Spekulatius

Almost $6B in debt at the Holding Company, up from $4.8B. This is a pretty substantial leverage.

I think the investment is done now more in nonpublic startup companies or those just past the IPO hurdle than it used to be. Space X, Uber and other Unicorns all these biotech startups spent plenty and perhaps some what foolishly in come cases, but some work out and will mature into major companies. In the past we had Xerox Parc and ATT labs but those didn’t really benefit their parent companies all that much, although they created plenty of benefit for others. now it’s outsourced and institutionalized kn dedicated startups. Then the other fact is that companies have become way more capital light, and more profitable at the same time, which generates higher FCF and hence allows for more buybacks.

WMB (added in size) and a bit of Berry. WMB was funded from proceeds of ENB sales a while ago.

Bought some CWGL. Hoping for $8 quickly:

I agree that Tobias Carlisle podcast production quality could be better. if I find myself in an episode where the quality is unacceptable for my ears, I just delete it and move on. The “ Meb Faber show”, “Compound Investing” and “Invest like the best” have excellent production quality.

Individual names are <> stock market indices, You can find quite a few good companies that are off 30% from their heights and probably valued lower than their LT averages. With respect to the overall stock market, I agree that Europe does not look that cheap and differences in quality account for much of the difference in PE ratio between Europe and the US (foremost the lower representation of faster growth tech companies in Europe vs US). Anyways, it is a good idea to keep an open mind for opportunities.I mentioned already 50p other GBP property companies. Another one are hidden champions in cyclical sectors, imo.

Yeah, but isn't that like Adjusted EBITDA returns? He would've done great except for all the losses and bad stuff that actually happened... He may be a decent stock picker, but it still doesn’t change the fact that he is a lousy investor , if he frittered away his gains with hedges or selling too early. In the end, only $$$ count.

Interesting! Any suggestions there? DJAN.L. Very clean balance sheets owning residential and commercial real estate in the UK and to a lesser extend in the US (East coast). They readily publish NAV. The stock has an interesting history and was initially a plantation (hence the name). It became a property stock after WW2. It is run more for wealth preservation than returns, controlled by an owner operator. I own a little. 3rd Avenue‘s real estate owns some U.K. property stocks as well. It’s worth checking out their letters and holdings.

U.K. is a great Real Life Experiment on leaving the EU. They have elected Boris Johnson, who is going pursue the exit, either hard of soft by October this year. We can watch the show from the sidelines and take positions as we fit, as some volatility can be expected. There are quite a few cheap stocks in the UK, like property companies with very little leverage trading at ~50% of NAV. I think there is a setup for some great investment opportunities. I would caution on the banks, but if they fail, they will just be nationalized. Contrary to the US, thats not a big deal in Europe.

Hussman may be Smart, but he is a lousy investor. He got lucky in his in his career, but had been wrong ever since basically betting that the world goes to hell in a hurry. He is the financial snake oil salesman of the 21 century. It is obvious that investment process is flawed if cant capitalize on the GFC. Folks like Druckenmiller or Howard Marks who are certainly skeptical too, but are able to capitalize on opportunities as they see them are way better investors. The problem that goes like Hussman (and Mauldin) have is that their views are part of their “branding” and they probably would see very adverse reactions from their investors, if they would change. Those static opinions are a strong impediment to being a successful investor imo. People should avoid everyone who claims of implies they have hey can predict how the future unfolds, as it will very likely be hazardous for their health, even if those prophets are right.

Whats the reason for the switch? You see more upside with PayPal? Long term yes. Short term also capitulating to any bearish ideas. The original idea was to invest in some recession-resistant dividend paying companies with at least some pricing power. But growth has totally outperformed this idea. Mostly I think I need to move towards a more passive (indexing) option, at least for the near term (3-5 yrs I'd guess). Over the last year I haven't really had the time/energy/pleasure to actually do any investment research, and the results reflect it. Even worse, I haven't really cared... The reality is given my situation (age, net worth) my ROI is higher concentrating on my career than on my portfolio (ROI both in terms of amount and volatility of cash inflows). Something about whole-assing one thing vs. half-assing two things ;D ;D Staying out of the politics section saves a lot of time. Even watching shows on Netflix is more productive.

Agreed, GOOG at a bit more than $1000 seemed like an obvious value - almost $50 in real earnings run rate or 20x earnings for a 20% grower. I had some from the dips in 2018 and loaded up more, such that it became one of my largest positions on par with BRKB. I take this any day over these money loosing tech stocks that may not grow all that much faster and trade at mind boggling valuations with huge GAAP losses. Same with FB last year. Of course even these things can go wrong, but odds are pretty good they those bets work out.

I sold all my shares a few weeks ago around $35. I wish I had your optimism regarding line 3 and 5, the way things looks right now, there seems to be real risk they shut down those lines and will never get the replacement assets in operation.

Bought a starter in COST clone BJ, possibly just a trade.

I recommend this one if you like crepes (The Billig): https://goo.gl/maps/TTAcH1vQF9tyHKNV8 We also enjoyed the Montmorency falls.

Hard work= more chances to be lucky Skill= Improving the odds to get lucky. Most people who get lucky do both of the above, but as always, exception confirm the rule.

If I had to condense what's happening with respect to interest rates I would say that the world is long central bank confidence and short common sense. I have no idea what is going to happen and how it ends, but I think it could be a trip to financial market hell like in 2008 and possibly worse. Going long real assets like real estate, gold, land etc. seems to be one way to escape. Even buying bitcoin seems to me a better bet than buying a 100 year bond yielding nothing. At least with bitcoin, you have a chance to make money (vs fiat currency ), while with a 10” year bond, you are almost guaranteed to be a loser.

Bought a little GRIF (piggybacking on BG2008) and added to REZI.

Is there any plan to use more debt with the company? It looks cheap on an EV basis, but if they don't use any more debt, I don't see how that changes. Yes, it trades at around 7x trailing EBITDA. I like that they essentially use zero debt at this point. One thing to consider is that interest rates in Mexico are fairly high right now (be careful with MXN on margin , I paid more than 8% on a little of margin debt at Interactive brokers). Megacable is a pure play broadband bet for me. I think the economics are close to what they are in the US and much better than Europe, and the penetration is still low, so there should be a good LT growth potential.

This is an example of a badly produced podcast. The talk is monotonous (single person, no dialogue) and the podcast is way too long. Not recommended, unless one is a Singleton junkie. I put it away for good after 20 minutes.

Adding to MEGACPO.MX (Megacable)

^ Negative loans still have amortization as main cash expense for the borrower, so default is possible.

I am waiting for the day when a couple of negative interest rate loans default. If indeed momentum and hope for capital gains (betting on negative interest rates becoming more negative) is the driving force, then everyone knows it’s a fools game and jut hopes they can sell before the rest does and once momentum turns, things could get rather strange when everyone runs for the exit.

Same here.

I believe the increased valuation in some stocks is due to the rush into compounders. I believe after one of the longest economic expansion in modern history, a lot of companies look like compounders, but are more cyclical than they seem. We will see after the next recession. Since many of them are roll ups (albeit well run roll ups), there is also reflexivity at work, such that a high valuation enables faster growth through acquisitions, due to lower cost of capital. Example are Heiko, ROP, DHR, TDG, ROK. They are well managed companies well worth keeping an eye on, but the valuation is a couple of bridges too far, since investors now discount many years of current growth rates into their stock prices. I'd agree with that. As an example, ROP has spent $11 bn on acquisitions in the last ~9 years to grow FCF from $471 mm in 2010 to $1.3 bn today. Meanwhile, EV/rev has more than doubled (~8.5 now from ~3.5x in 2010) and EV/FCF has nearly doubled (upper teens in 2010 to low 30s today). ROP acquisition targets aren’t cheap - the last one was done at around 17x EBITDA, so that keeps ROIC down. However, their return on tangible capital is very high due to the asset light business model. They can pay the high prices, because their cost of capital is very low, due to their high valuation and because debt is very cheap. Nevertheless, the comparison with Valeant doesn't hold water - ROP leverage isn’t high and they don’t buy cigar butts (at least they haven’t so far) to milk cash. my concern is simply with the valuation and the suspicion that some of their business lines may be more cyclical than thought. The one company they I am a bit suspect of is AVGO, especially after their pivot into acquiring software companies (and low quality one at that - CA Technologies).