DavidVY

IB actually provides back-end service/market routing for other brokerages. Very likely they will be the backbone to all e-trading eventually just from a cost basis. Front office/back office separation

My family owns rental (commercial) property in Los Angeles and cap rates are been squeezed down to nothing (2-4%) By contrast you can buy 5-7% out of state but in little podunk towns w/triple net leases. Then the stock market multiple REITs selling at 10-11x AFFO and around 5-7% dividend. I've been holding VER (ARCP formerly. All properties verified and 99% occupancy. It sells abt 10-11x AFFO and has a 7% dividend. This stock i understand why its low (Nick Schorsh legacy, lawsuit hanging over company etc) Then you have KIM (kimco) selling at 11x AFFO, 7% dividend. 95%+ occupancy. Has positioned itself as Amazon resistant. What is contributing to such a big pricing/yield gap between private transactions and public REIT transactions? REITS historical undeperformance against sp500 index? Hot money flying toward tech stocks? REITs too boring? Amazon? Curious to see what the board thinks....

Also check out NWLI. 1/2 TBV. Around 8x PE. Despite all the huballo about interest rates 1/2TBV is a pretty good margin of safety.

Not a bad idea IMHO. Are you following through on this? Yes, diversified industries. - Nestle - Diageo - Health/Life Insurance with divies - REITs - High yield bonds (3yr duration) - Asset-light high FCF- biz : Amdox - Berkshire - Google (before the surge. I backed out cash. It was selling at 26 PE @ the time, but backing out cash, closer to 16 PE. Mkt multiple for a company gaining operational leverage and compounding 10%+. Easy decision). Diversification becomes more and more important when you have leverage. Currently 175% long on not a very big sum (<100k). Salary can bail me out if things go sideways in the next year or so. I don't think central bank liquidity will dry up in the next 3-5 years, but I will have to re-evaluate as the position grow into the leverage (leverage will naturally reduce). Its also great as negative gearing. I try to max out my losses/margin interest to defer income from this year to next year EACH year. Basically try to get around 3k deduction every year. I have a high income bracket so its a great structural advantage. Buffet is a master of tax-code. There is a lot we can learn from him about defered tax liabilities. I think thats why he never sold Coke in the 90s. Its very seldom that you should switch from a "compounder" if you have embedded tax hits. The take-away is hold all your great positions until they become "obscenely overvalued" if they have large cap gains. I'd say to sell when earnings yield of compounders become less than treasury yields. Coke was at one time selling at a normalized earning yield lower than treasury yields (4-5%).

How about using IB low interest margin to lever up with stable consumer stocks paying 2.5%+ dividend. Buffett did it w/float (low coast interest margin). We can do it today because of central bank stupidity.

- Industrial Distributors- MRC/HWCC - Real estate- BAM/BPY , VER, CTO - Family owned and operatored insurance- NWLI/ANAT - Anything Media/Broadcasting Related: I like DIS (Shanghai park is a huge tailwind, 300MM potential visitors in a 3hr radius by high-speed metro). New pipeline of content coming that is just unbelievable. FOX-A and DISK.A look interesting too. Scripps is also a good candidate. - Anything that uses cheap US natural gas as a feedstock to make value-add products. I prefer companies with 30% or higher family ownership and proven strategies through cycles. I like WLK - Legacy fin-tech- WU is an product with unbelievable reach. People aren't valuing their distribution network properly (500k+ agents). This could easily be a 50% leg up if somebody like Paypal or Square wants to bridge the online/in-person gap. Speculation- Potential M/A candidates. Cheap $ is flooding the world, so M/A is likely going to continue to increase. -Low price/sales companies in consumer goods that have good products but have poor distribution would be good for takeover. - Airlines are consolidating Leveraged carry-plays - With margin at all time lows, arbitrage of stable CF companies with dividend covering margin- Nestle and Diageo. It also helps that these companies are gorging themselves on extremely low-priced long-term interest rates. I see this trend continuing. Any acquisitions that they do will leverage their enormous distribution network and scale. I see a decades long tailwind with the rising middle class of the world.

Disney is the ultimate good business with amazing pricing power People will take their kids to Disneyland for the holidays instead of paying for rent (overheard this on the radio station) Pablo Escobar took his kids to DisneyWorld @ the time he was being hunted by the US govt (Cocaine Cowboys) A movie soundtrack from Frozen becomes a US best-seller because of the branding power. The some of the biggest musical stars got started with Disney. And don't even start with how iconic cultural icons have lasted over 40+ years.

Disney is a good bet on China. They just built a huge park in Shanghai.

@Grey- Whats your thoughts on Amaya. It popped up on my radar too but the debt-load is pretty large. Online poker is also in secular decline.... Bought - Disney - Westlake Chemical - Softbank I am seeing a lot of value in media and commodity business. Discovery, Time Warner Inc and FOX-A looks interesting.

NWLI is at around 60 of book. Float is tiny (difficult to accumulate). Insider ownership large so no real catalysts but you are buying a conservatively run insurance company at 55-60c/$.

Tobbaco was the best but it also countered volume drop with price hikes. More often than not mgmt blows it on dumb stuff. OUTR went full retard and bought out EcoATM (cellphone recycling) which is beyond idiotic.

@ berkshire101- not really 100% sure to be honest. US shopping has really gone much more online. Maybe it's a familiarity w amazon prime or good postal service here... Just musing on a riff from my recent visit to Nordstrom after reading their annual report. I tried on shoes and jackets but I am an unusual size (tall/slender) for their luxury clothes. Rep immediately pulled up catalog and said we have your size online. Pay now and receive in 3-4 days. Free returns to the store if you change your mind. Perhaps gross revenue, gross margin and cash flow from operations. I would like to see increasing gross revenue and cfo, stable or increasing gross margin (minus forex exposure). Just floating an idea out there and see what angles people can get back to me

I've been doing some thinking and reading of various retailers and most are stressing the effect of internet sales and in store visit coupled with internet shopping aka "omnichannel". Same store sales (which don't count online) have definitely taken a hit but I believe it is a broader structural change in how retailers are being run. The store is a fitting room with limited selection (minimizing inventory risk) coupled with a warehouse distribution and direct shipping to a person's house

Cloud Peak Energy Bonds 2019

Insurance companies NWLI and ANAT. Huge family ownership (maybe not majority).

Because BRK is a diversified collection of business which is a diversification of itself

Insurance- NWLI Tech- ZNGA Retail- KORS I am getting massacred on my coal and energy/mining conglomerates. Still eagerly waiting to add more

Yea, O/G guys are pure gamblers to the MAX! Makes the natural gas imbalance and oversupply more cause and effect. Contracts linked to retaining leases specify a certain amount of drilling and extraction for lease to remain viable. I think the next big push is the petrochemical companies coming into the supply glut ala internal combustion engine coming into the gas glut in the Rockefeller era.

Great Crash and its Aftermath was an excellent book. Heavy statistics and P/E ratios too. I remember a bunch of companies going from 500% Book to 40% book (back when book actually meant something more serious). Or from 172 P/E to 10 P/E. Pretty unbelievable.

Crap, I thought MSM was MLM. Scratch that off the list, its not a valid comparison. I think MRC's debt is deceptive because it was LBOd by Goldman Sachs. They are paying down debt around 100MM/year, except when they make acquisitions. Its also #1 PVF company and has long-standing relationships w/most of the oil majors (less operational risk too). 60ish% of revenues is from MRO. DNOW will eventually swing around but it takes time for a spin-off to gain footing. Spin-off rarely hit the ground running. Just my 2c. Both are probably good opportunities...

Because they are extrapolating Fastenal's model (and prior compounded growth) to other industrial distributors, and taking advantage of low expectations to load up.... Instead of blindly copying the big boys, you can play their game better than they can. Buy similar companies w/less active volume traded. I picked up USLM (sub for MSM), MRC (sub for DNOW) and HWCC

Gencor squeaks by as a net-net w/a market cap of 94MM- 97MM in cash/short-term investments, A/R roughly equal to A/P + hidden real estate assets of around 50MM that is been carried on book for 7.2MM. I'd still wait a little longer before picking up shares, there is a lady who inherited shares from her husband (roughly 10% of company) and is slowly selling it off. You probably can pick it up cheaper as she liquidates. National Western Life Insurance is selling at 1/2 Tangible Book, growing at 8% per year, zero debt. Both are owner-operated and have share structures that make it tough for outsiders to gain control.

Its always popular to elect somebody to rob Peter to pay Paul. Instant Gratification is v popular w/the masses.

I am still finding a few companies that are net-nets and few selling at roughly half of book-value (no debt).

One key thing about the energy system and power grid is that it isn't built for optimization of today, yesterday or tomorrow but for 40-50 years from now. The key is diversity of energy sources not a push into one direction or another. Redundancy and Stability > Optimization. Another issue is that as the world grows, energy use will likely outpace the ability for renewable energy to keep up. Most of the fossil fuel usage growth will come from the 3rd world. We might be pioneers in renewable energy, but don't misunderstate the importance of fossil fuels for a continued world prosperity For those more interested I recommend reading -Following oil : four decades of cycle-testing experiences and what they foretell about U.S. energy i (2014) By Petrie, Thomas A. -Gusher of lies : the dangerous delusions of energy independence / (2008) By Bryce, Robert.