dealraker

StevieV I was referring to either privately owned, I am a part owner of a builders suppy and a millwork business, or public as I own about 250 stocks- although I'm 80 percent weighted in just two stocks. There is no difference as to staying connected/attached to the things that create wealth in capitalism. That said, I do absolutely know for certain that Walter Schloss types and right here Parsad can be successful buying/selling shares of stock. This model is an easier win in tax free accounts of course. I'm just not programmed or capable to do it and as of yet in my life I personally know no one who has gotten wealthy this way...and I know a LOT of wealthy people.

Very likely because I've seen so many cycles from 20% interest rates down to basically zero, inflation from way up in the double digits to whatever it was when lower, I'm far-far-far away from the fears that seem to be geared toward "folks" that just don't know enough. I personally think for most investors, including those thinking they are smart and thus able to maneuvre around thus escaping the downs, that the biggest risk is not being a participant. Again, I know endless wealthy people - to some degree I was incredibly lucky to have lost my parents early and thus forced to get out and about and I had endless connections from both family in political and business positions and ownership. For me I summarize it this way: People who are in business and who avoid crappy endeavors, trendy/silly things...people diversified (to some degree) who stay owners of business? They have ALL the money. People who sell, people who go to cash or skirt in and out of endeavors, and especially older people who go to cash, tax free bonds, or whatever they do to distance themselves from operating businesses? Their family money simply goes away...and NOT slowly. Inflation and spending send it flying away to others. And it really doesn't get much more complex than that--- given a lot of time. And most of you here have a lot of time left. The more direct your connection is to successful businesses the more money you will have over time. My biggest fear is the big boys take away all the good businesses while little people chant "I won" by selling out (at what they thought was great life altering price).

Most likely when chief economists of any political leanings begin speaking in "Cinderella" or "Goldilocks" tongues as in 2007.

Yes. When Berkshire gets left behind by Mr. Market...it is a wave that slams into the beach. I have a friend who plays this wave. He goes in and out of some etf (can't actually remember which) vs in and out of Berkshire. He has done absolutely grand for years in a tax deferred account getting in the high teens returns.

Always remember that in 2001 or so Jack Welch retired and went on CNBC (which GE owned) repeately stating GE's 17-18 percent annual earings gains for years and years to come. Jack was the most respected businessman in the country at the time and most likely he actually believed what he was stating. A few of us had spent years exploring the internals, the actual financial figures GE posted up, and we thought the company was worth zero, that's nothing spelled NOTHING. We wrote, published, and took the endless punches. It isn't an accident or some deep internal personality disorder that causes me to fabulously enjoy Gregmal's posts here. I'm not a cultist type either. But the damn economist prediction crap is nothing but worthless babble. The perfectly obvious screams often. In the early 2000's we had two handsome 35-40 year old men come do an investment seminar in Lexington, the famious little man Jimmy Rogers came. These guys "summary" was that investors should buy bank stocks, no accident given one worked for First Union the other Wachovia. Jimmy Rogers chanted commodities. Our investment club quickly bought more bank stocks, First Union and Wachovia. A couple of us began a long and finally successful "begging" to get the club out, that's OUT, of Kudlow's Ciderella Bank stocks. Was it not perfectly obvious when every single childless US couple was buying 2nd, 3rd, and 4th homes and investment advise always mentioned "beds and baths"? All those dudes - all of them - were wrong, wrong, and more wrong...as usual. Worthless jargon, babbling babble. Head spinning garbage slinging. Harry Dent was raging his expertise too during this phenomenal era or predictor worship. Experts parent ego states laying out musts, oughts, and have to's to followers child ego state. Copy/paste to prove your submission? Not my thing.

Simba...that last paragraph? Correct.

Bitcoin is the need to be free of constraints. Stopping or regulating it just means creating something else.

And lastly as I'm in rant mode obviously... The blast isn't likely to be expected. I think whether it is some kind of extended grid outage or bomb in a populated area - that everyone who can should have cash on hand to last a while...hopefully cash will be accepted (or maybe it will only be Bitcoin). But the "event" isn't likely this most ever predicted upcoming recession of 2023. The market blow-up event will be something you aren't reading long seemingly near panic sounding narrations here about. Life is great...if you can stand it. Prepare to be surprised when you least expect it. Rembember budgets were balanced in the year 2000 and tech stocks were soaring while Buffett was the biggest idiot loser in the history of investing. Jack? Jack was the world's hero...as was Johnny (Chambers) and Ace (Greenberg). All the outcomes of that were expected, right? Kudlow's "Cinderalla Economy" and nirvana for bank stocks? This upcoming recession is the end of the world as we know it and Burry briefly said (before he deleted it) "sell."

If you are a value investor focused on historical valuations, cycles, and the resulting most likely stock prices then surely you'd be selling some things today and adding cash. If you are more business focused and believe - and see easily or clearly - that strong businesses or "good" businesses gain over competition or simply gain when there is less competition hopping onboard (during recessions) - and thus less stock price/earnings focused? Well, it is a sound plan to just hold your interest in the businesses, particularly if you do not own the things that go balistic nuts on the upside during upcycles. I'd sell AJ Gallagher, Lowes, CME, ICE...basically all of them with a GE of year 2000 PE of 45-50. But the growth stocks I own tend to top out in the low 20 pe's and in taxable accounts selling and coming up with new ideas or wating for a re-buy is beyond my ability. "Hey man, I sold it when the PE was 23...waited 5 years and bought back when the PE finally fell to 15...although earnings had doubled." And, "Oh...and one more thing, my fed and state taxes were..." (so I lost my ass on that one). Avoiding lower quotes or staying on a forum where when things fall in price there's an endless parade of "I'm 20% cash" or "I'm 40% cash" or "I'm 100% cash" can get a tad over in envy-ville. I've been on forums now for 30 years reading posters chant up their cash levels. My cash level during all this time? As close to zero as I can possibly get it.

Or is it capital allocation? Somewhere around 35-40 years ago the oldest owner of our builders supply businesses said, "We should sell-out all but the original location, sell all our rental stuff, and invest in Lowe's because they are going to beat the living hell out of us." That's business, the successful version. Wasn't my idea, but man-oh-man have I benefitted from it. We tried to get Lowe's to buy us; they weren't interested. And sell Lowe's when? The bottom? I'll call Burry and ask him.

I recently went around my town and told all the local owners to sell their thriving businesses, join my "business is overvalued" online macro forum, and go to cash chanting fear (and of course grievance of the fed) while repetitively citing the upcoming collapse - most ever forcased downturn. The model states emphatically that we/they will buy all these businesses back in a few months from the new owner idiots when today's trendy/expert fund runners (you know the names....they are posted here every day) vision of Armageddon arrives. That said, 40 years ago Clemo Glosson sold his local large local trucking business for $13 million, the new owner quickly went bankrupt, and Clemo and his son Doug (my age) bought it back for a far lesser amount. Unfortunately it went down yet again under the Glosson ownership after a few years of struggle. And then my family sold the local newspaper to the NY Times, the NY thing was struggling and the small towns were thriving. And...(you know the story!) For the life of me I can't figure this crap out. Life is great...if you can stand it!

Oh not even in the 0.2. Some years ago I looked at CWEB, KWEB, BABA, BIDU (our club did well with BIDU but we sold it early), JD...all the typical ones but just sort of meeked away as is the norm. But I thought NIO as by far the most rediculous of them all and one night with a couple glass of wine in me I made a limit order after Angela said "Boy you need to get some stimulation in you!" LOL. I bought $2500 or so of NIO. Yea, I do know that it went to $60 or so and is back to $10-ish or whatnot. So with CWEB, NOAH, and NIO I'm in the NM category. NOAH is of course just like FANH in that the whims of authority restrictions are forevermore waiting to stamp out any success they deem either too much or hurtful to citizens...or just to be mean.

Also have a very small investment in NIO, one I've had since the stock was a tad over $2 per share. I don't much even think about it.

Deleted my first reply, didn't like wording. Yes UK, correct. Also bought a tad of NOAH which I have followed for about 10 years. I had owned some Fanhua, an insurance agency/broker, but long before Covid they had trouble sustaining a business model because each time they began thriving the gov't would literally step in an forbid such sales. So for years FANH would have cash (and no debt) equal to the market cap and big growing earnings and sell at a single digit PE. It worked out well as an investment but over time the obvious was just obvious - and then I simply got luck not owning it when Covid came. So I'm just messing around trying to stay in the present (as my wife urges me to do instead of just hanging on the long term build in the past things). Its just a tiny-tiny thing, but it keeps me alive and excited.

So let's do another story...seriously LOL. Our builder's supply we refer to as "the lumber company", Lexington, NC...the only private one left there. We put $20k into EMC in 1994-1995 or so, data storage. By 2000-2001 or so the stock had gone from our $20k to $1.2 mil. Yep, and our investment club had $600k of it. Data storage...the chant within the club was: The Internet is just beginning! The Internet is just beginning! Now this isn't the present club I'm fleeing from, this is a sophisticated bunch in the club, average age probably 78 and all had done well in both business and the markets. So, and I'm just right-brained guessing here, the stock at some point had gone from our $1 to $1.50 split adjusted price to $105 per share. Along the way, in the club, I just mentioned at a meeting, "Maybe given no one wants to step up and say "sell" ---- that we should simply just begin to sell like a percentage on a quarterly basis. The club sold a tad in the $90 range, yes we voted to do "program" quarterly selling. But I was told, from older members of the club, "Charlie, you just can't buy and sell stocks you know...there's no way to know when this is all done." But the members voted, just barely, to sell some - again - each quarter. We also owned Cisco, Intel, Microsoft, we'd bought them all at reasonable prices- but of course none were selling reasonable by then and the growth in their industries was simply astounding. At the lumber company? We met and finally someone said, "Enough is enough don't you think?" A sigh of relief came from all of us other 3 who all really wanted to sell but not be 'the one' who made the decisions, we sold all our EMC for about $900k some 6 years after investing $20k. The club? After selling a tad at $90-something, we held the stock. When EMC had fallen from $105 to $35" there was a motion made to "put all the club's money into EMC". Yep, that's how "cloudish" the era was UK, the Internet and data storage was "forever" thus endless profitable growth...right? In the end the club made 15% annual on EMC stock. We sold the majority of it at $7, some 7 times or so what we paid. Data storage? Oh yea, it continued to grow exponentially. Along the way EMC fell from $105 to $7. So my view is very biased. Yesterday while working a crossword puzzle I listened to John Chambers on CNBC. Chambers was on more magazine covers (this is before the web had destroyed most magazines) than any person in history, he was a business GOD at the time. Chambers said, "Yea technology will continue to grow. Some of the big co's will thrive and some won't." Then he says, "At Cisco we had 40% sales growth for 15 years...and then it stopped...and then it went in reverse." That will NEVER happen to the cloud. Never-ever.

UK my guess is that like storage of the 1990's and early 2000's at some point pricing/growth rate/competition makes it literally stop on a dime... ...and reverse. Yep, that's my guess. But my oh my does cloud sell well. Reminds me of the Buffett story: Fisherman walks into a tackle shop and sees an eight colored lure with eight hooks. Fisherman asks the clerk, "Does this thing catch fish?" Clerk replies, "I don't sell to fish." Like everyone else on earth the mystical thought of cloud and cloud growth, just like data storage, makes me want to put everything I have into it. It must have endless growth! It must! It must!

I've thought that maybe I shouldn't post this, I'll be possibly considered off-my-rocker plum lunatic, but... TO HELL WITH BITCOIN! I've got something far more logical! ??????????? Or not. This week for the third time I bought $5k of something symboled CWEB. LOL! I can afford to lose this $15k but there again I don't think I will. Hell, if you are going "China" then go with some ****ing GUSTO! I'd watch CWEB during the China run-up years ago and decided if there was any plunge in the future I'd wait till some uptrend began and step into some CWEB. I've bought three times...this will be one exciting ride.

The cloud is perceived an eternally astronomical PE sector. I disagree with this idea 100%, the same with cyber security.

A tad more than three years ago I made energy 5% of my stuff and it is more now of course. But I posted about it on a former Berkshire forum, that it seemed to me that Berkshire was heading that direction. A few posts, pleasant debate, and next thing I new my posts were removed and I was no longer on the forum. Yep, kicked to the curb for energy posts. What was allowed on that forum? That Buffett should be buying tech stocks of course and how out of it he was for not doing so. I was right back at the 1999 Berkshire annual meeting where endless "Why aren't you in Cisco?" questions...one year out from the 1998 annual meeting when all we got was questions of "Why aren't you in drug stocks?" Energy to me seems reasonably priced today still. Lots of earnings that don't appear to be headed for inceneration.

I'm not sure I know what I'm talking about here but corporate decisions such as this may be based on things not necessarily relevant to what most of us do as individuals. Although my family has gone subchapter S in one business with plans to do that in two others at some point...well, we just made some investment decisions that I don't think any of us even consider personally. I basically never clone Berkshire but I do follow basic trends that the investment trio seems to do.

Again, precisely. 25 times seems incredibly cheap to a tech valuation but nowhere else. But tech profits are growing slower than energy.

Oh my Greg, I'd just bought Highwoods this morning. My CPA friend and bro-in-law (they'd been chatting) called and said...

Before we made the lumber company a subchapter s corp we bought and sold Microsoft. We bought Microsoft at 10 times earnings LOL. So I know it is "THE CLOUD" and such, but for me it was also "STORAGE" - that exponential growth thing that too had near zero incremental cost that EMC Corp led back in the late 1990's. EMC routinely traded at 150 times earnings before (like Microsoft) falling to 10-12 times. These things do happen, a tad of history knowledge may be needed. But MSFT at 12 times would not even get level 1 in my surprise factor.

I co-wrote a 21 page document "The 12 Ways GE Misleads Investors" in 1999 with 4 other guys who I met in relation to Berkshire. GE was obviously fradulent but Welch's power was a wall of steel. Lord for me Blackberry was a disaster all the way, but one of the Outstanding Investor Digests was big on that so I may have gotten a lucky straw there. GE had one-time write-off every quarter for years. These often equaled net. Even if you were unaware that they were booking huge insurance profits in the same businesses where Berk and AIG were recording huge losses those one-timers were always there...and they were massive. That was a basic start for a basic understanding of financial statements even if other things weren't conceivable. Then there were quarters where stock based compensation equaled sales like Cisco. That tends to gain a rational person's attention.

Precisely my view.