Gregmal

Does anyone remember back in school how randomly it would be announced "we're having a fire drill today"? And Let's say the fire drill was set for 11:30, from 11 on, no one would work. They'd all just sit around, wasting time, just hanging out, getting ready to exit the building when the alarm went off....well investors do the same thing except theres no announcement of the fire drill nor a time that the bell goes off. Yet they sit around doing nothing and wasting time fixated with the drill. What a waste! Personally, Ive found its far better to just invest normally, while having contingency plans for a variety of possible events, however low probability they may be than wasting precious time preparing for something that many not come or prove actionable to a worthwhile degree. Best example was GOOG last year. I remember there was specific debate here in February about how it "wasn't" cheap. And I simply said that given the profile, when you back out the cash, low 20-something times(its then current price) is a reasonable and that a decent pullback is probably a great point to start taking hacks if you didnt own it(this was largely before the market started blowing up, GOOG was at like $1400 a share or so, and myself I even trimmed a bit of my GOOG there to "prepare" for the possible covid craziness)... well when GOOG traded down to 1100 everyone knew their advertising business was busted and many folks who were tepid at 1400 but had previously said they'd buy on a 20% pullback all of a sudden changed their minds and thought it was overvalued at $1100. So the point? Dont let your own psychology get the best of you. You can plan for the pullback but unless you are semi autistic or running pre programmed buy/sell decisions, its often easy to let sentiment ruin you and then all that preparation is for naught....every pullback I've seen in my life has a similar feature...90% of the people who were bearish and waiting for it remained bearish or got more bearish into the teeth of it rather than execute the second leg of the investment process which is to buy. And thats why its so hard to play that game.

I generally agree with this take, at least in terms of the sentiment. However I also think the recession worries are overblown. There were mountains of folks screaming "recession is imminent!" in January 2020, and February, and then "knew it" in March and April 2020...and Buffett didnt even navigate COVID all that well IMO, including being the ultimate contrarian indicator at the AGM and with his bank sales.....and yet, who's laughing now? A good company(which this is) with a conservative management(which this has) and a massive cash hoard(yup there too), with a business that will "earn" in any environment, just to varying degrees, will clean house over time with a consistent buyback...which I think is now the case. It gets too granular IMO saying, well one year of a recession with -15% share performance makes it hard to do 10-12% over time...however what Ive generally found is that during the -15% year if you crank up the buybacks it'll pay you back quite well in the follow years of rebound. I have a hard time seeing how this doesnt do 8-10% from here on out, with relative ease. Should shares pull back "hugely" I would simply adjust my allocation and also accordingly, my expected future return.

This is the best BWAR in the market, period. A term Ive coined for "brain work adjusted returns". You can buy this, and basically go away for 3/6/9/12 months(or years) without a worry or an ounce of due diligence. In line with @wabuffo remarks....the buybacks are the key to unlock market average or better performance. Its a nice spot to be in and much more preferable to something with a high brain work requirement like......eh, I won't go there today but you catch my drift.

Its official, the Old Man has evolved again. He's not gonna outsmart himself with "shares are a buy at 250 but not at 275" type stuff. He's shrinking the count 5% a year or more; the businesses are fool proof and run by people smarter than anyone doing the outside analysis on them.....just put this bad boy away and let it be an easy, no hassle/no worry investment.

I dunno. I think, generally speaking, I have been pretty fortunate(if not very good) at timing stocks and even the market from time to time. And even still, think its a horribly skewed proposition that requires being almost exactly right at too many crucial forks in the road. So as part of my evolution process as an investor, I completely stopped doing the go to cash thing. There's just too much that can go wrong and cash is a total waste of time. Instead, Ive found that utilizing margin to buy puts or put on high leverage downside protecting trades is the best approach. Shorting can work too but theres usually not enough leverage since you need to size things small there. Worst case scenario your hedges go bust but your longs still clean up. On the long side, I almost NEVER base a long on a macro call. I just buy shit I like no different than buying a tangible piece of real estate. If the market goes up, down, or sideways, I still like my house in the Keys the same. I try to look at my equity holdings the same way. But you have to condition yourself to think that way and its not always easy. But its far better IMO than playing red light, green light with risk on/off with the backdrop being predicated on "fighting the Fed" which is a total losers game.

The major issue is that this is not some fringe theory. People have been talking about this for years. IIRC there was a period of tightening under Trump and the market didnt do anything crazy. So the 2 main things in relation to this...1)why does the Fed do this at a pace that it knows will destroy the markets, 2) Do you really think Democrats will allow this to happen into mid terms? It seems to be in everyones interest to keep floating things or allow the status quo.

In case you guys are still holding...word of advice on the CRISPR stocks....never sell a small piece of your position. If you understand the investment case, the sky is the limit and irrespective of how it plays out the moves in these names will shock you so dont get too giddy after a simple 10-20% move. Ive generally found trimming 20-30% of the position after 30-50% moves or so works. Then reverse that process in terms of accumulating. You'll have your original investment pulled in no time.

Good shit. I'm in the process of closing on a property as well. A couple months ago I didnt think I've be pulling the trigger for a long time given the market, but sometimes when you really evaluate things, the opportunity cost is too great and its better to just bite the bullet.

LOL yea IDK. I really cant eat that kind of food(or candy for that matter either) anymore. I dont know what it is but something changed when I got older and I just cant. Actually there's one exception. Chick-fil-A I can eat all day. I'll occasionally try...usually prompted by the nostalgia of loving it as a little kid, or as a teenager smoking a ton of weed with my friends and then going to Wendys and getting a half dozen Jr Bacon Cheeseburgers and a couple fries for under $10...but generally even when I push myself to have something, I'll end up taking a few bites and then throwing it out or giving it to my dog. My kids though....love it. Cant pass a BK/MCD/Wendys without soccer game like cheers.

Sometimes it's about realizing that the narrative needs changing rather than being a prick and just not caring or insisting you'll do it your way anyway. Bill Ackman didnt need to sell BHC/VRX for $12 per share. On a valuation basis you could even say he wasted money getting out for what was obviously optics reasons rather than let it rebound. But sometimes it's just best to cut bait and move on so that everyone else can too. However when you are an egomaniac(which was surprising because Ackman is) its often hard to take a loss because that crystallizes the fact that you were wrong. In my book, regardless of where BB or RFP are sold, they were losses. Wake up and start changing the narrative.

^ No problem. Everyone should have one of these!

rebought a bunch of PSTH warrants. Finally getting appealing on a non-speculative hot potato basis now that the hot money has left.

A. This is all perception. Thats ultimately what drives things and makes a market. As @thepupil pointed out in one of the other Shiller threads...there was so much obvious garbage factored in, case in point GOOG/MSFT. But yea, those were YOUR perceptions, some turned out to be right, some turned out to be wrong. Thats the name of the game. Everyone has access to the same numbers and filings. However the bigger picture conclusions en masse determine the way something will move. Last year there were plenty of folks in March 2020 talking about how ugly the PE would be after Q2 lockdowns. The smart money saw that didnt matter because theres more important stuff at play. On AMC, I just shorted puts because I found that was the most effective way to play whats going on there. Still probably is. B. But what has changed though? Its cheap. It got cheaper....thats not really anything changing. Prem bought stock and its cheap. Thats not really anything fundamental to me. The insurance is still solid. The PE approach is hit or miss. The equity portfolio we all see fluctuate day to day...its been doing very well, but most of these the market still has concerns about and won't give credit til cashed in. Theres still questions about whether they'll even be able to cash them in, and there's a case in point they've already whiffed on Resolute and especially BB. C. Earnings matter and move stocks typically when all else is the way it should be. When there isnt a management issue. When the macro outlook isnt extreme. When theres no secular issues. AAPL will move on earnings(move defined not by "day of earnings volatility" but rather a headwind/tailwind during days after earnings into next quarter). FFH or BRK will not. Right now the steel companies are a good example. Earnings dont really matter, everyone sees them and can model them. What really matters and drives things? Steel prices over the next few months. Same thing with the shipping cos. Day rates. Not how much theyre booking from last quarter. The market is generally accurate or in the ballpark in assessing what "was" or whats already happened. Ive personally found that only during times of extreme chaos or distress can you profit off something that is blatantly in the market already, and thats primarily because while its "known" people are more focused on other shit. Such was the case when RFP had a buyback and special dividend during covid but people just sold anyway. That backdrop definitely doesnt exist right now for most companies.

No, its almost always major fundamental. Maybe something like AIV had technical aspects to it, forced selling, spin off, under $5....but generally its fundamental. Here for instance, Viking out together a good list, but only 3 and 4 I think might matter. Everyone already knows all the other stuff. Its out there. For me, I'd start going long and then probably get very long if I saw: 1) complete monetization of Resolute and Blackerry 2) Share buyback or tender offer 3) after some time to let the market process 1+2 and soak up shares, list on NYSE Is there ANY question that doing those 3 things doesnt create a totally different narrative here? Continuing to sleep with dogs or put on cute derivatives trades...to me, thats more of the same from the past bad behavior even though right now its kind of working for them.

I don't disagree with you on the trading logic. The best trading setups are when there is an inflection or a variable change that is significant that the market doesnt recognize right away. However what I am saying is that I dont see the variable change here and you and others are basically just saying "its cheap". Which to me, has never really been the key to unlock the big move. And this logic continues to be lazily used here with shit such as "if you bought in March/April 2020", but even there, NO!! you're wrong! If you bought FFH during that time frame you made a mistake because you could have bought everything under the sun and probably done just as well if not better. You could have bought the index and done better! Which is what Im getting at. Maybe the setup here to folks is "its cheap". And maybe from here, the market or "value stocks" do 15% and FFH does 15% and everyone is high fiving about "yea FFH is on fire".... but thats a waste of time to me. I'm looking for the stock thats market neutral or setup to do 20% when the broader market does 5%. And to get that you need a change or an inflection and Ive yet to see or hear anything with FFH that puts it in that category. The closest I saw was in January, and a few of the more superb traders here like @SharperDingaansaw it and hit that move, but even there, there were much better alternatives like BRK.

Eh I didnt buy because I dont think the issues are fixed(I also just think there's better stuff at the moment but that can change). And I didnt need to back up the truck during the covid crash like many did because there was plenty else much more appealing that turned out to perform much better. I mean come on dude, you bought Sardar's dumpster BH and its almost tripled. This is like my GM example. Sure if you held you made money. But you could have bought plenty else and done just as well if not better. My interest in these is parallel to my BRK investment earlier this year, or probably even more so when by myself I called the inflection on FIZZ(go check the thread) before its quick triple. When the risk/reward on an individual level are cant miss and the risk/reward on a macro level are poor. It's probably not going to be long term, but many times, like buying BRK in January, you can get beautiful, market crushing, absolute returns out of setups like this that are almost risk free.

I mean I just fundamentally think that when you trade at a discount, let alone a large and perpetual one, your focus should be on closing that. It flies in the face of the Outsider CEO MO or just in general the benefits of the capital markets where you can use overvalued stock as currency, to always be trading at a discount. For instance, APTS has gotten fairly popular of late. Its a straight up turnaround story from a management and reputational standpoint. If it trades at 50c on the dollar, and the reason for that is management and certain corporate actions, it is the single most important facet of the investment to STOP MAKING THOSE MISTAKES. If Joel Murphy turned around and issued 30M shares tomorrow as part of the deal, I dont care if he's buying Mark Hughes plot of land, Madison Square Garden, or half of Florida....its a big no-no. It still shows his head on in the place of "growing in size" rather than maximizing per share value. Whereas if Prem decided tomorrow to make a big acquisition, who'd be surprised? No one should be, because on a valuation basis he's done so before. Thats my point. To close the discounts you need to address the issues....Ive rarely seen these things correct themselves just by earning their way out of it. Wells makes lots of money. Fuck tons. But the reputation is why it doesnt trade like JPM.

GenRe was bought towards the end of the tech bubble and even still Warren has been honest about the share issuance being a massive mistake. Prem meanwhile, issued stock that on an adjusted basis was roughly where it is trading today. If you owned the stock then, you still haven't been made whole on a per share value basis. And on top of that, I am pretty sure there were a lot of people talking about how FFH was cheap then too. I was impressed with the recent earnings. I almost bought in. Then, the stock opened for trading. A couple days later....its barely moved and given a little back from the 530 prints I saw. Thats toxic. When your blowout figures are just totally ignored. It reminds me of a lot of the oil companies or GM for years which I owned. Blowout, blowout, blowout....shares barely budge. And GM, like 5+ years later is at 60 from 35-40...and some shareholders will tell you "it was worth the wait, the returns are OK", but the truth is, much like my hunch with FHH when it finally goes up 20-30%...is that you probably could have bought anything(relatively speaking) in the index or even the index itself, and gotten similar if not way better returns in many cases. Is this just a comfort vehicle, aka the devil you know for people? Or is it really the best investment out there?(or one of the best 10 or whatever constitutes a portfolio)

LOL yea I dont even know that. Thats egregious in any context but especially when you have had half of Canada talking about how undervalued this is for the past decade. Did Prem feel the company was overvalued or something? Profitable companies running real buybacks are virtually unstoppable. Looks at Dillards. The well known "shitty rural mall retailer".....outperforming AMZN during the same time period FFH grow the share count 50%....nothing special to it other than generating cash and buying stock.

How do you guys size this up to say something like Tetragon or Gain Cap? Ive seen far too often these financial companies, that(all of them plagued by this fit the profile) are opaque with their actions....just consistently print money but trade at horrendous discounts? Saying its a cycle thing I believe is short sighted. It could be. But theres merits to non transparent financial companies or closed end funds trading at discounts in perpetuity. Only getting credit for 70-80% of every dollar you make can be a bitch, especially when things hit a rough patch.The only remedy I've seen is real, hard, aggressive buybacks. Getting 70% credit but buying at 70% works. Not aggressive authorizations that go unused or derivative trades. The fact they did a TRS vs a real repurchase because they dont have any liquidity is part of the narrative issue IMO.

Added a nice slug of APTS 1/21/22 $10 calls

Never have. Dont understand it. I try not to invest in things I dont understand. And regardless of what I think I understand, if I get my fingers burnt enough on something, I back off because I dont like losing money.

I would actually love to hear what people here think of David Einhorn? Birds of a feather. Perhaps its easier to see when reading the Einhorn letters, but the arrogance is unrivaled and the insistence upon being right rather than making money is ungodly.

^Because he views this as "his" company and not that of the shareholder. Thus he doesnt owe anyone any disclosure other than what they are burdened to disclose by regulators. This is also consistent with capital allocation, nepotism/favoritism, and his cavalier attitude toward those who rightfully criticize what he's doing.