spartansaver

Muscleman, Thank you for bringing the Covid crisis to our attention early on. I managed to hold onto our positions but bought a lot of out-of-the money puts to hedge against our portfolio. We winded being up over 20% thanks to you. More importantly, the risk management tactic was a very nice "surprise" to my investors during March/April. Coming out of the crisis, we have gained more of their trust. If I can offer you a piece of advice is that if you see Vix trade to 80, just buy and hold your nose. It only happened once before during 08/09 in my short 15 year career. So if Vix spikes to over 80, it is just a blaring signal to buy. I hope you can benefit from this piece of advice in the future. Frankly, you can say the same for Vix of 40, or 60. But 80 is definitely a no brainer. I'll echo these same thoughts. Had a very good year because of your insight, it is much appreciated.

I've been reading a fair amount about certain industries having labor tightness as well as skyrocketing costs of certain commodities. This got me thinking that there a fair share of people who claim since the labor market as a whole has slack, deflation is likely to persist. But if we look at labor markets on micro levels we start to see different stories (see WSJ article below). Does the tightness in labor of specific industries have any parallels to a previous event? One parallel that comes to mind is post-WW2. Amidst WW2, the US rejiggered its economy as a war machine and when the war ended we had all the troops come home and our needs greatly changed. Inflation as well as employment spiked upon their return. We are in the process of dramatically changing certain parts of our economy to cope with a post-COVID world. Is this parallel off? Can you think of any other parallels that refute this hypothesis? https://www.wsj.com/articles/blue-collar-jobs-boom-as-covid-19-boosts-housing-e-commerce-demand-11613903402?mod=hp_lead_pos1

I'll push back on this a bit. I think learning position sizing from good mutual fund managers depends on your goals. If your goal is to remain wealthy I don't have a problem with it. If your goal is to get rich from investing, these are the wrong people to be studying. Mutual fund managers get rich by managing other people's money, not crushing it from an investing perspective. The wealthiest people in the world who aren't in the investment management industry got wealthy by loading up on their best ideas.

I'll echo what others have said. I think it's dangerous to take too many lessons from 2020. The primary lesson I'm taking away is to make sure I think through how current events will actually impact the business I am buying. Some are more obvious than others. I was buying LUV in early March, and really didn't think enough about how hard it is to understand the long term implications the pandemic might have on air travel.

I see net debt of $9.4m. What am I missing? Now I'm the shameless cloner. Your DD smells like DooDoo You're the 1st person to correctly uncover the real meaning of my username. On Feb. 4th, company sold some electronic billboard making division for $23M. Last balance sheet cash amount was $7M. Debt is around 3.7M as of most recent report (I ignore leases). Movie screen business is now losing money. There is plenty of corp. SG&A that the company breaks out separately. I doubt movie screen business can just get rid of corp. SG&A, someone needs to do the accounting and whatnot. Doesn't seem that interesting and for some reason they are issuing equity (doesn't make much sense if they think it is undervalued with a whole pile of cash). Maybe I'm missing something.

Sea and Crescita?

I would give almost anything to have been a fly on the wall during this guy's charity lunch with Buffett. I can only imagine Warren's reaction. ;D ;D We are living through an amazing era. I just have to believe this "meme culture" philosophy will go down in history books and new versions of books like "a short history of financial euphoria" for future generations to study. I've reread a short history twice in the past couple months. Trying to keep my head level.

What did you pay for each? SPCE Jan 2021 $7.50 Puts @ 47 cents NKLA Jan 2021 $7.50 Puts @ $1.37 Since you asked for pushback. Not much upside in the NKLA put. Your max win is 5.5x your outlay. What are the odds that NKLA share price declines 75% or more in order for you to get your money back? What are the odds it's a 0 and you get 5.5x your money by Jan 2021? I'd put both of those at somewhat low. Not sure I'd be confident it's a positive expected value. I can wrap my head around SPCE put as it at least becomes becomes very valuable in a true insurance scenario.

What did you pay for each?

Buffett Jan. 1966 Partnership Letter “How much do I put in number one (ranked by expectation of relative performance) and how much do I put in number eight?” This depends to a great degree on the wideness of the spread between the mathematical expectation of number one vs. number eight. It also depends on the probability that number one could turn in a really poor relative performance. Two securities could have equal mathematical expectations, but one might have .05 chance of performing fifteen percentage points or more worse than the Dow, and the second might have only .01 chance of such performance. The wider range of expectation in the first case reduces the desirability of heavy concentration in it.

Do you mind explaining, Cigarbutt? I'm more of a macrotourist than anything else. Thanks! I’m curious as well. I took the other side of this and bought very far out of the money puts.

Very far out of the money long dated puts on TLT. Protecting myself from one side of the tail and have plenty of cash for the other side.

Hi Investor20, Here's finally a topic we may agree on (partially at least). :) Opinion: the price of 'closing' schools is high and has been likely underappreciated, especially for the younger cohorts. Over time, this conclusion has grown stronger (with more evidence). Having said that, the study you mention has VERY serious methodological limitations. ----- When you spot a serious investment opportunity (i've almost forgotten how this feels like), isn't it useful (and fundamental) to viciously try to kill the thesis from all angles before embracing the occasion with a significant commitment (mental and financial)? i'm asking because, for the main author of the study, it must have been very difficult to adopt this disconfirming attitude when he initiated and performed the study.. There's hope however. On his Twitter thread, one of the authors of the study had this video: ----- It feels like i've done my share of tilting at windmills lately and i wonder if the overall investment climate has anything to do with it? Killing a thesis? I'm not having any trouble finding tons of opportunity at relative discounts. Why would anyone want to kill that thesis?

I read the write up and I don't get it. What is the business?

The next Kyle Bass?

Thanks, couldn't get past the paywall but this SA page provided insights in the comments section. https://seekingalpha.com/news/3507213-brookfield-to-take-25-stake-in-dominions-cove-point-in-2b-deal I would love to be a fly on the wall in the meetings where Brookfield determines their fair value marks. Between this, the overpriced Railroad they bought, the GCP shopping malls, the Forest REIT projects etc. The mental gymnastics will sure make the flys head spin. It would probably kamikaze into cow poop to feel better afterwards. I started wondering today if any of these public private equity firms are good short/put option candidates. Some are levered at the parent level, and generate are likely coming from highly indebted investments. If investments start turning sour, fees could dry up.

I understood it as: aim a bit long, a bit short and in the middle to hit the target. It means (as it applies to business & life) when you are estimating something, try to upper bound and lower bound tightly and your answer will be the middle. Thanks!

Can anyone help me understand what he means firing the mortar over, under, and kapow?

I think the most interesting part is that if you're certain that it is a great manager (almost impossible to be certain), the price differential becomes enormous. I think it really drills home the point when you look at certain examples (Tom Murphy (Great) vs. Bill Paley (Crappy)). For me the tough part is I don't know if I can recognize a great manager, so how much should I handicap my ability by (maybe a large amount). I think I can be more certain of who isn't a great manager, and simply pass on those.

Company A and B are the same company today. Company A and B are attractive businesses with long runways. The only difference is that company A has a great manager and company B has an average manager. Both managers are early in their careers. What difference in price would you be willing to pay for company A vs. B?

Please leave your politics in the "Politics" section. He's half white and half black. But you've chosen to lower the bar of discussion by pointing out only that he's black. Cheers! Are you insinuating he got a better contract because he was half white? Last I checked you have plenty of people far less than 50% claiming identities...like a certain Massachusetts senator. He got a crazy contract because of his skills. He is what most consider(maybe not Joe Biden) black, and I just think its worth noting that there are definitely certain levels of success available to ALL Americans, which is what the American dream is/was all about. No, I'm saying that race has no part in it and you were making it a discussion about race. Cheers! New Thread Topic... What's your favorite type of orange? Post 1: Donald Trump Post 2: Why are you bringing politics to a discussion on oranges? Post 3: Are you insinuating that he's not an orange?

Kinda self-explanatory, and maybe the answer is already out there. I'm just wondering if as the world became more genetically diverse, did that diversity compound on itself? What happens if this phenomenon goes in reverse? Also as it relates to business. It seems like there are many more types of businesses that exist because other businesses exist. Business diversity creates new businesses (and those businesses get supported by other newly created businesses).

It's true, back in 08/09 when Buffett was young he was able to act aggressively. (this is a joke)

95% of asset managers PBMs

I skimmed that article after the meeting. I couldn't believe the spin it took on the meeting. The WSJ watched a very different meeting than the one I saw.