Gregmal

Thats fine and all but prices are largely driven by future expectations. Is it going to be easier, or harder to increase output going forward? Is demand going up or down? Then add in easy money and the locust nature of speculators to an already out of whack supply/demand equation and you get....well, what we've seen in everything from Gamestop to Uranium. Tangentially, I recall back in the early part of the decade how easy it was to start up an O&G venture. We'd get PPMs all the time as well as offers to go out and see all these "deals" that were in the works. Now, as others have said, even the majors are going to have trouble getting reasonable terms to refi existing debt. I mean on one side we have Cathy Wood saying oil should head back to $40 because we're about to get deflation, and then on the other side you have guys like Tepper and Kuppy lickin their chops at this setup. In between we have the policy makers playing the "lie to me slowly" game. No inflation. Transitory inflation. Gonna be a little longer than we thought. Gonna be a lot longer than we thought but still temporary. Uh oh, we lost control! Everything one needs to see to make highly assymetric bets is right in front of us. Its pretty awesome.

The price movements and covid caused bottlenecks are what make this stuff sooooo easy to trade. Its all so predictable and has been for way too long that at points I wonder if it really is this easy. But when you have folks like the ESG clowns investing irrationally, that removes a certain layer of efficiency from the market.

Prem is just playing 4D chess. He’s hidden from the market his experience and expertise in tech. He’s even purposely made some bad investments just to throw off anyone hot on his trail with respect to his secret tech talents. Obviously BB is the next Apple. Don’t doubt, or pout. Have faith….FFH is the next Naspers. Between Digit and BB pretty soon you’ll be able to buy BB shares at a 20% discount to market through simply purchasing FFH shares and better yet you’ll get everything else at FFH for free.

I can sympathize with folks who have a couple hundred thousand in retirement funds in their 60s...it shows an effort and if you're not white collar its hard to get much more than that. But theres no excuse for not owning a home over the past 5 decades. Housing has spent exactly what? 5-10 years during that stretch as arguably unaffordable? Stop. fucking. renting. Now its getting past the point of no return which will just make it worse for folks as far as housing goes. But back to these people. Not only do they have 0! but they are talking about $4000 in debt as this huge thing. "Chipping away" at it? How do you chip away at $4000 lol? Isnt that like just something you pay in a month or two? Or roll into a no interest promo balance transfer? Part of me feels bad for folks, part of me doesnt understand at all, and part of me is thankful because if the majority of people weren't so dumb it would be harder to do well in life and certainly make things much more expensive.

Why dont we just give China and Russia the edge forever in terms of both technology and energy? Here's another insightful take...partially for what Putin is saying, but also the embedded narrative arrogance from the author. https://www.cnbc.com/2021/10/13/putin-says-russia-is-not-using-gas-as-a-weapon-is-ready-to-help-europe.html Along with this https://www.washingtonpost.com/business/energy/dont-blame-climate-activists-for-the-global-energy-crisis/2021/10/10/ce8372b0-2a22-11ec-b17d-985c186de338_story.html These ESG tools want to continuously push alternatives that have no place yet and when you screw with supply of essential products and services you bring on disaster. Of course, I'd expect Putin to get it...he's savvier and smarter than any US president Ive seen in my lifetime....but its just crazy watching these idiots in America and Europe grandstand about climate and interfere with energy production and then have the nerve to try to blame others for the crisis theyre creating.

Its more telling though the look through composition of these people. Soooo self consumed....thinking theyre important enough to personally write the CEO of Capital One...demanding their interest and late fees be cut. Planning on working 10 hours but then deciding that it "just wasnt for them"...but then shameless taking from organizations designs to help those in bad spots. The extra $800 a month made a HUGE difference for them, but they have no interest in real jobs... Its crazy too because it could all work for them, on their budgets, to an even greater degree....If they just went out and got semi skilled part time jobs making $25-40k a year with benefits. In todays labor market, you dont even have to try to get a job that can provide that. And yet, by choice, they do.... this? Live like vagrants?

https://www.marketwatch.com/story/this-couple-retired-2-years-ago-on-about-27-000-a-year-heres-how-its-going-11633706641?siteid=yhoof2 Came across this and looked into it and its actually a reasonably well followed retirement story that is not some typical "how to retire" clickbait story....are people this pathetic or is this just some kind of joke? $27k a year to live on? Dont want to work more than 10 hours a week but then decided they didnt even want to do that? Steve made $350 in a YEAR selling garbage as art? Joan is getting a $45 royalty? An extra $630 writing? They got their pandemic checks even though they weren't effected by anything...they avoid Cleveland Clinic because their medical bills went up $300 in a calendar year even though the husband requires more medical attention? Over the years they've been able to "chip away" at their $4,000! debt...including "writing a letter to the CEO of Capital One"! LOL. And yet, despite basically refusing to work they're at times going to the Salvation Army for help? WTF is wrong with people? And oh yea, what good is retirement if you cant "splurge" on a $5 a month museum membership?

The action in tech keeps pointing to a new stage of the cycle. I dont know how it was not at least reasonably obvious after last year where we went from arguably too expensive to undoubtedly expensive to mind boggling. Of course a lot of it, and subsequently the indexes hide behind the FANG stuff which is still not egregious but just fully valued, but everything under it is beyond comprehension in terms of valuations. The behavior has been validated by the capitulation type behavior of value investors seen everywhere from Twitter to VIC to Sohn. Parallels to Druck in 1999/2000. You can spit your carbonated beverage out seeing people drum up delusion inspired bull cases for garbage. And now even the leaders are fading/acting sloppy. Short interest across the board is basically nil...another tell tale sign. And you've got a lot of snowballs building. Ive got a few shorts and some puts+VIX calls along with some ETF type stuff but overall am not participating in much outside of riding the housing wave and the energy crisis, so I honestly dont care what happens. Cash is a waste of time, period. People have been saying "real estate is bad when we get inflation" and my biggest positions for the past year or so.. APTS(+107%), AIV(+82%), PCYO(+60%), FRPH(+27%), CLPR(+30%)...all so "Hi...yes, no, you're wrong, it isnt!".....on the flip side all those do well if rates remain at 1-2%.......we can let the value guys who missed a decade of easy tech money now fight over who thinks Peloton is cheapest not realizing theyre the last ones left at the party and the keg is empty...but otherwise the market is clearly bifurcated so rather than lazily fall back on "big crash bad!"...have some fun with it and play the game where you win either way. If you're buying tech here and its not FANG I'd underwrite 50% drawdowns into an accumulation strategy(thats basically what Ive done on the ~6% of so tech exposure I have)...otherwise, why even waste time with it? Even the FANGs probably have a few years at least ahead of themselves of boring returns.

Dunno, was going to the driving range yesterday and heard something on one of the radio stations about landlords owning 10 or more units being required to provide internet. It was a shocking new level of "we'll tell you what to do"...even for NY standards. You tell me, this goes to a vote....what happens? Its a classic case of pitting the haves against the have nots.

This is kind of the major issue I have with investing in the blue states. Housing is being viewed as a quasi state run utility almost; even the privately owned stuff. This kind of stuff will only get worse because there is no way around the major affordability issue. Look at large swaths of Europe and even Germany...the effects are disastrous once government starts telling people what they must do with THEIR dirt, bricks, and lumber. The upside we see, in stuff like CLPR, CLI, etc.... it comes with a catch...the higher prices go in these places, the tighter the supply, the CRAZIER these stupid liberals will get. I've got a solid allocation to the above two names but ultimately this is why I favor the Sun Belt stuff. Not only do you have favorable migration trends but you also know that these are the same places that refused to even implement masks in school in the name of "freedom"...they will watch with pride as housing prices go bananas and their dirt becomes viewed as gold. Whereas in other states they view that as a "problem"...

Anyone hear rumor of this new NYC law requiring landlords to provide free internet? Hopefully just a rumor but doesn’t surprise me at all.

Theyre somewhat illiquid so I dont wanna give an exact date and strike, yet, cuz the trade is still in progress. But go out a few years and up 20-50%. So figure $100-125 strike on the CL. Pick your date accordingly but it doesnt really matter if you give yourself some time. You dont need a bee line. As we saw with the last correction, it just washes out the wimps and then resumes whats inevitable. We dont have the infrastructure for all these alt energy dreams and theyre killing what we do have. Its a basic supply and demand trade and globally theres places even worse than we are here. Wait til places like India start their "covid recovery"....demand....up. Joe will be gasping for a ventilator due to the sheer horror of what he's created. And we'll just laugh and count our dollars and smile while filling our cars with $6 gas.

Added a little bit to the crude oil futures call options and XLE calls. Credit to Kuppy again on the futures calls.....clearly the best way to play a big spike without the company specific risk. Another shoutout to the genius president and his fans for making it all happen. No better way to redistribute the wealth the high energy prices. $100 oil here we come!

https://www.yahoo.com/finance/news/heres-the-best-new-asset-class-in-real-estate-tricon-residential-ceo-145713574.html Once again, why are people wasting their time investing in anything else?

Eh, IDK. I dont think the broader markets do a whole lot over the next couple years. Maybe 10% a year or so but nothing special. Saying FFH will outperform the index by 40% a year no with real corporate actions or changes is a little bit fo a stretch, no?

Well that’s kind of the problem. He s built it, and got nothing left to prove. And fwiw I had the “audacity” to criticize Buffett too, both about the refusal to buyback stock for several years and for being a pussy in April of 2020. For those keeping track at home… Gregmal 2 WEB 0 Im right about Prem here too. If they announced they were liquidating the entire equity portfolio, buying back stock up to 90% book value, and refocusing on India and insurance only the stock would probably do 50% over the next 2-3 quarters regardless of what the broader market does.

Briefly, no I m not short this, nor am I long this. I track these type of situations so that in the event it inflects I can make a lot of money in short order. Most recent example was BRG. Total shit management team but trades at 50c on the dollar. Only catalyst is a sale. Rumor leaked of strategic alternatives, stock took a day to process and you could buy at $11 and sell a couple days later at $13...easy. Same thing to an extent with Berkshire. I questioned the logic of Buffett and his allocation strategy for years and probably annoyed some of the loyalists but said all along when the buybacks got serious the stock would rerate. Saw the buyback in 2020 Q4/2021 Q1, made it a 40% position at 230, and a couple quarters later its flirting with $300. @Viking Its nothing to get sensitive about or call below the belt. I "bought last year and the thesis is working" isnt really the same as I bought on the same thesis I have now almost 2 years ago at a higher price than it trades today. In the later case, its really again just falling victim to what folks have suffered through for 10 years now. Harping on cheapness and the quant crap and missing the key that unlocks it all. Nothing more, nothing less.

Anyway, time for the weekend. Good playing ping pong with the bull/bear stuff. Cheers.

Exactly, more of the same... meanwhile people are saying things have changed. The market and most people do not find FFH management trustworthy and find that there is great risk of big screwups, even ones we are told shouldn't be worried about, and thats the major reason this trades at 60c on the dollar. And THAT, barring a management overhaul, or a huge tender, hasn't changed and won't go away anytime soon.

Why can't it change depending upon the variables? Its good to have a set strategy communicated to people. However at various points in time the strategy can be right or wrong, no? It doesnt stay the same forever? So yea you can have it both ways. Buffet was more into acquisitions, until he wasnt. Again, the mental process and ability of the management team is whats called into question with FFH. What benefit is there currently, to addressing the debt vs buying back stock that trades at 70% of an understated book?

Yes outlining the allocation strategy is a clear plus because it holds them accountable. However if, as many are claiming, your stock is so raging cheap, then why isnt that list shifting? Why arent lower risk/reward opportunities being exited in favor of better risk/reward? I mean is reducing debt right now really a better use of capital? Either the business is cranking and making oodles of money and its(the debt) not an issue or.......

More on the buybacks, but first...if you're touting something as an investment, you can't then hop scotch around with "I traded it". If you're waiting for a rerate and premium to book, I dont think its unreasonable to assume a holding period until it reaches that. If its a good, well run company, it will withstand the market hiccups...yes, even covid. Pretty much EVERYTHING(good and bad companies) is currently trading higher than pre covid levels. And with FFH, again, we're hearing, "WE'RE RIGHT AND EVERYONE ELSE IS WRONG". So...on buybacks, why is it a satisfactory excuse that because they do insurance they cant buyback stock? Plenty of insurance companies run buybacks. Berkshire has done a ton, just as one example. IF FFH is so cheap and buybacks are undeniably the right move, is it not further evidence of mismanagement, not being able to execute them now for well over a year? Doesnt it speak volumes about capital allocation when a company literally has their hands tied and barely any spare capital to opportunistically take advantage of a 60c dollar? If you have a 60c dollar, doing 2-3% of outstanding a year is a red flag.

But then they need to actually repurchase stock. There's still excuses for that. Again, going back to the post above, below is Viking in 2019 talking about buybacks. Are they really just a constantly hanging carrot? You have things you can monetize, and frankly when you trade at 60c on the dollar everything should be fair game in terms of monetizing. And yet.... the story is always the same here.

To be specific, you keep mentioning how you bought into FFH mid last year. But thats not really an honest statement. You've been touting FFH for years and listed it as a top pick going into 2020. Yes, you panicked and sold all your stocks during covid, and then bought it back, but I mean come on. Acting like its a new position and the thesis has played out and the IRR has been great isnt really reality.