Gregmal

There’s no windfall tax on individual investors buying call options on the futures contracts….

Its structurally really simple. These guys have gotten by using windfall profits from a few quarters or years to fund many years of the down cycle. And thats still been shitty for the most of them. Now you have greeseball liberals taking a chunk of their windfall. It will 1) force better allocation throughout the cycle, 2) reduce investment in the space, 3) quickly BK those who dont get 1+2 have/are occurring. Higher prices, way higher, would be inevitable. Forget the fact that as prices go higher the pols will give people stimulus and subsidies too make it look like theyre tackling the issue, which just further fuel demand.

If they do this crude goes to $200 easy. The idiots just cant help themselves.

Underfollowed OTC stock that uplisted to Nasdaq few years ago. Super conservatively managed. No debt. Pretty much, but not quite a royalty company...they dont drill. Assets predominantly in Marcellus and operated by CHK. Latest update showed encouraging results in OK which should materially ramp the earnings. Selling from large shareholders putting a lid on stock. Company using this to repurchase shares. Large existing insider ownership. Current dividend yield is 3.5% which should only go higher. Check their May 31 release for latest updates but seems super low risk given the macro backdrop.

Quadrupled my position in EPSN yesterday and today. Nice setup there.

Toastin to Captain Jack Sparrow with some Diplomatico.

I was watching a documentary the other day and it brought up a period earlier in the 2000s where the US was fighting its Iraq/Afghanistan war. There was great outrage, constant "denouncing", and a general stink made about Pakistan "aiding" some of their allies(whom happened to be fighting the US) through providing weaponry. Interesting perspective now, given todays situation. Of course it was different because whatever we are doing is right and whatever we dont like or are fighting against is evil and wrong.

Look at what the Fed did. One day of QT and we're already plummeting!

not to mention carrying massive leeches in the forms of unions.

Nestle is an under appreciated consumer staples power house. The options are still cheap, yes. But I think they can grow earnings above inflation without trying too hard. So if you sit down and write up a list of all the shot folks are scared of right now, namely inflation and recession, Nestle becomes more potent and appreciated in those situations. Also, because of its size, there is international arbitrage opportunities for the company as far as labor and product sourcing goes. American sugar is a good example historically.

Bump. I think I’m the current environment, obviously adjusting for many years and now using a different date/strike, this is a wicked good trade to put on.

Some inflation is healthy, crazy high inflation is not. All inflation eventually ends up being transitory. You will never get hyper inflation in a first world county. So again you always have the “what if this happens” folks, who take the highest high, go out the longest tenure possible, and point to the lowest lows, and then assume nothing ever recovers. But these things always end up working themselves out. Then life goes on. Its why it becomes silly making the blanket bear predictions. Earnings don’t need to come down 50% or markets don’t need to crash 80% because rates or inflation are high for a few years. At some point you get past those few years and then those same folks go back to talking about how expensive everything is again. If you bought stocks in the 70s I’m pretty sure you had earnings growth and share appreciation for the next several decades….in fact, the 70s was the perfect time TO BE BUYING stocks, which is very different than the narrative being peddled today by folks about the 70s. Unless of course your goal was to not make money or avoid volatility/meaningless drawdowns.

The biggest mental hurdle for many is to stop thinking like a little investor. If Icahn wants a company you think he’s afraid of tendering because it moves the market? What about entities that offer huge premiums for a full buyout? Typically you want to have the same mentality. In an illiquid security or market you have to make it liquid. If I have something at $17 trading for $5 who gives a shit if you pay 6/7/8? Of course like @aryadhanajust mentioned, be practical. Take a few weeks or even months to balance out your buy orders. If your fears are that you buy it at $7 and your brokerage statement shortly thereafter shows $5….play a different game then.

To me the biggest thing with these is you have to eliminate the idea that you're trading; you are making an investment. So with that said, you need to make sure your work is tip top. And then forget about this whole notion of "effecting the market price". If its illiquid and you think its worth 2-3x more, I could care less about moving the market, I want to accumulate the desired position, and over a specific accumulation period, get in at or below the highest acceptable purchase price.

Yea IDK but I followed it much more closely between 2014 and basically Jan 2020 threw in the towel with the name due to brain drain and lack of justifiable returns. They've always kind of touted that they trade at like 5-6x. I think they even briefly traded, supposedly at 4x during the big recall or shortly thereafter. At least on the "adjusted" metrics. Nevertheless, even guys like Tepper briefly went activist here, and got drowned out by the bureaucracy. I also got totally turned off by the board arrogance. Consistently touting their returns when anyone who owned the stock could tell you there weren't many, and certainly not ones that justify owning this type of business. @RadMan24always had a somewhat different and more optimistic take, so if he's still around perhaps can fill you in on the bull case today. I think Millers is too academic. GM is awful at executing and thats the problem even if the numbers are ok.

Added a little more Berkshire.

I dont think GM is worth owning. Look at what its done the past decade. The excuses, the questionable investments. They cut the dividend to be cautious and to my knowledge still haven't reinstated it. And even when the bulls though it finally was having its day, it essentially turned out to be a mouse fart meme stock bump, in its entirety of maybe 50-60% off its decade long range which is nothing to write home about. Just in general a terrible business run by bureaucrats who now want to be an ESG stock which....generally tends to be bad for profitability.

The media and hedge fund guys, not to mention analysts and pundits, have spent the last 1-1.5 months really drumming up and laying on thick the inflation story. The “1970s again” narrative. During this time the market began precipitously dropping. So, one, I think the claim that the market expects nothing but a transitory and soft landing situation to be clearly absurd. Otherwise, why the sell off? But overall, the talking and narrative control, fear mongering, by itself I think plays a role in how things and people react. The stock market the past month or two didn’t react to inflation getting worse, because inflation didn’t get worse. The stock market didn’t, or at least shouldn’t be punishing companies too much, on a go forward basis, for predictable difficulties faced last quarter. The Fed hiking to a whopping .75% doesn’t even create a hiccup on the valuation side so that shouldn’t be it either. Bond yields were basically where they were a couple years ago. Not it either. So if nothing else, I think what’s clear is that there’s always some kind of data or narrative floating around that will justify anyones conviction in just about anything, at any given time. The aggregate of data and circumstance combined with future expectation is really what can and does matter. May 2022 can likely be summer up as a storytellers circus. Inflation didn’t get any worse, Fed did what it said it would do quarters ago. Bonds were at 2017 levels. But the stock market had a correction and that’s because nobodies expectations changed? LOL…we serious here?

Yup. It’s the same mistake people make all the time. Like the “if rates go up real estate is screwed” arguments. And it’s just like nah. Not if rents double in 4-5 years. If an NBA team gives up 100 points a game, they’ll lose. Well not if your style is uptempo and you score 115 a game. In a vacuum anything, especially something like inflation, can sound scary. But one variable moves others and there’s places to exploit. For instance without inflation, there’s likely no wage growth. But that doesn’t stop people from wantonly claiming inflation is stealing peoples wages. It’s not. Not even close.

Maybe it faith in Powell, or more likely people just realize 8% ain’t sticking anymore than $35 masks were in April 2020. We continue to see signs everywhere of inflation moderating, but if we want to keep telling spooky stories….

That’s typically what happens when the folks freak out for no reason. The worst inflation happened LAST YEAR, and extended into Q1…we got prints we should have expected, the Fed did, exactly as it said it was going to do, and it is my opinion the whole momo and computer driven stuff did it’s thing just like in late 2018. Unless anyone else has real reasons for the sell off transpiring basically from 3rd week April until last week? It wasn’t a 50 bps hike and it wasn’t CPI prints we already new about. it wasn’t China COVID policy that was already done with. Perhaps sometimes markets just do funny things? In other words we get some opportunities to make money that we wouldn’t if they were always rational?

Was so good I picked up 2 spares this morning. Appreciate the heads up!

The following is true of any company if you go back in time. Hence many baggers are rare. The odds of Amazon becoming more than just a bookstore were good but the odds of it becoming what it is today were tiny. You wanna look for legs and webs that branch out into potential opportunity. Couple optionality with good management and you have a chance. Other than that, we re all just guessing. There is a good bit of pattern recognition. For instance, every company with obvious growth potential people decry as “expensive”. Any company revolutionizing a new arena and capturing massive market share is rare. Typically you want something that is polarizing. Short interest is also typically a good sign. How many shorted Amazon for ages? There’s no science to it. UBER has a huge advantage because it runs a capital intensive business in a capital lite way. Even self driving will have to deal with car upkeep costs. Uber just puts this on the driver. They have the network, and no one person or group really matters. All the drivers are interchangeable. They have ridiculous data. They also have brand recognition with a future generation who knows nothing but their iPhones and androids. You think those fuckers are googling and shopping price for local taxis service? Nope. All the hallmarks are there for a huge winner. Could definitely see a half trillion or even trillion dollar valuation a decade from now. If not, what’s the downside? Pretty negligible if you size it right.

Athena Health I know was a controversial stock but really taken off within the actual hospital systems. Yup, another Einhorn valuation short.

For the average worker, the one who wants it, and has some ambition; we ve already seen probably 20% raises. I would probably model 5-10% annual wage growth at the middle class blue collar level for the next 5 years, at least. Everyone from AOC to Trump now claims to be repping these folks. We’ve already seen many places give in with benefits. Starbucks offers crazy shit like IVF to 15 hour a week employees. Barring any sort of insanity inducing action from government or central banks, the worker is gonna be in the drivers seat for a while, and far outstrip inflation which maybe is gonna be 2-4% from here. ESG is bullshit. We re moving to other methods but what’s hugely being overlooked? What happens when Republicans retake control and open door energy production domestically? I actually think Canada seizes this opportunity as well. Was looking at stuff like Melcor and Dream with the Alberta exposure. It’s always good to have a lot of stuff that’s en vogue. That’s oil and gas right now. It’s too easy and too much low hanging fruit for one of the parties to basically endorse drill baby drill. Lowers costs for everyone, creates jobs, demonstrates independence from evil OPEC. It’s going to happen.