spartansaver

Ectm is a similar idea although it was much more interesting at 30 cents. Should distribute around 12 cents this year using the futures natural gas strip and a 50 cent hub discount. If natural gas prices go to 4 or more, it gets very levered to the upside. It’s my largest position, partly because of the run, and partly because at 30 cents I felt my downside was pretty limited. I would have posted sooner about this idea, but I was trying to buy as many shares as possible and it’s reasonably illiquid.

https://www.theinvestorspodcast.com/episodes/common-sense-investing-w-joel-greenblatt/ Does anyone know the company that Greenblatt is referring to at the 35:03 mark?

I'm not sure 50 years is a long enough time period on a macroeconomic level to draw too many conclusions about a single piece of the macro framework. Fiscal policy does not exist in a vacuum. An infinite number of macroeconomic combinations have played out over the past 50 years that contributed to our current situation. I'm a poor historian, so perhaps there are some cases in history where this lasted for several hundred years instead of 50, then touche.

I would say that bond investors are using close to the 10-year in computing intrinsic value.

Looks like it earned close to around 40% ROTIC for the few years leading up to it getting acquired. Earnings could get cut in half and it'd still be generation solid returns on net tangible assets.

"In 1999 and 2000, Buffett spoke of the market environment and the minimal returns investors could expect going forward." That was my exact takeaway from this year's letter. He was pretty clear on bond's being insanely overpriced, and you can deduce what you would like from that in relation to the level of the stock market. My issue was that we have a pandemic going on and I expected some commentary around that. The only commentary around that was that NFM was closed for six weeks.

Likewise, couldn't disagree more with the notion that Warren should focus his communications on excogitations about the future. Those who want discussions of Snowflake and explorations of the future development of Berkshire are in the wrong place. Read through the 50-plus letters and it is apparent what Warren tries to do/likes to do with these letters and with his Berkshire-specific communications in general. There are people who would like him to do quarterly conference calls, to discuss current investments with more depth (why did you investor in this?). I mean the most glaring omission would be the dearth of Apple discussion right? They have $120 billion in the company but he did not even review basic thoughts of the business, its moat, its value, etc. Essentially the only substantive discussion of Apple was an empirical description of its buybacks. So it may be reasonable to expect a discussion, at least a minimal one, of this $120 billion investment....BUT that is not the kind of thing he generally does. That is as a part of Berkshire as much as GEICO. Also the nature of annual report documents and letters is to review the past. That is their essential function - they are concerned with what has happened to get to this point. I do believe Warren is addressing the future though by addressing the past. These letters and Warren's Berkshire-specific communications shape and cement the culture and character that he intends to endure at Berkshire into the future. Reading through 50-plus years of Berkshire letters and the way he discusses the companies they've purchased, how those companies were built, the way the Buffett Partnership became Berkshire - and how that indelibly shaped the present, and he hopes future-Berkshire, is a powerful message to Greg, Ted, Todd and their successors. The communication has been so clear and the transmission of values through these communications so powerful, for instance, that if Greg immediately started quarterly conference calls after he takes over - then every single long-time Berkshire shareholder that I know of would revolt. That is because of Warren's clear communication in these letters. In 1999 and 2000, Buffett spoke of the market environment and the minimal returns investors could expect going forward. In 2008, Buffett discussed the financial crisis in the midst of it. Today we are in a pandemic and not a word is mentioned. I had expectations that Buffett would to some degree talk about the past year and his thoughts around it. I don't think it was that crazy of an expectation and I was let down. Perhaps I should have listened to Charlie and gone in with no expectations. I was disappointed and thought it was one of the most generic letters he's written.

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?