kab60

Large position (for me) in Ashford Inc. last few days. Good writeup by Scott Miller@Greenhaven Road but price much more attractive now, and they announced a major deal yesterday (somewhat expected but confirms thesis).

Bought more ADS, more Lion Rock Group yesterday

Bought some SAVE, ADS and Lion Rock Group lately

That reads absolutely ridiculous, if SA here hasen't tightened the ship totally, kab60! [ : - ) ] I just looked at the website, I could not see a link to an app anywhere. Is the app that you're using an app that you have downloaded from somewhere, kab60, or is it that you're ["just"] browsing the site from mobile/tablet? Just browsing the content via SA app

Just fyi, when I access from the app (mobile/tablet) it is like it used to be.

Bought some Townsquare

I keep coming back to buy more Trip

Any particular names?

CBI (buy@19.50, sold@16.50). Revlon (buy@28, sold@22.5). Aimia.pref (buy@12, sold@8). Revlon I coattailed too much, which was a mistake. I think the other two were good bets with of upside, not so much downside. Which was probably true, but all three were down almost 50 pct. at one time (I think Aimia was in one day), so lots of downwards volatility which was handled by sitting on my ass doing nothing before taking a (lower) loss later on. I'm pretty concentrated (around 7-10 pct positions I think), so it was a decent test which I think I passed, but going forward I'm refocusing towards stocks where I'll me more inclined to ADD when it gets dumped. Which means I need a preferbly boring and simple business, aligned management and good capital allocation.

Wow, some very impressive results around here. I was up 19 pct. ending the year with around 20 pct. of portfolio in cash. Currency was a major headwind (some 12 pct. I think since I'm based in Europe and 85 pct. invested in the US). The year was very volatile. Lost 50 pct. MTM on Aimia prefs and more than 50 pct. on Revlon from top to bottom. Lost around 40 pct. MTM on CBI as well as SVU during the year. Sold both Aimia, Revlon and CBI with more manageable losses around 15 pct. per position while SVU is back in the black. While the first half was pretty bad (to say the least), second half was very good with both Interactive Brokers and Redknee Solutions popping (my two biggest positions). I think my calls on Aimia and CBI were decent, but the results were bad. I was up almost 50 pct. last year, but I made more mistakes that year that this and consider the big difference in returns more a matter of good/bad fortunes.

I prefer a concentrated approach, it's just extremely important to consider the downside in those cases. I think the best opportunities I've come across has been good/decent biz facing temporary headwinds combined with an extremely strong balance sheet. Thus you might get a combination sales growth and increased margins, which the market usually re-rates much higher, and worst case you don't lose much. SMA Solar has been one of those cases for me (twice now). Went from 12 to 50 in a couple of months and with 60-70 pct. of the market cap in cash downside was fairly well protected. Then it went to 20 and back to 40 not long after. I didn't make nearly as much as I should have, because I didn't concentrate enough, but I think those cases (if you think management is aligned) is where it really makes sense to go big. Not when a debt-fueled, price-gouging pharma-rollup is shooting towards the stars.

There is definately some truth to that. You have had subsidy systems that were too generous and didn't get developers to compete, and you haven't designed the right market to handle the large increases in renewables. But my point is that it's doable. One way is to pay gas plants to stay idle and let them earn a lot of money when demand is there. Even if one doesn't subscribe to global warming being man made you can get rid of air pollution (think some 25.000 are said to be killed by pollution from Coal in Europe?) and be more independent from oil and gas regimes be it Russia or Saudi Arabia (less of a problem in the US since you guys won the shale lottery).

I've fine tuned my understanding of the co since but there's is a ADS thread I posted in a month or two back that you can look at. I was going to put out a mini write up on vsto at 13/share in the old vsto thread but no one responds to my posts so I didn't. Cool! Totally missed that and I was starting to look into it. Thanks.

Agree with above. Wind delivered 41 pct. of total electricity consumed in Denmark last year. Around twice as much as ten years ago. Yet, energy security (as in there's always power) is in the top globally. It works, but obviously it takes a bit of work.

ADS as in Alliance Data Services? Care to distill your thesis into a couple of lines?

I'm very Bullish om renewables but of course you're right, Cardboard. There is a cost of intermittent production (just like there with coal) that producers don't pay for today. I expect gas to play a big part in the future as well because production can be ramped quickly and one way to secure supply is to pay for it to stand idle. Another thing is a better grid, making it possible to better match supply and demand.

It's a good question. BRK and FFH - with large cash hoards - are probably pretty good bets. I've been trying to shift my own portfolio towards businesses that can take advantage of a downturn - either through M&A or aggressive buybacks - but without paying up for it. But one thing is having the biz to navigate in a downturn, I think management is even more important. Here are some of my owns picks as well as reasoning; Autozone: My thesis is basically that the Amazon fear is way overblown, they should have a tailwind from more cars in their sweet spot (age wise) and then you get superb capital allocation/management that actually levered up a bit during the GFC to buy back shares. Plus, in a recession, more people tend to fix their own cars. Autonation: While car sales are cyclical, O&M is not, and thus it generates healthy cash flows in a recession. Like Autozone it is a proven cannibal and does low-risk M&A as well (buying other dealers). Interactive Brokers: Well, maybe not so much anti-fragile, but there's some option value if we get increased volatility. And then I have (over?)levered stuff like HC2 Holdings and Supervalu that might get absolutely fucked in a downturn and probably has too little wiggle room within their covenants and overall debt load. I also like distributors and am a bit annoyed I missed MSC Industrial at 65/share, since it - like other distributors - releases WC and turns it into cash when a downturn hits. And has proven it'll mix M&A with buybacks - whatever makes most sense. So, I'm not really there yet (AZO, AN and IBKR makes up some 40 pct. of portfolio), but it's difficult to find value with these attributes.

I'm not allowed to invest in Vestas, but I think it's a pretty fat pitch here around 5-5,5xEV/Ebitda. Capital allocation is subpar but decent for a Danish Company (dividend, buybacks but nothing opportunistic - and most important I don't think they'll do a major deal). Market seems to overlook that these guys are transitioning from a model of making money mostly on the turbines to a model more ala Finnish Kone (escalator manufacturer) where the bulk of the earnings come from high margin, long term service contracts. And they're smoking their competitors. It might be volatile and bumpy, but long term I think it's a winner.

That is truly impressive. The drop in PV prices is crazy, and if this earth isn't to get totally fucked, those two technologies needs to get ramped aggressively. I think it's a pretty good bet that politicians get their shit together. And if not, it's becoming so cheap so fast that it won't need subsidies anyway.

It's frickin' amazing how fast wind is dropping in price, and the absolute leader is on sale now at an Ev/Ebitda around 5 even though more and more of the revenue is from long term, high margin service.

Doubled down on Trip

Did the same yesterday plus some TRIP

Do you have a link to a thesis or anything like that ?! There's a write-up on VIC that sums up the thesis pretty well. It's a classic bad biz/good biz story with a bunch of noise in the numbers. It's mostly known as a retailer, but the new CEO is a wholesaler with extensive M&A experience, and the biz is increasingly becoming a pureplay wholesaler (thus setting itself up for multiple expansion). The major event was selling most of the retail biz last yeah to delever, but they still have some 200 company owned retail stores that I expect them to get rid of. They also own some 16 distribution centers (RE value in a retail play - where have we heard that before!) post their last acquisition where they'll have a bunch of sale-leaseback options. So basically, it seems like we have a quiet competent CEO in his best years where the market might not appreciate how the biz is transforming. There's always integration risks, but experience is a huge plus, and in wholesale distribution I think it's pretty straightforward. It's trading at around 4 times this years Ebitda guidance or around 6-7 times wholesale Ebitda, but wholesale should grow nicely with their latest acquisition and customers wins (grew some 12 pct. last quarter) and then you have a bunch of value unlocking options. Sometimes it can take ages for management to unlock value, but the CEO seems pretty intent on pulling the right levers. While retail isn't popular right now, privately negotiated asset prices seems priced to perfection most places, so I'd prefer if he acted swiftly before an eventual downturn.

Supervalu. (It'll be awesome if it lives up to its name)

I think part of the market is bubbly, whereas other parts aren't. With interest rates this low it doesn't seem expensive to pay a P/E of 10-20 for a quality biz if you add in 5-10% yearly growth and expect margins to hold steady or improve, but that's what worries me; margins. Corporate margins are freaking high across the board, and that has a lot to do with the lack of wage inflation since the GFC. Workers across the globe have said goodbye to yearly raises (while CEO's and investors have had a party) due to fear of losing their jobs, but the labor market is getting tight a lot of places, and that'll affect different companies in different ways. If you have margins compression, you might get multiple compression, and then you've been served a double whammy.