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kab60

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  1. I haven't used any specific indicators, but you could take a look at the fear and greed index to keep it simple. And if VIX is really high, there's a good chance people are liquidating for non-fundemental reasons, which is usually a decent time to buy stuff you already know and like. But usually I'm just looking at stocks, and if a lot seems to be smack-in-the-face cheap, I've used up towards 20% portfolio margins at times (like March 2020). When I think they're around fair value, I sell and dial down margin and don't fret about paying taxes (I never joined the #neversell band). I've basically used margin as a cash substitute, but it needs to fit your style and holdings. When I've used margin, I've had a large slug in stuff like Berkshire and tobacco and knew I could take a greater than 50% draw down without breaking a sweat. If I was as smart as @writserand @Hielko and had a large percentage of special sits, even better (I basically have only Twitter atm as it seems so simple that even an idiot can figure out Musk has a poor case). There's no doubt leverage can be great if applied in the right dose and coupled with good stock picking. But, margin increases the risk of blowing up, and it might stress you out, which in turn might result in worse decisions. I think Buffets' general principle of not doing stuff which messes with your sleep is sound. As generalist investors and one man bands, we all have limited mental bandwidth and need to use it wisely. I can see why people would forego margin completely (it's partly why I don't short or trade options - getting the timing right is different than LT investing). A decent savings rate and a LT view should make most of us end up in a fine place (economically) unless we blow up.
  2. Do you understand why the numbers are so much worse than CPRT? I haven't looked into it, but they weren't that far from each other in terms of revenue a handful of years ago. Since then CPRT has grown faster, and margins are just much better. Is there some big structural differences, because it's an interesting industry?
  3. Financing has long been lined up. I'm not a lawyer but reading the agreement it seems very tight. I'd say funding secured even... I also don't think the board can just 'drop' the deal due to unruly employees. I'd assume shareholders would sue their asses. At $37, it's clear there are risks. But I think people overestimate what Elon can do in this case with the facts at hand (might be famous last words/baggie quotes...).
  4. Ideally I'd like something like 20% of my portfolio in special sits as they should be mostly uncorrelated bets, but we saw during covid how the spreads on deals blew out, so it's not necessarily a good source of cash. I think you need to know yourself and your portfolio to figure out what works best for you. Some like holding cash, I like having something very defensible I'm comfortable borrowing a bit against if things get ugly cheap (like Berkshire, tobacco etc.). I was well setup for the current correction/whatever you call it, as I pivoted a bit late last year/yearly '22 and added to cheap, defensible stuff I owned and liked with inbuilt inflation-protection that didn't seem to cost much despite inflation ticking up a lot (tobacco, oil, auto dealerships). Better lucky that good I suppose, but generally I try to own stuff I have a hard time killing. For me it means I much prefer businesses with good economics and either very stable or countercyclical cashflows (like distributors that release working capital in a downturn). AND I want to pair that with management which have shown an ability to take advantage of whatever gets thrown at them - cheap acquisitions, cheap buybacks etc. It makes for a rather small universe of companies that I'm comfortable with, but it means I'm fine owning them in big size and love when they dip, so I don't need a whole lot of ideas.
  5. He needs a valid reason to walk - he can't just make up excuses and pay 1B. I think this sums it up pretty well: https://yetanothervalueblog.substack.com/p/twitter-the-circus-will-have-a-happy?utm_source=%2Finbox&utm_medium=reader2&s=r
  6. That's not how these things work. He can't just pay 1B and walk away.
  7. I don't do merger arb, but I bought some Twitter. Musk gets away with a lot of crazy shit, but I don't see how he'll be able to break a deal where he waived due dilligence and whined about bots before, during and after closing.
  8. The regulatory capture of Big Tobacco is pretty great...
  9. Some FB. There are risks, but I think valuation takes care of a lot of those.
  10. To tax it? Not sure, politicians seem to do that easily. As for Health Studies, you have some pretty formidable health data in Sweden, and as I understand it (I was told by an Economist friend of mine at Novo Nordisk, so take it with a grain of salts) there are pretty much no negative health consequences from Snus/Nicotine Pouches when you look at cohorts of users through decades. We can agree that nicotine isn't beneficial, and being addicted is generally bad, but for a lot of people nicotine pouches substitutes cigarettes which are just terrible, obviously, for your health.
  11. Yeah, I think it's inevitable that nicotine pouches will eventually be taxed meaningfully. Not due to health concerns, but simply because continued declines in cigarette consumption will leave an increasing whole in public budgets. Hopefully, politicians are sensible enough and realize that nicotine pouches might be one of the greatest things to happen for public health. But one of the attractions for me in investing in MO (apart from being perhaps the greatest business ever) is that they seem to have a tremendous amount of regulatory clout. It's pretty sad for society and public health, but it's great for shareholders. Despite increasing taxes, I think SWMA will do well. I've been smoking a cig once in a while when going out since I started 'drinking' and have almost completely switched to nicotine pouches. It's just a better product, not least as you aren't banned to standing outside, AND the health benefits are tremendous. I hope we do well, Spek!
  12. Maybe. I wrote Swedish Match regarding the PMTA process, as I'm not 100% on the risks. Will see what they say. They don't really mention it in their annual report risk section, so I might be seeing ghosts. As for politicians, it's always a risk in this space. But if common sense prevails, they won't oppose nicotine pouches. The health benefits compared to tobacco are immense - you can't really compare the two types of products. While nicotine isn't healthy, it doesn't kill you unlike all the small particles and tar you inhale into your lungs when smoking. This might be of interest:
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