted above), and provides capital to the insurance operation; BNSF does not (on my view) benefit. Independent peer, UNP has no problem raising equally cheap debt capital.

Berkshire, office, tetragon, mineral royalties, asian conglomerates!

to benefit from this underperforming, now overly diversified, pretty much outsourced to various investor vehicles portfolio, you must marry me. i like you gregmal, just not that much.

this is a bit stale, but pretty much the same, I think people will be surprised how the real estate has decreased. I feel naked, having revealed the entire pupil book. i'll keep the family's accounts I manage a secret to maintain some option of fudging reported performance numbers. PERSHING SQUARE HOLDINGS LTD 9.4% ~25% discount, in Ackman we trust TETRAGON FINANCIAL GROUP LTD 9.1% ~60% discount, in Reade we trust BERKSHIRE HATHAWAY INC-CL B 8.6% ~20% discount, in Warren we trust EQUITY COMMONWEALTH 7.1% ~5% discount to NAV most of which cash, in Sam we trust ALEXANDER'S INC 6.0% ~25-35% discount, much of which cash, in Steve we trust Cash 5.4% JBG SMITH PROPERTIES 5.1% VANGUARD TOT STK MKT-ADM 5.0% PARAMOUNT GROUP INC 4.2% OLD REPUBLIC INTL CORP 4.1% APARTMENT INVT & MGMT CO -A 4.0% BLACK STONE MINERALS LP 3.9% JARDINE STRATEGIC HLDGS LTD 3.7% GRIFFIN INDUSTRIAL REALTY IN 3.3% SPDR GOLD SHARES 3.0% BROOKFIELD ASSET MANAGE-CL A 2.6% LAACO LTD-UNITS OF LTD PRTNS 2.3% CEDAR REALTY TRUST INC 1.7% January 22 Calls on BERY US 1.7% UNITED DEVELOPMENT FUNDING I 1.6% <---should be $0 HAW PAR CORP LTD 1.6% PLAYMATES TOYS LTD 1.4% FARMERS & MERCHANTS BANK/CA 1.4% ISHARES SILVER TRUST 1.2% JARDINE MATHESON HLDGS LTD 1.2% March 21 Calls on JOE US 0.6% January 23 Puts on BRK/B US 0.3% March 21 Calls on VNO US 0.3% January 22 Calls on BERY US 0.2% January 22 Calls on BERY US 0.1%

https://www.nytimes.com/interactive/2020/12/03/opinion/covid-19-vaccine-timeline.html based on this, I'll get it after about 97% of Americans. My wife (who works in a hospital) will get it after 3% (potentially 1st dose in December, though there are more front-line types that are presumably ahead of her)

I bought some Singapore listed shares last night. I woke up to owning a US listed ADR. Has this happened to anyone? I prefer to own the shares on the singapore exchange. I'll contact Fido just wondering if anyone else has had this happen.

a reasonable article discussing gold and its relationship to stocks and inflation. https://www.morningstar.com/articles/1011134/gold-is-a-dull-investment

What’s an example of an exurb that you think will do well because of WFH over the next 5-10 years.

Gold is an element and therefore fungible and investable at scale (central banks and large institutions can trade gold and, absent chicanery, know precisely what they’re buying / selling), not so with diamonds (or art or air cooled 911’s or whatever) I do not know this for sure but I’d expect the above ground gold supply to be far less volatile than diamonds (ie I think there are big diamond discoveries that can be large relative to existing supply). This has happened with gold several times in history, but is probably less likely to happen today than with diamonds; someone more knowledgeable than I can opine)

I own some gold; I expect a very volatile 0% real return with some convexity/hedging benefits in the event of high inflation/some other macro scenarios. I think most people outside of gold bugs view it this way, no?

I love that chapter, but don’t quite understand the relevance other than “office RE values can fall very low / are very cyclical over long periods of time”; is that your point?

so this is all of course anecdotal, but I beyond multifamily / condos, I have seen very little evidence of any loss in value of well-located residential real estate. the single family market seems to be universally doing well, both close to cities and further out my zestimate (which seems correct based on some recent sales/comps, but not a huge # of data points because inventory / transaction activity is so low) has gone from $470 / foot (2019 real price) to ~$513/foot. there's no reason to pay those prices unless you value the convenience and lifestyle of living near the city / in good school districts, access to restaurants, airports, amenities, etc. i don't think WFH has drastically changed the value of those things. as long as people are realistic on pricing, homes continue to sell w/i a couple of days of listing. this probably has more to do with how low rates are, but you'd think that if everyone wanted to have 4K sf and an acre in the exurbs, people wouldn't be tripping over themselves to buy 2K sf on 1/4 acre near the city (for more $) i think WFH will make people priced out into the exurbs have a better life, they won't have to commute every day, but it's not clear to me that there will be marked decrease in pricing for well-located close-in convenient real estate near cities. maybe if rates rise significantly that will change. here's an example of the type of thing that i think needs to correct pretty hard: https://www.zillow.com/homedetails/7171-Woodmont-Ave-UNIT-307-Bethesda-MD-20815/166716517_zpid/ 2015 built condo offered at $740K / $690/foot, sold for $800K in 2016. you can see this was a rental asking $3,300 / month pre-covid). this building is popular with downsizing boomers who want to live a convenient walkable and luxurious lifestyle (not a thing during covid, but probably will still be afterwards). This building was built at the exact time (I think by the same developer) as a rental building across the street, where you can rent a similar unit for $3,600 / month, that's before any incentives. https://www.flatsatbethesdaavenue.com/floor-plans/apartments?bed_count=2 I'd say the market rental rate for the condo is $2,700 - $3,000 so if you bought the condo for cash at $740K, you'd have $800/month in HOA and $700/month in property taxes=$1,500 of cost and you'd be getting about $3,000 / month in imputed rent for a $1,500 / month "NOI" = $18K / year = $18K / $740K = 2.4% cap rate. The fact that it's "expensive" doesn't really matter so much as there are 100's more of these being built and rent growth is not likely in the near term or intermediate term. single family homes trade at similar cap rates, but there' no more land to create more of those and demand > supply.

The orgiastic future...as represented by the shores of Windsor Ontario

I began to like New York, the racy, adventurous feel of it at night, and the satisfaction that the constant flicker of men and women and machines gives to the restless eye. The city seen from the Queensboro Bridge is always the city seen for the first time, in its first wild promise of all the mystery and the beauty in the world. There’s a reason the great american novel wasn’t about Detroit.