Gregmal

This guy comes for them?

If I had to guess the way a textbook bottom plays out…crypto posts massive weekend losses, Europe plummets Monday. US futures gap down big. Tuesday is massive down day. Wednesday or Thursday the full flush-out, starting from the February 2021 speculative blowoff up til now, and that whole thing has run its course. Obviously all just piece work for connecting guesses. But again, a lot of this stuff occurs in similar patterns to past. The past couple weeks absolutely everything, even stuff having nothing to do with the current situation or even beneficiaries of it, has gotten whacked. That’s typically occurs near the end. Friday seemed like a short covering rally driven by crap tech stocks and economically sensitive stuff like cruise ships. This all further accomplishes the Fed objective of wringing the excess out of the market, killing sentiment, getting the techies and crypto bros back into real jobs, etc.

I think what is worth looking ahead to is that if the “new economy” theme, and easy money policy period is gone, Berkshire is a 1.6-2x book company. It’s all about the cycle. I can buy Berkshire here because in any number of scenarios it’s at worst, probably just OK. Where are the next darlings? There is still a good likelihood IMO old economy and value is where all this shakes out to. It started last year, the shakeups have accelerated big time, and look at crypto in real time. Look at high multiple tech. That stuff is destroyed and likely not coming back for years if not longer. During COVID there was a when does the market hit all time highs again thread. If I had to guess for the Nasdaq it would be past 2030. But there’s still a ton of liquidity in the system. There’s a need for places to put capital. Berkshire in a very easy and low maintenance way, checks a lot of boxes.

May be happening....

There’s definitely structural tailwinds for sure. We will see oil stimmies at some point I think. It’s the only thing that makes sense because you can’t get elected running off the idea that poor people should be driving EVs instead of complaining about gas prices.

You realize Berkshire has gone from 360 to 260, right? For a stock with a huge % of market cap in cash I don’t know how that qualifies as not getting hit. It went briefly to 165 on COVID fears where the assumptions were that the world was ending, insurance was toast due to claims from people getting COVID, and Buffett himself shitting the bed with his investments. How is that even remotely comparable to todays situation where we have what exactly? Widespread panic over 3-4% rates and a run of the mill recession?

If nothing else I would target the pre COVID level around maybe 230 or so for some real size. And additionally, you can overcome the sizing problem by adding leverage through in the money options. Typically my accumulation style is to buy shares when the valuations are good enough but not great, and once you really get into can’t miss territory then you hit up the LEAPs that are maybe 25% below current prices.

Exactly. And it is good you are cognizant of this as one evolves as an investor and fine tunes the mechanisms through which you invest. Through its history, Berkshire has had how many 50% drawdowns? Here that would be roughly $180 per share. Then you ask what gets us there and its…..a 3.5% 10 year and a run of the mill recession….LOL. The biggest mistakes made are exactly that. Sitting around and finding excuses not to do things in situations that when you look back, where obvious. Over and over we hear that what’s obvious in hindsite isn’t obvious at the present moment. But that’s false too. Or at least many times it is. If it wasn’t obvious it’s cuz you weren’t looking at things properly. I have a hunch the Q2 buyback numbers are going to be very surprising, and to the upside.

Absolutely. I’m really only buying sunset stocks right now. Building or adding to my positions in unbreakable long term winners. Once fully there, off go the computers and cell phones, mental freedom achieved.

I mean this week was so enlightening because the Fed statements basically confirmed we are done soon IMO. They doubled down on no recession, and strong data. However as has already been discussed, we re one quarter print away from a technical “recession”….it’s pretty likely, and then what? Egg on the face and yea we got a recession, and since everyone blames the Fed for everything that happens in the world and especially the stock market and economy, what do they do? Powell very clearly said they’re not trying to cause a recession, and that there’s no signs of one, but in august the data will likely confirm one. Now, I don’t think the Fed caused any of this one way or another, just like it seemed super obvious to me Peloton numbers and stock would peak Q4 2020 into Q1 2021…well in December you just had to wait for time to pass….same shit is already happening in real time, one by one, on the inflation inputs. Anyone got a lumber or steel price chart? I seriously don’t know what TF folks do to themselves to get so wrapped up in the current stories but all the data is right there to be had and it contradicts most of the existing narratives.

Come on Spek. Unless you're trading odd lots the 2-3 week period into quarter end is where all the book marking takes place. Especially in a market like we've seen, inspired to such a great degree by non fundamental based transacting, I dont think its an irrelevant part of the equation. Whats weird though is it is at least to me, starting to seem like this "soft landing" or "hard landing" or just a "landing" is occurring. Theres such an element of supply and demand to all of this that it got comical watching people and talking heads chase their tails contradicting themselves. We were gonna have rates rise in perpetuity because prices needed to come down. Rates rising in perpetuity has to indicate prices ripping higher for a lot of that "perpetuity" timeline. But at the same time now car prices, chips, basically all the cyclicals and beneficiaries of those continued higher prices, plummeting! Look at Micron! So then they declare "recession"! but you arent going to have perpetually higher rates with a recession, because the hallmarks of recession indicate demand for everything ceases up. Which is what the Fed said it wanted to get to in order to level off rates. Energy is kinda in the same boat. You kill air travel, road trips, basically X out all the leisure and discretionary usage...down she comes. You can't have all the shit everyone is predicting because it doesnt mesh. You can't go swimming at the South Pole and you cant drive to Bermuda from Tennessee. If we have a recession, you cant have the price of everything go up 5-10% a year in perpetuity. Maybe a few inputs here and there, but not all of them. And if you cant have that, rates arent going much higher because thats what the fed is seeking to curb. Its been so obvious watching the market for the past 2 quarters how 99% of participants have ZERO clue what they are doing, what they own, what drives markets, and ultimately how cycles and supply and demand work. They all just follow the noise and the crowd. All that matters is whats working this day or week or month, and if its bullish we worship Bill Miller and co and if its bearish we praise Grantham, Hussman, Spitznagel etc and ignore their shitty performance and track records of calling for doom 12-15 times a year, every year. Personally I find it both exciting and fascinating.

Ya was an Okterbest special. 33 oz beer with a special glass mug. Big fan of those sort of value propositions. Same with the holiday packages. Get a few nice glasses and a good bottle.

Big boy beer time. Good week.

Everything lately getting thrown out with the bath water. Group think fear inspired market mentality along with Q2 book marking taking place and even index reshuffling. IMO there’s some absolutely tremendous opportunities that have presented themselves in the last few weeks.

There is not much execution risk, they have Oklahoma space thats starting to produce well above expectation, and on top of this their core is Marcellus acreage operated by CHK. Its one of the lowest risk ways Ive found to play nat gas. You dont need a whole lot to go right here. You've currently got a couple clown funds competing to exit which is presenting a good opportunity while the company repurchases stock and sandbags guidance.

Nah haven’t you seen how important the excuses of Putin and the War are to Bidens entire schtick right now? Before the war even really got going I said how he rather have an excuse and a scapegoat for $125 oil than have it at $90 and no one but himself to blame.

I was one of those. Actually four of them. And this, barring stupid spending, is a good thing, not a bad thing. Now those folks have cash, the Zillow price of their home doesn’t matter, and over time it gets paid down again regardless. My only regret is not being more aggressive on the LTV. I don’t think we ll see 3% 30 year fixed rate mortgages on investment properties again any time soon. Maybe you get there again in a few years on primary homes, but I doubt that happens either. So all I’ll say is if you went from 800 to 1.2 and cashed out last year, you most definitely aren’t feeling bad about it. Or poor. $100k-400k is pretty meaningful money to some, if not most people. I mean now you can put that cashed out equity in 1-2 year government paper and get 3% which is what you borrowed it at.

I really don’t know anyone who’s done anything crazier than tap a home equity loan to do some remodeling or whatever. Those sort of things actually tend to add value. I’ve even tried talking some close friends into doing cash out refis last year for both the cash and the rate benefit and they just don’t want to mess with it. They’re definition of normal middle class folks too. Housing wealth mainly just facilitates an earlier retirement. The number of folks doing cashouts or heloc to buy nicer clothes or cars or vacations is probably pretty immaterial.

I always get a kick out of the election cycle fear mongering that occurs. Like it’s always crazy and over the top. And I honestly don’t think it’s all Bidens fault, although he has his hands in most of it. But man, if you had written up a list of all the shit that’s gone to hell since he took office and blasted it out as propaganda during the summer and fall of 2020 election cycle, I don’t even think far right folks would have believed all this could happen since there’s just so much of it in such a short period of time. All this “this will happen if you elect this guy” stuff….well…. Makes you long for the days of Russiagate and sham impeachment hearings

An interesting setup here for the 6/21 and 6/28 VIX options. Especially with today and depending on tomorrows tape heading into the long weekend. Tuesday could be wild, and crypto can sometimes do funky shit over the weekend. Individual securities are just too pricy on the put side and IMO a waste of time shorting because down here you should be spending as much time as possible locating good investments.

Biden to Buffett

Big daddy knows what to do here. Unlike all the talking heads he’s seen and invested through whatever it is folks are currently terrified of. Probably a minor recession and good government created/government solved “inflation” crisis. It’s a Kobe to Shaq against Portland alley oop

More Berkshire hard to believe it’s off almost $100 a share in a couple months on little but pants pissing about the general “market”. Love it. just took some Disney too on hole 16. Tough to tell from the golf course but seems like there’s a strong bid in the market lately around 93/94.

Uh huh. How do you solve the affordability crisis? Make housing even more unaffordable and force folks to waste money renting. Genius

Berkshire, msge and Joe. Come to papa.