Gregmal

Please let us and Mr. Buffett know where we/he can make a 12% return with minimal risk of permanent capital loss. I have trouble finding investments that meet these criteria where I can put a couple of millions at work… If there isn’t 12% involved in BRK equity then what’s the point in owning it? If there is, then why isn’t he buying it back? Old man has lost it, and he knows it.

I think there’s been more than enough evidence presented to conclude that perhaps Buffett has lost it. Which is independent of the market being in a bubble or not in a bubble.

I was reading somewhere that guns stocks/sales did far better under Obama than Trump for the reason mentioned by Bizaro. Gun sales can remain elevated in perpetuity if there is the constant threat of killing the second amendment. No one is running to the gun store with a Republican in office. Somewhat half heartedly, I would think certain pot stocks could do well also as legalization is basically a blanket policy for all the dems. Maybe someone can create a 3 P's ETF. Pawn shops, pot stocks, and potato chips.... Personally, I'm inclined to look at short opportunities simply because, like with other stuff, you can also kind of be right without Warren getting elected. Things may just slow down on their own. Warren getting elected would just inject steroids to the main vein. You'd also think NNN REITS would go ballistic. I dont want to do a complete reshuffle as Warren is a low probability event, and I think Im decently market natural already, but you can never be too prepared and if the cost is low to put on a few trades with optionality, why not?

Agreed, I just started a thread to discuss the market prep for a Warren win. I agree on oil, but think many of the E&P's still suffer quite a bit. IN fact, somewhere in there I am sure there is a tremendous pair trade shorting some type of fracker/E&P and going long something a little more casual, maybe KMI or something. I think the house voting this week quelled any fears of impeachment. Politics aside, you need a big number of Senate support, if you cant even get a vote in the House, its not happening.

I hope the headline is tame enough for all the sissy's, there were definitely more compelling title choices, such as "Basketizing the Basket Case" or "Trail of Tears for the Stock Market"...but I wanted to get a thread going, given the overwhelming amount of sentiment that Elizabeth Warren would be very bad for the equity markets, that focused on ideas that hedged and or capitalized on her rise to power. This is an investing website, so for those able to get past the politics I think it makes sense to throw around ways to soften the blow. As we all know(or should know) now is likely the time to prepare for this rather than waiting for the thread about "buying puts" a day or two after she is elected. For the record, I do not think Warren can beat Trump, but in the name of making money, do not think its wise to completely write this scenario off either, at least from a risk management perspective. I'll start with a few that Ive got an eye on. Shorting, or well placed puts on Credit Acceptance, CACC and World Acceptance, WRLD. These are names that have been somewhat controversial and attracted negative attention for supposedly taking advantage of the consumer. They are very prone to regulatory sensitivities. Pelaton, PTON. One can only imagine what would happen to something already as flimsy and non proprietary as this. What happens when the pool of people willing to pay $2500-$5000 plus a monthly subscription fee for what is basically a NordicTrack with an iPad taped on and a Youtube feed gets cut do to the threat of higher taxes and compressed business resources? I'm looking at the frackers as well, but Ive always kind of considered most of the E&P companies pieces of shit anyway. Maybe shorting an ETF or something there has merit. Will add others in time depending on the unfolding of events. Curious to see how others are setting up(outside of 50% cash, bro)...

What is your take on deep OTM index puts vs deep OTM individual security puts. I won't mention names, because that could redirect the focus to specific company talk, but wouldn't it perhaps make a better setup to cherry pick the most endangered of species? We can all use our(relatively speaking) more sophisticated investing insights to basketize(I might have just made up a new word) the same general hedge trade, no? An index will never go to 0, but select securities can. I've been doing the OTM put stuff now for the past few months with pretty decent success(not to lose sight of the fact that you and others Ive noticed have been doing the same but with the index and VIX), so Im just trying to see where the greatest risk/reward setup is. Would a subjectively selected Warren basket outperform the broader index which would also include names that benefit, IE healthcare?

https://www.marketwatch.com/story/billionaires-cohen-and-jones-predict-the-2020-election-could-trigger-a-market-plunge-if-warren-wins-2019-10-29?siteid=yhoof2&yptr=yahoo

Sure we got say things like "worst case scenario Warren, is basically like France or Germany"...but lets not forget there is a reason the US economy is far superior to anything in Europe, and there is a reason US markets get premium multiples to Europe. So worst case, Warren erases a lot of that premium, and IMO theres a long way down. Wealthy people are fleeing France because of their crooked tax schemes orchestrated by the government, and Germany has basically confiscated residential real estate through price controls.

I'd still probably spend the same amount of time on investing...I'm an addict. David Winters said it best when he called inviting a "global treasure hunt"...but yes, to answer your question...we'd basically become France...where June-August offices are mandatorily closed and it would be illegal to respond or even check work emails between 6pm and 6am. How boring...and how opportunistic for those of us that dare work, or enjoy what we do.

I agree about political risk and have tapered, and continue to taper my portfolio to be much more neutral by the time we get a handle on the Democratic nominee. Japan comparison has always fascinated me, but I think its unlikely, some of the reasons in the blog post address why. But whats important to consider with Warren, is not really what the actually policy does to a business's fundamentals, but the effect it will have on the market. Maybe nothing tangible materializes, but that still doesnt mean we couldn't/cant see multiple contraction.

http://brklninvestor.com/blog.php Good read about how silly all the bubble talk is.

I put on a quick trade here today. It seems this has lagged everything, including some of the stuff mentioned above regarding its larger holdings, not to mention the broader market. The stock traded at levels we know they were buying back stock at, into the Q3 close. While I am sure Warren doesnt fret what others think or are saying about him, I am sure he 's not totally deaf or blind, even at 90+. So in other words, I think theres more negativity baked into this than necessary, and that Mr. Market could be pleasantly surprised by whats reports, in which case, Im looking for a relatively risk free $5-10 a share in short order. As always, I could be wrong, but in that event, theres worse things to own.

Put on a little weekend trade with BRK @214.

Not for nothing, but I learned pretty quickly that one is significantly better off assuming that EVERY person they encounter in the financial industry is a total piece of shit. Ive now been in that biz(tangentially) for a while, and to this day, out of everyone Ive ever met, can count on one hand the number of people who would put people before dollars. It is what it is.

So Fairfax tries to be as clever and cutthroat as say, a Brookfield; they just suck at it, among other things...

Trimmed GM, CRSP, GRIF. Still holding positions but looking to continue tapering down the margin balance into next year.

Great investment thesis, Greg. [And from here, please don't expect me to participate in this topic.] Well Greg is wrong there but the feeling he's basing the decision on is real. What he should do (if he really wants to put "who knows?" to rest) is do what he does when he decides to invest in a stock. He wrote on this board he looks at stocks and looks for a reason that makes it uninvestable so he can stop looking at it and move to the next company. That is easy to do here too (easier than with stocks, because the crap is so much more on the surface). Just look for insurmountable problems. Examples: Problems with the initial distribution (pre-mining or the founders continue to assign part of the mining reward to themselves for "development"). Problems with being centralized rather than distributed (what is the added value of a centralized crypto, either by organization or technically?) Is it even a cryptocurrency? Is there mining? Is it a token? is it a "stable coin" (aka unprotected, non-yielding loan to a not trustable 3rd party) Do the idea behind it, and the differences with Bitcoin make any sort of logical sense? Just those 4 questions will eliminate nearly all of them. Of course no-one has to do this, but saying it's unknowable is like saying it's unknowable which stocks are investable and which are not. Simply untrue (unless you take the statement literally: you can rarely know anything ever with absolute certainty). This is all true, and useful, but it doesnt totally provide answers to the bigger picture. There are myriad "issues". But all this has been around and known to various degrees, forever; ie its in the market. And yet here we are. Its the same kind of structural setup, and ideological "you think you know, but it just aint so" as we saw with all the super duper smart guys and their Excel spreadsheet Tesla short's at $30 per share. And $50. And $100...and so on. I was briefly one of them until I had an awakening and decided to step to the sidelines, acknowledging I just didn't know anything useful regarding the investment and what I thought I knew, consistently seemed to put me on the wrong side of the trade. If something has now, for a multi year period(or longer) consistently outstripped "consensus" and expectation, at the least it is prudent to respect it. If you sit there and watch something go from $100 to $10,000, I dont know, I think its fair to ask oneself, why? And how wasn't I able to take advantage of it? One of the most hilarious things I think this bull market has revealed, is how little the big, smart, pompous Wall Street guys really know in the grand scheme of things. They derided, and sneered at, and shorted AMZN from inception, to like $1500 a share. And now, you know, as it starts to get "toppy" and is worth like $1T USD, all of a sudden they find it a consensus long and even a "value play" L-O-fuckin-L. So sometimes, it pays to realize where you are in this vicious cycle, see if where you've been has made sense(and money) and if necessary, adjust or step away. At least is seems, and has worked, for me. A lot of times, Ive found that your risk/reward skew is significantly better if you are able to get comfortable allowing there to be a few ?, rather than impulsively "needing" to know EVERYTHING.

One final thought as I wind down a 12 hour day of reading earnings call transcripts and evaluating trade ideas for the upcoming week and pivot to sushi and a bottle of wine over TV with the wife(even though my mind likely still stays consumed with business and investing thought)... Re: the "who knows comment"... this is the only honest answer there is. You will never find a multi bagger unless some, if not many of the questions relating to the idea are honestly answered with something to the extent of "who really knows" or "no one knows"... when "everybody knows", you get Treasuries and CDs. On crypto and blockchain, I think it would be foolish for anyone, not to want to educate themselves on the subject. That does not mean or endorse investing in it, but simply making an effort to be open minded and understand it. There were a lot of people who wrote off a lot of disruptive ideas in their early stages. This may be one, it may not be, but personally, I find it inexcusable to potentially miss a major investment theme and possibly world changing shift, by being closed minded or pigheaded(or lazy). An investor should always at least seek to have background information on any subject, and try to answer the questions of who's making money, how are they making money, and why are they making money. And then not forget one can make money on multiple sides of the trade, not just one. Food for thought.

OK, Greg. Each to their own way. Personally, I'm investing for the long term, where the underlying earnings and cash flow generates the future earnings and capital allocation opportunities. So you're long TSLA? (kidding) Greg, What is it with you? -Please tell us something about what you're really up to .. - instead of all those [now hundreds of posts here on CoBF] about your <100 bps trades. - Please post your thoughts in the relevant investment ideas topics. -Personally, I don't see your posts there . [And please give me a break with regard to crypto.] I wasn't under the impression membership came with such obligations. Posting shares two primary purposes; engaging in thought provoking+pencil sharpening discussion regarding investment related content; and entertainment. Its a hobby that has tangential benefits with regard to understanding various market factors, including, what makes a market. I try to share with two things in mind, contribute to a community(as a member of any community should) and being transparent with what I am doing and why I am doing it(pretty much nobody in the financial industry is, and even less are on the internet). I delve into a third at times, which is debate(the purpose of which admittedly has little value). I dont know whats wrong with 100 basis point positions. In fact, a quick glance at any responsibly managed portfolio would likely disclose the same. Here's a link to the hero's investment portfolio, of which 80% in sub 1%... https://www.dataroma.com/m/holdings.php?m=BRK I have been pretty clear how I trade and allocate. That I have 60%+ in my top 5 ideas and trade with a portion of the portfolio as it is essentially free money and if managed appropriately probably entails less risk than good old buy and hold. That it has been proven, time and again that owning assets, of pretty much any variety(within certain frameworks) will do better than holding cash. That the stock market has a natural inclination to go up in time. That theres certain scenarios and market conditions where an idiot could make money, in which case its an almost certainty that a sophisticated investor with proper risk management techniques can as well. I can and have gotten into extensive analytical discussion and debate on various names and topics, but am under no obligation to. Given how little many else here contribute, why is the burden of weight all on me, John? Would you prefer if I just sit around and moonwalk my thesis drift on why BRK is currently a meddling investment? Or spend days and nights trying to convince myself and others that Prem is about to get hot now and that he's due? Nah...I like it better being on the right side of things, and if that means calling Buffets conflicts and hypocritical behavior for what it is, or seeing that Watsa has lost his way, so be it. If it means buying things that are currently working while others sit on both their hands and their huge piles of cash.. too chicken shit scared to even make a sub 100 basis point investment...so be it. I like making money. Not everything I buy is for everyone, thats fine. My BTC can sit there with my Gretzky OPC's... I'm good. Funny enough both have to date, and now spanning multiple if not many years, been noteworthy performers...which I understand, in value investor world, must be scorned, for it is part of the Bible for many a folk to look down ones nose if money is not made and lost within the framework of the Intelligent Investor....

OK, Greg. Each to their own way. Personally, I'm investing for the long term, where the underlying earnings and cash flow generates the future earnings and capital allocation opportunities. So you're long TSLA? (kidding)

Great investment thesis, Greg. [And from here, please don't expect me to participate in this topic.] Agreed; one of the most compelling you'll ever hear! Sometimes I prefer to live a little adventurously. Some folks find $20 in their jacket pocket(metaphorically) and think they need to protect it, nurture it, and carefully compound it(probably at mid single digit rates). I, sometimes just say what the ef, its not changing my life either way. After all, my BTC, whether now or in the future, will provide me more to show for my money than that vacation one took last year, or that fancy restaurant you went to last week, or the sports car you bought in your 40's to solve the mid life crisis...its all relative. I try not to take everything so seriously.

I think its important to note that payment systems have and continually evolve in ways that are typically underestimated. Further, there is definitely a moving risk of government overreach. All the evidence you need to see is right there with how swiftly, and desperately they've moved to kill Facebook's Libra project. They hate this because they cant control it. At this point it seems unstoppable. The big question to me is "why Bitcoin" vs any other crypto, and is being the first mover a valid answer to "why Bitcoin". Really, who knows? I have a small % of personal money in BTC. I would in no way ever recommend this professionally or buy it with other people's money, but as a personal investment, I look at it as something as simple as "I can afford to" and just leave it at that. Its not a "portfolio move" and its not a trading strategy. I threw spare change on a monthly basis for like two years in my late twenties(several years ago now) at it and if I never see it again, I wouldn't even notice, and if it goes bananas, well thats what we play the game for and what investing is all about.

exited MPC

Added a little bit of ILMN after hours at 298. If the PACB scenario has taught anything, its how dominant ILMN is in that space. And its a beautiful space at that!

Closing PTON puts