Spekulatius

Advanced Energy is heavily tied to the semiconductor and display industry. Their power supplies are used for thin film deposition pretty much everywhere.

Producing Wind turbines is a mediocre business at best. I looked at Vestas a while ago and didn’t see a reason to get exited.

Rebought some FOX Bought a starter in GTS, a crappy insurance business in Puerto Rico, trading at an even crappier price. Bought an even smaller starter in SPOT.

I wish I have gotten tequila shots every time people got fired in the company I worked for. I don’t think I would have been sober at work in late 2000 and 2001 at all. The more I think about it, so more I like the idea.

Why would he? If she can do deals that are too small for BRK, the gains won’t be material. If she were to compete with BRK he doesn’t have a reason to invest in her vehicle either.

Cigarbutt’s posts are almost always very well thought out and useful.

Tracy monetizes her experience gained with Buffet . Nothing wrong with this, but no guarantee for success either. The problem with anyone starting out with a BRK copycat is if they can afford to be patient. There are plenty of holding companies with good capital allocators that can be bought at a discount to NAV.

Regardless of why the repo rates increased dramatically and who was involved, in the end, it seems like several big boys in our financial system found themselves short on cash and with their pants down. I guess we all have seen this movie before. I personally think the Fed shouldn’t have stepped in, if if they borrow, they should have lend out at a high interest rate too. Perhaps this is related to the recent rebound in interest rates after a huge bull market in treasuries, but I am not sure.

A value buy it seems as you got in before the spike to $100/ bro that’s some doomsters predict. I think it will be more like $2-5$/brl and quickly reverse. I doubt there much supply impact from the drone attack. FWIW, so many oil heated homes on the East coast. It would be a great green energy plan to have them all connected to natural gas. Does this Gregmal guy ever get his timing wrong? He's on some epic streak! Tesla is probably going broke a few days after he bought some puts on the stock. FWIW, I bought some SPY 280 Dec 20 index puts for hedging yesterday.

A value buy it seems as you got in before the spike to $100/ bro that’s some doomsters predict. I think it will be more like $2-5$/brl and quickly reverse. I doubt there much supply impact from the drone attack. FWIW, so many oil heated homes on the East coast. It would be a great green energy plan to have them all connected to natural gas.

For the macro folks out there, anybody noticed that the inflation numbers are pointing up and pretty fast apparently. YoY change is ~2.7% now and the monthly annualized change ~3.6% and high 3 month in a row. Of course there is a signal and the noise issue, but this seems worrisome. The inflation target is 2% and we are way above that. I wonder what the Fed officials are thinking about this. https://www.frbatlanta.org/research/inflationproject/stickyprice/

Sold NUVR ( concerns over negative comps next quarter ) and GRIF ( quick trade, bought at ~$34 a couple of days ago ). This is my second round trip with GRIF. Edit: Also sold MSG (fear the Sphere)

I believe that WeWork may well work out to the Enron or Lehman of the next downturn. If that’s the case, it won’t just be WeWork either, there will be a host of similar cases. I also think that SoftBank will be pulled into this, they own crap like WeWork, UBER and seem to have wildly overpaid for ARM semi as well and who knows what else. Mr. Son has been there before, he lost the vast majority of his wealth during the first dot.com bubble but a few smart investment (Alibaba) bailed him out. Luck or skill , this remains to be determined . I don’t think his Vision Fund co- investors have the stomach for 85% drawdowns.

Sold NUVR ( concerns over negative comps next quarter ) and GRIF ( quick trade, bought at ~$34 a couple of days ago ). This is my second round trip with GRIF.

I believe the B- mall comparison if WMB vs AM is a very good one. No doubt money can be made from these junk yield plays, I just decided for myself to never go there again, because the baseline success rate is not good and errors will be severely punished. I don’t have numbers on WMB contract adjustments , it was a bit of a give and take as CHK extended the gathering contract length and the guaranteed area for G&P services in exchange for lower fees, if I remember correctly.

BNTGY, RYCEY, MOG-A, trimmed some FOX and CMCSA

I believe that AM’s contracts with AR ( which fee indeed very favorable to AM) will be revised, even without an AR bankruptcy. Same happened with the gathering assets WMB acquired from CHK a while ago.

Odd lots / Bloomberg has a great episode with John Hempton about banks (mostly) https://www.bloomberg.com/news/audio/2019-08-16/john-hempton-on-what-s-ailing-bank-stocks-podcast

I am avoiding gathering midstream companies like a plague. My largest position is WMB, which I recently build up. They have gathering exposure too, but it’s only~30% if EBITDA. I bought it for the Transco assets mainly, one of the best perhaps the best regulated pipeline assets in N.A.

I don’t think he raises Yen denominated debt because he has a deal in mind for a Japanese business. I think it is just one way for him to raise very cheap debt. He could even hedge out the currency risk, if he wanted to, but he doesn’t care about Market to market fluctuations, so he probably won’t. I don’t think the Yen is currently very undervalued relative to the USD either. Companies like PG have some business in Japan somit makes sense for them to raise some Yen denominated debt as a Natural currency hedge, somit speak. I don’t think this is the case with BRK though.

Belated answer - the $4.3B in net debt with a $12.5B equity base is still higher than many other insurance cos that are typically 20-25% levered. Most other insurance cos don’t have the equity exposure that FFH has though FF India, Africa and various other holdings. It clearly is a more levered insurer than many others. FWIW, I sold my FF holding when it went to $480+ and essentially put the proceeds into BRKB, which consider a better bet. I would consider buying back FFH below $430, but that would probably be for a trade.

The problem is now that so much hybrid capital (catastrophe bonds etc.) is on standby to take advantage of any hard market, should it occur. Unless we have an unfavorable credit market at the same time than a hard insurance market, I don’t see hard markets lasting.

Sold me last batch of FB shares ( yesterday )

Are you buying puts with the VIX around 16? No, I have not yet done any put buying. I’d like to see premiums coming down more and look for a VIX around 13. I haven’t made a decision if I follow through at all this time, I have been trimming positions , especially in anything that is cyclical.

Interesting read . It looks like Applied Underwriters was competing for business with Berkshire subs. BRK generally doesn’t integrate their subs and this one had minority interest outstanding, so even if they wanted to, they couldn’t without buying out minority interests. That’s one of the limitations with Berkshire’s modus operandi and a sale is the better option at this point. Also on a side note, workers comp claim stats tend to get far worse when the labor market goes cold in a recession,