Deepdive

FYI Rhizome_Partners_Q1_2020_Investor_Letter_Final.pdf Massif_Capital_First_Quarter_Letter_to_Investors.pdf

Anyone know of any funds/managers that made short position bets in the last quarter. I found the following: 1. Ackman/Pershing Square is an obvious one here with his CDS trade. 2. Universa Investments did 4,144% - https://www.bloomberg.com/news/articles/2020-04-08/taleb-advised-universa-tail-risk-fund-returned-3-600-in-march 3. Rhizome Partners bought a basket of 15-20% OTM puts that did 11.2x 4. Massif Capital bought 30% OTM puts with 90 days expirations that returned ~7x If anyone has any others, please feel to share.

Both ThePupil and BG2008 have good discussions on real estate topics. I like BG's discussion on B malls, dept stores, and why he avoids them. Ericopoly is great for back the truck up ideas. I wish he would post more. Packer is great for leveraged situations and telcos. Liberty opened my eyes to investing in better companies.

Producing Wind turbines is a mediocre business at best. I looked at Vestas a while ago and didn’t see a reason to get exited. Agreed - but everything in the wind farm business is mediocre. Per public markets, the choices are either the utilities using them - or the turbine makers themselves. Different types of business. Turbines pollute (noise, aesthetics, etc). Viable locations are limited, and damage suits are working through the system. Hence utilities have a long tail risk, that must be included. Turbine makers not so much. Turbines are two businesses. Once/done construction, and erection/decommission + repair/maintenance. When the industry is growing the money's in construction, when its mature it's in servicing. Break everything down into flat-packs, and ship by the thousands to extract economies of scale. Asia (& therefore Asian manufacturers) has a material advantage. Easier to override public objections, cleaner air/water quicker - by leapfrogging o/g and coal as a fuel source, and lots of sparsely populated windblown desert/plains to put them in. For every 1 'western' turbine, maybe 2-3 Asian turbines are being installed. And not just in Asia. The problem is time to market development. These are FUTURE cash flows - that must be discounted at a high rate to reflect the uncertainties. Current NPV is negative to marginal - at best. Hence the industry subsidization. You don't get rich, your kids do. SD So turbines are like giant metal trees that eat carbons. You plant them and get virtually no return, but your kids are glad you did just like you don't get to sit in the shade of the trees that you plant.

I used to use EarningsCast app on my iPhone and it was great. I can't find the app in the Apps store anymore. Does anyone know what happened to them? Does anyone have good recommendation for conference call app similar to a podcast format?

It is interesting that the article mentioned that in VC funding rounds, Adam can use his charisma to charm the investors. The public market isn't getting that front row seat and tend to be more skeptical of the company.

LAACO is a MLP, not a REIT. But they own good real estate and trades at 12x P/FFO or P/AFFO. The FFO is still growing rapidly and you get a call option on Downtown LA gentrifying. The drawback is that it is illiquid and you get a K-1. But it is probably one of the safest real estate company with decent upside.

I noticed that finance twitter has absolutely exploded in the last few years. I particularly like Bluegrass's tweets. Liberty, from this board, is pretty active as well. Anyone else that I should follow? Any updated PodCast list that is particularly good? As far as events go, I thought that the Casulo event was quite good. At $1,000 for the day, it is meant to be curated. This means that you don't have to sit through Seth Klarman talking about why passion, drive, and stoicism are great traits to a bunch of college/MBA students.

Who in the peanut gallery is 28 years old and able to pay $4.6 mm for lunch with Buffet? Please stand up!

To be fair, he navigated 2008/2009 quite well and that can sometimes give you another 8-10 years of rope to hang yourself

This is one of the better advice.

Give me Barbie and Ken dolls with Ivy League rowing gold medals, 6' 3" and 200 pounds of solid beef.

My friends and I go for Blue Moon, Stella, Brooklyn Lager, and maybe a Guinness. I don't remember buying Coors or Bud. We are in our early 20s.

What companies do you think will benefit the most from raising rates? MetLife trades at a discount to book value. If you have more rates exposure, should you buy some Life Insurance Companies to hedge your real estate exposure?

Buffett's lifestyle is only modest by billionaire standards. I think spending $3 on breakfast at McDonald's is more modest than my $6 coffee and eggs sandwich. I am not a billionaire.

Charlie also said that the adopted babies were better than if the parents had had their own children. He wasn't talking about crack babies. He also wasn't just praising to gain favor with his audience. He brought up the gambling stereotype which was not intended to be complimentary. Charlie is at a point where he can say what he thinks ... as am I. Scientifically, how does Charlie observe, measure, and quantify the performance of the adopted babies versus that of "never been born" babies? Better than if the parents had had their own children? Aren't we giving Charlie too much credit here?

Buffet has the image of a honest mid-western businessman. I always imagined him writing the annual reports from his house in Omaha. Does it change anyone's view of the annual letters when we know he wrote it from his multi-million dollar beach house?

Maybe Charlie was actually being very politically correct by not mentioning the alternative to adopting Chinese girls. Years ago, I overhead an older Canadian couple who was having a conversation. The older gentleman mentioned this phenomenon of adopting Chinese girls from poor Chinese villages. He mentioned that black and white babies up for adoption in North America sometimes came from young moms who had drug problems, engaged in sex work, etc. People have experiences where the adopted babies exhibited behavioral problems and it ruined their adoption experience. In contrast, the Chinese baby girls were put up for adoption due to poverty and/or the one child policy that favors baby boys. I guess if you are spending thousands of dollar in adoption, you probably talked to people and words get around. In short, one population was a potential land mine for behavioral problems and another population was consistently devoid of defect. Making this differentiation was likely okay on an airplane in a semi-private conversation. For Charlie to talk about "crack babies" on public television will likely bring out all the social justice warriors.

Thanks for the share, will be checking some of these books out.

Came across Rhizome's 2016 Year End Letter. Interesting to see low teen returns while still holding onto cash for 2016 and that there are no meaningful signs of impairment. Also seems like the FRPH thesis is working out. Rhizome_Partners_Q4_2016_Investor_VFinal.pdf

All these buildings are now worth at least $10 mm, but back then they were empty mostly because it was very dangerous. This is the result of people feeling unsafe.

Thanks, this is great.

Definitely one of my favorite quotes.

Great stache

I wouldn't call Wilbur Russ a small fund guy, WL Ross' AUM is over 11 billion.