kab60
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Posts posted by kab60
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Berkshire - 22 pct
Linamar (CA) - 14 pct
Clipper Logistics (UK) - 13 pct
Altria - 12,5 pct
Cambria Automobiles (UK) - 9 pct
Ulta Beauty - 9 pct
Lion Rock Group (HK) - 8 pct
Cast SA (FRA) - 7 pct
Asbury Automotive - 6 pct
Park Aerospace - 5 pct
Berry Global - 5 pct
Alliance Data Systems - 4 pct
Brookfield Asset Management - 4 pc
Analogue Holdings (HK) - 2 pct
Cash: -20 pct.
It has been a crazy year. Portfolio isn't all that different since February, but I've been in and out of most of the stuff during the year trading relative value and I've flipped a lot of Companies fast (Cimpress, Motorpoint, AMA Group, Williams, Ship Finance, KKR, FPH, BSM, PCYO, ESRT). Stayed fully invested during March and added most of the margin to buy (more) Berkshire, Altria and Brookfield in the fall before the vaccine news (cash never below -20 pct). In normal circumstances I'd look to dial down the margin, but I expect to sell our apartment and summerhouse during the next year which would take cash to some 40-50 pct. of the portfolio, so I'll probably just hold on instead of paying even more taxes.
In March I felt like a Kid in a candyshop who'd forgotten his money (being fully invested). Two months ago I still saw quiet some good bargains (like Brookfield, Altria and Berkshire). Now there's very little I get excited about. Luckily HK is in a bear market, so there's still some hunting to do there, but otherwise I consider most of the portfolio pretty fairly valued.
Any thoughts are very much appreciated.
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Bought some Analogue Holdings (HK), pretty good business at a fat discount to NAV. Will write it up.
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This year has been nuts and I should probably sell something instead of buying more, but I couldn't resist getting some more Lion Rock Group (HK) which like a lot of the HK market missed that stonks only go up
It certainly looks like market inefficiency there. I would be tempted to make it a very large portion of the portfolio.
Took it to 8 pct which is a medium sized for me. Think it'll be well worth the wait. Do you follow it, what do you think?
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This year has been nuts and I should probably sell something instead of buying more, but I couldn't resist getting some more Lion Rock Group (HK) which like a lot of the HK market missed that stonks only go up
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SIMO - Greenblatt/ Magic formula type semiconductor stock.
Looks interesting.
Likey likey:
“In addition to our annual dividend, our share repurchase program is another important component of returning capital to our shareholders,” said Wallace Kou, President and CEO of Silicon Motion. “We are committed to opportunistically repurchasing our shares when we believe our equity value may not accurately reflect the company’s future prospects.”
Care to write a couple of lines on your thesis?
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I'm not into hedges and shorts, but I've been intrigued for a long time by shorting HY as portfolio insurance (luckily, I've been too dumb to get much further than that and levered up instead...). Anyway, it seems like cheap insurance and with less downside than say a broad equity market short, and when things crack, illiquid HY also gets punched in the face. Any ideas for a cheap way to express that view? Perhaps just short a liquid HY ETF?
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Anyone have the cajones to lever up at this point?
Only smallish, was 120 pct long Friday, added some more today. But I have 40 pct between Berkshire and Altria and mostly dabble in boring GARPy stocks with good balance sheets and no companies with both financial and operating leverage, so less agressive than it might sound.
What are everyones favorite picks here? I bought a chunk Park Aerospace because I like the LT story, but lots of cash on BS so not all that beaten up. RE still looks cheapish, just don't like financial and operating leverage combined, but also that is a winner here.
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Park Aerospace
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AMC up 70 pct. pre-market, SKT having a blast too
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It's obvious he was/is hoping to bag another elephant. And considering his success with BNSF and BHE who can fault him. Anyway, a combination of the current FED as well as record amounts of dry powder @ PE shops makes it seem like a very difficult task. Possibly for a very long time. At the same time, Berkshire is really not getting much credit for the formidable combination of businesses, their free leverage and the ability to invest large amounts of capital internally (although not enough - BHE should really pursue offshore wind...). Perhaps be came around to the idea that Buffett bagging Berkshire could be his final elephant?
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Great to see, hardly a surprise. Between this and Apple, the old man is still quiet flexible. I'd expect a rerating going forward, seems apparent he won't hold back on buybacks if he likes the risk/reward.
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Bought some Teva yesterday, results out today. Really cheap on a P/FCF basis, lots of noise around litigation. Should be in a place to return money to shareholders in 3 years time. Expanding margins, growth plus litigation settlement could see this triple in 3 years but there are obviously risks here.
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Bought some MO and BAM.
The secular tailwind for alt managers is just massive. I also follow Tikehau Capital in France closely, it's trading below the value of their balance sheet investments I believe and it's tiny compared to BAM while being run by founders.
MO is just a crazy good business, and I don't really understand the price other than it's not exactly ESG kosher. Fat and growing divy in a world of negative rates, and if inflation ever comes around you have an asset light business with pricing power. It's tempting to lever up like crazy and enjoy the spread, but there's no Buffett put unfortunately. If only they'd issue some debt at 1 pct. and buyback shares yielding 9 pct. plus, but instead of doing the obvious thing these dumb smucks rather light their capital on fire. Glad the old CEO is gone.
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More BRK... It has lagged the rest the portfolio, now back at 25 pct. I think it looks like a pretty safe 8-12 pct. annual return with inherent tax advantages for a schmuck like me that pays 27-42 pct. taxes on realized gains.
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More Cambria Automotive. Now 12 pct. of portfolio. Stocks only go up, but this one has mostly been going sideways.
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A lot of it is flowing into alternatives like PE. Institutional investors love private investments as it gives the illusion of smoother performance. It is insane but it's the reason why these alt managers have a long and profitable runway ahead of them.
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Some FPH and BSM during the week... Small bets, like the optionality
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Some Park Aerospace, thanks Schwab
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Sold all my Motorpoint PLC today, another quick flip. Now a tiny bit of net cash instead of being 120 pct. long. Still like it, think it's cheap, but considering the froth in parts of the market I prefer to be neutral rather than on margin.
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I agree pipes like Williams' are cheap in a zirp world, but terminal value is a bit trickier. EIA and BP expect, I believe, natural gas demand to grow to 2035 before starting to decline. But there will obviously be major regional differences, and 15 year energy forecasts are mostly crap. Look at something like offshore wind - demand is increasing rapidly and making forecasts done 2 years ago look ridicilous. Since financing is a big part of the total cost of renewables, low rates should be a major tailwind.
Unless they have published something new, they expect natural gas to start to decline around 2045-2050 timeframe. In fact, worldwide natural gas use is still expected to grow 50% from 2020-2030.
Yep, I went from memory and it seems like I was wrong. I think this is one of the most recent forecasts from EIA: https://www.eia.gov/outlooks/aeo/pdf/AEO2020%20Natural%20Gas.pdf
They've been far off before though, but I agree pipes look interesting and bought a lot of Williams myself in March (sold most but still have a chunk in an account with low dividend taxes). There's just such a huge disconnect between public market valuations and what private infrastructure funds are willing to pay for these kinds of assets today.
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I agree pipes like Williams' are cheap in a zirp world, but terminal value is a bit trickier. EIA and BP expect, I believe, natural gas demand to grow to 2035 before starting to decline. But there will obviously be major regional differences, and 15 year energy forecasts are mostly crap. Look at something like offshore wind - demand is increasing rapidly and making forecasts done 2 years ago look ridicilous. Since financing is a big part of the total cost of renewables, low rates should be a major tailwind.
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Is it me or is today's press release, the first time Berkshire Hathaway has referred to itself "as the largest company in the U.S. as measured by shareholders’ equity."
I get that this PR was written for a Japanese audience who may not know that, but it sounds a bit like a humble brag to me:)
Berkshire Hathaway, the largest company in the U.S. as measured by shareholders’ equity, has a long history of substantial, passive holdings in successful businesses. For instance, Berkshire Hathaway has held major stakes in Coca-Cola for 32 years, American Express for 29 years and Moody’s for 20 years.https://berkshirehathaway.com/news/aug3020.pdf
Japanese Companies are wayyy overcapitalized, I suppose he's making sure they understand Berkshire is as well to increase the chances of doing large deals together. Or he reached a personal Milestone and wanted to brag.
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More Cambria Automobiles... US and Chinese auto dealerships having a good time, Motorpoint also back up, but Cambria isn't much up since the lows. No liquidity so takes time to get some shares.
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I'm also in the camp of no surprises re buybacks, but glad he didn't let us down. There was a long period post the AGM where it traded around the lows - or between 170-180 - despite the broad rally and way less uncertainty. The old man is pretty smart. He didn't bottom tick but he probably got the best possible risk/reward.
Berkshire Hathaway - Break it up? - Size is the anchor of performance
in Berkshire Hathaway
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I prefer to keep it they way it is with decentralized ops and centralized capital allocation. But he should turn up the buybacks, even at these levels, and I think he will. Berkshire has been undervalued for too long, and the attitude of central banks makes distressed deals less likely. If he turns up the buybacks and gets himself a decent currency, it would hurt less if a wounded elephant came around and he had to issue a bit of equity to bag it.