shhughes1116

I wouldn't say I am negative. I originally bought Viacom in the mid-20s, HODL through the March 2020 tank, and then sold in the high-40s (and missed the subsequent rip to $100) I tend to think mid-40s is a fair price, and I tend to think high-20s is a reasonable price to accumulate. When volatility is high, I like to sell at the money puts for stocks I like. In this case, the premium was too juicy to resist, and puts me into the stock at my buy price if I am put the shares.

To be honest, I hope it is not an isolated case.  The pricing disruptions caused by this forced unwinding of positions is great for those that are patient and hold some cash.  Nice option premium on VIAC for instance.  And I hope that the end result, as people see this blow up, is a reduction in leverage across the entire system.  I think this would be healthy for the financial system, and to my point above, lucrative for my portfolio. 

VIAC Jan 2023 puts @ $40 strike for $11.50.  I'd be happy to buy Viacom again in the high 20's. 

Hoovering up some UNTC. Not generally an O&G guy (aside from midstream), but this one is pretty cheap and the publication of post-restructuring financials should make that more obvious.

Yes, greening is still negatively impacting citrus production in Florida. Production is down more than 50% over the last ten years. The various interventions studied and applied have not been effective at reducing the spread. Infected trees have also been found outside of Florida, in Southern California and South Texas. There is a semi-last ditch collaboration with Bayer AG to identify a solution. In the meantime, a substantial amount of groves in Florida get transitioned to cattle grazing land.

They have a nice asset in Wyoming, which is cost-advantaged relative to synthetic production, and cost-advantaged relative to other trona miners. However, I don't trust management. Didn't take a rocket scientist to figure out they inflating annual production through deca rehydration, and eventually production would drop off significantly. The manner in which they disclosed this made them appear either dishonest or incompetent. Happy to chat more about this one on a dedicated thread for CINR.

This precisely and concisely sums up the problem with our present day society. To a certain extent, people are willing to tolerate inequality because our system is set up in a way that enables people to improve their lot in life through hard work, ambition, and creativity. That said, I believe this door to the middle and upper class is closing for many folks in society. If people feel like they can't improve their lot in life, they become a lot less tolerant of inequality. And when they have nothing, then they have nothing to lose by destroying the system. If we don't solve for this sooner rather than later, I don't think there will be much of capitalism left to save in the United States. I think this is where we need to be careful with how we describe the solutions. I see equity and equality differently. I believe in equality - equality of opportunity. We should endeavor to make sure people have access to education and other tools that enable them to start businesses, earn money, and to generally improve their lot in life. I do not believe in equity, which seems to be a disincentive for ambition, personal responsibility, and hard work. I struggle to see the difference between equity and socialism.

SDS.

Why have cities always been desired? When travel and communication was more difficult and time consuming cities brought people and ideas together in one spot. Population density was a necessity for ideas to spread and serendipitous meetings to take place. Also it allowed an economy of scale for businesses. All of that still happens in cities, but, I don't know if that is still entirely necessary. People now meet and talk online just as easily as off, and with modern shipping the whole country is your marketplace. Very well said. Still impossible to replicate human interaction, but virtual is good enough for much of day-to-day life, and when compared against cost and livability of cities, will be very interesting to see future trends. Cities may become virtual cities. We know have online community where members can have strong bonds . That wasn’t possible historically. Am I going to go to the virtual theater? the virtual music arena? the virtual ballpark? the virtual museum? the virtual skateboard park? the virtual hospital to have virtual surgery from a top-rated cardiothoracic surgeon? Pardon the hyperbole, but you get my point. People are drawn to cities by the availability decent-paying jobs AND amenities/attractions that are not available in rural parts of the country. The population density of [insert ruraltown USA) does not support a good theater, decent skateboard park, large music arena that attracts big-name artists, decent museum (history, art, sports, or something else), MLB/NFL ballpark, and/or NHL/NBA arena. it certainly doesn't support a high-end hospital with top-rated physicians either - you are lucky to have a good general surgeon and a good general practitioner in ruraltown USA's local hospital. So the idea that people are going to leave urban office buildings, and scatter to the four corners of the earth where they can work remotely from their house is far-fetched to me. I work 1/3 of the time at home, 1/3 of the time in the office, and 1/3 of the time on the road. I have an entire team of folks around the country, similarly situated. If I wanted, I could work 100% from home, and could do so wherever I want in the United States. The same goes for my team. But over the last 10 years, I have found that it is mind-numbing to work from home every single day, and it blurs the boundaries between work life and family life. I have also found that locating myself in rural places, even for short periods of time, is boring. This is not unique to me. I see this same mentality across an organization with 10,000+ people. People are hyper focused on working remote, on getting the hell out of the office, so they can enjoy sunshine and rainbows every day from the comfort of their own house. Yet 90-95% of the people who go off to work 100% remote end up returning to the city and our office buildings. They either went nuts working 100% remote in their small apartment in the city, or they went nuts (in a larger apartment or house) living in a rural area without the amenities they were accustomed to enjoying. I think we are going to see a huge cohort of folks jump on the 100% work-from-home bandwagon. I think we are going to subsequently see, in maybe a year or two, that many of these folks want to return to the office building and the city for the reasons mentioned above. I think the endgame is that most white collar workers will do 50% of their time in the office building, and 50% of their time at home. And most of these folks won't leave the city (or will return) because they will miss the action, the amenities, and the proximity of their friends/peers.

Sold my Google. Figured my quick 15% gain in advance of earnings was something worth holding onto, and had a hard time seeing what would push their shares higher in the near future.

Job title/description: Team Leader Industry you work in: Federal Gov City and Country: Virginia (United States) The Federal Gov can't seem to figure out what it wants the employees to do. Under Bush 2, telework was sporadic. Under Obama, we were pushed to telework. Under Trump, they rolled a lot of that back, only to find out that they didn't have enough office space for everyone. And with the pandemic, they want us working from home again. Prior to the pandemic, I worked in the office about 1/3 of the time, at home 1/3 of the time, and on the road about 1/3 of the time. I run a team with employees that are scattered around the United States, so it doesn't really matter where I work most of the time. Virtual communications (Skype, video, Bat Signal) are expected and routine, and if you can't deal with that, we get rid of you in your probationary period. The remaining time, I need an office and conference space, to meet with industry, or with foreign govt officials. As a result, I never was able to do 100% telework, and never will be able to in my current position. I will share one interesting observation, at least in my opinion. Good leaders can lead, whether their staff is remote or in the office. Shitty managers are shitty managers, regardless of where their staff are located. I think remote work really highlights those that are good at leading and connecting with people, and those who believe leadership is randomly showing up at your office door to "make sure you are working".

How much changed after the Spanish Influenza? Not a whole lot, in fact we saw an explosion in GDP as life returned into normal. And keep in mind there were three waves of that influenza. Everyone knew someone who was seriously affected. Also note that there was no vaccine or therapeutic. After the third wave, it faded away and never returned. We have a reasonably healthy banking system, a Fed that will literally do anything to keep things afloat, and a Congress/President that realizes some fiscal stimulus is going to be necessary to get ourselves out of this hole. I think we are going to see a painful six months, and then an acceleration as things return to normal. Maybe movie theaters are gone for good, maybe class c malls are gone for good, but these were trends already underway that will be driven to completion by the quarantine.

My preference is to value these businesses on the basis of free cash flow. The suggestions made by LC are good, and will help you understand how free cash flow might change over time. Not sure about your relationship to this tenant, but given you own the building, and assuming you own the improvements made to the building, you are in the driver's seat for negotiating a pretty low FCF multiple. The main question I would ask myself is whether the extra FCF from buying the business (above and beyond the rent) is worth the headache of running the underlying business on a day-to-day basis.

Given my investing restrictions due to work, I am mostly in banks, REITs, utilities, and a little bit of energy. Instead of selling any of my positions, I took a small percentage of the paper gains and bought some XLF puts, and some SDP calls with cash-on-hand. To put this in perspective, I didn't take anything off the table as the market dropped, and I only added a little bit around the bottom (JPM, PBA, EPD, SJI). in hindsight, I wish I had been more aggressive like I was in late 2018. Maybe that opportunity will present itself again.

More JPM and Google.

I’ve had mixed results. The first time for me, someone took out a credit card and bought $30k in jewelry, at a store about five hours from my house. I got a statement, along with my “new credit card” and my wife was a bit confused - I think she thought I was buying jewelry for a mistress. Interestingly enough, the jewelry store hired an investigator, who managed to find the culprit. The local police arrested him, he had his day in court, and my understanding is that he went to jail. Early on, I asked if they wanted me to file a police report, and the investigator said it wasn’t necessary, that the police wouldn’t do s**t about it unless he put all of the evidence in their lap for them, along with the address where the could find the guy. About a month later, I received another credit card from Best Buy, along with a statement showing that I purchased $6,000 in electronics. I called Best Buy, they agreed that is was fraud, but refused to waive the credit card charge until I filed a police report. So I filed a police report. The police officer basically said “thanks, you shouldn’t expect to hear anything else about this case given the low dollar amount.” Same with the Best Buy folks - Seemed like the people I talked to didn’t get a s**t, even though the store manager admitted to me that they had video footage from the day when the electronics were picked up. Maybe they pursued it and were successful, but they didn’t tell me anything further. Last experience was when I was five. Social Security office called and asked my parents if they knew their child earned $90k in income the prior year, and $60k in income the year before that. Obviously I had not. Social security office told my parents to bring me down to the office to get a new social security number. When asked about reporting this to the police, they said don’t bother, nothing will happen.

There is a bit of this in my area. Anecdotally, I know a few of these coming to to the rental market were purchased at insane prices. I went into these looking for additional rental properties at about 15-20X TTM AFFO. These were purchased by AirBNB "speculators" at 25-30X TTM AFFO. Shortterm, I think there will be a little bit of downward pressure on rental prices in my area. Longer term, I expect these AirBNB speculators to become insolvent, and these properties will come to the market, leading to some downward pressure on purchase prices. The inventory for purchase and rental is pretty tight in the DC area (Virginia for me), so I don't expect much long-term impact.

It is most definitely affected by crude prices. The crack spread represents the difference between the incoming cost of crude (usually a function of the cost of crude from a particular basin that is accessible to the refinery), and the value of the outbound products (e.g. gasoline, diesel, jet fuel, asphalt). Light crude and heavy crude produce a different ratio of outputs, and that ratio depends on the complexity of the refinery (e.g. presence of absence of a hydrocracker). Anyways, the cost of crude is falling, and it looks like the value of the outputs is falling as fast, if not faster. Hence, crack spreads are tightening, which is negative for refiners.

This changed as of this morning: https://mf.freddiemac.com/COVID-19/ https://www.fanniemae.com/portal/media/corporate-news/2020/renters-covid-19-multifamily-7002.html Basically, multifamily owners will be allowed to defer mortgage payments if they agree to pause evictions due to non-payment of rent. My day job is to own/operate multifamily investments, so I pay a lot of attention to this :-) Only about 50% of all multi-family mortgages are Fannie/Freddie insured. This a big help for the other half, but the way I see it, almost all tenants will choose to not pay rent, even if they can. It will just be too easy to say they were negatively affected by the virus: "I have to help my parents/sister" etc. I see the word spreading on social media that you can just skip rent for a while. there is no incentive for anyone to keep paying. You can't kick them out and it won't affect their credit rating. So you have multi-family managers that get minimal rents coming in, but still have to maintain the building, pay for utilities (if they are not individually billed to renters directly from the utility) If you can defer mortgage payments, you will still be cash squeezed because of costs, and if you can't defer, then you are at the mercy of the lender. I can see the pressure on landlords to limit evictions continuing for months, not weeks. Even once people are allowed to go look for work, many of them will not find one right away. What are you seeing in your business? This thread highlights for me why the UK took the right approach with fiscal stimulus. Cover 80% of the salary of those that are unable to work as long as they remain on the company's payroll. This enables the rest of the financial system to continue working in a relatively normal fashion (e.g. people can continue to pay rent and utilities, landlords can continue to make mortgage payments, and so on). I fear that with the US approach to fiscal stimulus, we have created incentives for tenants to not pay their rent, as noted very well in the preceding comment. If this actually happens on a large-scale, there will be significant knock-on effects through the rest of the economy. For example, if you aren't paying rent, and the landlord can't evict you, does that mean you are still entitled to have things repaired in your apartment when they break? I would think not - if the tenant is not paying, why should the landlord pay for the cost of the repair?

I like multi-family REITs and industrial REITs. That said, even after the large drop in the market, many are still at unattractive valuations. I am buying NextPoint Residential (NXRT). They are currently priced around 12x TTM AFFO, and growing 10-20% per year, with properties located primarily in the Sunbelt. I am also buying BSR REIT. It trades in Canada, but all properties located in the Sunbelt. Last I checked, this was also trading at about 13x TTM AFFO, and also growing at a reasonable clip. I have also been looking for residential property to purchase (e.g. apartment buildings, condos, duplex, single-family homes). Sadly the best I can find in my area are properties trading at roughly 20x TTM AFFO, which is not appealing to me. I'm hoping that the devastation in the AirBNB market leads to some people selling their properties at more reasonable prices. I've also considered buying land, and then building, but the current prices on suitable land aren't particularly appealing either. Happy to chat more about either in a separate thread, if someone wants to create that thread.

The price action has been pretty...brutal...in utilities. Hard to say if there is any relationship, but I have often wondered about the relationship between Seeking Alpha and certain "income producing stocks" in the market. A lot of the content on Seeking Alpha, in the recent past, has been pedaling all sorts of "income producing stocks", even as they reached nose-bleed levels. I have to think a lot of weak-hands were pushed into these stocks, and are now fleeing, hence the awful price action.

And rightly so - if there is one thing this President has been right about for 3 years - it's dependence on China. The haters will never give the man an ounce of credit during a crisis obviously, but the average Joe will do so. Seems like this crowd is real critical of Trump handling of this crisis. Too bad really. I mean the President is ALWAYS fair game for criticism given his position - but the "open border" crowd and all the folks that don't want border security and fences - want to have it both ways. No screening or profiling - let any body in at any time. Remember all that crap? The crowd that loves China - and detest how Trump was out to destroy China. Yet China covers this shit up and causes a world-wide disaster. LeBron James and Trump critics must be happy now... Oh, right crowd, our REAL enemy is Russia, not China - remember? But now you have your armchair quarterback reasons to really bring Trump down - instead of band together as real citizens should do under their leader during a crisis. Very patriotic. And of course, President Trump is a bigot for being the first to impose a travel ban on January 31 from China: https://www.whitehouse.gov/presidential-actions/proclamation-suspension-entry-immigrants-nonimmigrants-certain-additional-persons-pose-risk-transmitting-2019-novel-coronavirus/ The first world leader to have to balls to do it - yet his liberal critics condemned him as a racist and xenophobe. Too bad some of you want to have it both ways...I would love to see how the Dems would have handled this crisis. In the end, President Trump's 3 year effort to distance us from dependence on China is looking more and more brilliant. But perhaps, Corona virus will accomplish what your beloved Russia Hoax, Mueller Investigation and countless other feats of Presidential backstabbing didn't accomplish for you: Bring down this President for good. I have found quite the opposite. Most of my friends and family lean hard left. They despise just about everything about Trump, much of which i think is warranted. But not once have I heard any of these folks give Trump a hard time for the trade war with China. Quite the opposite, this has been one of the few aspects of the administration that they have supported. They are educated, and see China for what it is, and see Trump as the one person willing to take them on.

I'm bemused by this entire situation. I spent the bulk of late-January and early-February trying to convince people in my area that COVID-19 would be a significant problem, and we needed to batten down the hatches, close schools, ramp up testing, and halt international flights for a few weeks. I was laughed at. Now, these same folks are in pure pandemonium, looking at this event like the end of the world, buying 15 Costco-sized things of toilet paper, massive packs of bottled water, and MREs. And here i am, trying to point out the "green shoots" (e.g. therapeutic treatments that seem to be working, rapid diagnostics that are being rolled out, rapid work on promising vaccine candidates, effective use of existing drugs on off-label uses, substantial fiscal stimulus to households). And I am getting laughed at again. Don't get me wrong, small business is getting squashed from this. But, for the first time in a long time, there is a genuine desire, at least in this area, to go out of your way to support small business (e.g. take out food, take out beer). I suspect that will continue as folks realize how many small businesses are impacted by this issue, and how "local" that impact is. Medically, this will be a v-shaped recovery. Rapid diagnostics + quarantine/isolation will bring this virus to an end pretty quickly, likely before a vaccine candidate is widely-available. And while the economic recovery will likely be slow, it will happen. Life will resume, business will resume, people will get on with their lives and spend money. My biggest concern from all of this is the failure to implement "complete Keynesian economics". I have no objection to the fiscal stimulus, i think this is exactly what is needed in this situation. However, as the economy recovers, I can only hope that people use this opportunity to raise taxes, or expand the tax base, in a way that enables us to pay down the debt from this fiscal stimulus. Then we have some dry powder, as a society, for the next COVID-19 event - asteroid?

I think there are a few folks still waiting for the 2008/2009 GFC bottom, and look where that got them over the last decade. So with that in mind, you can sit around all day/week/month/year waiting for a bottom. The market is down 30% now, and there are some companies down 60%, 70%, 80%. Maybe the market will go down another 30%, or maybe we will just marinate at this level while society figures this out. Maybe we will go to 8% UE, maybe 10% UE, or maybe 20% UE. I don't have a clue, and frankly, no one else does either. The clinical information I am seeing from South Korea, China, Italy, and Spain, suggests that we are getting closer to the point where we can effectively manage severe symptoms associated with COVID-19 (combination of antimalarial medication, and other approved drugs used on off-label use). We are getting closer to wide-spread rapid diagnostic tests. And there are a number of promising vaccine candidates. All of this information seems to be lost in the midst of rising death counts in Italy, Spain, and elsewhere. And in the meantime, it seems that finally the administration gets it (or at least we have adults working at the table now while the toddler-in-chief plays with his legos). The Fed stepped in with the Big Bertha Howitzer of monetary stimulus. And soon the administration will be stepping in with the Big Bertha Howitzer of fiscal stimulus. They will literally do anything they possibly can to avoid the Great Depression 2, even if it means UBI for everyone. In the near future, I think we are going to turn a "clinical corner" on this. And when that happens, I think we will end up with a rip-your-face-off rally.

More EPD and PBA.