Gregmal

gaming is going to be a MONSTER theme for the foreseeable future? Todays ATVI deal just another, but gaming and its ecosystem to me look like that new hyper growth area where everyone is starting to rush for gold. Everyone who's anyone in the corporate tech world has been tipping this recently. Of course the catch is in a tech sell off, you've got some headwinds. But longer term, we are moving into an era where I think this could be almost revolutionary. In the 80s you had Pacman. When I was growing up it was Madden. But things still weren't fully integrated. The next decade is where you start seeing generations of kids who've been raised on electronics and by extension a full wave of people who know nothing but their phone/tablet/laptop. I guess this may be me starting to see this thing theyre calling the "meta verse"....IDK. Im not totally sold on all the offshoot stuff or degree to which people are optimistic on VR. But gaming to me seems to be a modern age cigarette. Its cool and my friends are doing it. You do it sometimes out of boredom. Its expensive. And its addictive. Definitely something Im following. Curious if anyone else sees this too and what they think. Nintendo and Sony seem like stupid obvious blue chips who get no respect in the US because of their foreign status.

Yup there’s just so many different avenues of optionality which is part of the appeal to me. I generally try to stagger it. Have some that are maxed on the LTV and some that are getting paid down. Don’t think I’d ever find an advantage in being fully paid off though.

Yea IDK. Ive long been fascinated by the Canadian market, but with US RE where it is, I dont have to worry about it cuz the value proposition is obvious and its not one that compels me to be buying in Canada. I would eventually like something off the grid in the New Foundland/Labrador area though. Probably a summer retirement home or something. But those remote bubblefuck places aint exactly expensive now anyway IMO. Its probably more expensive over a 10 years stretch doing the commutes for a seasonal home out there than actually owning it. Like WTF, $300k? Actually its hockey dollars not even USD. https://www.zillow.com/homedetails/14-14A-Pidgeons-Rd-Marystown-NL-A0E-2H0/2067469241_zpid/?

Yea those were thoughts I had too. Admittedly knowing very little about the specifics of the Canadian RE financing system, but damn….must be good being a mortgage broker. Basically an annuity stream with all those refis.

Yea these are all good points. Quality is paramount in non traditional investment markets. A close second is knowing your liquidity parameters because these are often NOT liquid markets in a traditional sense. A broker at minimum is gonna charge 10% and sometimes as much as 30%. But to your point, with the right quality of asset, it doesn’t matter because of the pool you are swimming in. Another good example is Persian rugs.

What I mean is, what prevents Canada or other countries from replicating this? A lot gets made of rising rates but for everyone who already has a mortgage in the US, this is actually a positive thing if you’re 30 year fixed. But if you have to refi in 5 years or have an adjustable, maybe not so much. So while everyone worries about when the Canada bubble pops, I think it’s worth pondering what gets done in response to something like that. 30 year fixed mortgages solve a lot of the problems. Crisis or crashes aren’t really that scary if you can see how they get resolved. Governments consistently and especially recently, are more and more willing to provide soft landings. So I was just spitballing a bit what kind of options do they have if the “bubble” that’s been going for like 20 years all of a sudden bursts?

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?

How many people would have thought this a good investment?

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.

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.

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.

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.

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.

Pretty sure Hawley supported the well documented, months long insurrection in Portland.

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

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.

Yea but it would blow your mind how much people value not getting daily mark to market! Not kidding! Thats what they pay for.

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.

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.

Its roughly around there.

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.

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.

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 %,

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.

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.