Gregmal

To truly answer the question, we can likely deduce the average value investor is not an Uber driver but rather a white collar worker who earns a reasonable amount more than the Uber/lyft driver. Therefor, the answer is Lexus and Acura’s.

I'd echo Subaru's and also add Mazda. Both are totally underrated, high quality yet affordable cars that dont get talked about enough.

Or.....enter black swan... not unheard of in the world of professional boxing. The fight is fixed and Mayweather takes a flop, and all of our observable data points were irrelevant. Those that wagered correctly, lose big. And then you get "the rematch", which pays Floyd and Conor for round 2! Often following the money/financial incentives is pretty useful as well. In which case McGregor's weighted odds would have been higher than the ones purely based around the data set above. Which one is the correct one? If this happens 100 times, what is the distribution? Subjective and interesting nonetheless.

In which case it’s really no more insightful than anecdotes like “buy low and sell high”. Giving greater weight to your highest conviction ideas is really just common sense. But it’s also again, subjective. Buffett, Icahn, and Tepper all have different top ideas. Some will do better than others. When all else fails, look at your results.

If the inputs are subjective, and the variables ever changing, then it’s no different or more reliable than any other product or paper put together on how to “beat the market”... But there’s nothing that will ever stop the Excel sheet crowd... it has zero to do with the math being wrong or right. It has to do with calculating things that aren’t linear or regularly constant in terms of their predictability. I mean Mr. Einhorn is still absolutely convinced that Amazon and Tesla can’t possibly fit into his 476 tab spreadsheet that justifies their valuations.. a decade later. And if you ask him, the “math” is telling him he s 1000% right... Dillard’s, was an easy way to use math to make money. But you can’t openly apply that successfully without applying something subjective in determining whether the idea fits the criteria for application. And even then, there was the spreadsheet crowd, totally fixated on “they’re got bad operating metrics”. Many of these folks are too married to their own preconceived notions and incapable of evolving with the markets. It’s to their own determinant not mine...but if you’ve cracked the markets with some mathematical formula.... more power to you.

The difference between the blackjack cheat sheet and applying some mathematical cheat sheet to the markets is that the markets are always changing. The 52 cards in a deck don’t. One persons 42% odds are another persons 66% odds in the stock market... and both can be wrong. Whereas a 9/4 against a face card has the same “odds” every time. I’d also add that even an indisputable %/odds(which is rare if not nearly impossible by itself) can change instantaneously, because of some black swan event coming out of left field, rendering the entire premise useless. Such as the for profit prisons a few years back. Over reliance on tone deaf/non malleable mathematics is probably the single greatest area of stealth wealth destruction for otherwise generally intelligent folks in the stock market.

Investing is just intelligent and disciplined speculating. Nothing more, nothing less. There is a thread of the wager inherent in any opportunity. If there wasn’t there would be no variance in rates of return. The Kelley criteria is no different than any other ideological framework. Choose and apply as it suites you. No successful market participant should be married and/or permanently divorced from any specific strategy.

Great decision buying AMD. It continues to surprise me how some (only a few) companies can re-invent themselves. My son (who is in grade 12) alerted me about 2 years ago to what was going on at AMD; he and his buddies are into technology and he explained to me that AMD was a company on the rise. Alas, i was too busy thumb sucking to do anything about it. I use it as an example with him to how small investors can do well if they do what Peter Lynch advises: take advantage of what you see in your circle of competence. I was quite torn about selling it since my cost basis was so low. I like the management team and what they’re doing. I think they have been executing very well. Solid products, good growth in multiple segments and a really solid pipeline. But the valuation has gone bananas. 200+x earnings is too rich for me. But I’m definitely looking for another entry point. It’s hard to say whether this will trade at a fair value anytime soon. Thanks Excellent trade. What made you choose to sell at 200x rather than say, 150x? I am just curious because one area I would like to improve on is with handling these "non circle of competence" buy sell decisions. I can look at a real estate company and say, Im selling at 5% discount to NAV; easy. But holding AMD from 10 to 47 or whatever obviously involved some sort of valuation work and discipline. And like I said, since the earnings multiple was never really all that traditionally obvious, I am curious your thought process; if you dont mind sharing. Also, if you wanted to hang on or rebuy, in the future you can just utilize shorting long dated calls. If you wished to one day repurchase AMD at 30, just sell something like the January 2021 $30 call for $18-19. You get a little extra premium on your sale, are position neutral with no tax obligation yet, and if your bearishness is warranted you then just cover the call position into the decline effectively putting back on your long position- STILL with a long term basis.

Added to NFLX puts, shorted some WING, and put back on a small bit of BYND short.

Merry Christmas all.

GOOG is a whole lot closer to FV than where I bought it ((~$1050 blended). I sort of try to reduce positions when they approach fair value, although with GOOG, it’s a tough call. CTVA is my 3rd round trip this far. Yea IDK. I just dont think you can really ever get a "fair" value on something like that. Its one of the largest companies in the world, and covered by everyone. IMO on a relative basis its probably pretty efficient in terms of how its priced. So you dont ever really have an edge. I remember David Winters saying it reached fair value and selling(a guy with like 2% portfolio turnover) at like $1030, a few years ago. Now its $1350. To me, or at least what I tell myself, if that its an irreplaceable business, that should do better than the market on the way up, and hold up better on the way down. As long as it trades at a price I can cross a few bridges to rationalize, I dont ever see myself selling it. Just buying the dips. One of the few securities in my portfolio I have in that category.

Exited all but a few remaining shares of TPL. Love the company, but high 500s to almost $800 in a couple months works for me. Agree its probably wise to lighten up GOOG too, but I am incapable of selling it. Same goes for MSG.

I was looking at this stock for some year end dislocations, but there isn’t much volume. I don’t think their last acquisition indicates that management is selective about where to put their money either. Shopping malls in Jacksonville ? http://ir.ctlc.com/file/Index?KeyFile=401493134 The main driver right now, as you pointed out, is probably the volume. Any half observant investor sees that, yet Mr. Institution somehow just decided to blow out 250k+ shares in what seems to be a few days...genius. I wanted to double check my cynicism, but a look at the rest of the V3 portfolio was just as baffling and confirmed that these guys just have poor judgment. I am having a hard time reconciling the volumes, so perhaps the company took some of the shares privately, although Im almost positive theyre currently in a blackout, so not sure how that works. But what an idiot. They've been monsters repurchasing shares since Winters left and would have happily taken down those shares if this guy wasn't interested in packing up and going on vacation....I'm all for using 4% debt to buy as many shares $15+ below the low end of NAV. The Jacksonville purchase isn't totally out of nowhere. They already owned several outparcels at St Johns from another deal. Simon owns the other half and its a very upscale retail corridor. I can live with it at a mid-high single digit cap rate and their track record in Florida, which is very good. I'd rather they stick to Florida than try to be heroes buying crap like Party City and Joanne's up in NY and MA...I also think the property serves other purposes; mainly I believe it will be mortgaged in order to retire the convertible note in early March. Getting rid of that poison pill is huge and basically puts the company in play. Either way, at a $280M m/c and a few upcoming catalysts, its one of the few things not nosebleed expensive right now I justify chucking money at a little bit.

Added a little CTO. Always amusing how the brainiacs at these "institutional" firms can be so stupid. Yea...great time to liquidate your funds position; 3 days before Xmas, during blackout... LOL dopes

Whoa whoa whoa... you mean to tell me that as an established fund manager with a real business you don’t live in a giant mansion paid for by extracting fees from people?? All jokes aside it’s refreshing every once in a while running into someone in the financial industry who isn’t a totally selfish piece of shit only concerned with stuffing as much money as possible into their pockets. Cuz it’s like 98.5% of them.

You can find a $1500 garage door and a $5000 entry door just as easy as you can find a $10,000 garage door and an $800 entry door. The prices will vary but if you shop around you can get to wherever you want on pricing on the hardware. Installation is always where people get fleeced. For certain tasks, such as something like this, I ve had much better luck ordering the part and having it shipped to the house, and then paying a quality handyman any variation of an hourly rate or a per day rate. ($40-$75 per hour and $300-$600 per day would be a reasonable range)

Maybe its over simplifying it, but my understanding of outflows has always related to ETF and funds and is as simple as the net of new investor money vs existing investor money. You have $1M of new shares issued but $5M worth of existing investors requesting redemptions... thats $4M net outflow. This wouldn't be something that applied to individual securities IMO.

I would add this useless but fun supplementary note on the WFC trade, relating to a scenario mentioned in terms of theoreticals... something Ive done once or twice with similar situations... should the stock somehow blow up($45 as I mentioned is a very powerful support level) you can always run it back so to speak and then go short the long dated $55 puts as well. I like scenarios where worst case is you own a quality company. A lot of my MSG exposure over the years has been rolling very deep in the money calls and shorting deep in the money puts.

sold a little TPL at 765 into the closing spike

I am in total agreement. I bought MO $52.50 Jan 2020 Calls in late July of 2018 (equity was at $58) for a premium of $8. They went up slightly after purchase & then plummeted along with the equity. If I would've just bought the equity, I would've been able to hold on for what will probably hopefully be a gain over the next few years. I also bought MO $50 Jan 2021 Calls in late Nov of 2018 (equity was at $53 BTFD) for a premium of $7.50. I have watched a similar but less drastic drop in these options & a slight recovery since. If I'm lucky the 2021 Calls will get me close to breakeven on the option debacle. I was trying to replicate my luck years before with Edwards Lifesciences Calls, where the options nearly paid for my equity. This was an expensive, but not debilitating, lesson & I believe that from now on I'll leave the long Call trading to the experts. Not every situation is right. Especially with a big dividend player like MO, with that type of premium and only a 6% floor(53 spx - 50 strike) puts you at a disadvantage. Ideally you want as little premium as possible. The $45 WFC calls are about $9 vs a $53.7 spx. If it goes up your pretty much getting 1 for 1 returns vs having to calculate for premiums and whatnot. If it goes down, then you still, and also beneficially, have some protection, IE if it went to $45 your $9 call would be greater than 0 assuming its a short term move and a longer dater option.

Not to sound like RuleNumberOne, but theres not too much to be high conviction on here, right now, when the market is going up .5% every day. I expect WFC to rally a few bucks into the January earnings. I retain the option to maintain a position thereafter via the calls, but have some flexibility in between without a big capital outlay. Theres worse things to own than a small bit of WFC

Hopefully the new CEO won’t do write downs, like many new CEOs like to do. Yeah, or set the future bar low, so he can easily jump over it. FWIW, I don’t like banks right now - potential for lower NIM and higher loan losses. Greg, why the 45s? Just leverage ? A few reasons, women similar to what Dynamic stated. First, it is leverage, yes. Second is that $45 is where you had all that support during the worst of times right after the account opening scandal. If it held there, then, it would take one hell of a meltdown to take it below there on a short term basis. It hasn't done anything the past month or so; my hope is that something will give. The big banks are still modestly inexpensive and reasonably high quality. So there could be some catching up to do, especially with Wells. I dont entirely anticipate holding it through earnings. We've got a nice runway until then. One of the easiest and most repeatable trades ever was buying Apple a few weeks before earnings and then flipping it the day of, between 2012-2014 it worked like clockwork. You could always still hold, especially if you get yourself a big enough cushion. So basically, with the $45s, I have enough leverage where a move of a few bucks up can work, but enough of a cushion where if it doesnt do anything or goes down a bit, I can always just exercise the call and hold the position. In which case I own WFC- theres worse things in the world. AND if there is such a scenario where the $45 mark comes into question, then it'll obviously be something extraordinary, in which case having the position on will likely prompt me to dig into the potential opportunity much more thoroughly than if I just had it on the potential watch list with a gazillion other companies, while at the same time still limiting my losses.

Bought a few WFC $45 calls. Looking for a run into earnings.

PACB, HHC, 700.hk

I'm in Northern NJ, so probably a little different than the Westchester/White Plains area, but similar characteristics. I haven't noticed or heard much about the rent control effects, but 10000% have seen the impact of SALT. Any home over $500K is impaired. Which is not to say it doesnt move, but you've seen a major slowdown with anything in that price range and up. Especially the McMansions. The machine looks like it will keep moving, but is taking time to digest the fact a lot of buyers are leaving the market. By me(Morris/Sussex/Warren Counties) you're basically able to buy homes that several years ago were $700-800k for high 500s/low-mid 600s. A $500K home in this area carries about a $17K+ annual property tax bill. Which for my rentals, works great, because its increased the demand for the lower tier properties. And also given me a speculative angle to acquire more properties with the eventual assumption that Washington repeals the $10K SALT deduction limit. Bergen County, for the most part, has slightly lower taxes, but that $800k-$1.2M range has gotten whacked. I would think the closer to NYC you get, the less obvious the effect, but its still there. And on a side note, regarding really low end, my brother in law was recently telling me about owning/operating trailer park rentals in Florida...the returns would blow your mind....