Gregmal

That’s typically what happens when the folks freak out for no reason. The worst inflation happened LAST YEAR, and extended into Q1…we got prints we should have expected, the Fed did, exactly as it said it was going to do, and it is my opinion the whole momo and computer driven stuff did it’s thing just like in late 2018. Unless anyone else has real reasons for the sell off transpiring basically from 3rd week April until last week? It wasn’t a 50 bps hike and it wasn’t CPI prints we already new about. it wasn’t China COVID policy that was already done with. Perhaps sometimes markets just do funny things? In other words we get some opportunities to make money that we wouldn’t if they were always rational?

Was so good I picked up 2 spares this morning. Appreciate the heads up!

The following is true of any company if you go back in time. Hence many baggers are rare. The odds of Amazon becoming more than just a bookstore were good but the odds of it becoming what it is today were tiny. You wanna look for legs and webs that branch out into potential opportunity. Couple optionality with good management and you have a chance. Other than that, we re all just guessing. There is a good bit of pattern recognition. For instance, every company with obvious growth potential people decry as “expensive”. Any company revolutionizing a new arena and capturing massive market share is rare. Typically you want something that is polarizing. Short interest is also typically a good sign. How many shorted Amazon for ages? There’s no science to it. UBER has a huge advantage because it runs a capital intensive business in a capital lite way. Even self driving will have to deal with car upkeep costs. Uber just puts this on the driver. They have the network, and no one person or group really matters. All the drivers are interchangeable. They have ridiculous data. They also have brand recognition with a future generation who knows nothing but their iPhones and androids. You think those fuckers are googling and shopping price for local taxis service? Nope. All the hallmarks are there for a huge winner. Could definitely see a half trillion or even trillion dollar valuation a decade from now. If not, what’s the downside? Pretty negligible if you size it right.

Athena Health I know was a controversial stock but really taken off within the actual hospital systems. Yup, another Einhorn valuation short.

For the average worker, the one who wants it, and has some ambition; we ve already seen probably 20% raises. I would probably model 5-10% annual wage growth at the middle class blue collar level for the next 5 years, at least. Everyone from AOC to Trump now claims to be repping these folks. We’ve already seen many places give in with benefits. Starbucks offers crazy shit like IVF to 15 hour a week employees. Barring any sort of insanity inducing action from government or central banks, the worker is gonna be in the drivers seat for a while, and far outstrip inflation which maybe is gonna be 2-4% from here. ESG is bullshit. We re moving to other methods but what’s hugely being overlooked? What happens when Republicans retake control and open door energy production domestically? I actually think Canada seizes this opportunity as well. Was looking at stuff like Melcor and Dream with the Alberta exposure. It’s always good to have a lot of stuff that’s en vogue. That’s oil and gas right now. It’s too easy and too much low hanging fruit for one of the parties to basically endorse drill baby drill. Lowers costs for everyone, creates jobs, demonstrates independence from evil OPEC. It’s going to happen.

1) is political and there’s a good likelihood voters choose something else in November 2) COVID is over, China will get the message too. 3) this is a fair point 4) debatable, but in the face of shortages and imbalance greed will prevail. Biden has already talked about pulling back tariffs. 5) the is massively bullish for the average person and especially the consumer. In addition, pretending the market dropped 20% because nothing changed is a little off. The drop to them clearly signals uncertainty and expectation of higher rates and longer inflation otherwise, if the expectation is the same as last year, 1) why the sell off and 2) how do you reconcile -20-40% in many names over a 1-2 year expectation. Didn’t we learn during COVID that longer term, 1-2 years of earnings, even 0 earnings, doesn’t translate to very much off the long term DCF derived valuation of that market? Many wise folks, I believe Brooklyn Investor one of the first, ran a 0 scenario and came to the conclusion that MAYBE, 10% deserves to come off. So we ll see. But saying the expectation is the exact same as last year despite overall market reaction and sentiment is something I’d bet heavily against. Everyone has their own take but generally, at least over the past two years, I’ve read this whole thing like a book. And the recent action seems exactly in line with what one would expect if all the transitory people from last year all of a sudden came to the conclusion that oh shit we were wrong and now this is going to be higher for longer….exactly the position you would have wanted(and I did) take last year, but this year…fade it.

Liberals are basically the confidence termites of the American system. There’s nothing they won’t hollow out and destroy. $6 a gallon gas is great cuz, well, you should be driving an EV anyway. And it’s an excuse to nationalize big oil profits.

Interesting timing, but this piece sums it up well. At some point you really do have to wonder if it is deliberate. https://nypost.com/2022/05/26/team-biden-might-be-purposefully-crushing-the-middle-class/

Decided to take your suggestion on this. Expectations are high

Im not sure the quality will matter in the end. Its currently a duopoly and LYFT is a dumpster fire. People need to get around, and they'll do what's easiest. Funny personal story, but maybe 2003 or so I was in the city with some friends. We had a late night yellow cab take us back to Jersey. For context, this was shortly after 9/11 and the height of Islamaphobia. So as we're driving back the driver, a big Arab dude, full turban, the whole 9, turns up the music, middle eastern stuff IDK, and then gets a phone call and starts shouting in a foreign language into the phone for a few minutes. One of the girls we were with, wasted, starts panicking and asking to be let out and screaming about how she doesnt want to die LOL. It was definitely a bizarre encounter. But the next week we took the yellow cab again. Its simple. You need a ride, what will you do? What are the alternatives. UBER put a lot of people out of business and I think that was the plan. Recently you've been starting to see the "horror" stories of the price increases. Even that Goldman dude who was killed on the subway last week, apparently just started taking subways because Uber doubled their rates. So the money should come. They've got an excellent network. Logistic possibilities that probably rival(or complement) Amazon. There is so much they can do. Whether they do it or not, IDK. But when I look at tech stocks right now, Im looking for multibaggers, not 15% on GOOG or whatever. If we're in the 2001-2004 post tech wreck period, I wanna be looking for Pricelines, not Microsofts or Ciscos.

I keep coming back to UBER and being awed by the optionality and potential. Market cap ain’t huge and valuation is ok.

Ya. Common sense is really the largest and most useful input. But not everyone has it. Weirdly, most financial types I’ve run into are all WAYYY too academic or anchored to textbook shit and business school or CFA type nonsense. All I’ve heard since I’ve started my career, 2010 or so, is “you’ve never seen a bear market” and “your generation doesn’t appreciate cycles and risk management”…but whenever shit hits the fan, at least so far the past decade, Im always like “well you have and I haven’t, how come I’m still doing better than you? Lower drawdowns. Quicker recoveries. Using meaningful amounts of margin and never holding cash, and holding concentrated positions! How is it possible?” And really, as you said, it’s about being sensible and knowing what you’re buying in the context of the current macro backdrop. Then applying common sense.

This is always sad. That last drop is the toughest one. Especially when there’s no reliever in the bullpen

It is often helpful to be contrarian but its also just as important to end up on the right side of things. It was consensus from February-October 2020 to "sell everything" because of covid. Yes, now I know everyone bought tons of shit during the height of the hysteria, but in real time, that was hardly the case. It was consensus that housing was a bubble about to get destroyed in 2020, in 2021 it was consensus housing would do well. It did well both years. Now its consensus that rates will kill housing but that isnt happening either. You can have biases and get feelings and they evolve and you just go with it. Last year everyone slept on rates rising and blew off absolutely outrageous real world inflation. Now its a headline and everyone is obsessing about it but it seems pretty obvious we have taken the punches of the worst of it. I dont know what "the market" is pricing in because Ive never bought indexes or "the market". But people claiming we're getting a 30-50% correction because of 3-5% inflation are out to lunch. As long as Ive been a member here, every couple months, people need something to be afraid of. And every time we have a 5% or more market decline, people start making up reasons for it. So IDK. I kinda just like to focus on where there's money to be made and ignore the noise. No one makes much money doing what everyone else is doing. Wasn't it like 12 months ago and even recently where everyone was drooling over Amazon at $3200 when they had Berkshire staring them in the face? Right now I dont see how you can go wrong buying good cash flows or hard assets with a growth profile. Who cares about everything else?

To the bold question, Yes! But why is this over and over a recurring theme? Everything the government starts meddling in, gets fucked up. Then they turn around and tell us that the obvious as day reasons(them!) arent really the issue, but rather its something else, and that something else always happens to be a self aggrandizing or serving position. Biden now blaming Putin for high gas prices even though the barrel was already up 50% year over year, but hey, now to solve this, we need to promote more green energy shit! Or look at the grandstanding at this hearing. Or the "greed at the pump" hearing. Its about creating problems, blaming someone else, and then getting your moment in the sun where you can create sound bytes and Twitter likable quips. I absolutely believe they shut shit down for no reason, look at energy! We rag on China for their "zero covid" stance, but didnt we just have the same sort of shit going on in NY/NJ/CA just presented through the media differently? This time last year I still couldn't freely go into a restaurant in NJ. So overall you have, just in the past few years, bipartisan actions: shut shit down and tell people to stay home, create economic/health/quality of life problems. give out free money, create supply and demand shit storms. hostility toward energy, soaring energy prices. meddle in Ukraine, create a war. campaign on an open border and create a border crisis starting on "move in" date illogical gun laws, lead the developed world in shootings restrict/hostile zoning/building, housing shortage mandate fire people for not getting the flu shot, making shorthanded companies even more shorthanded close largest baby formula factory, now have baby formula shortage Seriously, fuck these people.

Dude I need JPow to kill the economy. Monkfish should not be $15/lb!

I have found though, as the market got crazy for a while, one of the best value bourbons is Angels Envy. $45 and probably better than most bottles double that price.

So shutting one of the largest baby formulas factories in the country had nothing to do with a baby formula shortage following? No one thought to maybe have contingency plans? Or was the contingency plan to just hold hearing and blame the company?

I got put on the order list at the local store recently. They said it only recently became more available, never goes on the shelf, and it takes a week or two to get in upon order. First reservation, first serve. $82. Cautiously optimistic. Prior I’d been getting it for $150 from a local guy who runs a massive chain of stores. Didn’t like paying that, but what are you gonna do? Need something to wash down the Natty Lights. Those are still the bargain of the century at $18.99 a 30 pack. 20 years ago I was buying that same 30 pack for $14.99.

Yea I was the other way around. Always liked smoky type scotches. Glenfiddich Fire and Cane is awesome. Lagavulin. Then kind of just moved over to bourbon.

Nah. It’s like the crime surge in NY. Bail reform? Nah too obvious, so the media, in cahoots with the politicians, creates some “other” excuse. Blatant lies and distractions. I believe gaslighting is the word liberals use. Of course it’s not the obviously stupid stuff we did, it’s actually something else! Bottom line is yea there were issues at the plant, but shutting it down and then, wouldn’t ya know, having a baby formula shortage? Dur da dur. Same thing happen now as happened with energy. They create the problem, and then hold hearings blaming the oil companies for negligence and greed….

I think to a certain degree, some liquor markets can provide a good look through on consumer behavior, supply chain, and generally supply and demand. Q42021/Q1 22 it was virtually impossible to get certain bourbons. Blantons was a ghost and if found, a $200 bottle. Eagle Rare similar. A $35 bottle pre COVID now $80 IF you can find it and happen to be one of the first few in line after the drop off. Lately these are back on the shelves at normal prices, although they still move quick. Even with bourbons that require an aging process, capitalism wins. So hard to see how 2x4s and trucks don’t follow suit.

You happen to live in the real world. Nothing to be ashamed of.

Bump. just thought I’d remind everyone how wild and whacky sentiment gets sometimes, and how it’s not reality.

Which is nonsense and just indicative of the general market looking for excuses to sell. Which is generally what happens when stuff is over owned. I’m kinda getting tempted on some of these, but not really. I think they stabilize and become dead money for a bit.