Gregmal

DIS

Used all that analyst excitement as an opportunity to buy some PTON puts.

Not sure if this applies to your case, but often times with foreign securities, the broker will have to do currency conversions or cross exchange transactions, in which they mark up your securities. So if you put in an order at say, 11.02, its not going to work, vs 11.04 perhaps that covers the currency exchange, plus the purchasing of the shares(or taking from inventory) and placing an ADR in your account.

Started a little TPL.

covered a portion of the NFLX short from yesterday

added back into NFLX short

True up to some point. I think there's a difference though. If you look backwards at Berkshire there is not only history of good returns, but also a history of solid decision making and closing on savvy deals. In hindsight you can analyse what Buffett did and conclude: his thoughts on Geico, See's Candy, Coca Cola, American Express, Bank of America, BNSF, his hedge fund bet, etc. were spot on (and, in all fairness, not so spot on with Berkshire, Kraft, ..). But I think all in all history suggests that Buffett is a great investor, which would suggest future outperformance is perhaps possible. You still have to judge for yourself whether he is getting senile or not, whether he can generate alpha with such a large capital base and what will happen when he dies. But I think there is some predictive value in his track record. And if he starts dry humping Becky Quick on CNBC you can think "he's losing his mind" and sell your shares (though did he really lose it? Maybe he's just faking it). On the other hand, if you look at a graph and say: "I could have bought BAC at $22 and sold at $24 a few times", is there any predictive value in that? Why would it work in the future? Why would it be a more profitable strategy than buying at $22.50 and selling at $23.50? Or, even more extreme, than buying at $22.90 and selling at $23.10? Or than buying and holding? If the strategy stops working after a few months, should you be patient or adjust your price levels? Can you explain when and why the strategy works? Can you explain when and why it stops working? If you make the roundtrip a few times, are you simply lucky or are you a good investor? Maybe there are answers to these questions, but I don't think Cardboard has them. I for sure don't have them. Not saying you can't make money the second way. Just saying that I prefer situations where I can explain beforehand why I expect to make money, and where I can explain afterwards whether my thought process was correct. That way I can hopefully avoid making repeat mistakes. And it gives me a (tiny) bit of confidence if something blows up in my face. I get what you're saying but its not really intended to be an endorsement of "its done this before so it will do it again". Its really just a way to enhance returns while remaining flexible with liquidity to fit a trading range or area high probability entry/exit point into a larger thesis. Its not really worth doing this sort of stuff if you wouldn't want to own the security longer term, for starters. From there, I suppose the best way to summarize it is that you're taking a position at a point where short and long term value converge and either a) looking to generate an above average short term IRR, or b) build into a position at a favorable long term valuation. So short term, $199 has proven favorable for BRK as a trading point. Longer term, provided nothing crazy occurs, $199 is a good value as well. This convergence dissipates probably around $210 for the time being. Viking does it quite often. A lot of people dont like this because its something you have to see with your eyes and then make a judgment call on rather than throw it into a spreadsheet at stare at it...

I for one would like to point out that people talking about previous BRK performance are talking about things that are backward looking and based on hind site. Which is funny because Cardboard just posted "The Perfect Trade" topic(which wouldn't you know it, just worked again) and there were a bunch who took issue with it for the same reasons.... Personally I think looking backward and using hind site is incredibly relevant to forward assumptions, so I'm not sniding that...just the inconsistency amongst some, which frankly I think comes down to people differentiating trading(taboo) vs investing(THA ONLY WAY!), or failing to do so...IE its not ok to be backward looking and base a trade off hind site, but if you are investing, it is;...FALSE. If we dont learn from history, we are bound to repeat it. Patterns repeat themselves, the trend is your friend. Theres a million sayings similar to those that correctly deserve to be heeded. Its also important to note that trading patterns based largely off of psychological factors and purely technical market forces and a certain security, BRK for instance, outperforming, are probably more closely related to each other than many realize.

HTL

ESGR

Little more GRIF. Feeling like $36 is the new $35.

Greg, what's your time horizon here? -If you think carefully about it, really! - what does then matter -real long term? John, I like to think of my time horizon as forever....however...forever doesn't last forever. I could wake up tomorrow and not need the cash, I could wake up and need the cash, or I could not wake up at all. Thats true for every day for the rest of our lives! I think as investors we need to be realistic about what we expect but also mindful that consistent returns are better than inconsistent ones, and that compounding early and regularly do more for us than later and greater in amount. Ive owned a little BRK since January because I see the value, but I also cant help but think of the security as a product at this point, more so than a business like BAM for instance. Its probably a lower beta SPY or something like that, which is good. If your investment objectives are preservation of capital and probably willing to take on risk somewhere between a junk bond fund and an index fund, I think it's great. You're not going to lose your nest egg here, but if you're looking to compound at an average to above rate with consistency, I just dont see it here. I also think if you have certain rate hurdles or expected returns, it might leave something to be desired for quite a while. I've detailed my thoughts on the Buffett overhang, and at this point, I'm mainly just a fish swimming by a feeding frenzy to take a look, rather than dive in to the crowd. I'd like to see certain things happen first, which I've also detailed prior. I just dont think people are being intellectually honest when they derive some of these excuses when at the same time, we're talking about a guy who was so obsessed with making money that he neglected his wife and kids in ways he now regrets, BY ACCIDENT! He still buys food from the MCD's dollar menu! So to claim he's willfully leaving dollar bills all over the street is insanity to me. I wish he would still go with his gut. You can tell he still has it to a degree. But I dont like thats he s obviously holding back, and that he hasn't really been forthright about why.

Got my 50c in a few weeks out of JOE, so back into GRIF. Also sold 80% of my MPC from May

Thats why I used Costco. But its not about a specific name. It s about the oddity of, his macro outlook has actually been pretty spot on, but his investing style has been flaccid and completely contradicts what's he is saying. If he thinks what he thinks(ie at worst fairly valued and at best wildly undervalued...) he really can't find ANYTHING! to invest in? Especially companies he's pointed out as having missed but admires, like GOOG which was at $1000 not to long ago or Costco? Let alone myriad others? Theres something off. IMO its because he's selfishly invested in the idea of one last giant elephant hunt. But thats just my opinion and it could be any number of other things, which as a shareholder I dont like.

GRIF

Yeah, I think that some people care a fair amount about integrity and other people don't at all and will do what they can get away with. What's more, I think it's hard for both types of people to believe in their hearts that the other side truly exists. (You can see this in the comments here: "I don't believe that the shrewdest investor of all time would pass up on an opportunity for such a stupid reason." Similarly, I have a hard time believing anyone would even consider selling their integrity when they have literally no need for the money.) As for the argument "who cares what people think--it doesn't have anything to do with responsibilities to people and shareholders", I find the argument pretty weak. First, Buffett isn't Berkshire shareholders' bitch. He has no responsibility to destroy his own reputation--or compromise his integrity--to make money for shareholders. To me, this point is sufficient to refute the argument. Second, displaying a lack of integrity could hurt his business. One reason people sell private companies to Buffett is because they believe he'll act with integrity in his dealings. Not everyone's trying to maximize their own profit, particularly when they're thinking more about their own legacy and the outcome for their company and it's employees. If Buffett were viewed as someone lacking integrity, some people might decide not to sell to him the company they've spent decades building. That would hurt Berkshire. (Chrispy, the difference with Microsoft is that Buffett is good friends with Gates, but not good friends with Bezos or Dimon.) +1 I share your thoughts re: integrity. But, this message board is literally filled with folks who have trounced the index, Buffett and virtually stand alone by way of performance. Based on reported performance here over the past decade. Give it another decade and the world should stop listening to Buffett’s words. Who knows if I will do so myself but for now, Buffett and Munger are on top of my reading list. And the hyperbole is great and all, but, it completely avoids addressing the real issue. The integrity argument doesn't really add up for somebody who has used it as their main crux for not making an investment. Is the public perception that, let me get this straight, he is trading off inside info from Gates, really any more reality based than the negative perception of helping to bail out the horrible big banks that robbed hard working everyday Americans during the housing crisis? Or you know, disagreeing with Muhtar Kent and that horrendous Coke compensation plan, but letting them go ahead with it anyway? Or the nepotism argument he makes while having Howard on his board? I'm not saying he doesnt have a right to do these things or even that I think he shouldn't, but its just a bs argument that of all things, two of the wealthiest and (as far as we know) most philanthropic people the world has ever seen, would collude to trade Microsoft stock! LOL, GTFO. Not to mention, Buffett rarely even trades! I'm calling bs here and I think most objective folks are too. But... Lets stretch the logical interrogation a little further. Buffett has said, numerous times that stock are fairly valued here, and actually very, very cheap if indeed these rate levels are permanent. I remember him, perhaps using some hyperbole but nonetheless making the claim that the Dow should be at 100,000 if 2% rates were permanent. Yet for years we've been rates stay around there, and now on the horizon are FURTHER RATE CUTS! And yet, Warren hasn't bought a stock in ages and his largest position, by far, is CASH! My objective is not trashing Buffett; I'm looking to be an honest investor and not just make excuses for nonsense I would not tolerate from other portfolio companies. I dont know why this is so hard for people. Buffett's decision making prowess has not exacxtly been up to par the past half decade or so, maybe longer. I dont know why people would rather hear glowing things about their investments than get cold, hard, pushback from opposing viewpoints....

Are people really OK with writing off Warren missing super obvious investments simply because "he didn't want people to think" this or that? Who cares what people think? People can correctly or incorrectly think whatever they want that has zero to do with his responsibility and duties to shareholders.... Frankly I dont even think it is that, regardless of what he says. I mean what about Costco?? His best bud has long owned it and its something that at his sharpest, was right in the wheelhouse. Whats the excuse there? I mean, I've been reading these threads for a while and the degree to which people are giving passes here is outrageous. Even back with the "oh he's not being more aggressive with the buybacks because he wants to give every single last shareholder a perfect warning and doesn't want to take advantage of anybody..blah, blah, blah" nonsense. Where does it end? How is it not completely unacceptable for somebody with a fiduciary responsibility to continuously make excuses for crossing off more and more investment opportunities when by both his own admission, and the observations of any rational person, he's already significantly limited by size in terms of what he can invest in, in the first place? I dont think I'd have a single investor if I said, I'm automatically not really able to buy 90% of companies out there, and oh guess what, because of my moral perception cross off 2% more, and then because I am worried about what people think of me I'll eliminate another 5%.

I find the entire universe here to be enlightening and one of the best(if not the best) place to stay engaged. Each member provides valuable input to me in ways they and I am probably both aware and unaware. There isn't really a place where you have the entire investing spectrum covered, from great high level thinkers, to kind of know nothing follow ons... I dont mean that as condescending, but there is a very good variance/distribution here. On that note, I've grown to find Tesla shareholders and BRK shareholders have significantly more in common than I'd ever imagined, and I'll just leave it at that... Sanjeev is the best. The way he lets things flow works, whereas many other places Ive seen get restricted and become echo chambers and fiefdoms. I love the rare occasion when he will jump into stock analysis with the rest of us, although I can understand why he doesn't do it very often. I am a bigger picture investor. I think SharperDinegaan by leaps and bounds is the best at really sizing up and summing up any given situation from politics to Bitcoin Ive seen him just nail it. To me thats the hardest thing to do. Anyone can look at the same income statement numbers and draw conclusions(although Schwab711 does it better than most) and anyone can simply buy or sell a stock, but finding where things fit into the universe Ive found is the most crucial element in the "producing returns" equation, and Mr. SharperDinegaan does that extremely well. Once you figure out where things are going, the rest is easy.

I think it's wise to look at what he is saying rather than what his track record is. The things he mentioned about Berkshire are true. And I also find it interesting, not really on what Warren has missed, but rather when we look at it in the context of everything else, such as his statements about rates staying low and stocks being cheap, combined with having exorbitant amounts of cash on hand, and delegating to Todd and Ted. Is it possible he just isn't really looking to make investments anymore?

I should clarify, CTO vs GRIF. Short term for me its definitely CTO(as my position sizing expresses), however I think GRIF has higher absolute upside longer term from $36. The million dollar question, which changes everything, is would GRIF management sell? If they will, or give any indication, IE an FRP type transaction, then the potential for a high IRR is huge. If not, I think it runs the risk of lagging around and just being a turd, kind of like CTO has for the past few years, maybe squeaking out a 5-10% IRR which aint bad, but isn't worthy of a large concentration IMO. Read the Footnotes you make good points as well.

You're not wrong. I definitely would not call them a developer. I can count maybe on a few fingers the number of properties they've ever been involved in any developmental aspect of. All of them have been in Volusia/Orange Counties. I've even been somewhat outspoken to encourage them to do a little bit more of this as simply buying and holding 5% cap rate properties isn't totally my preferred capital allocation strategy. But the response is always that by doing the 1031 they save lets say 25-30% of the proceeds(again, very low basis land), and that 5 years after a REIT conversion the 1031 deferred taxes are forgiven so that is your margin of safety. So maybe I am portraying it wrong in terms of them developing. That said, they do consider development options quite often when making acquisitions. So maybe not developer, but NNN preference with a risk/speculation appetite is a better description. A failed deal would be Westcliffe Shopping Center. They bought it 2 years away from some major tenant expirations, looking to then flip to a developer interested in doing a senior center and the deal fell through. Now they're holding it with 1/3 of the potential NOI absent and can either look to find a new developer(the area seems ripe for student housing) or try to lease it back up. They've already said they're not touching any development there themselves. We'll see what the overall return profile on that situation looks like probably next year, but that's most likely where the downside sits. You are buying at a reasonable discount acquiring something with big renewal risk less than 3-5 years out...so I get your point from the perspective of an outside investor or an acquirer. My pushback would be that the same is true for CTO who is also quite often buying these properties with that lingering on the horizon. My thesis at this point is that if they convert the remaining acreage anywhere near the market values, you're looking at another $150-$200M in proceeds. If those get thrown into more properties at the same targeted cap of 6-8%, tack that on to the existing portfolio and two years out, even with discounts and whatever, the figure is much higher than $64. I haven't seen any reason not to expect 6-8% annualized NAV growth as well. Maybe I'm more comfortable because I've spent the past while watching and studying these acquisitions one by one as they happen, but provided things they've been buying for market rates between 5-8% cap rates don't massively blow up, you'd think one should do fine. The threats again are that this occurs with a few of the bigger ones. Thanks for the different view and pushback though.(and yes, some of the metrics are bs, such as book value and EPS growth when you're flipping 100 year old land...)

Re Packer: Yes I agree, and that's a valid concern. As a shareholder however, the question was, would you rather have 11,000 illiquid acres of raw land in Daytona Beach, a mixture of that land and some income properties, or a full blown portfolio of NNN properties and little to no land? I fall somewhere in the middle; management clearly wants the last option. As a potential shareholder, the question is, would you rather pay 20-30% premiums to NAV owning NNN, O, STOR, etc, or pay 65% of NAV for something like this? I dont think it's totally an apples to oranges comp; maybe a tangerine or a clementine, or maybe a marzipan orange to oranges comp. Given CTO's size, I dont think they'll ever really compete with the bigger guys, rather the company has been built IMO to eventually be sold to one of them. The CEO is a mercenary and came to Florida from Texas, with the intention to eventually move back there. Despite the already massive discount to NAV, an acquirer has plenty of juice to squeeze as they'd more likely have a lower cost of capital and would likely immediately chop the $8M in G&A. The geographic diversification has been intentional, which is cool provided they stay in areas of decent demand, but my concern would be the ability to get things done should there be a need for major Capex or repositioning. The lower duration leases are not entirely by accident. A number of properties fall into the "covered land play" category. The best example is probably the BofA in Monterey with I believe about a year and change left on the lease. You have a tenant option to extend for(iirc) 10 years which would more than double the NOI from the property(as you mentioned, there was no escalator in the original lease they bought, just the options to extend), OR have them leave, which would be my preferred option as the location has greatly changed from when the building was originally established, in which you've got an entire block in Monterey, not to far from the beach, with approved uses also including residential and the ability to built up another 2 stories. https://www.google.com/search?client=safari&source=hp&ei=xlqiXeiFMrK0ggfOp4fwDQ&q=200+e+franklin+st+monterey+ca+aerial+view&oq=200+e+franklin+st+monterey+ca+aerial+&gs_l=psy-ab.3.1.33i299l2.176.10573..11820...0.0..0.223.3169.32j4j2......0....1..gws-wiz.......0j0i131j0i22i30j38j33i160.qeffXpWXJSE The Century Theatre in Reno was also bought specifically to repurpose once the lease expired, although Century chose to renew a couple quarters ago. The 24 Hour Fitness is Virginia is another example, right next to a big Brookfield project and square in the middle of the area Amazon will be building their second headquarters, or the CVS in Dallas right next to the American Airlines Center which is approved for like 40 stories of residential. Thats at least how these are pitched. Personally I don't think they have much interest in developing, at best, they'll JV it, or more likely just flip it to a developer once the old tenant is out. The locations I'm concerned about are the two Wells Fargos, and maybe stuff like the Cliffside Shopping Center or the 99 year lease on the boutique hotel in Austin. Wells is like 20% or so of NOI, and those massive compounds should the tenant leave, basically become shitbox multi tenant office space requiring a lot of time, Capex, and despite all that, often having massive tenant churn. But all in all they seem to buy pretty good dirt, which is my preference. which leads me to Cardboard's statement... Re Cardboard: I really dont like REITs at all. The have a lot of fat and fees are everywhere with real estate, and specific to REITs you also seem to have this extra layer of yield chasing shareholders which imbeds a premium into most of the valuations but also a further level of idiot in the base that allows nefarious managers to get away with things they shouldn't be allowed to. It boggles my mind the implied cap rates people are paying for stuff like O and NNN. Ive flirted with shorting them because it just seems insane to me to be giving this much value to what are largely retail operations. I'd much rather have a shitty tenant on a well located piece of dirt than vice versa. I only own one REIT and its a tiny micro cap that has very little characteristics with the big ones. Whereas many of these types of companies, are kind of riddled with the inverse of what I dislike about REITs. CTO, JOE, GRIF, FRPH, etc(want to get real whacky check out CKX Lands), illiquid, no real or natural shareholder base, the all screen poorly, and have inefficient corporate structures and more often then not, questionable management arrangements or shareholder bases. So they trade at big discounts but what is nice there is that you dont really need a whole lot to go right for that discount to narrow slightly. Usually they're just dead money but if you get increased transparency, or a few favorable deals, or god forbid, management wakes up and decides they want to let Wall Street know they care about shareholders, you see some nice upside. So if you get confortable with what they own, and find ones that dont really make a lot of money but also dont burn through money or destroy value, its an interesting place to hang out. If you can observe how they trade, its real easy to keep tabs and then take advantage of the lack of liquidity during market sell offs, and then load up and be the beneficiary of the predictable V shaped recoveries once things normalize.

Next 12 months, CTO without a question. The plan all along was to monetize the company by taking 11,000 illiquid acres and selling them then 1031 the proceeds into income properties, go REIT, and then if necessary sell to a larger NNN reit. They’ve got 5,000 acres left with a big chunk scheduled to close this quarter. What’s left is mainly 1600 commercial/residential lot and some scattered parcels along I-95. But the main thing is you have catalysts, and in March the convertible note due, which IMO has been a poison pill of sorts. Further, as I alluded to before, you have reputations at stake. These guys are not crazy rich. Sure I was utterly disgusted by some of the behavior during the proxy fights with Winters, but in the context of the corporate world, they were in a fight to the death and while unfair to shareholders, you can at least see where they were coming from. Going forward I believe they want to redeem themselves and deliver for things that, by their own admission, maybe weren’t ideal. Either way, I think we see fairly soon how this plays out. With a $95+ NAV, it shouldn’t be hard to get some upside. I haven’t always liked or agreed with everything, but it would take a really special type of piece of shit, like a Sardar Biglari type, to do what they did with Winters and then just screw everyone else and do nothing. It’s always possible, but I don’t think they are those types of bad people. GRIF I like, the same as JOE, but it needs either a catalyst or a clear plan. You could say value there will explode once shareholders and outside investors get comfortable with management and determine them to be adequately aligned with all shareholders, but the same is true at CTO and CTO happens to be further along with the transformation. That said I’m a buyer of GRIF anytime it hits $35, the same way I’d be a buyer of CTO below $60 or JOE under $16. If nothing else those prices get you a good pop back to normal levels once whatever hysteria currently occurring subsides.

Start at 1:05:00; and deduce what you will...

Appreciate the thoughts and(at least I assume) first impressions(unless you're previously familiar with this). Its good hearing outside observations. I've been with this prior to the "basically dark" days, which iirc probably changed sometime in 2015. Prior, there were no calls, no confirmed earnings dates, nothing. You'd just randomly see a brief release dropped at like 1:30 in the afternoon. So to me, disclosure has improved greatly, although it is inconsistent at times. In 2016 it seems to have peaked, with everything down to the 3rd digit of a cap rate often disclosed. Since then it's been a little less so. The cynic in me always rushes to find a link to something that's being hidden or indicative of something devious, however it really just appears to be random. I do not think the cap rate used in the presentation if that is what you are referring to is including land values. Those are broken out separately on the NAV sheet. A few points. Pre-2014 this was basically just 10,000 acres of land with a few income properties in Florida. So almost all of the portfolio has been acquired in the past 5 years, meaning if you like it or dislike it, or whatever, you at least have a general idea of a recent market value. The income properties are acquired more or less to skirt taxes on the land sales, which have a basis in many cases dating back to the early 1900's. The tax implications of a REIT conversion have been communication to be around $45M, so figure ~$9 per share needs to be shat out for the conversion. Not awful and better than original thought which many believed included all the 1031 deferred taxes which apparently dont need to be purged. They do not develop...at all. So there is no risk there. Every so often they'll take on something in their back yard, such as the Winter Park project or the beach front parcel, but these are generally sub $10M developments. To date those have been some of the better investments made. Daytona IMO is very much a good ole boys club and if you are on the "in" you can do well where others cant. They are very much on the inside there. I can't tell you how many times I've grown frustrated seeing them sell a parcel to a developer for say, $3M. Then seeing the developer put in $10-$15M, lease it up and flip it for like $30M. I call it lazy, they call it conservative, but thats the deal. Sell the raw Daytona acreage and 1031 to an income property. The CEO has a background there and is reasonable competent. I have not always agreed with the capital allocation(among other things), and while I think they've been boneheads sometimes, cant say they've ever destroyed value. They(management) own a lot of stock relative to their net worths. That they don't use traditional REIT metrics(AFFO, etc) I think is just a result of the fact that they still report the same way they always have as a land company. The transition is still occurring but agree that moving to those metrics with REIT conversion on the horizon makes sense. I do agree with what you allude to about the bigger properties. I hate gargantuan single tenant office space. Fidelity is not a concern but the two Wells Fargo's have always bothered me. Those to me are value traps. But generally speaking I think one is fairly compensated at these prices. I think they've got a lot to prove and they kind of made fools out of themselves blaming everything on Wintergreen(a whole separate story not really worth getting into) and claimed a Wintergreen Discount was the reason the stock trades at such a discount to NAV, at $65 share price/ ~$365M market cap and now 6 months after Wintergreen is gone have a $64 share price and ~$320M market cap. The incentives to me are there for this to do well and at least narrow that gap over the few quarters; but I also could be wrong and maybe they just keep telling stories and milking the heck out of this...but we should have an answer soon and its a heads it doesn't really go anywhere and tails it goes up a lot situation, which I like. And had I listened to BG several years ago I'd have spared myself a huge opportunity cost here...but I think at this point the cards are on the table and we get to see if these guys are respectable dudes(my first impression of them) or just another bunch of schemers(my next impression of them).