Spekulatius

Yeah, the market seems very much like 1999 now. I think there is a generation of investors at work that is either on autopilot using ETF’s and index funds or driven by narratives rather than fundamental valuations. Great business/CEO, great product, high customer retention, but outlandish valuations and operating losses shock no one. I also note that more and more fund managers and CEO note how important it is to “tell a story”. While good communication always has value, I would like the numbers do most of the talking. I do agree it could go on for a while, but generally speaking it’s time to worry when nobody else does.

Now I remember that Chuck Akre was in the “Invest like the best podcast”, where he explained his three legged stool approach and how they came about AMT. As I recall, they had a position before the stock declined substantially, which they used to average up in. http://investorfieldguide.com/akre/

Hilti used to be a public company and traded on the Swiss exchange. Trumpf is a Family owned business with a very long term focus. They developed their own photonics Technology for their lasers (the modules are build in NJ/US) in order to control the whole value chain. I don’t think they are likely to sell out.

How is the 737 max issue mitigated? LUV is basically a single aircraft airline and their low cost position is partly build around this. If this bird never flies or is impaired in terms of resale, what is going to be their upgrade path?

I have various accounts and my overall estimate is close to 30% return. Stock picking was so so, but some trading around (DD, CTVA, NOW, AMZN etc) really helped. The setup this year was pretty good with the decline in fall 2018, similar to 2015. If I could settle this year for an 8% return, I would take it.

This is an interesting quote from this article. I can’t say I follow this advice. My buys and sells are mostly based on valuation with perhaps a short term focus on momentum (letting winners run). I also tend to sell if a stock goes up substantially without change in corroborating news or fundamentals. Sometimes, it pays, and sometimes I leave money on the table, especially in bull markets. When markets seesaw and volatility is high, the buying /selling works very well. Also, if not selling based on fundamentals, what other guidelines is one using? Every single time I have sold a great business for valuation reasons I've regretted it. I think the alternative option is to hold great businesses as long as they're great. I have seen both. To some extend, I was playing the 1999/2000 tech bubble and I really didn’t regret anything I sold back then. Many would have lost 90% back. Even with great companies like MSFT, which did. put out good numbers all along, the multiple regression caused substantial losses that took a decade to make up. Current examples are a bunch or SAAS companies or even something like DIS. While I agree thwt DIS has great assets, I do wonder if the stock surge of ~30% has overextended the stock. The streaming competition is going to be tough and DIS estimates thwt it will take a few years to just break even. Then the cash machine ESPN is becoming a wasting assets. So what we have is a stock that may not have any earnings growth for a couple of years, yet trades at ~27x earnings ($5.2 earnings estimate for 2020), which is far above it’s historical range. I‘d rather own FOX or CMCSA Right now at far lower valuations and that’s indeed where I swapped proceeds from DIS sales into. This may turnout out to be a mistake, but I think it is a value approach and protects downside. I think a lot folks that talk about great business here have not really experience when the multiple compression bear raises its ugly head.

I have two bets that are a good risk reward: 1) DD, stock hasn’t budged despite value unlock of the nutraceutical business 2) MEGACPO.MX - relatively cheap mexican cable co. Low debt and owner operated. I think this will do well, if the Mexican economy does better.

This is an interesting quote from this article. I can’t say I follow this advice. My buys and sells are mostly based on valuation with perhaps a short term focus on momentum (letting winners run). I also tend to sell if a stock goes up substantially without change in corroborating news or fundamentals. Sometimes, it pays, and sometimes I leave money on the table, especially in bull markets. When markets seesaw and volatility is high, the buying /selling works very well. Also, if not selling based on fundamentals, what other guidelines is one using?

"They are endless money pits" - Scotty Kilmer If you want reliable, no-brainer cars and you like the design, I would go with Toyota. Most of the Hondas are great as well. Recent Mazdas are great value for money, reliable almost as the Toyotas, have very nice design(I love them). Also consider Hyundai/Kia - very good value/features etc.. If you are willing to spend more or want more premuim brands, check out Lexus/Acura/Genesis. Especially Genesis can be a great value second hand. Avoid anything German, specially premium German(Mercedes/BMW/Audi), unless you really like them. Also better avoid anything with CVT or Dual Clutch transmissions. They tend to have many problmes and are expensive to repair. Do you have any specific models in mind? What is your budget? Willing to buy second hand? Size/shape(passenger/SUV?). I wouldn’t trust Scotty Miller. I think he may be paid by Toyota. Toyota is very good at marketing it’s crappy cars through self media. I remember one day Scotty said his son bought a new Toyota Tacoma and expected to keep it for decades. If you check Consumer reports or other car review channels, you can see that the new Tacoma is one of the least reliable pickup truck on market. Its highest end TRD PRO off road trim is also a complete joke. Search for a YouTube video for Honda Ridgeline base model driving into Death Valley Race Track, with a Tacoma TRD as the support vehicle and see what happened. The Tacoma’s all four suspension exploded after 6 miles while the Ridgeline base model made it back in the end with tiny leaks in one suspension. Scotty Kilmer has a video out there “Why not to buy a new Toyota Camry”, so if he is paid by Toyota, he doing a bad job promoting the brand. Anyways, I have never heard of him before and I am surprised anyone would take your tube opinions as a gospel?

Bought some more DD (swapping some of my my CTVA sales proceeds I to this). One of my better ideas for 2020. Feels like tax loss selling is causing the weakness.

It’s hard to beat free access to Morningstar via your Public library.

I have bought (and sold) cars as well as a motorcycle on Craigslist, but you really have to be careful there. There are a lot of crooks and tire kickers there. I almost look at the person who is going to buy or sell more so than at the vehicle before ai buy. If the person looks shady, I would walk away no matter what the deal with the vehicle is.

Since we moved to the NE, I bought a basic model Subaru Forester new. We paid $25k. It has been a great ride. Used cars arn’t as good as a deal relative to new cars as they used to be before the GFC. For Subaru’s, you can do better buying new, imo.

I still think that even if the absolute odds or probability is not knows, the Kelly formula is reasonably to determine A) Maximum bet size B) sizing bets relative to each other Apparently, the input size are based on estimating the odds, probabilities for each investment and each investor cannot have a precise estimate of each, but they should have an estimate of odds and probabilities nonetheless, as it it better than following the guts so to speak. At least in my opinion it is.

Great decision buying AMD. It continues to surprise me how some (only a few) companies can re-invent themselves. My son (who is in grade 12) alerted me about 2 years ago to what was going on at AMD; he and his buddies are into technology and he explained to me that AMD was a company on the rise. Alas, i was too busy thumb sucking to do anything about it. I use it as an example with him to how small investors can do well if they do what Peter Lynch advises: take advantage of what you see in your circle of competence. I was quite torn about selling it since my cost basis was so low. I like the management team and what they’re doing. I think they have been executing very well. Solid products, good growth in multiple segments and a really solid pipeline. But the valuation has gone bananas. 200+x earnings is too rich for me. But I’m definitely looking for another entry point. It’s hard to say whether this will trade at a fair value anytime soon. Thanks So, if you are concerned about taxes, why didn’t you wait a couple more days until next year and then sell? This would push out paying taxes another year.

Few responses often means that an idea just takes off. A long thread often means that an idea becomes controversial. and a battleground of longs vs skeptics. The performance in a lot of cases isn’ that great for those ideas.

GOOG is a whole lot closer to FV than where I bought it ((~$1050 blended). I sort of try to reduce positions when they approach fair value, although with GOOG, it’s a tough call. CTVA is my 3rd round trip this far.

I was looking at this stock for some year end dislocations, but there isn’t much volume. I don’t think their last acquisition indicates that management is selective about where to put their money either. Shopping malls in Jacksonville ? http://ir.ctlc.com/file/Index?KeyFile=401493134

Yes, I believe it is correct to be concerned about this. Once the gears of bureaucracy start to move, it can be hard to stop them. I would also think that the OTC probably is biased as they would benefit even if just some compansies chose to disclose financials on their system, regardless of collateral damage to investors into those companies that don’t. Then on the other hand, there might be unique bargains available to individual investors who are willing to play a long term game regardless of liquidity issues. Any fund that might own these stocks now may be forced to sell these stocks, if the rule indeed gets implemented.

Reduced positions in GOOG, FOX and CTVA today.

Shows I am liking right now: Daybreakers : witty version of Mad Max and Walking Dead Expanse 3rd season (Amazon Prime) The Boys : Cynical Superhero series (Amazon Prime) The Boys Season I is great, but Season 2 is a big let down. I am two Episodes in and I think I give up.

I bought the door myself and had a handyman install it. I also had the issue that the price most contractors charge wasn’t transparent as they both had a margin on the door and Charge for labor. That’s why I bought the door myself. This also was cheaper than going with Home Depot doing the whole thing. I think contractors are afraid that customer size the door wrong and want to take some margin on the hardware itself. We did this with our last kitchen renovation, the same way. We bought all the hardware cabinets, stove, tiles vents ourself and had a handyman install it. Cost us ~10k back in 2010. Now people pay 5x as much to get similar work done. Crazy! (My wife had awesome connections to Asian hardware stores in the Bay Area back then). Cabinets cost half what we would have paid at Home Depot.

My door was a Home Depot Fiberglass door back then. I was pretty satisfied with the quality. The door looked similar to this: https://www.pella.com/doors/half-light-entry-doors/pella/ I also recall I got a bit money back from the utility back then for buying an energy star product. There was a little bit of extra work required to get the door to fit, because my house back then was build in the 70’s so shoddily that all the frame dimensions were off a bit.

Seems expensive. I got my front door replaced a couple of years ago for ~1.5k. This was for a larger door (~60” double door with glass). The door cost was ~1.1k ( Home Depot) and installation ~ $400. This was a couple of years ago when contractors were really hungry for jobs. I am hearing nowadays that people get outrageous quotes for all sorts of things. Home Depot also has an installation service, so it’s worth getting A quote from them. A door installation isn’t really a difficult job as long as the size doesn’t change, so even a good handyman might be able to do it.

He is definitely an out of the box thinker and he is a good investor. I hope he stops by here every once in a while. I feel we will hear more about him.