Gregmal

I generally just try to be an absolute pig in situations where I can’t lose. In order to not lose you need something that is iconic, indestructible in terms of its capital structure, and riding the wave of long term secular tailwinds.

One of the Ten Commandments of Trading, which at its core, is what every SELL decision is, is to never sell a 52 week high.

Exactly...NYC suburbs are on fire right now. So even in challenged markets, theres still very favorably supply/demand characteristics and if anything, the "pockets" are where the challenges are, rather than the overall all regional pictures being described as "bad, with pockets of good", if that makes sense. Further, in the event of macro weakness, this almost certainly becomes the catalyst for lower rates, which then subsidize the "net monthly payment" equation, further supporting prices. So we're still doing the Chinese finger trap thing with rentals versus home ownership. Both eb and flow but fairly inevitably continue to be the catalyst for each other and so we should continue higher for the foreseeable future. I just got a 10% rent bump in NWFL...its anecdotal, but certainly closer to reality than a lot of the cherry picked stuff you see the Twitter experts and macro alarmists proclaiming.

Yup. There is no credible bear thesis on housing currently. Nor has there been for probably 15 years, despite all the crash calls from the supposed "experts". The best you can do is make very regional arguments that tie into an exodus from high tax, high crime blue states. NYC, Chicago, LA/SF....other than those places, housing is gonna be fine.

From what I can see, the most likely scenario with builders is that pricing comes down modestly and that combined with somewhat lower rates creates the equilibrium everyone was seeking. Noway crashing or going back to precovid any time soon, or ever again imo. But every market I follow(Northeast and Southeast) there’s boatloads of demand probably 5-10% below current prices. Builders are pretty much choosing higher margins(as many of the building product inputs have collapsed further enhancing margin) or having to work more. The nationals like DR Horton or KBH will lower prices to move inventory but the regionals are probably more content working less and making the same.

Yea I think a lot of this sort of data gets woefully misrepresented, and quite often. Boats, sure...Ive noticed people have reverted to the mean on their love affair with boating, away off from peak covid. But the home sales for instance, are hardly this presented economic disaster in the making. Builders are making astronomical amounts of money compared to pre covid. So theres this, but then also the fact that theyre all still pretty much trading at single digit multiples....so what exactly does the market need to "wake up" to? If it was asleep, you'd expect 15x at peak earnings, not 8x. Im hardly bullish on the homebuilders, but the above doesnt really reflect anything important. Home sales slow when things get expensive and people dont want to move. If nothing else thats more money to be spent on wasteful discretionary consumer items.

Yea this idea seems conceptual to me. I haven’t seen any products or offers that really make this worthwhile or even possible. For the end dollar amount benefit it would probably be easier to just open one of those Citi diamond or Chase private client accounts and get $3000 offers. The process for a HELOC is also akin to applying for a mortgage in terms of paperwork which in itself would be a huge negative to me.

Either or. But mainly falls into the “landing guessing” category. Folks manufacture reasons to underperform all the time. At some point you just gotta snap out of it and realize that there’s no reason to be scared of your own shadow. Mainly because, your shadow can’t kill you.

The reason many non indexers underperform? Active management. The reason many active managers underperform? Fear that "something bad could happen".... Bottom line is if your investment isnt strong enough to endure a recession, or to deal with full economic cycles, its not worth owning in the first place.

Yea absolutely no clue. Don’t care either way. Predicting “landings” is a fools game. As we ve seen enough times already.

That’s what they said last year…that the 6-7% margin hurdle was just too much….heck we had people hooting and hollering about how attractive cash and t bills were at 5%….and the market did 30% or whatever. Just gotta make a decision based on the opportunity set. This year I’m slightly less margined, but still confident my aggregate easily exceeds the carry cost.

Knowing what you own is important. I have zero issue borrowing heavily against stuff like MSGS, FRP Holdings, the Berkshire or Fairfax stuff too would fit the bill. Stuff that has clear value and won’t get zero’d. For lots of last decade I then bought stuff like Google, Waste Management, Costco, Visa, etc…fully on margin. Essentially, Wall Street likes to scare people with tales of “well there was this one time”…and “if you bought xyz on (insert all time high before crash) you’ve never recovered” stories. I’m basically short the shit out of that fear mongering bullshit. Use your head and you should be fine, if not just stick to indexing. Like yea, I have access to the “max” button on the Yahoo finance chart for Berkshire Hathaway. I’m capable of seeing it has had a drawdown before. If I own it, I’m either not expecting that to happen, or perfectly ok if it does. Next….

Rolling average over the past 15 years is probably around 1.3x but it totally depends on the opportunity set. Have gone well over 2x a few times; lowest I think I’ve ever been is 1.1x. Really just depends. Wall Street spends a lot of money advertising things that prevent investors from maximizing their returns. The overall misrepresentation of levered investing is one of them. If for example, I am 60% long Berkshire, 60% long the SPY, and have a 15% position in index put options, I wouldn’t consider that risky at all. But my account statement would show 1.35x or whatever.

Yea a lot of the stuff we see people do makes no sense. Sitting on a bond yielding 5% is like paying 20x for a business with no growth and no inflation protection. It’s probably even worse. But people do it and then think Apple is expensive even though it’s got modest growth and inflation protection. Not saying I’m a buyer of Apple here, and I still wouldn’t even get out of bed for 5%, but the logic is head scratching. On Berkshire, it’s an index substitute with a few caveats. You don’t buy it to sit around spending all this time thinking about it. You buy it so you don’t have to check your stock quotes every month.

Nothing screams “I do not value my time, at all” quite like someone indicating they’ve spent time trying to find a reason to short Berkshire Hathaway.

eBay is the furthest thing from a melting ice cube. The VIC write up posted yesterday sums it up as well as any of us could have in the thread. eBay will exist a decade from now, and it doesn’t need to do anything for us to make a satisfactory return.

I’m not even sure what a cigar butt is in relation to todays investing world. Maybe merger arb? Generally I don’t have an interest in terminally declining businesses, which was always what my understanding of cigar butts was.

Yea amazing how people forget that it was the US government that stole everyone’s Russian assets.

Yea when you manage OPM you learn at some point that your gift is also your curse. Most people are shitty investors because they can’t handle volatility but still insist on being in the market. This is why they hold cash, sell early, waste money gambling on crashes. So being able to deal with volatility is certainly necessary for investing success, but having to manage OPM and deal with their emotions is another story and one that eventually you either learn to ignore, or come to resent.

Maybe we do, maybe we just aren’t looking at it the right way. Who knows? All I know is there’s a million instances over my investing career where something didn’t make sense to me in the moment and then in hindsite it became clear what I was missing. For instance there were some pretty aggressive Tesla short pitches in 2012-2015, most got really, really hung up on “valuation”, and today they look downright stupid and that valuation would be a bargain. My comment was more so directed at the folks who spend all this time micro analyzing all these reasons they can’t invest, rather than just finding things to invest in. There’s always stuff to invest in.

Reminder for the millionth time, stop worrying about things that don’t make sense to you. Stop spending so much time fretting whether or not something is “expensive”….and just focus that energy on things that do make sense to you and that are solid value. #foreverSPY3000

Focus on understanding the material non public part. Inside information by itself doesn’t really mean much.

I do find it amusing how bent out of shape people get about him; he’s literally just doing what any finance guy would do if they had the ability. You can’t honestly tell me these money and career obsessed egomaniacs wouldnt or don’t do the same type of stuff in the context of how it applies to their opportunity set. Ultimately it’s up to the Tesla BoD to determine if this makes sense for shareholders. But finance dudes whining about a scheme to enrich oneself is really…..rich.

Wow I had not seen this. But again, it just shows what kind of scumbags the run of the mill, non professional investor has to deal with.

Yea totally depends on the assets. It helps being familiar with the individual assets too. A vintage Porsche, a private market warrant, BC era coin, and a mitigate bank are all solid assets but Im not sure I know anyone who's an expert on all 4. Gotta get your hands dirty and sometimes seek out expert opinions.