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Everything posted by Gregmal

  1. A post about the interest rate risk via Canada housing related finance got me thinking….why aren’t there US type 30 year mortgages in Canada? If rates rise and people cant afford refis what are the odds there would be a government push for them to solve the issue? I am not familiar with the market in Canada but how feasible is it to eventually see a similar government sponsored product like this?
  2. How many people would have thought this a good investment?
  3. Nobody forgets about the 52 Mantle or 79 OPC Gretzky. Doesn’t matter what you invest in, keep it simple. Buy high quality, and stick with things that have demonstrated a long and sustainable market/demand profile. A beanie baby was popular and had widespread demand for what? 2 years? Pokémon was what? A few years…then long stretch of no demand. Then periodically popular? Big different and it really isn’t all that hard to figure out the differences.
  4. I’d also add that at a younger age I would definitely focus more on acquiring good assets than beating the s&p or whatever. Almost everyone fixates, sometimes to a debilitating degree, on what the index is doing. Who cares? If you compound at 50-100% on $50k for a few years in your 20s does it even matter in your 50s when you have $5m? Vs if you have $100k in your 30s but do a mere 10% annually, are you ever really gonna get anywhere? Certainly not fast. Everyone has a different “number”. If you’re a normal person it’s probably 65. If you’re middle class ish it’s probably a million bucks or two. If you’re coastal blue state it’s like $5m and if you’re finance world it’s “more”. But get yourself figured out with regard to that, and then start building. Once you build your foundation and bridges to get there, you’ll be a lot clearer on what and how you want to invest. But generally speaking, if you’re normal upper middle class and your goal is to amass $2.5m by 55 and by 30 you have two good properties you put a mere $50k into(each, 10% down), after making the down payment and signing the mortgage you do the landlord thing which on a good property is pretty easy; those half million dollar properties don’t even have to appreciate…..but by mid 50s you’d have 40% of that $2.5, and a nearly paid off mortgage and good source of cash flow. There’s few things that offer the simplicity and assurance of that. People will argue the stock market, and maybe that’s true….but you have to stay on top of the market. Additionally, everyone says we are in a bubble. One thing I love to shit on is when people make future index projections. You just don’t know. And if you’re willing to put the time into the market, why on earth would you buy an index? Of course people will say “it’s easy to invest in a bull market” but I almost always throw that type of thought away because those same people when harping on what s obvious in hindsite(obviously the market went up recently!) are totally befuddled when you then ask them to predict where the market goes from here. You’ll either get a noncommittal type of IDK or some projection about how the market has to produce very low returns from here. So it s like “ok, you shit on people for making money because it’s a bull market although you were probably underweight the whole time yourself but then going forward are underweight because you don’t have the confidence to invest and then two years from now when the market has ripped you’ll again revert back to “easy in a bull market” LOL…make sense? Nope! So I think with the stock market just leave it be, ignore the indexes, and again, just look for good assets and compelling opportunities. If they happen to be in the form of stocks then take a shot. If not, don’t sweat it.
  5. I think it depends and the largest factor is whether or not you expect to have consistent, investable cash flow from your job/business? If you just have a lump sum type portfolio cash, I dunno. But if you expect to earn decently for the next 5-10 years plus….just do a little bit of everything. Real estate privately owned is not really comparable to stocks. The financing and optionality IMO make it a different animal. For instance in my mid 20s I got into my first investment property. Bought it for $135k. Rent was $1500 a month. Cash to get in was $35k. 30 year fixed was 4.875%. Tenant sent the check every month. I paid the mortgage. Not a lot to think about or stress about and not having mark to market gives you one less distraction. Today rent is $1900, appraised value is $250k and whenever I want I can either sell or pop out cash with a refi and lower rate mortgage. The only real important action I had to take was writing a check for $35k, once. So it’s a different animal all together. Biggest take away though? I didn’t have to be smart or make savvy moves, but you do have it be in it to win it as they say. Good things happen when you go to the front of the net and the cost of admission was pretty immaterial. With RE too something I’ve found neat is that you can easily pay fair market value or even overpay a little if certain things are working for you. Especially with rentals super hot right now. Find a property somewhere you may want a vacation home one day, secure it, then rent it off for the time being. If a second home or a retirement home ends up costing you 10% of purchase price plus a few grand a year in write offs, but is fully paid off by your 50s…again, who cares? Well worth it. I’ve also found good opportunity in graded vintage sports cards. A Gretzky OPC, Jordan Fleer, Ruth Goudey, Mantle Bowman or Topps type stuff, pretty solid wagers going forward with long term track records of both demand and appreciation. Private market equity investments. This too is basically just writing a one time check and then letting the process play out. First one I did was with a bunch of work friends. We made money on a deal and took the proceeds and bought Docusign shares pre IPO. These markets are a lot more liquid than you think and simply being in pre IPO can get you a good head start on stuff you probably would want to own anyway but would never likely get allocation for. You wanna buy the +40% IPO pop, or be the guy who bought shares with a 6 month lockup 3 years ago? Another thing is, how do you wanna live? Are you a normal dude who wants a decent place, nice car, goes out 3x a week? What’s your monthly figure because if you expect to earn more but wanna live high on the hog, saving and compounding will be a lot harder than if you just live like a normal upper middle class fella. Otherwise, it’s really just about doing what you’re comfortable with. But give yourself multiple irons in the fire and look for different types of investments because you always kind of wanna have something working for you.
  6. For years I’ve bought various “alternative investments”. One of which is sports cards. There’s ~130 PSA 9 or better Wayne Gretzky OPC rookies. There’s maybe another couple hundred lesser equivalent of the Topps version. There is no shortage of demand for these, and while they aren’t “super rare”, they always generate a lot of interest when they hit the auction block. Over the existence of this asset it’s outperformed the S&P, easily. The major trend is that more and more people move into the market and over time the card begins to be appreciated in ways, by more people, that it previously wasn’t. I gave up even bothering to argue with people about art and sports teams…they too have this sort of characteristic rerating feature continuously occurring. MF is seeing this same thing happen but in a much more condensed timeframe. Same with industrial and self storage. There’s only so much of it, and especially if there’s a cash flow, almost an inevitable supply/demand imbalance. There’s folks out there with their negative yielding cash and bonds, no yield gold, etc. The more people look at MF the deeper the market gets. It’s still got a long way to go to rerate to it’s equivalence on the risk spectrum with other assets. I don’t have it on hand but check out the numbers of international buyers of US MF assets. It is likely to be a new and prosperous, secular bull market, and it’ll last way long then folks think.
  7. Actually, I will recant my assertion about Hawley until the bipartisan committee investigating the attacks on democracy that took place between May 28 - December 12 releases its findings.
  8. Pretty sure Hawley supported the well documented, months long insurrection in Portland.
  9. Will be interesting to see if there’s any implications from the volcano within the energy space. Or if Gavin or Letitia decide they need to sue the volcano for contributing to climate change. Once again authorizes are promoting masks. This time it’s just a suggestion though. Only heavy smoke and ash in the air. Wonder who is the dominant strain in the smoke/ash vs COVID turf war. Or do we get a mega variant when they merge? Smogricon variant? #tailrisks https://www.bloomberg.com/news/articles/2022-01-15/tonga-issues-tsunami-warning-after-undersea-volcano-erupts
  10. You get what you vote for. If you disagree with the policy it’s easy to utilize logic to make money off its insanity. Then you happily pay your heating bill with profits from the whole ordeal. Quite simple. Even good ole copper is crushing it right now. No where are they more deserving of this than the EU. Good riddance.
  11. Yea but it would blow your mind how much people value not getting daily mark to market! Not kidding! Thats what they pay for.
  12. BKEP is a bit of a hybrid. Had a small single digit position from under $2 then after the buyout offer the profile changed dramatically so I upped a good bit. So there's an investment portion of the position and then also an event driven cash sub element to a much bigger part of it. Will adjust accordingly as things evolve.
  13. MSGE low teens AIV high single digits but more options than common so notional is close to double CLPR ~4% after swinging some of that into ALX in 250s. My NYC basket of CLPR, VRE and ALX is low teens total. These # are for informational and entertainment purposes only though. Not advice.
  14. p/s is irrelevant in the grander scheme and especially on an adjusted historical basis because the reality is that e-commerce has different characteristics than brick and mortar. You dont need to think too hard to expect on an adjusted basis that 1950 p/s would be significantly lower than 2015. As e-commerce continues to be relevant in the world(and grow its reach) this should continue and by itself isnt anything to be alarmed by.
  15. I had that thought enter my mind too. I think the childcare credits are potentially bigger than people think. that said I also wouldn’t be shocked if all these stupid boys crying wolf with the COVID hysteria had an impact in December.
  16. Eh its overstated though. Ive got like 80% in the top 10 investments or so. Bunch of trackers and stuff. DIS is mid single digit %,
  17. Like theres been an indisputable trend with well location RE going on for decades. You want to own it and especially if you look at the NYC Jewish Mafia guys....the ones who have just crushed it for decades on buy and never sell strategies.....its obvious. Even the "crashes" are really just washouts. Dont be a forced seller, and you're golden. But even there, there's been what? 2-3 housing hiccups in the last 40 years? LOL You want to try to time the next one, good luck. Me, like with margin, I'd rather spend 2-3 weeks every 10 years worrying about a margin call than 10 years worrying about a 2-3 week per 10 years event.
  18. My view is kind of twofold much like with response to @Dinar question on NYC area RE. Public markets you dont really need the same trends to continue to still make decent money if the discounts are there. Private market, if you're underwriting a 4 cap on a new build with 10% annual growth for a decade, thats probably a dumb bet to make. But we dont really have to and I think it says a lot that many of these types of shops are going the public market route more than they have in the past. Longer term thought, if RE and MF does well(I obviously think it does) Sun Belt should be first in line due to the underlying trends. Weather, politics, taxes, migration, etc. The thesis doesnt need to be too complex. I buy good and appreciating assets at a discount. Can hold them in an efficient manner, and enhanced when opportunistic with options or margin. Barring MAJOR management screw ups, I'll make money. And even there, outside of egregiously share issuance in most cases its damn difficult. Guys overpaying themselves millions per year doesnt really destroy a thesis that the market is turning more appreciative of the asset class and someone will try to take them out in the next 12-18. 95% of the risks here IMO are general market related risks, and these are IMO very high up on the quality/low risk totem pole so they should do better than average under general market turbulence. Ive never been a fan of the "well if the housing market blows up, a housing stock will get killed" thesis. Its a weenie way to say you're making a market timing call and even outside of that, very easy to hedge.
  19. The way I view multifamily is rather simple, but essentially it's viewed as what it is. Its a diversified income stream with massive flexibility on the asset desirability side which ensures, generally, the reliability of the cash flow. If 2/125 tenants suck its not hard to turn them over. If its a newer building, or even an older one, assuming the construction wasn't faulty, maintaining the asset is again, predictable, and reasonable on the cost side. If the dirt its on top of is in a business friendly and desirable location, there really arent too many things in the ENTIRE WORLD that I would say provide similar risk/reward. This IMO is what the rest of the world is starting to figure out. When it comes to allocating new capital, this is what I see on MF. Another awesome wrinkle is the financing durability. APTS was a great exercise in that. CLPR too. Everyone, including folks like Brad Thomas look and say "too much debt"....but fuck, again, NOT TRUE. Whats real estate debt? Mortgages? Preferred are different and thats a different topic which was discussed elsewhere so Ill leave it, but how any sensible investor looks at a mortgage and goes..."nope too levered"...mortgages are awesome because you dont need things to go right all at once. The property is yours for the term of the mortgage and you have no problems unless you dont make your monthly. Actually, scratch that. You would have to not make multiple monthlies, and then you still have time. Otherwise, its the lowest cost debt, can generally be refinanced, etc. How people look at this the same as a regular operating company who have 2x debt/EBITDA but can have the business impaired materially in a matter of months is so stupid! But its a common part of the traditional thought process. Learn to see things differently. Where I notice people run into problems is when they see this asset, encompassed in a stock, and because of the way finance is structurally taught, people assume all stocks are risky and $100 I put into a stock has the potential to lose $100. This is so not true on any level outside of obviously an academic one. Since my early 20s Ive been doing thousands of stock transactions a year. I have never bought something and had it go to 0 overnight or even in a month or two timeframe. Its EXTREMELY HARD to do, even if you tried. Let alone overnight. Honestly, its hard to even do with options although please understand where thats coming from and dont try it at home unless you know what you're doing. But my point is that people claim to be "investors" and think like value investors, but then get wildly obsessed with these distractions like "collapse", "crash", "correction". Dont get me wrong, if we had a crystal ball and could predict 10-20% corrections, sell, go to cash, rebuy, that works. But in the long game, its a fools distraction. Like when you are at the casino and the super hot chick serving drinks comes over. You know those titties and the gin and tonic are there just to get in your head. Fear of loss is the same thing in the markets. DO NOT, EVER, completely ignore risks or take on risks that threaten your livelihood. But on a different level, when I look at cash, and I look at liquidity, to me its the same except cash has little value other than paying for shit that you can use liquidity for and liquidity at 1-5% annually is worth utilizing. If those hurdles are too high, you shouldn't be investing. But with cash, its like...can I not pay my bills? Do I have a huge, non financeable expense coming up? WTF do I need cash for? Then I look at long term charts and think, would I rather own cash, or have my pick of any number of tremendous businesses? And its easy. If you have no access to liquidity, perhaps its different, but in todays age when Joe Blow can get 4:1 margin at IBKR, or 2:1 for 8% anywhere else.... who doesnt have access if they want it? If you have 20% cash at iBKR, you likely have buying power equal to your entire friggin portfolio! You also have other thought exercises...like go ask your local pharmacy or HVAC owner if they ever wake up and are like "yea, im gonna dump 15% of my business cuz its getting choppy out there"...Or if you own RE, you know why private owners generally do well? Cuz its expensive and burdensome so they sit on their asses and just let it be. Same applies to stocks but the whole system is so reliant on transactions and trade activity that its obvious why we are constantly encouraged to do "something". So for the majority of my shit I try to really think as a business or an asset owner. If you picture the microwave in the kitchen of your new build MF rental in Miami...you're not thinking about, "well what if we get a 10% correction? Better cash up!"....A lot of value investors dont actually behave like investors who are obsessed with the fundamentals. Disclosure, Ive recently trimmed down a lot of my excess holdings and even took off 40% of an extremely overweight BRK position, but Im doing these things to manage my "liquidity", not my cash. I still have margin and still think theres worlds of cash subs out there from ALCO, to PSTH, to ALX, to BKEP type things. Liquidity you need to manage and be prepared for anything with. But cash....
  20. Yea kids have opened my eyes to certain stuff that otherwise I wouldn’t get myself. Nintendo and Roblox come to mind. I don’t get the younger age groups, but shit that’s addictive, educational, and engrained at early ages is probably somewhere a good formula for business opportunities. Or the brands they love early and often. That’s how to grab a long term customer.
  21. Have not heard of Dutch Bros. More good reading to do!
  22. I think the public market stuff is cheap. Private stuff, like physical ownership of an individual property, is probably fairish valued IMO. Suburbs probably erring on the side of overheated a tad but all that changes if the SALT stuff comes back.
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