Spekulatius

Never invested in this company or followed it, but just by reading the last couple of pages it seemed they tried to time the market like some macro tourists. (read: they are not value-investors.) Is my understanding correct? Yes, they made a bet going long garbage and short the general market, which didn’t work out. They also had a deflationary macro view and did lose money on inflation bets. The latter are gone or worthless , as are the shorts on the general markets, but they are still long garbage and even adding to it (Seaspan). The latter may work out due to better protection and management (Sokol), but you know what they say when good management runs a bad business...

I can live with terrible Communication when the execution is good. Terrible execution with terrible communicsti9n however is a real problem. FWIW, I own several insurance co. with decent underwriting, and they can do high single digit ROE currently with zero equity exposure. FFH has ~$4.6B in equity exposure (this has been flat over the years with ~$12.5B in equity (numbers are from memeory, so may be a bit off), that’s roughly 37% of their equity. I am guessing they can’t go higher, unless their stocks actually start to appreciate so the addition mal equity exposure becomes “House money”, and not necessary to support the insurance business statutory capital, like is the case with BRK.

I agree with then concept of trading volatility. If the current prices environment of instability and volatility persists and the market just swings around in crazy moves and ends up going nowhere, this could become very profitable. Note that POTUS always talks up progress in trade talks with China, when the market tanks, with no follow up. Seems like a good bet to sell these releases. The Fed talk yesterday very much reminds me on Bernanke‘s armchair talk in March 2009, which pretty much marked the bottom of the bear market. It’s a different situation now, but this talk was clearly orchestrated to calm the markets.

It’s not a truck, but I absolutely love our 2015 Subaru Forester. Mileage is actually better than with my 2012 Hyundai Elantra on our suburban roads (31 mpg vs 28mpg LT average) despite being heavier and having a 4 wheel drive (which is very handy in winter). The progress in mileage in the last few years has been significant.

Pretty good talk from Damodaran about the current equity risk premium and why he feels good about owning equities right now:

Market timing is tough, but both Howard Marks and even Graham to some extend thought about the market in a broad context. Howard Marks reminds us where we are likely within a cycle and Graham suggested to put a higher percentage of a capital into bonds when the market was high and bargains were few, as far as I remember.

I own at least one of his picks, Ming Fai (3828). They shut down an unprofitable business line the past few years, are paying out a big dividend. Market cap ~750m, ~300m in excess cash and 100m in net income last year. Decent company & very cheap. Allan international is similar company. Webb sometimes uses his stake to push a bit for sensible capital allocation so I guess he generates his own catalysts? My guess is that he's not very busy with looking for 'catalysts' and just buys reasonable companies at unreasonable valuations. Though I have to admit I don't understand all of his picks. How do you know what he owns? I don’t see it on his webb site.

The deferred taxes on LT gains need to be taken into account, since the cost base of their long term holdings is so low.

Other than Trump being a wildcard, I see no connection to any investing strategy.

FWIW, very few companies in the auto business have FCF = net earnings. For many, it was about half that number, which makes even a 5-6x PE less enticing. Some of the auto suppliers don’t have debt disruption risk, like for example seat manufacturer LEA. LEA is one of the companies that deserve a second look, because they do actually generate a lot of FCF and are well managed with a solid balance sheet, unlike ADNT. The problem with suppliers is generally low margin and fixed cost, as well as dependency on fee customers which could go bankrupt and pulling their suppliers down with them. Another angle is to invest in EXO.MI, You get a double discount, as they hold discounted FCAU as well as a steep conglomerate discount, despite being a good capital allocator.

I am guessing that was the bank where the CEO felt he needed to dance as long as the music keeps playing. One real lesson from 2009 is that you never want to be in a situation where you needn’t dilute at the bottom. This is what killed many Bank stocks, even those those that survived. It’s sometimes that little extra buffer on the balance sheet that doesn’t matter in good times that can make all the difference in bad times. I never worked in banks, but have been with companies where management destroyed a lot of value (99% from top to bottom in one case and 70% in another) and they still made out very well. Quite amazing how incentives are stacked.

i bet Warren weighs the price declines for his holdings vs the price declines for BRK, and BRK until today has actually outperformed. My guess is that he put much more funds into adding to his holding than buying back BRK shares. This may changes, when the relative value proposition changes.

Bought some TRUP (starter position) after the discussion with OG Investor. I am not totally comfortable with it, but I feel that I can’t let a potential very long term compounder slip away. It also helped that the stock was down a decent amount today. Added a bit of FDX. I have some high priced shares that I am probably going to sell in a month to harvest some tax losses.

Things can always get worse. I share your concerns regarding macro. I do think that a lot concerns are baked in current valuations.

Brkb still significantly outperformed the SPY over 1,3,6,12 month periods. I bought it cheaper in May last year. The stock was a safe haven until Dec 2018 when it started to crater with the market.

Looks like I am down 5-6% overall. It did feel much worse than that.

Interesting list. I own 5965.T (Fujimak) and 9142.T ( Railroad/ real estate). The performance and moves of Japanese stock made very little sense to me, but there are a lot of cheap stocks out there. Overall I have done well over the years on contrarian buys of decent to good business.

FB May be one of the best “obvious” or plain sight opportunities out there for 2019. I bought a bit more on the last trading day. It will be interesting how they navigate the choppy waters this year. I feel like the reputational damage is fixable. I also think they could surprise on the cost side, relative to their projections in Q3. GOOG is essentially flat in 2018, while the business has grown 20%+, so its significantly cheaper than early last year.

The Redfin chart shows some seasonal cyclicity for real estate prices, but no proof of a downturn yet. It is normal for RE to rise in early in the year and and recede a bit in fall. It‘s clear that RE has slowed, but I don’t think this is visible from the charts yet. Besides that, the Fed supposedly doesn’t care about asset prices, also I think it should at least to take into account housing prices, because they translate into cost of living for the majority of people ( 2/3 of the people in the US own rather than rent). The only central bank that actively looks at RE prices (to my knowledge) is the central bank of Hongkong, probably, because RE is such an important part of their economy.

Wells Advisors has an article for income stockideas for 2019. EPD and DWDP and PKG look interesting to me. Link is for customer only: https://www.wellsfargo.wallst.com/EBrokerageDesktop/Report/2303-f93fdf5576c8400faf98347ebadd353e-40

Which issuers/CUSIPs fit your description? ETP PRC ( a floating preferred) is one that fits my bill and which I own in small quantities. Yielding close to 9% when I bought it. BB+ rated and metrics are improving. The bonds are BBB- rated, I think and also due to for an upgrade. Does ETP PRC generate a K-1? If so, does it have any UBTI - just checking for the IRA. Thx. I believe it does generate a K-1. It should not really create UBTI, so should be Ok to hold in an IRA on reasonable amounts.

Which issuers/CUSIPs fit your description? ETP PRC ( a floating preferred) is one that fits my bill and which I own in small quantities. Yielding close to 9% when I bought it. BB+ rated and metrics are improving. The bonds are BBB- rated, I think and also due to for an upgrade.

The growth comparison during the period and 1913 until today is irrelevant. All 1st world countries show lower growth as they come of a higher base and also be sure population growth has slowed. We simply don’t habe the growth today that we had 100 years ago in any 1st world country.

My best value ideas (risk adjusted) are preferred and selected bonds. You can buy lower grade investment quality or high grade junk with good coverage and pot. forcredit upgrades with around 9% yield. Upside potential is about 20% plus whatever you earn in interest until they recover.

I think Trump needs to own his mistakes. The Fed can own theirs, if it comes to that. Also, where the the conspiracy if a Fed chair elected by Trump raises the interest rates? He could have just kept Janet Yellen, if he likes the low interest rate policy? Anyways, I see this correction more like the one in 1987. back then, we had rising interest rates, a fairly strong economy, the Regan tax cuts buffing the economy and a considerable stock market rout they in the end meant very little for the real economy.