Gregmal

And today markets the first day of buyback blackouts for anyone not running a 105 plan. Long month til earnings +2.

Right now kind of feels like that period of denial where folks are slowly realizing they need to get the rifle and bring Old Yeller out back. The sooner you put him down the better. Or you can wait and hang around til he bites you. Tech is done.

No idea lol. I just think Warren probably might have 99 problems with cash certainly not being one. And if he views AAPL as a big part of the BRK universe I would be shocked to see him sell anything material

I think part of Buffetts' evolution of the years has been with respect to valuation. If you paid too close attention to valuation you've basically missed most of this bull market. The metrics the market is moving to largely evade folks until they are obvious in hind site, AKA Amazon, Google, etc. I would imagine AAPL aint going nowhere in the BRK portfolio anytime soon. Nor should it. He trimmed last year and said it was a mistake, and exited Costco in the mid/high 300s which now looks dumb. You've got all the cash you need for buybacks elsewhere. Ive sold some of my BRK to buy DIS but still have it as one of my bigger positions. Top 5 for sure. If I was holding any cash I'd just throw it all in Berkshire without losing an ounce of sleep at night. The key is to just let it be and let them play the long game.

In an alternative universe I wish there were exit interviews for people selling stock. I dont know anyone who is selling MSGE here, but if I did I'd ask which category they fall into: I sold a potential multi bagger with virtually no long term downside because: a) Im scared of covid b) I'm scared of a temporary ~20% paper loss c) I wanted a pureplay with worse economics instead d) I didnt know what I was doing to begin with There's really no other category or reason for selling into the current situation. Mr Market is great though. Even in a rich market, always an opportunity somewhere.

This is a pretty crazy rabbit hole to go down, especially if the primer is a course on psychology and how it drives markets and cycles. I recall in 2013 how basically anything growthy had rather big short interest and shorts for the year got absolutely wrecked. I recall stuff, like TDOC was a popular short at $14 in the mid decade part on the basis that it incinerated cash and would never earn a real penny. Then you literally had a one in a hundred year event even take that and blow it up 20 fold or something. Every short has been wrecked and scarred; thoroughly washed out. Even people who thought about going short, but didnt, and probably branded psychologically by the bull market. If the book closed today a student of history could definitely say, "yup, cycle complete". Now imagine the destruction if rates gradually go to 5 or 10%?You could make a case that a huge portion of the market, even many darlings over the past half decade, would be wiped out, probably even several times over, O&G company style. I disagree with the statement that we are in unchartered waters and theres no precedent so therefor nothing you can do. Contrarily, theres predictable psychology behind what reactions will likely face certain events....and a LOT of dominos to fall thereafter. Theres almost too much you can do. Should be fun being part of it. Or maybe not.

That is kind of my suspicion. Money flows around. You've laid the foundation for certain types of assets to do well going forward over the past decade or so by wringing out those markets. Go through 13fs and stuff like that. RE and hard assets in general are horribly under owned. Everyone is basically closeting to the Nasdaq 100. Cash is worthless and over time more and more people will come to realize this. But its hard parting with a security blanket like cash the same way an infant cant part with their pacifier. But eventually you are 5 or 10 years old and realize you look like an idiot with a pacifier. Cash holders will have their moment too.

Rebought some PSTH. Free money.

Because it’s the lazy academic shit they put in the textbooks. I think once those 25% annual paper returns in tech stocks vaporize the 10% or so in real returns you can get via value stocks will appeal to people. Much more so than the 0% returns on cash and the negative ones on bonds.

A decade from now there will be much more cash out there but less Berkshire shares, the same amount of land in South Beach, and only one team named the NY Knicks. It really isn’t all that much more complicated than that. Much on the macro side can be simplified and reduced to such a way where things aren’t terribly hard to predict.

Yea no I can joke/poke fun at @LearningMachine because he has been somewhat bombastic in his deliverance of the 10% rate thesis, and pursuit of the ultimate investments that work if it happens overnight, but the major underlying concerns he shares have really resonated with me and made me think hard about how I want to be setup with my long term investments. And I keep landing back at rentals, especially well located ones. By and large stocks are hard to project more than a couple years out. With housing, its so integral to the system and so many safety nets, plus on top of that, so much cash out there which will only be furthered if bonds implode.....it looks mighty good to me.

It is in no ones interests for housing to fall off. Even those who say it is, it isnt. Even if they raise rates or shit gets whacky in one place, there will be mitigating factors in others. We haven't even really seen much accommodation in terms of loosening lending standards. Juts closed on another cash out refi Friday. Its a total bitch and I have 800 credit and good income. They'll call it making homes more "accessible" or something. Any way you cut it, theres a huge and long runway ahead. And the risk/reward to me is vastly more appealing than buying AAPL at 40x or BRK at 20x, although I can dig the later, just not as much as what you get when you buy the housing freight train. @LearningMachine has been talking about 10% interest rates for a while now. Maybe that happens, maybe not. All I know is that would be a metaphorical destination down the line. Call it Z. Maybe at the moment we're at A or G or M. But if we get to Z the cocktail of factors along the way are going to make housing plays look like Gamestop stock in Q1.

You’re focusing on the wrong end of the equation. If rates go 5% it’ll be because you have way more people with $1M to spend on houses.

Rates don’t go up in a vacuum, just cuz. If they go up, based on the factors currently in play, those variables will more than compensate for the higher rates. As I’ve mentioned previously, the GFC occurred because of a housing bubble when mortgages were 5-6%. The notion that 5% mortgage rates will kill housing is largely academic.

Unless higher rates emerge as a result of lower wages and lower building costs you can basically throw that line of logic in the garbage. It may be a bit harder for single family sales, but rentals will be the new treasury bond

Larger than normal sized starts in Nintendo and T, also added to MSGS and AAPL puts

^^ I feel like a lot of the people talking about this do so with a chip on their shoulder and a “see! Cities ain’t dead slant” as if there is some sort of vindication but the reality is quite simple….when your government shuts down everything that attracts people to the area there is no longer any reason to be there. Aaaaand, when it opens back up they’ll come back. That’s been the driver for pretty much every reopening play. Cities are not nearly as desirable when you can’t do anything. NYC without restaurants, bars, nightclub, broadway, sports, concerts and by association huge pools of singles looking to mingle….why would anyone want to be there? Let people do those things, and you’ll see recovery. Wasn’t and isn’t rocket science. Was quite easy to time from a trading perspective as well. Basically started for real this August or September. COVID just confirmed remote work was doable and remote work just means expensive city offices aren’t mandatory anymore. Which will be the lingering lesson from this whole thing; COVID put city office into the same category investing wise as a lot of brick and mortar retail. All the other shit just ebbs and flows the same as always.

I think too, maybe related to this subject or maybe unrelated, a human nature to value cash greater than an equal amount of stock.

My read is that would be that AAPL realizes it’s stock has gotten ahead of itself and that something like PTON isn’t worth paying cash for if they can get away with it. I think AAPL has been a great example of a company that does bolt on efficiently and just writes a check the way a college kid picks up cigs at 7/11. I’d have been annoyed if they were just giving away stock for all these little deals they’ve done when they are over capitalized and the stock cheap. But again, a multi trillion dollar titan making a rounding error sized investment would be more of an outlier situation IMO. When I think of all stock deals I generally think of O&G land or telco and real estate where some bloated body realizes they need to hoard cash, are tapped out on debt, and kind of view their stock as a “free play” token at the arcade.

I think there are often situations where value investors extrapolate their own thinking into a market situation and give themselves high probability of getting things wrong. I would say probably 99% of the time a company is doing an all stock deal its because they arent in the financial position to pay cash; and this can in some cases being an indication that the acquisition is potentially too big. Not because they have some savvy operators who ran calcs on their shares and viewed it a better route.

I am not even sure I really understand the whole thing here. Often times you go into a trade or investment with a playbook and the job then becomes about executing it. So if you see a $15 stock and see a setup that gets you to $25 and things play out, who cares where it goes after? There are longer term type investments, but even still, with those, you have to keep things in perspective. I typically have those types of things(BRK, MSG's, FRPH, ALCO) on margin and while I rarely sell those types of assets, if I do its to free up capital for better opportunities. If you are consistently missing big returns because you are selling good stuff so you can go to cash...well thats dumb and makes no sense. But strategically moving stuff around to fine tune your portfolio risk is not something that should be evaluated and a "what could have been basis". I mean I owned TSLA in 2012 at like $25. I at one point bought AMZN at $180. So to hang your head because "At one point in time" you owned something that went bonkers IMO isnt keeping yourself in the right mental place. You should only be hanging your head if your gameplan was to hold the stock forever and then because of poor execution/fear/lack of discipline/etc you deviated.

Oh totally. First things I think of in that regard are Al Capone and Frank Lucas handing out turkeys on Thanksgiving. Or guys like Clinton, Trump, Gates heck even Epstein and their "foundations"....the movie Inside Man basically plays Soros. These guys do the scumbag thing to attain crazy amounts of money and then use their wealth to buy publicity and buy a facelift for the "legacy". Fuck them all. I'd rather have a beer with the guy who anonymously puts $20 in the church basket.(although I'd prefer not to go to church LOL)

MSGE, MSGS

https://www.redfin.com/news/housing-market-update-record-high-price-record-low-inventory/ Weird, I was told housing was slowing down....

This type of stuff is wayyyy more common than you think in the financial world. The majority of the people who still do this past the age of 40-50 have more money than they need but an addiction to accumulation. They are benevolent only when it suits them, IE publicity and recognition. Type of stuff where they give shares at low basis instead of a heartfelt donation. Tip 15% pre tax. Will flip on a subordinate over $100. Cheap AF. Treat their underlings like total shit. Most got their original fortunes ripping off clients, especially the old timers. P&D schemes, "private" investments, non traded REITs, etc. In addition to hefty wrap and RIA fees. There arent many honorable ones out there. And generally, the ones that are, you'll never hear about.