Spekulatius

Weeds are flowers too, it’s just a matter of perspective.

A dog is worth it and does not cost a fortune, if you treat them like dogs not like substitute children.

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Good summary of the current state in Ukraine:

@Ross812 I followed JCI for years, but never owned it. years ago, it was predominately an automobile supplier (batteries, car seats) and while looking cheap, it’s wasn’t that interesting to me. They have post GFC totally restructured and transformed it by 2019 into an industrial focusing building (fore, AC, control etc) and that’s a much better business. I recently just got aware of this when I read their earnings report (I typically skim though current earning reports especially when the there is move ent in share price and like what I see. it’s not deep value but cheaper than it should trade imo. Anyways, it’s a small position for me still, but I added a smidge this Friday. So far, I have not see any yellow or red flags besides the light guidance for Q1 2024. Let me know what you find out when researching JCI.

This has “Dancing as long as the music is playing vibes”.

I prefer JXN in that space, owned it two times but are currently out. Both BHF and JXN are black boxes in terms of accounting, but generate a lot of cash that’s used for buybacks and dividends in JXN case. They tend to sell off when financial markets get stressed. Another on in th energy space I recently found is IMO (oil sands business from Exxon). They reduced shares from ~850M shares in 2016 to 540M shares now (after the latest issuer bid).

Sold DOCS (today) and ESS (yesterday). Reduced CPT by 1/3. All in tax deferred accounts. I am surprised how much ESS has outperformed peers CPT and MAA.

Ukraine needs an air force. Not since WW1 has any war being won without dominating the air. I think that's the missing piece that Ukraine needs. It tough because Russia still has viable anti aircraft defenses but a win isn't possible without having air presence. Otherwise it's cracking trenches bunkers with stormtroopers artillery / Himars and that's a slow and bloody process.

Selling remainder of POAHY (small loss) $BAC and $GS in my tax deferred account (very nice gains on these just 2 month old positions)

Sold $LHX and $CASH in tax deferred accounts.

Bought a starter in $JCI this AM. The stock seems to be down based on their underwhelming forecast for 2024 but other than that it looks like a very solid industrial around commercial building automation / HVAC at a reasonable price.

Sold the remainder of LUV in my tax deferred accounts and my highest cost basis shares in my taxable accounts. Worked out very satisfactory due to averaging down. I have no idea why it went down so much, nor why it went back up so quickly (lower crude prices?).

My guess is once inflation hits about 2.5% run rate, the Fed starts cutting. My thinking is that at 2.5%, they can cut to 4.5% and still have a 2% buffer to being "neutral". Timeline would be the first cut by mid year 2024.

Harris was a great business (satellites ) while L3 was an acquisitive rollup with somewhat subpar margins. I m thinking that similar to the Boeing/Mc DonnelDouglas merger, the junior partner won with LHX and now the business looks more like L3 rather than Harris. CEO Kubacik is from L3 as well and continued the acquisitions after the L3 merger. I particularly see Aerojet Rocketdyne as a questionable fit, since they now compete with customers. I guess AJRD was acquired because they could buy it (LMT or NOC were not allowed to) not because it was a good fit. In any pandemic, case, to me, the IR day presentation does not look all that convincing. I do like that Shaw is not keeping management on a shorter leash.

US overthrowing Maduro is not that easy. It’s not so much Venezuela’s oil production I am worried about but Guyanas. They are small now but the production is supposed to grow over 1.2M BOE in 2028 and that’s significant. If Venezuela does controll the offshore oil fields, none of this will happen.

Checkup on LHX. Looks like they stop deals for a while which should not surprise anyone. https://seekingalpha.com/news/4045760-l3harris-to-halt-ma-activity-for-foreseeable-future I looked at the latest shareholder presentation and quite frankly wasn’t too impressed. very modest margin improvement projected from a bit less than 15% to 16% in 2026. The 2026 FCF target of $2.8N translates into $14.7 in FCF/ share which I think is a bit less than what forecasts are projecting. And all that with quite a bit of leverage also the sale of the commercial pilot training business will reduce this somewhat. The rest of the shareholder presentation was just platitudes (digital factory, cost saving blah blah blah ) https://www.l3harris.com/sites/default/files/2023-12/LHX_InvestorDay_ExecutivePresentations_Final.pdf

I do. It's sort of an irish classic now. Many Irish folk bands play it.

@Xerxes Yemen was always about controlling trade routes for spices in the Medieval times (and probably before) and now for all sorts of things including crude / NG through the Suez canal. Attacking ships is unlikely to make them friends - they get similar status than the Somali pirates on the African side.

if a stock drops a lot, the tax loss can be worth more than the shares you hold. Example - assumed 30% tax rate. Stock drops from $5 to $1, so that's a $4 drop x 0.3=$1.2 worth of tax writeoff. One of the issues with the US tax code is that you can only write off tax losses against gains in the same year or use them against future gains. It's set up asymmetrical that way. In the tax bubble I have seen folks using their house because they were taxed on gains (from equity grants) that they failed to realize to save taxes. After their stock plummeted in 2020, the unrealized gains vaporized but they were still on the hook for the taxes from unrealized gains.

Houthis have been attacking ships including US warships since 2015. These idiots never learn.

The Houthi's in Yemen essentially try to close the Suez shipping route which is one my of the most important shipping routes for trade. My guess is that these cruise missiles come from Iran. My guess is that the US and allies won't let this happen and there will be a price to pay for the Houthi's of doing so.

The Guyana thing seems worrisome. there is a meeting between Maduro and the President of Guyana later this week. Maduro going through all the trouble with a referendum etc and then do nothing does not make any sense. As I mentioned before, he has elections coming up next year and he could lose, even with this militia controlling the streets. there is also a chance that if he rigs the election too overtly, there is going to be backslash from within Venezuela. So he may see himself forced to make a move prior to election to get a patriotic wins. Just because it is stupid and doesn't mean it does not happen.

Has anyone looked at IMO? I have rarely even heard oil bugs mention this one. It's controlled by XOM which owns ~70%. Seems like there is a lot to like - they are buying back shares like crazy with issues bids. There is another one going on for 1.5B CAD right now. Shares are down from 847M shares in 2016 to 566M and with the issue bid, it's going to be less than 550M. They also pay a small but rising dividend and the balance sheet is extremely strong - only 3.5B in debt or ~0.2X EBITDA. On the issue bids, it seems like XOM is selling into those and keeps their stake constant. I do think way back they owned 80% of IMO but not sure.

Same here regarding concentration but I also sleep very well. My best investment was LAACZ. Bought it in 2012 after screening for stocks with high share prices trading on OTC markets. My rationale was that stocks with high share prices were less likely to be crap and OTC stocks were most likely to be mispriced, but there were just too many of them to go through without and initial filter. the high share price was my initial filter. I did a fair bit of research on LAACZ and the owners back then and bought a ~10% position. Stock about doubled until 2015 (~$2000/unit) and then just sat there for years. I started accumulating more in 2018 until 2020 and more than doubled the position over time, adding opportunistically here and there (the units were quite illiquid) because I noticed that fundamentals kept improving and while the unit price stagnated. On the 2020 March dump I got 2 units more around $1350 or so. The buyout offer was for ~$10K in late 2021, so a 10x bagger for my 2012 units and 5x bagger for those I acquired later. My only learning experience from this is that if you own something (or even after you sell a stock) keep tracking it, it likely will become interesting again and some point later. I often keep ignoring this lesson to this day though. It's one reason why I like to buy smaller positions in a stock that I find interesting and reasonably cheap, but don't really have the conviction for larger positions yet. As I own and track it, I might get to the point where I get the conviction to bump up the position later.