StevieV

IDT - Remains undervalued after litigation win. SPHR - I think filling in the schedule with new acts will be a significant boost. The success of U2 should prove out the model to other acts. A 2nd sphere could also be a big catalyst if the company negotiates a company friendly deal (i.e., capital light). PX and BRDG - Have lagged the alts rally. BRDG is lagging because it's real estate and will need to show some fundraising life. However, as per usual, the funds have long lock-ups. BRDG has bounced off its lows, but still is of BRDG isn't pricing in much if any growth in AUM.

Thanks RL. A few fortunate picks in 2023. Thanks to the board for FFH and JOE. Obviously a lot of great insight by Viking and Gregmal on those.

The client separated the possible costs of repairs and rebuilding from his other investible assets and invested the funds instead. He assumed he could make an average return of about 6% on the roughly $1.5 million while waiting for some other insurers to re-enter the market, Newman says. It's a stretch to call this finding a way around the challenge of increasing insurance rates. It is simply choosing to forego insurance. "Instead" of buying insurance, the homeowner will pay for a rebuild out of pocket if something happens. Those are typically the two options.

$OWL

Do you know why APO does convertibles rather than straight debt financing? If I recall correctly, ARES has done some equity financing in the past as well (at much lower prices). I assume they have good reasons.

Made me laugh. Someone in the thread mentioned an 8-12% range of returns. I think that's reasonable enough. Is BRK a more certain index (i.e., you can have more confidence BRK will return 8%+ over time than the SPY) OR single-stock risk without big upside potential?

I agree with this. Particularly the comments on historical evidence and timeframe. History can be a guide, but 6% isn't a law of nature. Also, corporate profits as a percent of GDP broke out above 6% over 20 years ago. That's too long to be useful even if it were to mean revert. Reminds me a bit of the Shiller PE. I think the best one can say is that there is a risk of shrinking margins and, as mattee says, the possibility of lower future returns (again similar to the Shiller PE I guess).

Since there seems to be demand for sell thread postings - I trimmed some LEN-B this morning on what turned out to be a very brief post-earnings bounce.

I think that E&Ps are just reflecting the dump in oil. Big difference in earnings on a drop from $77 WTI (the YTD average) to $67 WTI (today's price).

This post made me look up the Roku CFO. Apparently the Roku CFO announced his retirement last year. New CFO named last week. https://finance.yahoo.com/news/dan-jedda-join-roku-chief-133000515.html

I feel like the role of time at a particular rate is under-rated. Taking your example, even if there was a pause at 4%, rates would still be at 4% rather than 2% or 1% or lower. The rates take a while to work through the system.

Small adds to JOE and Fairfax. No heroic moves.

I don't know. I really, really dislike self-checkout. My local grocery store went to 1 cashier lane, got a ton of complaints and long lines and quickly reversed course. I was going to switch grocery stores to be able to have a cashier.

"Pilot company has grown a ton since 2017. They are doing a lot more business than just the truck stops." Do you (or anyone else) mind elaborating? Curious about how they are expanding. I know essentially nothing about the company.

JOE

BN and IDT

I like anything with a high probability of double-digit returns over the next few years. Fairfax certainly still looks like that here. I don't know about 1.5x book, but $1,000 USD over a few years, that seems pretty high-probability. Fairfax's 2022 and '23 YTD outperformance has been nice.

I don't care so much about Fairfax maximizing yield in any one corner. Yes, this is why I thought they'd increase duration. Not to maximize yield, but to lock in yield for a while. Fairfax generally knows what they are doing with the bonds and the short duration served them very well getting here. They could certainly be making the correct call again now.

I thought they'd keep extending the duration. Not bad at all. Maybe not as cheap as it was, but hard to see how it isn't a nice holding from here.

At almost 2 hours long, I'm not sure I'll get around to watching this. However, if I skipped to the end correctly, it looks to me like they are putting "fair value" at $326/B share. Seems reasonable enough. I generally find the BRK "fair value" estimates too high, as in they give prices at which I'd never buy and at which I don't think you'd get a good return. I think it is more useful to figure out a "buy price" as in buy at this price and you have a good chance of achieving a good risk-adjusted return.

Well, now I know what you thought of the earnings report without asking.

I should clarify - I'm not asking for myself. I'm just curious if there are career paths people have taken that they'd recommend. The most common refrain from people seems to be: "don't become a ________". I'd love to hear opposite examples.

I have apparently run out of FT free articles. If I recall correctly, most of the reporting was that Kew left when the board wouldn't discuss his $300 million pay package proposal. $300 million is obviously a huge number, but probably not out of line for this type of position. The new CG CEO has a $180 million incentive program, so the board isn't opposed to a large incentive pay package. I think there was other reporting about him being pushed out as well. I'm out of Bloomberg articles as well apparently, but the part of the below article that I can see says Kew was abruptly pushed out. I don't know how accurate the reporting is and only the parties closer to this know for sure, but I don't think it is plausible that it was only a pay dispute. If the board wanted to keep Kew, I think they would have negotiated a deal. The targets are a huge factor in these incentive deals along with the headline numbers. The new CEO isn't getting $180 automatically; it requires 110% stock appreciation in 5-years. If Kew wanted a higher headline number, the board could have put a higher target - 150%, 180% in 5-years. In any event, neither here nor there at this point. https://www.bloomberg.com/news/articles/2022-08-17/carlyle-ceo-drama-exposes-fault-lines-between-old-guard-and-new?leadSource=uverify wall

I think CG is probably a good buy here too. They have some potential margin expansion and multiple expansion for the reasons n.r98 mentions. However, I also prefer KKR and APO, though I haven't compared particularly at current prices. The alternative asset managers have become more than just PE shops and I think management and longer term planning is pretty critical for the best outcomes. As these companies grow, they need to find new large areas to expand into in the next 5 year, 10 years and beyond. I believe that Bruce Flatt mentioned that the next 2-3 years of 15%+ growth are locked in and they are starting to work on the years after that. I think BAM and others are looking significantly farther after that. Marc Rowan at APO has a strategy. Many may think it is insurance, and it is, but it is also credit origination. Plus, he's chosen Australia, Japan and Europe geographically. Bruce Flatt (Brookfield) has a strategy and that is pushing hard into infrastructure, energy transition and, I believe, Asia. BX has gone hard into real estate and retail distribution. KKR is always talking about their proliferation of strategies. As I see it, everyone is trying to position themselves to be able to grow double digits not just for the next few years, but in 5 and 10 years, and hopefully beyond. I'm not sure who has the best strategy, but I think each company is pursuing a strategy. CG just really hasn't had the leadership stability for me to have as much confidence in the same. In 2018 they named co-CEOs. In 2020, Youngkin left and Kew was sole CEO. In 2022, Kew left and they have been without a CEO for a number of months. From my vantage point, I thought Kew was very effective. I thought it was a big mistake not to run with Kew and am concerned it was a personalities clash and not performance. That's just speculation of course. I mean, I listened to at least most available interviews and I'm not sure Kew and I would be best friends (that's not a knock on Mr. Lee - his public persona seemed perfectly fine), but I think he was doing the job and had the company headed in the right direction. I got off on a bit of a tangent there, but the point is that leadership is critical and CG hasn't had enough stability in the recent past. Here's hoping the new CEO gets them onto the right track.

What does the board recommend for young folks then?