dpetrescu

All SAAS companies haven’t truly recovered and haven’t interesting you were shorting all SAAS companies haven’t really participated in the market boom of the last couple years. definitely some valid concerns and risks. I just keep buying ADSK for the last decade plus just because of their unique competitive advantage. Just got a bunch of 2 year LEAPs art the dip this morning im sure everyone here is tired of me talking about ADSK :).

I think I agree there. I’m using Revit every day for work. I can say it still has a long very long runway - as contractors and builders adopt it. Then product manufacturers are adopting it. And owners adopt it and maintain it for maintenance, records, and future renovations expansions. And public agencies still have pre-2006 2-d Autocad standards, they’re slowly adopting it….very slowly. Surprising how slow the BIM/3d adoption is considering its old tech by now for public agencies. the curveball is AI. I can imagine AI giving Autodesk either a bigger advantage or maybe risk of taking share away from residential and small commercial firms.

How do they mess up their accounting and delay their annual report? And all this after a big earning beat. I imagine this could fall another 10% or more. Either way I’m buying - hoping to load up on another 5% drop over the next week or weeks! what do you think of long term AI risk to Autodesk?

My approach is to find a couple companies that have a strong long lasting competitive advantage in a niche market - that can increase revenues and earnings at near double digit rates every year for decades and decades and is at low risk of tech disruption. this way you can have your entire portfolio in only a couple companies for decades. And the most importing - you feel comfortable doubling down every time it’s down big. Also makes investing easy….that is, once you find these two gems

Money is a scam if it’s not towards a purpose - to bring value. For me personally as an architect - I will always put the vast majority of my wealth into cost of building a custom home. Without much regard to market value of the house, without caring much if construction cost results in higher resale value. I do agree that big houses are such a waste. I’d rather have a smaller quality custom house than a wasteful mansion. PS….as much as I look up to Charlie for his general wisdom in all things and investing. He was not a good architect - his proposed design for the California residence structure is a massive monstrosity.

Haha yea, best to invest in what you know and use!

Currently: 75%……..Simpson SSD 15%………Autodesk LEAPs 10%………Cash, Tyler TYL, BYDDF, Pinduoduo LEAPs (last couple weeks have been using PDD gains to buy ADSK), and also a few surviving Alibaba LEAPS:) I imagine in 2025 this will be about the same. Thinking of using the remaining PDD gains to get a decent Alibaba position?? Not sure yet

Yea exactly - it’s something easy to understand. They make metal connectors for wood framing. That’s it - just keep churning out these things and sell them - in a small market with just a couple or so manufacturers. Very refreshing simplicity in the era of high tech and AI.

Simpson (SSD). It’s pretty much all I talk about on here . So I hate to be a broken record. I use their products in my field so I feel I have a good understanding of it. Its had a good run up and share price is very expensive today.

My best investment has been after I stepped away from being a Buffett clone to uncovering hidden gems in my own professional field. A long time ago I found a great company and invested in it. And I had such great conviction in it. The error was in not going all in (Soros and the juggular). Years later I realized this, I overcame my regret - and went all in, made this one company the vast majority of my portfolio and threw out the other junk. Worked amazingly. That might be the biggest challenge with investing (as anything of value in life) - lessons and rewards are best understood over a great portion of time passed - in decades.

My two best ideas going forward are the same as last year: 1. SSD - Simpson this company continues to amaze me. Perfect for a 50 year holding. Just one minor note… being such a wonderful company, it is today very very highly valued after a couple big corrections. So you might need to deal with a 30% to 40% correction in 2024. Aside from that technicality, it will continue to be my 75% holding and I will just keep buying in 2024 . If we ever have a world war 3, Simpson will also act as a complimentary sleep aid - will help you sleep through worst of times worry free. 2. ADSK - Autodesk This will continue to be the Robin to the Batman in my portfolio for 2024 These two together will continue to make up 95% of my portfolio. Another wonderful company. While many know about its strong competitive advantage - I’ve reached the conclusion that even the most fancy of analysts don’t truly understand the depth of that advantage. Stock price has been miraculously flat for a few years but we might be seeing a breakout. Also of note a minor detail - the share price is veeerreyyy! expensive. But then again - if you’re like me and planning to hold it for 20 years, then it makes sense and I also just keep buying this one and can’t wait to keep buying in 2024. And I hope this one also sees a 30 - 40% correction in 2024 but I’m not waiting for it. The big risk with this one: still not sure how the decline in demand for new commercial office buildings could impact it over the next decades. With some decent percentage working from home currently and that percentage likely to grow over time. This is the big unknown for me. Bonus idea: I hate to be obvious but yes…Alibaba. I’m hoping to scrape up some funds to maybe make this a minor #3 in the new year? Not sure yet…maybe for 4%? Reminds me of the cake in the trash Seinfeld episode - it’s a perfectly good piece of cake thrown in the trash. Everyone is just to scared to pick it up. Maybe 2024 is the year of George?

Similar to the flowering waters analogy. You could also think of relationships. Maybe it’s best to go from polygamists to monogamists…or as close as possible. About a year ago I sold everything except 2 companies - 2 making up 95%. (Technically I still kept a few other investments as out of the money options for that last 5%. Ive never felt more confident. Even when one of the positions fell 30%, I just kept adding more. Took me 15 or more years to learn this lesson - but I guess no amount of convincing would have changed my mind 15 years ago.

Bought some more 2 year Autodesk options over the last week.

Agreed that their strong competitive advantage is relatively well known, but I think there are some advantages: 1. Not as widely know as the obvious big moats like Google, Microsoft, Facebook, Adobe, etc. those big names face legislation, fines, and people objecting against their moat. There seems to be a weekly article about how damaging their “monopoly” is 2. Although ADSK’s moat is known, I don’t think the market understands how strong the moat is. I personally think it is beyond Microsoft’s and Adobe’s moat for example. There are multiple decades invested in that software and it has a runway adoption of multiple decades going forward. I use Autoddsk, Adobe and Microsoft software - it would take a lot for me to switch from Word and Excel and Photoshop….but can’t even imagine switching Autodesk, it’s nearly impossible at this point for a lot of projects. 3. for both Autodesk and Tyler - they’re both involved in Public Agency adoption. That process - like Munger has said - has such a slow adoption rate - and once adopted it’s a much slower rate of change. Public agencies move very slow and have very high bureaucracy. That’s why I’m invested. Always looking to be proven wrong!

looks like we have a couple conviction names in common. only exception is I have Autodesk in my lockbox, and Tyler Tech in my 10 year+. after a decade of searching for an investment approach - I now realize these companies with an amazing and unusual and unknown competitive advantage are gold.

Here’s my portfolio - including investment account, IRA and Roth: 75% - Simpson (SSD) 10% - Autodesk (ADSK) Other 15% - Tyler (TYL), Alibaba and Pinduoduo ps… I wouldn’t recommend this to anyone else. SSD is very correlated to housing starts so lot of near term (5 year) volatility

I don’t think Buffett is buying any bank. There is a similarity here to airlines in 2020 - the entire small and medium bank industry is waiting for more and more bailouts of some kind. How would it look if Buffett buys a few regional banks and two days later Biden announces FDIC support for all 20T deposits?

A tiny bit more Autodesk and Simpson. Hoping to get some dels in these over the next year PS….if I ever buy anything other than these companies in the next 5 years (including also Tyler and maybe DJC) please hold an intervention ASAP

Bought more Autodesk LEAPs expiration in 2025. Price is still so expensive but a lot less expensive after the market didn’t like their guidance. I could care less about guidance for the next quarter or two. This company just keeps increasing revenues and earnings and I think will keep doing so for decades more. Happy to pay for quality, although it would be nice to have a clearance sale….maybe one day, I can hope Might also buy some more Simpson if it dips under $100. Also just started a new position in Tyler Technologies. Owned it for a couple years and was stupid to sell. Every time I listen to Munger at the DJC meeting, I get a renewed excitement about Tyler. Again - expensive - but it will be less expensive in 5 years and beyond. Common theme for both Autodesk and Tyler - public agencies move at the pace of a snail. But once they commit, that snail pace becomes (can’t think of an animal that’s 1% the speed of a snail).

Down almost 40% in 2022. My takeaways: 1. Lost my way on some speculative tech companies. Luckily I saw the error in my ways and got out fairly quickly before it got too bad. 2. Built a very big position in Chinese tech - Alibaba and Pinduoduo in 2022. Pretty much bought every month on the way down the cliff. I feel fairly confident about this over the long term. PDD is a big gain overall as of today, wish I could say the same about BABA:) Was hoping to also build a position in Tencent but this brings me to the next insight… 3. I think I learned the one most important thing with investing (and also in life) Like any lesson, it’s something obvious - but unless it it tattooed in your mind it is easy to miss even if known. What matters most is being able to be more confident when times get tougher - in a panic - when you’re really tested. When WW3 is a possibility. I remember holding some tech companies, sold those fairly quickly. Even with Pinduoduo - I thought market was being irrational and kept buying 2 year LEAPs monthly. But when it got under $30 I realized I didn’t have the confidence to go even more all in. I can’t say I have unique insights into Chinese tech aside from taking advantage of market bias. But I do with two companies that I’ve been investing in for more than a decade - Simpson and Autodesk. I know their unique competitive advantages and I’m in the field and have some insight when they might lose that advantage. This year I went even more all in on these two. I think -and also hope- they might go lower. I keep reading and watching interviews looking for ideas but realize these two ideas are all I need for the next few decades and beyond. And it’s now just a matter of managing regular investments in those two. I’ll still keep researching

Do you still own puts on the SPAC ETFs that are pre-merger? What is your reasoning there? They already got decimated. The median SPAC last week was ~ 1.5% under asset value. So that’s like shorting a pile of cash that’s on the market for 1.5% less than the value of that pile of cash. Maybe you meant post-merger. But the -1.5% median, this includes names that have deals.

Archegos doesn’t have to disclose their holdings in US holdings because most of their stocks are swaps. But it’s concentrated in: TMT and media like Viacom and Discovery Asian tech like Baidu Asian education names like GSX (Carson block accused them of leveraging up just for the short squeeze - muddy waters accused GSX of using bots for their enrollment) I think how it was able to lever 5:1 was because they also owned SPY puts as hedges. There are rumors that some more blocks of Viacom need to be sold this week. But if anything it will be a boost to the market if they still ha e to unload the SPY puts - banks have to buy the index to get rid of the puts. That’s likely why the markets had such a rise in the last two hours of trading Friday. But the next leg is Nomura could be down a bit ~15%. And I think credit Suisse and maybe others to a lesser extent. Hopefully everyone’s still wearing shorts as the tide dips a bit on a few names. Either way, today morning will be interesting to see how the market opens.

Gold has historically been very closely invert correlated with REAL 10 year yields. Take a look at the chart in this video at 6:05. At least for the last couple years.

The Muger DJC Q&A was great, wish he would have rambled more but The questions asked what exactly what I would’ve wanted to ask Munger. SPACs got annihilated last week. Almost everything, even with deal announcements is back to near NAV. I think at this point it is a great value when you add the arbitrage put protection and call incentive. There are quite a lot of value investing legends involved: SPACs - Howard Marks, John Malone, Bernardo from 3G, Howard Marks all have SPACs. Also Bill Ackman Investments - Seth Klarman has investments in a few SPACs. I had to check that twice when I read this but Seth also just did a PIPE in Reid Hoffman’s SPAC that merged with an eVTOL Joby with 4.6B EV valuation. He also owns shares in addition to the PIPE. I always thought Seth Klarman was doing this as arbitrage. But with the PIPE investment They’re locked in for five years. And by summer this year, the $10 floor arbitrage becomes $0. Why is Seth Klarman investing in flying cars?

So shouldn’t the 10year rate heading towards 2% and the curve steepening be a good thing - a sign of a healthy market? Typically, almost all recent recessions happened a little after the 10 minus 2 year went under 0. This has been a surprisingly good indicator for the last 4 maybe 6 recessions. Using the 10 minus 2 resulted in surprisingly almost no noise. It was a leading indicator by months. Maybe the only One false indicator was July 1998. A fast rising steepening of 10 minus 2 happened after each recession. After the dot com recession it quickly rose to a difference of 2% -3%. It did that after every recession since the 70s, in every case rising quickly out of a recession yowards 2-3% difference. And in most cases in the past the Dow was rising (post 92 recession) or consolidating (post dot com) as the yield steepening was happening. So why are markets panicking now if it’s a common symptom coming out of a recession? Is it a case of this time it’s different? How is it different? https://fred.stlouisfed.org/series/T10Y2Y Anyone have a way to generate the inflation adjusted Dow over this?