dealraker

To the degree stock price number go up the resulting optimism turbo charges irrational expectations and wild-ass capital allocation. And this theme always registers the hardest within those we consider the brilliant minds of the era. It is nothing new. The circles of technology expertise and superb capital allocation only overlap to a small degree, either by skill or luck. But you can't grasp any of this until the stock prices quit going up. Nothing can be fully rationally discussed or analyzed until prices stop escalating and that particularly includes our tech and crypto worlds of today.

Often thought that a bunch of somebody's lofty rep and stock price would get slaughtered by the Chinese. Not much an acceptable view but mine regardless.

And makes sales of TRUMP non taxable is a given.

In 2018 friends wanted me committed from hearing me chant the 2020 election would not be honored. My attempts these days to get a discussion going about US debt being restructured fail. So my prediction that many productive assets will be temporarily obliterated in price as a source of funds chasing coins probably isn't doable discussion either. And I have a couple more predictions too. LOL till falling on the floor with belly cramps...we are in for some fun in the ole U S of A. Life is great...if you can stand it! A flee from Bitcoin to fund chase of TRUMP?

Dave I know nothing more that what you can read in any analyst report other than personally equating or linking FSLR's size position in its arena and my belief that regardless of tax credits and politics demand is going to be greater than supply. I had bought both FSLR and ENPH a few years ago and made crazy returns but sold. I see FSLR as possibly doing very well. Barron's also just wrote up on FSLR. I built 11 "solar" along with earth sheltered homes years ago (I built 52 custom homes) and have a personal residence 75% powered by solar. So it is an interest I have which further gives me bias.

JOE...maybe FSLR and LHX. A few aren't too short term, longer than most would think.

We were bought out.

None of these are either meaningful nor are they something I'd suggest. But out of sheer boredom in my tax free account in the last two weeks I have bought the following because they were somewhat cheap I think the economy (that's Biden's economy LOL) is far stronger that most wanna admit (and I think interest rates will go up too!!). None except a couple will be long term thangs: SHEL TTE MDT HAL JOE (added) UBER GSK CVX COP FSLR (rebought) AZN SRE (on the fires issue) CWT LHX CWK (added) MSGE NGG C (added) EWBC (added) SLB OXY FMC LYB DOW

As I've posted several times there's been ways to make an incredible amount of money being "associated" with Fairfax through the years regardless of Fairfax's stock price. The Hub insurance brokerage connection is or was the most important wealth builder for me outside of Berkshire and AJ Gallagher and probably the most significant investment I've ever made. It was just as successful as Fairfax has been in the last few years, an incredible literally guaranteed investment - but only in plain sight if you were associated with Fairfax.

There will be millions who feel empowered by the economic gains "entertainment" of others - two mostly - for reasons only a psychologist can interpret. Get on the ride nowadays with DJT and TSLA stocks as the campaign ain't askin'.

I have been a shareholder of Fairfax since 1994. Having Berkshire and Markel plus a mentor who held many of the out-of-the mainstream stocks was my ticket, it certainly wasn't some grand expertise or early recognition of greatness of Prem - although he was considered special. It was a culture I particpated within, a unique fun place to interact and invest. Although I was in the insurance business, most in that business had little knowledge of Fairfax, it was Marshall Johnson from McDaniel Lewis in Greensboro...his making a market for small insurance co's and banks and the links he had that awakened me. I checked my online and I added to Fairfax 27 times both on its journey down and up in the last few years. And finally, much to my surprise, Fairfax is now my 4th largest holding behind AJG, Berkshire, and Meta. I added enough although not near enough to both Meta and Fairfax to make a difference. That's something I probably would have done but not nearly to the extent I did which was fueled by participating on COBF. As I've often mentioned, knowing who to follow is my best skill, a thing I think most investors far under-rate as something that can, if you are programmed like me, greatly affect investment performance.

Sold Blue Owl today. I can't remember the discussion we had here a couple of years ago and who was a part of it, but it turned out wildly successful as we all bought around $10 per share and out at $24-ish. I sold APO but will retain BX because of insane gains the tax man, same less so with BN and BAM. I think these asset managers are wildly popular...too popular. It doesn't always go well for them especially with exponential gains so quickly. At least to me that's the case. Wasn't long ago that these guys were very unpopular.

As far as tops are concerned, as we watch the major beer/wine/spirits makers stocks plummet, I've had a view for some time that I think we now see: A major wipe-out of craft breweries. A few will survive of course.

Yes.

I simply find those that use Berkshire/Buffett/Munger for self-gain to be blandly down on the lowest of any possible level ----- simply incredibly annoying. But so many obviously first class people feel strong connections to these guys and enjoy doing so. I think it is probably related to personality types. LOL! Life is great...if you can stand it!

Berkshire and AJG are 4/5ths of my stuff; Lowes, Norfolk Southern, Erie, Brookfield(s), Brown and Brown, Mondelez, Coke, Pepsi, Markel and Fairfax take me well over 90%. I'm guessing I'm up a bit over 20% this year. I bought Erie after 1994, added some to Fairfax a few times in recent years, messed with Brookfield, and bought Cadbury (eventually Mondelez) in 2000. Other than that no significant portfolio changes since 1994. Lowe's, Fairfax, and the brokers began in the 1993-94 period; Coke and Pepsi go back to 1975. Markel began at the IPO 1987 or 88- can't remember, family worked there and the desire to buy was widespread among those who were knowledgeable financially. Norfolk Southern was a 1/27th (27 grandchildren, me the youngest) of grandmother's inheritance linked to the family's North Carolina Railroad stock. Much bigger railroad today. I held North Carolina Railroad for years until the State of NC bought us minority shareholders out at a bargain to continue the el-cheapo lease to Norfolk. I think business, not stocks. Hate trends and hot sectors...although I have owned Google for some (guessing) 12-15 years...can't remember. Sold MSFT to buy land. And I do now trade some in my 401K! (Which I love doing!) Probably wrote something in error, but I do that constantly and can't figure out how to do better. Oh...by the way, of the stocks I've bought related to the posters I follow here on COBF (their rants...not mine!)? I think I'm doing about 35% annual a year with those! .

Reciprocity...one of Cialdini's 7 for a reason.

I just watched a video of Michael Saylor saying he will be buying Bitcoin at "one million and then probably at one billion." So 21,000,000 times 1,000,000,000 is $21,000,000,000,000,000. Yep 21 quadrillion I think...fifteen zeros. There is a lot of wealth coming to Bitcoin holders! What will happen with all of that wealth?

Since I'm out on the limb this morning... What businesses are most at risk? My view is that while AI is absolutely as meaningful as "we" think it is, the capital mis-allocation towards dealing with it will inevitably prove unsustainable. So in my view the businesses getting sales and profits from AI spending are the most at risk of losing market cap over time, no matter what the growth of those businesses is today. Doesn't mean they won't stay in business and stay profitable, but Intel, Cisco, EMC, etc were....well, Intel, Cisco, EMC.....

The "time" thing Spooky gets hard, really hard. An example I've mentioned is Abbey Joseph Cohen and her incredible status that really got started in the mid the late 1990's. Even when she began her crusade of big cap promotions these stocks were (based on the outcome...any time period after 2001 - it matters little as they all prove it) over-valued. Not over-valued for that time period, but over valued even considering their prices decades later. Yet the parade she led kept on for years and she still had her reputation - despite the outcome - all the way up until 2008. What popular "analysts" today are wrong? Well, you don't know yet.

So being both old at 70 and having lost my parents at a very early age basically I got throwed (pardon my grammar...but I am from the south) out into the real world financial abyss long-long ago. So I've seen things, things that see-saw such that it makes the mind come to life with both excitement and anticipation. Here's a good summation: I own the best lots in my waterfront development, a development that was done by the family builders supply and millwork where now I am a 25% (was 12.5% until last week) owner back in 1980 and I had enough position and luck in the family to get to choose my place to live. Today my southeast facing waterfront (don't ever buy a west facing home on water unless you want to boil in summer and freeze in winter) home and land across the street (large acreage...3 digits of land acreage) would sell for a big price. I have seen three times in my life living here where I would have had a reasonable amount of difficulty selling my home for 50% of tax value, and once where I'd have been lucky to sell it for 25% of tax assessment. Times change. Today is not one of those times when things don't sell well. The world is full of people in full mode of desperately wanting eggs from others baskets to come to their basket! Fear ain't happening, but greed is glory! Today in this world we just gleefully elected to the pres a man who has been a comical failure in business, yet a resounding success in consistently establishing and maintaining a profitable cult-like following. But business performance wise, that's net profits from sales, the pres stuff shows there's only a massive decay of wealth for 50-60 years from keeping up with inflation. It doesn't matter today because things with little sales and no profits have huge market caps and these aren't just the pres's holdings such as DJT, these wildly "valuable" things are literally everywhere. Money chasing what moves the fastest is the theme. It isn't new and it is not unique whatsoever that the desperation to chase dance comes. It happens repeatedly over time. There will be a time when I won't be able to sell my home and land for 50% of tax assessment value again. Count on it. The more intense today's chase becomes, the more intense the future discount. Miss-allocation of capital is the long game weighting temporarily obliterated by the chase of voting. Welcome to boom and bust capitalism. Oh, one last thing: Could the Donald become "capitalism's" most disliked person- even for no real logical blame at all? If you aren't quite sure of that answer you've got "wet behind the ears" as we say in the south. Life is great...if you can stand it!

Most railroad discussions are stuck in the past, they discuss operating ratios and HH. Here we go, slowly getting up from the Rip Van Winkle to what has been the New New Thing for a while. Very simple and obvious place to start right here. And unrelated to this article....yes the CP thing does seem to make sense to me. https://www.trains.com/trn/news-reviews/news-wire/carload-considerations-will-pricing-above-inflation-work-indefinitely/

Wells Fargo likes the AJG acquisition: Equity Research Price Target Change — December 9, 2024 Insurance Brokers Arthur J. Gallagher & Co. Reaffirm Overweight On Accretive AssuredPartners Transaction Overweight Price Target: $344.00 Our Call We raise our estimates and price target for AssuredPartners deal. Our EPS estimates go up 9.6% in 2025 and 9.2% in 2026 and price target rises to $344 (from $315). The expected deal accretion and favorable multiple paid had AJG outperforming peers. Out year estimates and price target go up: Our 2024 EPS estimate is now $10.03 from $10.11 while our 2025 and 2026 estimates go to $12.60 and $14.30, from $11.50 and $13.10. The changes to our estimates reflect the incorporation of the AssuredPartners transaction as AJG stated on its call there was no other change to its financial condition since it last gave guidance. Our price target rises to $344, using a 27x multiple on our 2025 cash EPS (24x 2026) plus $4 per share for our clean coal DCF. More thoughts on the multiple paid: Gallagher is paying 14.3x EBITDAC (13.3x when adjusting for the $1b DTA with the transaction), which screens favorable to other large broker deals (EBITDAC multiples of 20x and above). We think AJG benefited from the PE partners looking to monetize the assets (they will be fully out of AP with this transaction) and they are also known not to pay up for deals (Gallagher also received a great price when buying Willis Re in 2021). Synergies could be conservative: Gallagher is looking for expense saves of $100m, 5% of AP's expenses, which could prove to be conservative in our view (Aon/NFP was a lower 3.5% of expenses, while MMC did save 15% of expenses with JLT). Further, the revenue synergies outlined in the deal ($60m) could be higher as well as they ignored any revenue synergies from the Risk Management business as well as on the wholesale side. Thoughts around owning a broker in the midst of a large deal: While we recognize there are often pitfalls to large broker deals, we believe the financials outlined with this deal are achievable and the expected accretion as well as low multiple paid has us viewing the deal favorable, even against the backdrop of an industry that often sees noise with large deals. AJG has a strong track record of integration larger deals stemming from its internaional expansion in 2014/2015 and Willis Re. Valuation post transaction: AJG shares are now trading at 23x 2025 and 20.4x 2026 EPS estimates, favorable to historical levels given the expected accretion with the deal (average P/E is just around 23x). On an EV-to-EBITDA basis shares are at 15.9x 2025 EBITDA post the equity issuance (and our assumption of $4.5b debt issued with the deal), versus the peer group (ex WTW) at 17.3x on average and 17.1x prior to the transaction. For additional thoughts see first look note & conference call takes.

This is a big one: GTCR Announces Sale of AssuredPartners to Arthur J. Gallagher & Co. for $13.45 Billion

It is going to be interesting to see what the Canadian rails deal with as to the DJT administration. While I own them all and don't consider the stock prices crazy high I'm still not aware of what's coming along to give them more volume and sales growth outside of inflation pricing. I bought NSC averaging in around a bit below $200 during the East Palestine tragedy but as of yet I've seen no other stock prices I'd be tempted with given what seems - at least to me - to be little coming along to up their game. NSC will get their OR down some from where it is now but that's already in the stock price it seems to me. That said, I'm an long term owner but I'm not an expert of the cycles and trends that make would help make a good timed buy.