Gregmal

Priced in? It depends, like I said, housing a year ago was definitely priced in, and then it didn't happen and some things utterly exploded. But then there's the issue of "what if there actually is a recession?" and I think that comes down to valuation, and where things are in the cycle. There are two cycles. The economic one, and then the market cycle for any individual or group of equities. We may be in inning 7 or 8, sure. I agree if we are talking about economic expansion. But some equities have been well ahead of that or even permanently penalized because of past events. So I think there are a lot of companies, BAC, WFC, GM, etc's of the world, that arent terribly far off in terms of valuation, from where their cyclical bottom may be. Im probably in the camp of Marks philosophically. Where are we generally speaking is quite easy to assess rather then "when exactly" it will all start/end. Political risk though I 100% agree with. Donny losing his mind a little more could be bad, Certain Lefties getting in next year could be catastrophic, so one needs to stay nimble. But if things don't go haywire, and we just get a regular old run of the mil recession, I dont see much to be scared of investing in certain names. Are 20-30% pullbacks possible? Sure. Is that a big deal if your are ready for it? Not in my book. The part that is really exciting? If lets say BAC has 30% downside until the next bottom, and Im there with bags of cash to throw at it, how big a position can I get, and how much upside then do I have going forward if now we're talking about being in the 1st or 2nd inning of a new cycle and these once hated companies are now proven, durable, and market leaders?

I also think being a macro guy is poisonous because your beliefs at the top trickle down and influence your ability to analyze at the bottom. If Im a guy looking bottom up, I do my analysis and have the various scenario skews and then assess probability and risk/reward. But Ive noticed that most macro guys can't do the same. Instead, they'll take their macro views, and then taint the fundamental analysis of individual companies, with those macro conclusions. The danger is, when you're wrong on macro, then that will likely translate to you being wrong on everything else. Again, look at Paulson, Einhorn, Bass, etc. These guys arent just wrong, they can't even hit the broad side of a barn and their returns arent just bad, they're f**** terrible. Whereas with individual investment companies, I can get the company analysis right and not even care about macro, and still make money.

This is actually something I wonder a bit about. My current thinking is that this is more likely to be a temporary situation than not, the reason being that normally when you have a shortage of something but a lot of demand for it, yes its price can go up like crazy at first but then over time the high price attracts new supply and that brings the price back down to earth. I don’t see why something similar cannot happen to things like, say, quality businesses via increased/improved entrepreneurship over time. That being said, it may take quite a long time for this type of “cycle” to fully play out. Today’s Bloomberg Odd Lots podcast was pretty interesting: https://www.bloomberg.com/news/articles/2019-09-02/why-one-of-the-oldest-investing-strategies-has-been-doing-terribly?srnd=premium The guest (Chris Meredith, Co-CIO of O'Shaughnessy Asset Management) talks about some similarities he sees in the business/investment environment today and the 1920s. In each era, he notes, seemingly expensive growth stocks hugely outperformed other stocks, and not because there was a stupid bubble but because the growth companies (GM, Sears, etc in the 1920s; FANGs and co. today) actually lived up to the market’s lofty expectations. He then notes that value investing started to make a comeback sometime around 1940-50 as other businesses gradually caught up with those industry leaders in terms of technology, and that we may be heading in that direction today. I think this somewhat relates to what was discussed above re: how the lofty valuations of great companies — even if they are fully justified — can gradually deflate over time as the supply of such companies increases through things like imitation, technology diffusion, and the invention of better alternatives by new entrants. Yea, I kind of see some parallels and I think regulation could ultimately be what causes the valuations to readjust. But on the other side, GOOG, AAPL, FB, etc I don't see as outrageously expensive. The Saas stuff is ridiculous. Much of biotech is hugely at odds with what is implied by big Pharma valuations. There s a lot of stuff all around that doesn't make a ton of sense in relation to other stuff. But one area where I think it is harder to overcome this is because of the massive increase in wealth inequality(in other words, control of the resources) it's harder for ... "normally when you have a shortage of something but a lot of demand for it, yes its price can go up like crazy at first but then over time the high price attracts new supply and that brings the price back down to earth"... to occur. Yes the roaring 20's saw similar wealth gaps, but todays environment I think makes it difficult for competition beyond a certain level. To the extent we have some of the big tech monopolies, that at the same time have tentacles stretching into many other business areas, I see that stifling the success of new entrants. Unless you're a Silicon Valley type which most of us are not. That said, I have and continue to see plenty of areas to make money for the normal investor. I am hardly a macro guy, and frankly wouldn't consider myself smart enough to justify spending time in that arena either. Ive seen so many people who clearly are intelligent enough to play there, still be so friggin hilariously wrong with their macro reads and predictions, that it makes me question why anyone bothers when they can just spend time studying the over 10,000 publicly available individual companies and make easy money that way. And by easy money I dont mean get rich quick, but kind of just being a singles and doubles hitter with a .400 OBP vs being Kyle Bass or John Paulson and hitting .150 with a few grand slams...

Cheap money and lack of quality assets is a recipe for....significantly greater appreciation and duration of "cycles" than anyone can predict. Look at the Canadian housing market, specifically in areas like BC where Asians with unlimited wealth keep on rocking and rolling. Even Buffett has said something along the lines of, if the rate on the 30 year remains 2%, stocks are very undervalued. Its supply and demand. There really arent THAT many quality asset options out there and money printing has just allowed the people with assets to need to place more of it somewhere. Another thing I'd point out that is truly amazing to me is the unemployment rate. We're at 4% and considered full employment, EVEN WITH Amazon destroying retail, 90% of mom and pop businesses 6 feet under, outsourcing abundant, and automation gearing up as well. I would have expected things to be much worse.

I always come back to the same things, kind of touched on above. Much of the market is already pricing in scenarios much more severe than just a run of the mill recession. Its not like autos, housing, energy, banking, etc, etc are trading at 52 week highs and 25x PEs...I mean look at what we just saw with some housing stocks. I recall about 9-12 months ago chatting here with some about companies like NVR, and LGIH...how they were priced for death and if death didn't occur it was impossible not to see massive rallies here. And NVR is up like 70% and LGIH basically doubled and guess what? They're still trading at pretty modest valuations...Nothing says the same isn't possible for many in the above mentioned sectors. Is it really all the farfetched to see BAC at $40+ or WFC at $65 next year? But further contradictory, if indeed all believe the slowdown is here, why does nearly everyone on this board own BRK which has a massive composition of cyclical businesses? What cuz Warrens got $120B of cash? At 90 some odd years old, you're essentially making a bet that a recession and massive plunge will occur in such rapid order that a guy statistically on his deathbed not only has the time to deploy all that capital, but to see the investments through... I don't know about that. I think all would be well suited to step back off the ledge.

Pretty funny stuff from some unique characters that Im sure many here have bumped into from time to time. Ones batshit crazy but brilliant and the other is an all around scammer. Ill let each make their determination as to which I'm talking about. If you've met them you already know... https://nypost.com/2019/08/30/investor-who-was-once-fbi-informant-files-25m-defamation-lawsuit-against-rival/

Entered the abyss. Bought a little TEVA and ENDP. Looking at a basket approach as it seems everyone thinks this is the end of all of them. Very small spec position.

Ive actually long believed the opinion put in play by some ex Obama fella yesterday or the day before...That Trump/China is the real collusion story. That Trump's given them a deal under the table and is now just timing the shit out of it so he has momentum going into the elections. If this were the case you'd see a trade deal announcement finalized in either Q4 or early Q1 so you have the economic data showing blowout figures in July, August, September, October.

Just snagged some more GRIF at 34.9, cuz why not

Have been buying & selling over the last 2-3 weeks. Typically 20-30% of the position. When VIX dropped to 15-17 I was buying and selling those same contracts each time it went to 20+. Entire position has basically been paid for in profits at this point and I purchased more today. VIX hasn't dropped in the target range like I've been waiting for on prior buys, but 2 observations give me an ominous feeling: 1) A handful of the last few days have ended slightly positive or flat for the S&P/Dow and my puts positions still rose in value slightly (crazy!) 2) NYSE Composite failed to break through it's 200 DMA today and turned negative again. Not a huge TA expert, but that seems to tell me that a major composite failed to break out on positive headlines (supposedly softer trade stance from Trump/China) and the market isn't buying it and is hedging instead (a bid under puts despite rising market). Maybe I'm just to more risk-seeking now that it's house money, but it doesn't sit right with me so I purchased more puts today. Yea, Im getting the same gut feeling. Everything of late seems like a bull trap. Cyclicals just don't move on up days and then get flattened on down days. Everything gets faded. Many names within an earshot of or at 52 week lows. Even non correlated assets are getting sold off. My top performer this month is basically a triple net REIT.... Seems like I was wrong this time around. Closed the extra positions but continue to hold the core hedge. We'll see. It seems every time something recovers(be it the economic news, stock market, or whatever) Donny thinks he's got money in the bank to go wage war on someone...

Trimmed about 10% of my BX. Dont know what's wrong with this stock but it won't go down...

added a bit to HTL on the dip under $1

Have been buying & selling over the last 2-3 weeks. Typically 20-30% of the position. When VIX dropped to 15-17 I was buying and selling those same contracts each time it went to 20+. Entire position has basically been paid for in profits at this point and I purchased more today. VIX hasn't dropped in the target range like I've been waiting for on prior buys, but 2 observations give me an ominous feeling: 1) A handful of the last few days have ended slightly positive or flat for the S&P/Dow and my puts positions still rose in value slightly (crazy!) 2) NYSE Composite failed to break through it's 200 DMA today and turned negative again. Not a huge TA expert, but that seems to tell me that a major composite failed to break out on positive headlines (supposedly softer trade stance from Trump/China) and the market isn't buying it and is hedging instead (a bid under puts despite rising market). Maybe I'm just to more risk-seeking now that it's house money, but it doesn't sit right with me so I purchased more puts today. Yea, Im getting the same gut feeling. Everything of late seems like a bull trap. Cyclicals just don't move on up days and then get flattened on down days. Everything gets faded. Many names within an earshot of or at 52 week lows. Even non correlated assets are getting sold off. My top performer this month is basically a triple net REIT....

The failure here is in judgment. Yes this war is punitive on the people. But China and America are very different culturally. Americans have ZERO pride in their country compared to China. Chinese are also quite used to a much lower standard of living(and higher degree of "suffering"). So lets rework this.... Who do you think is better prepared to hold out in the name of patriotism? The average Joe from China, or the average Joe from America, who cries foul and has temper tantrums because they cant pee with the opposite sex or take a selfie when they want to? And in terms of America, and the pain that must be endured to prevail here... does anyone really think it will be Trump himself who has to deal with any of this? Of course not. Other people will pay for his egotistic pissing match.

I would be buying more GRIF if it wasn't for the large position size already. Yea while I don't think its got much of a catalyst I still kind of ask myself Who TF is selling at these prices? Its one thing to look at a stock and pass. Its another when you already own it because you have to at least peripherally be aware of what's going on. I mean, even on a super short term, trading based thesis, $35 is still where'd you'd be buying, not selling... got another 1250 today.

GRIF @35 and MSGN @14

https://seekingalpha.com/news/3494406-sinclair-turns-attention-and-t-sports-nets-wsj

Do away with politics! That said, what you described is a predictable element of the equation. We know how both sides react to things typically and adjust our expectations based on such.

MSB, MSG, MSGN

Generally yes, lower prices are good. And Im all for it, as I've said before, to an extent. The extent, is that these "things" have to be short term issues, or undoable. Trump has gotten so far off base that some of this may be irreversible. Then, "lower prices" just turn into "the prices", or worse, "the high prices". For instance, if you're long some of these companies with China exposure, the rhetoric gets you a nice little entry. If and when things are fixed, you're all good. But to the extent the rhetoric escalates and goes on too long, or like today, becomes real, so then to do the impairments...

Yea.... I am about as big an advocate of much of Trump's tactics, and rhetoric in terms of slapping back many of these loser lefties.... but Im sick of this kind of uncalled for nonsense and the constant bullying where it isn't needed. HE picked Powell. And now the guy can't breathe without Trumps rampant bullshit. The market liked what Powell said today. Then Trump starts in AGAIN...unprovoked. HE escalated things with Xi. Then today HE comes out of nowhere with a bunch of 10 level responses to a 3 level action... We'd be several hundred points green today and because of this idiot we are probably finishing 500+ points lower with a setup for a really, really, nasty Monday...Give me Biden.

I must say, Trump is such a moron sometimes... just shut up

The problem for Powell is Trump. Trump is right. But how does Powell do what Trump is saying to do, while not looking like a partisan hack or Trump's bitch? In this case, Donald should just shut up because he's making Powell, an already awkward guy, do and say these stupid short term things just to later rationalize doing his job... Powell likely wants to ease, but with all Trumps bs, he is afraid to have it appear as though he is acknowledging that Trump was right and he was wrong. So instead he minces words to take the other side, while at the same time gravitating towards making the decision he wants to...It's dumb. But predictable. And now it seems Trump thinks he can ratchet up the trade war, because worst case it just forces the Fed to ease more...

Puts already paying off lol. But China just set the stage for a potentially very ugly day with dimwit Powell in the on deck circle... Buckle up.

A 20% FCF yield with a 13.5% decline in operating profit isn’t necessarily a good deal. I have heuristically cam to the concluding that most of these type of value situations don’t work, and even if they do, they cause much more grief then they are worth (averaging does trading around ). Others may come to different conclusions and better results, but those are mine. FWIW, I think the whole cable / TV sector is a bit spooked by subscriber losses, but MSGN are definitely the worst I have seen. Thanks. Appreciate the cold water as I always prefer hearing the other side of things. I don't think there is much if any downside here, and likely IMO it overshot to the downside for a number of reasons, all short term. ~$600M market value decline in a couple weeks is a bit much for a company like this. The numbers may move around, but this company isn't going anywhere. I'd like to see them consider some sort of streaming option for out of network people. Plenty of people would pay $5-$8 a month in season for this. That said, I only see two things that provide a catalyst for better valuation. 1) Dolan hitting the bid. The most recent RSN deals definitely support a higher valuation than todays MSGN share price. $2.5B EV is about a 40% premium 2) stacking cash for the next couple years. This, after today is about a 3% position for me. I'm inclined to add a bit more to it but also probably need to adjust my allocation based off of a longer expected holding period for the thesis to play out.