kab60

Ulta Beauty... And a bit of ADS (almost puked when I did that)

According to research by Verdad, the highest expected returns after a large correction is typically in small cap value - and obviously levered small cap can be explosive. I understand why everyone, including myself, are attracted to strong balance sheets and low leverage in times of crisis, but coming out of the GFC a lot of multibaggers were found in small, levered equities that made it through. Considering everything is getting soldt indiscriminately, the proverbial baby might be thrown out with the bathwater. Not saying the time is right now, but it would be nice with a list. It seems the biggest risk for many companies atm is liquidity, and that risk is real, but perhaps well stacked debt at low rates isn't such a big issue unless companies have to refi in the current environtment. Personally, I have a large investment in Berry Global. But that has actually held up quiet well despite high leverage (it was sold down prior to coronavirus scare due to company specific issues). Ashbury Automotive is interesting in that they have high recurring revenue from service, and it's a high quality business, plus they can terminate an acquisition (and probably will) that otherwise would've take leverage to 4x. It's down almost 2/3 in a short while, but I'm still not sure one gets compensated for the risk versus say Cambria Automobiles or Vertu Motors that has low to negative net debt. So, what's your favorite levered value small/mid/large cap? Possibly throw in some cyclicality too for maximum YCK factor.

Since the GFC it seems monetary policy has been about the only tool used. But that toolbox is very limited now. If politicians start using fiscal policy, ie infrastructure spending, do you expect inflation and rates to go up? Wondering whether now might be a good time to lock in a 0,5 pct loan for 30 years (have variable now). If rates rise, it can be called below par.

I'm down like 35 pct. in 3 weeks and haven't missed a minute of sleep since it won't affect my day to day life one bit how them stonks are doing. I mostly feel like a kid in a candy store who forgot his money. As for the virus, not scared, but I think it's import people take this thing serious (we're in lockdown for 2 weeks now at least) so as not to endanger those who are vulnerable.

Charter, definately. Just holding up okay unfortunately.

Anyone found any good cannibals on sale? (Something like Autozone but on sale obviously - and not like Aercap which is on sale for a good reason...)

Denmark is basically locked down for two weeks now. Our prime minister is currently giving a press briefing. School is off for two weeks, public workers (who aren't in healthcare etc.) are off with paid leave (those who can must work remotely). Daycare/kindergarden (which pretty much everyone uses) pretty much closes. Gatherings above 100 people inside is banned. Bar, clubs etc. closed for two weeks. This is definately much more serious for the Economy than what I contemplated just one week ago.

WMB, EQUINOR

Yep, less flu deaths: https://amp.ft.com/content/ad7ae6b4-5eab-11ea-b0ab-339c2307bcd4?__twitter_impression=true

Wonder whether there'll be fewer deaths in total than during a normal flu season (if one normalize things) when this is all set and done. I've never seen people use hand sanitizer as they do these days.

More SAVE, more Vertu Motors yesterday.

Norwegian airline Norwegian Air Shuttle was in pretty dire straits before coronavirus (3 capital raises in a year)... Multibagger and donut potential in one

Sold some BRK, bought more SAVE. I'll crash with the stock! (Just had an American AirBNB family cancel their weeklong booking at our flat- you fellas take this beervirus real serious!).

Autozone. Does well in a recession, and if people are afraid to fly they might drive instead (more miles driven equals more repairs). Fabolous business, perhaps less so if EV's become a big thing.

Yeah, I know people at TV2. Obviously suck to be guarantined (well with small kids it might be nice with 2 weeks "off" binge watching Netflix solo and eating takeaway), but I'm not the least worried about Coronavirus. I can see why people are on the sidelines due to knock on effects (supply chain disruption, weak stock market getting Bernie elected - though I think he's needed), hoping to catch a bottom, but the virus seems pretty harmless unless old and weak - like the flu.

I'd be interested to hear what long term compounders are trading cheaper than last March and at substantial discount to IV. 8) I guess EXPE is but it was cheaper in November and without virus overhang for near term business. Me too. Even summer 2019 was cheaper and Dec 2018 was much cheaper. In Addition, we now have a Real problem with the economy that we didn’t have last year. A selloff always offers some bargain, thats true, but it was way more true in Dec 2018. Linamar! Auto parts, yada yada, cyclical, yada yada, but their growth is real. And you get in at an almost 50 pct discount to BV while their capital allocation is to go for plus 20 pct returns. Obviously, their ends markets are pretty bad, but even then you get a fat yield and 5-6xPE. And they tend to come out stronger through a downturn. Hasn't traded here since 2013 and has reinvested almost every penny in the business or bought back shares (talking my book, 18 pct position).

I feel like a kid in a Candy store who forgot his monnies. Perhaps take another one of those store credits...

Sure, makes sense. Just have no Idea about the probability of that. And the many macro bear cases almost always seem rational. Dalio sad cash was trash the other day, no? I mean, he seems like a pompous douche, but I'd venture he makes more informed macro forecasts than I and he looks like a complete idiot now. Seems easier to identify good businesses selling for cheap that can weather most of what will get thrown at it. But sure, not much is cheap.

The comparison to influenza is total bull. It's not about how many people the virus end killing. It's the economic impact. Simply put, the flu does not shut down supply chains. Unless you get a season of something resembling the 1918 Spanish Flu, the systems we have in place work very well in dealing with the flu and the economic disruption is basically non-existent despite a human cost that is surprisingly high in this day and age. The coronavirus, despite having killed not that many people seems to have had a much, much greater economic impact. The profit warning from BUD yesterday was HUGE. A lot of companies are still mum of the effects. But if BUD is not an outlier then Q1 and Q2 earnings are gonna be a shitshow. I also agree with what others are saying that things were pretty expensive and the economy not very robust so the virus may have just been the spark for a selloff. Look at what treasuries were doing for a while now while the stock market was whistling its way ever higher. You couldn't square the two. The bond market was flashing red and the stock market didn't have a care in the world. One of them had to be wrong. I'm just sorry that I didn't buy S&P puts when I was thinking about it a couple of weeks ago. Additionally, from trading patterns it looks like we have indexing working in reverse now, taking things down indiscriminately. There's a line in Ford v Ferrari were the car starts going really fast and a guy goes like "This is where the uninitiated tend to soil themselves.". If you've never seen a 1000 point drop in your life it's really scary stuff when it happens. If you've never seen a 1000 point drop in your like and you see 3 in a week well... it's soiling time. This is stock market education. Of course the economic impact is bigger, there's a high degree of uncertainty and fear, but it already seems to be getting somewhat under control in China. I haven't seen anything to suggest this is anything more than a temporary issue, which can obviously be bad if you're overlevered, dependent on capital markets etc, but I also think the baby is being thrown out with the bathwater. Sure, the backdrop is probably ripe for some heavy, broadbased selling, but few here are probably buying indexes. Again, anecdotal, but here is the latest comment from Rolls-Royce: East said the coronavirus may hurt air-traffic growth in the near term but that long-term trends most affecting Rolls-Royce remain intact. Some suppliers in China did briefly close, but Rolls was able to rely on existing inventory, and those are now back up and running, he said.

That would obviously be a different scenario, but it doesn't seem grounded in facts but fear. Anecdotally, but I talked with the CEO of Company with 60.000 people and ops in China yesterday. Said things are normalizing there. Just received this from a Chinese friend of mine that works as a consultant (excuse the poor English): Situation in provinces out of China is getting better and better. My home province Sichuan, nearly Hubei, has reported 538 cases cumulatively so far. It is a kindly of under control as only two four new cases reported in the past of 48hours. You got to know, there more than 100 million people in my province. What I said doesn't mean that you don't need to worry about it at all, but just don't be panic. Sure, that's just anecdotes, but most else I read and hear supports those comments. The experts I've seen comment on the subject also advice people to take a chill. Obviously, the market is freaked, and I have no idea where the bottom is. But I hardly thing great businesses are impaired due to a Chinese flu. Actually, great Companies might come out stronger if they're able to secure work from those that are hit harder.

Obviously the market as a whole isn't cheap due to a quick 10 pct. drop, but boy do I think people are overreacting. Obviously there will be shocks to supply chains, obviously there will be Companies that'll have a bad year. But how much does 1 year matter? Haven't seen anything to suggest this is anything but temporary. Now, I'm not saying things won't keep going down - who knows, probably lots of momentum guys and milennials that can't stomach the vol - but companies that were already beaten up suddenly seem very attractive if one has a longer term view. When this round of Chinese flu is over, rates will still be rock bottom. As for feb 15, CDC estimates 29 mio. people in the US have been ill with influenza. 13 mio. have been to a physician. 280.000 have been hospitalized, and at least 16.000 have died: https://twitter.com/dr_rwt/status/1232959423989112832/photo/1 Very much seems like a case of high uncertainty, low risk.

I think WMB looks most interesting. Transco is great, and they take advantage of public vs private discrepanies. Seems close to sell a chunk of gathering pipes for 5b or probably around/plus 10xebitda while they trade below and the total company due to transco should be worth more. They should sell 49 pct of all their gathering pipes, get leverage down to their target and buyback shares.

SAVE and LNR on margin. YOLO

50 pct. more AMA Group after my quickest 30 pct. loss :o

Cast SA recently. Microcap, french software Company transitioning from perpetual licences to SAAS and recurring revenue. 55m market cap, 23m receivables that should be turned into cash in Q1. Spent some 150m on R&D over the years. Seems to be at an inflection that market has not caught up with (or fatique/lack of confidence in management). They've disappointed for years, seems like they're about to turn the corner with SAAS booking growing almost 200 pct in Q4 albeit from a low base and guiding for overall profitable growth of 20 pct in 2020. Low float, interesting shareholder composition. Think it's gonna go big or go private. :)