Gregmal

Yea IDK. Its shocking to me how scared most people are of "losing money", which in todays day and age is basically defined as "suffering" a paper loss or dealing with volatility. I dont take new investors anymore but when I did, part of the process was avoiding folks seemed too preoccupied with the idea that the stock market is dangerous and risky. As I said earlier, its a HUGE advantage going into an investment not being scared. I cant help but think this is a byproduct of the Feds grand experiment where they've more or less snuffed out volatility. Now every time we get a 2-3% decline everyone thinks "the big one is coming!"...

I'll quote the guy who's style I randomly end up finding a good comp to some of my own. Everyone likes to talk about how he blew up even though he never really blew up and they like to make a big deal about his names that didnt work like JCP, HLF, VRX but losses are just part of the game and he's once again the top dog in the biz... "Its my job to be right. If I'm wrong I deserve to be held accountable" “We size things based on how much we think we can make versus how much we think we can lose. We’ll probably be willing to lose 5-6% of our capital in any one investment.” -Bill Ackman I mean I know so many people who are terrified of losing money and cap their positions at like 2-3% and its just a head scratcher. If you cant withstand losing 5-10% I mean why even bother with stocks? If you have a real home run on your hands and its a 2% position? Who gives a fuck. Maybe it turns into 5% lol. What a waste.

Exactly. Position sizing is the single most important facet of investing. If you don't know what you're doing, invest in small size, diversify. If you anticipate a high degree of risk, size it small. If its a slow pitch down the middle, swing for the fences. Its actually quite simple. Figuring out how to optimally structure your trades and investments(aka manage your risks) is way more important than all the numbers and crap folks waste so much time fussing over. Fundamentals dont mean shit if you're wrong about others aspects of the equation.

He s gonna be right about it, although I dont think it plays out nearly as fast as it seems he's anticipating. Its funny, Kuppy says it, and its controversial. Whereas quietly, back in the spring, Tepper said the same exact shit. What the ESG nonsense is doing to top energy producers, coupled with government regulation, is a recipe for disaster. Like Joes administration is refusing to allow new production and harassing existing production and then in response to high prices begging OPEC and Saudis to pump more LOL. Like WTF. And its not like big Oil needed another excuse to allocate capital irrationally. Its like telling big tobacco to shift towards pot and ecig and then be surprised when you get a Juul or Cronos. Which again shifts back to inflation....in the real world, gas is at multi year highs, cars and houses are expensive as fuck, grocery prices have skyrocketed...but like with covid they lie and manipulate the narrative to "transitory" for their benefit but everyone can see whats going on because its hitting their bank account.

https://www.valuewalk.com/praetorian-capital-fund-2q21-commentary/ Even if theres occasional blowups, few people can make money like he's been shown to. I'd say the same thing about folks like Bill Hwang too, or Ackman. Who cares if they blew up every now and again? I wanna see what those guys are up to because theyre generally in the right ballpark. And in Kuppys case, unlike most self consumed, entitled, "Im too important" type fund managers, he'll tell you exactly what he's doing as he'd doing it which gives you great insight to the process and the rationale. I've never liked shipping stocks, nor have I liked commodities. Surprised how everyone mentions shipping but doesn't also mention he's crushing the commodity trade this year, especially of late with Uranium. Ultimately investing is both an art and a science. Each individual has to figure out their own "user settings" and then refine their process. Part of this is always learning and being open to ideas and then evolving with the times. How many guys do you see out there buying the same stupid stocks that just dont work and haven't worked simply because its fits what the textbook tells them? Thats what you dont want to be like, rather than fearing the occasional miss or loss. Everyone loses money from time to time. Nothing to be embarrassed about or afraid of. In fact, I'd gander not being afraid of losing money is a huge advantage.

Anythings possible and I have no dog in the fight other than Ive found his instinct to be on the elite end. From a trading sense maybe on par with @SharperDingaan or @ERICOPOLY here, to at least give folks a measuring stick. Something happens, a catalyst, and inflection, boom, he's on it. As someone who trades a good bit, you want to pay attention to these things because the current market dynamic(really the dynamic present for the past decade) is that a good trend or spurt of momentum will last for a good while and give you lots of opportunities to profit from it. Largely speaking, society has gotten way too quick to write people off because "they said/think this or that". If I'm looking to make money I want to read and hear and see absolutely everything I can, take in all the different vantage points, and then process it and hope theres an actionable conclusion. Guy on the street could tell me "Hey Mr., Can I have $5 for a ride because my Uber called and said they had to go pick up someone from Hershey at the airport)...and if we're in Ohama, maybe Ive got a good lead. Maybe its bullshit. Stupid example of course but my point is that all it costs is a minute or two of my attention. In regards to what he's(Kuppy) wrote on inflation, everything IMO is spot on. There seems to be a proud public investment many folks have in the "transitory inflation" storyline....and the common theme of support for that narrative is to point out how commodity product ABC which was at X pre covid, and then went to 3 or 4 times X, has now fallen back to 2X....which is kinda bullshit but then you read another story slip out about how this sort of increase is here to stay. Or that one. Or how Costco expects freight prices to stay high... https://www.cnbc.com/2021/09/24/costco-nike-and-fedex-are-warning-theres-more-inflation-set-to-hit-consumers-as-holidays-approach.html In a conference call Thursday with analysts, Costco Chief Financial Officer Richard Galanti called freight costs “permanent inflationary items” and said those increases are combining with things that are “somewhat permanent” to drive up pressure. So at the end of the day why not listen? Who cares about the messenger although if the messenger is currently hot, take that for what its worth. But if you're trying to make money or catch a wave, you've gotten be open to everything in order to assess what makes the most sense.

Yea IDK because I'm not a big fan of following individual people and terrible and tracking the Twitterers. But in the past year of following some of his stiff he has: -called the BTC rally from 9k to 60k -then called the exact top -in between nailed the SPAC bubble top intraday His fund performance is pretty solid. Additionally he's accomplished quite a bit for a guy his age and on top of it is very down to earth and willing to engage with pretty much anyone. Overall I'd say, and please recommend others if you know of them, the single best person I know who can quickly size up a developing situation and spit out how you can make money from it....a far cry from most who just look at shit, slow as molasses, and then want to do fundamental analysis. So I dont know ones politics but I'd say its pretty irrelevant here. Personally, I have never had a problem generating actionable ideas, but if I did, his weekly idea generator newsletter is totally worth $3k annually. I dont subscribe because if it did I'd probably be like 6:1 levered which is just asking for trouble. I'd also add that anyone who bought the COVID hysteria got their shit pushed in and likely missed what may indeed have been the single greatest quick money opportunity they'll see in their lifetimes. Like you could have made 50-100% on shit like Google and Berkshire inside of a year if you weren't wrapped up in all the media nonsense.

Yea what these sons of bitches(or in some cases, just "bitches") are doing is effectively stealing from Peter Thiel, who happens to have been a critic of many of them. There is no argument that Thiel is 100% the reason for this new "rule", nor is there any doubt that his money is the target....Outrageous.

Fish in a barrel, the easiest repeated trade running for the better part of 6 months now.

Come on bro, you should wanna be like Bill Clinton.

50 more CLPR March 5s. 50 still on the bid at 3.35

Good stuff for sure guys and I appreciate the pushback. I dont think its anything that plays out overnight and as I mentioned, the accumulation part needs to be mindful of that along with the inherent volatility. Its not a big position for me and never will be. COMP I just started with at sub 1% and Z is ~3%. I'll take Z to maybe 5 or so if it gets into the 40-50 ish target range where even I can justify a lot of the valuation however from experience, these sort of things rarely get to price targets appealing to the stingier of investors and when they do you may not want to own them. The real push for me here was earlier, again having dejavu, where the evolution of the company was apparently and the long time bears who had regularly mouthed off since 2015 or so had all but disappeared. Its a pattern Ive seen all too often with certain types of special or disruptive companies and considered it a tipping point to stop being a pussy after stalking it(on the hunch of "potential" that we'd discussed above) for almost a decade. At ~30B its not small, but I recall vividly enough people whining about how egregiously overvalued and risky it was at $6B. Perhaps the iBuying is the significantly part of the story now(it is) but again, to have the optionality on the rest is what I think the real opportunity is. If it doesnt work out thats fine, not all do and as always you can only lose 100% of what you put in vs make many times that if you're right. The comp to financial brokerage biz is reasonable, although from personal experience I'd point out that folks have been trying to disrupt that for 3 decades and even in its current form there is still TONS of money to be made there. Everyone looks at the ticket charge(or for RE agent commissions) but if you've worked closely there you'll know that those are just a fraction of the equation. I mean eBay is as mature and "disrupted" as you can get from 20% years ago and they still take 12% of everything sold. So who knows. A lot of times you have to just settle for knowing you'll never have the exact roadmap for how things will evolve, so Ive found it more practical to simply look for companies that are best positioned to evolve and innovate rather than figure out how they'll do it.

So that's ibuying...OK, but thats just a small part of what I view the whole thing. For instance, the smallest ticket on my current refi, or on my purchase last month, was the appraisal. Appraisers need to be satisfactory to a lender. The average appraisal is about $500. Ive paid anywhere from $375 to $650 for one. 6.5 million homes sold last year and about 5 million used financing that required an appraisal. Given their algos already in place it wouldnt take much to move into this market and become the lowest cost provider at a relatively high margin. If that occurs, do you think any lender is ever going to waste time doing anything but clicking a button to order up an appraisal that can be generated in 15 minutes vs the current process which take 3-5 days and is likely to cost way more? Theres so many call options here its insane. Just need to be patient with an accumulation because depending upon how you choose to look at this its still arguably quite overvalued on some metrics. However I'd prefer not to be the value investor that gets in at 3000+ on AMZN or $250 on CRM, etc(just examples) because I didnt understand the early story and the valuation didnt make sense to me so instead of doing something I wallowed about it being overvalued. I'd rather lose a few % wading into a mid single digit position over time than leaving it on the table hoping to eventually get into the story once its cleared and pray to eke out 10-15% annual returns.

Covid distortion aside, theres an obvious different between buying a home and a car. And outside of the obvious one with regard to the long term desirability of the asset, I'd say the buying/selling process is much simpler for a car. I dont think cracking the home buying process will be easy, but you have the ingredients already. Again 39/40 doing a transaction go to Zillow at some point in the process. Thats all you need in terms of moat to kind of tinker with different stuff until you get it right. Imagine a world were you spot the home you want, apply through Zillow for financing, setup via the site a walkthrough tour either virtually on the spot or in version next day...where doors can be unlocked through the cloud, and then after exiting the property can submit a bid or buy it now? You wouldnt even need to charge a commission if you can automate all the bullshit title stuff. Almost all of it is nonsense that is hugely marked up. I'm doing a refi right now and these things are like 2% of the home price by themselves. Maybe charge a 2% total commission or 1% to each side. Then because you originated the mortgage yourself you get that $ too? Its a massive opportunity. I dont see anyone else having anything close to the footprint to do it. Also, on I-buying, look into it. Theyre not buying anything, theyre buying what the data is telling them is the best markets. And they offer like 10-20% below market in many case. Big difference from buying a used car 20% above MSRP.

The simplified bull thesis on Z is basically theyre going to turn the long, arduous home buying/selling process into something that resembles buying/selling on eBay. One stop shop. THEY will become the real Home Depot. Where you can transact like you trade stocks. They will eat the middle stuff which if largely automated or outsourced can be hugely lucrative. Anyone who's done a deal can tell you all the absolute bullshit fees and costs the title companies take down and then of course the agent commissions. So on one end they'll have a huge inventory of homes purchased with 2% debt, notes, stock issuance. You can rent or buy from inventory through the click of a button. And all the money thats made through the transactions, which is tons! goes to the bottom line because they can offer it cheaper than anyone else, while providing the buyer and seller unmatched convenience.

Initially that was probably were I stood on the ibuying. But if you can leverage your size and issue at will with notes, shares, or cheap debt, thats fairly big. So whats the risk if you're raising lets say $500M and then buying 1,000 SFH with solid fundamental data supporting it at a 10-20% discount to market? This is effectively what theyre doing once you remove all the sales speak around "adjustments". And further, if you're buying these in cash or fixed debt, and the markets not "on fire", is the risk really that big? How do they lose a lot? How many times has the overall housing market gone down 25%+? Maybe a handful of times over like the last 50 years? Its not like theyre owning these at 5% down. Cash or largely funded by long term fixed rate debt. Carry cost for a home is maybe 5% a year tops assuming its vacant? So whats the ballpark on what losing a lot" actually means? Well, not really a lot. Frankly, this model, as well as similar ones from guys like Blackrock, make it far easier to dominate the market over time, especially if there's pullbacks. Of course you cant do this if you're small, but Z is the biggest fish and once you really start seeing the access to capital relative to what buying slugs of well located homes costs, it gets wild. Think about what would happen to home prices if BRK or AMZN decided to issue 5-10% of its market cap in shares to go on a SFH buying spree? You can literally buy entire towns in some of the best located neighborhoods in NY/NJ for a few billion.

Meanwhile theres folks going on and on about a US housing bubble LOL

Big move AH for BB.....all the way back to.....$10!

Yea commission are generally reported on a gross basis which is misleading because they are typically paid out on a % basis with the smallest end going to the firm. So a listing that does $30k gross best case has a dual representation, 60-70% can be paid out to the agents meaning for the reported figure only $10k or so is true revenue. Had a ton of people bring me small boutique financial/stock brokerage firms and be like "1x sales"...but if you're paying branch offices 90% of revenue its really more like 10x. The good thing though about this model is the overhead is typically lower as the higher the agent payout the more of the cost burden they typically bear.

There's some winner take all dynamic as well. Few industries are more ripe for disruption than RE brokerage. Z owns the internet(which the internet is a pretty important theme over the past couple decades). 1 in 40 is the number you need to know there. Thats how many people transact in RE without ever using Z in the process. Or in other words, its virtually impossible to avoid them. From there its just about the ecosystem, engagement, and automation of the process. Ibuying is just a call option, but could be significant as well. Having done dozens of transactions over the years, its a pain in the ass. Z is the only real player who can seize this opportunity IMO. COMP has the funding to do some damage as well. But I view them more as just a tiger running wild in the old ecosystem, which if you're willing to spend, is pretty easy to conquer. Poach agents or buyout smaller shops, undercut listings. Utilize some automation and advertising. Softbank knows a thing of two about throwing money at ideas....COMP is a smaller position but worth keeping an eye on well below its IPO price.

COMP and FRG

Exactly, losers dont like to be accountable. Its not your fault, its because you're white and white people are quickly becoming the minority and the left wants to scrub you out and take your guns and jobs and make you a third world citizen. Thats the mantra on the right. On the left its basically the same; its not your fault, America has been out to screw colored people because the country is run by evil supremacists. This type of net catches like 80% of the population. Only 20% see that white folks aint endangered and with the proper skillset can easily get what they want and that colored folks are pandered to to such an outrageous degree that its almost impossible to fail if you make any effort. The later requires work though but if willing is a huge opportunity. I remember in History classes thinking how crazy it was that back in the day the American Dream required saving for freaking months to by a ticket to make a weeks long journey on a fucking disgusting ship and then go through a shit hole like Ellis Island and then after that start from complete scratch without even having a place to stay, and then go find work in a non industrialized setting. Today you literally just have to get off your ass. Mental set is the key though.

The medias job is to shape the public into subservient and moldable followers. This applies to both left wing and right wing outlets. Its far easier dealing with 2 predictable groups than a sea of individuals.

IDK but personally I think you can learn something from anyone. Whether its knowledgeable things they do well, mistakes they make, a thought process or pattern, or simply other behavioral stuff. But we live in a world were the media has molded us to immediately identify with folks as either friend or enemy. If any enemy, its become a trained behavior to just find some surface issue, and dismiss absolutely everything about the person. Oh well. If everyone wasnt so dumb it would be a lot harder to excel in life. So be grateful.

I would also add that it seems a lot of people have their eyes in the wrong place with the "covid disruption" thesis. Yes, that occurred, but that merely set the table for a lot of whats to come. Just as significant IMO, if not more so, is the government spending and stated objective now of both parties to effectively pay for votes. We've more or less backdoored our way into a UBI with the Child Tax Credit stuff. Look at all stuff in the 3.4T package....Covid IMO was merely an excuse to get certain programs and ideas into play. A lot of them I think are here to stay.