Gregmal

Why is it a terrible short? I actually thought the Seeking Alpha article that moved the market today was quite well done. There’s zero proprietary work for one. It’s basically just another “they don’t make money, issue shares, and seem promotional” piece. Which isn’t ideal, but at the same time, there is absolutely a flip side that justifies why some companies would be at that stage, and regardless, there’s certainly a market/appetite from investors. The gist of the thesis is basically it should be valued like peers and what if every investor wakes up tomorrow and decides they’re done. In other words a no catalyst investment that is basically reliant on macro factors abruptly deviating from the same course they’ve been on for a decade now. An Einhorn short basically. If you need a macro event to be right, well there’s better ways to play that.. Don’t get me wrong, it’s certaibly a very high risk investment, but when looking at it from a risk/reward, and especially from a “what stops it short term?” perspective; sorry, but it’s just another smart guy analyzing a growth company, oblivious to the bigger picture. TDOC, another high risk, dare I even say, shitty company with a great story and big revenue growth runway several years back was/is a good comparison. It’s also comparable to the bull thesis on Macy’s right now. Hey you’re probably right about the company but you have too many other things moving against you.

Added a little NVTA. First the VIC write up a couple days ago, now the coordinated SA piece, when once again these thick framed dimwits keep putting on the wrong Einhorn like “oh but the valuation! They lose money!” Short. As if there isn’t enough evidence to point towards this being a terrible short, they just keep banging their heads against the wall wondering why they can’t make money. I remember reading the same pitch verbatim about TDOC at $14... Andrew Left has this correct in his evaluation.

Im just kidding... relax. Im just shocked at the prices people pay for investing advice. The buyer doesn’t pay for investment advice, they pay for advertising that comes from a possible news story with him having lunch with a semi famous person. I was referring just as much to the $3,500 30 minute conference call. But to the above, I don't really think that's why people are doing this. Let's face it, Warren Buffett is known the same way Michael Jordan or Woody Allen is. Nobody outside of us investing dorks really know or think lunch with Monish Pabrai is worth paying big bucks for. You could say the same about any number of investing legends. Heck you could say it about Sanjeev too. I'd pay a few bucks to a charity for a lunch with Sanjeev. If I told the guy next to me in NJ, or even NYC, most would probably look at me like "who the f*** is that?" and then even after I explained it likely wouldn't get it.

Im just kidding... relax. Im just shocked at the prices people pay for investing advice.

Well when his fund liquidates he could certainly follow in the footsteps of investing legend Whitney Tilson, that's for sure!

Just my 2c, but if you're interested in the triple net stuff, check out CTO. They're not currently a REIT but I would bet my last dollar that either this year, or next, they do a REIT conversion. They are basically built to resemble NNN and O. Still have some land and a few spec projects which I think give you additional upside, but on the income property side they're basically single tenant retail with a bunch of high quality single tenant office(WFC, Fidelity) properties as well. By my estimates NAV is mid 90's, which against a mid $60's share price is a reasonable margin of safety considering peers(just going by who they consider their peers) trade at a 20-30% premium to NAV. This is one of my top positions.

People get paid to write articles. Those that dont get paid/make much, look to build an audience, which then later on gets them paid to write.

Good article. Its probably as much on point as anything Ive read. People tend to need to keep up with peer groups and there is a certain human desire to be recognized and have status. I find this stuff to be toxic to the well being of a person and counter productive when trying to live what I consider to be a good balanced life. Well before even starting to work I determined what would be important in my life; my family, and in general just trying to be a good person who lives modestly and sets a good example. Being in NYC and around "peers" I saw as the equivalent as living in a house full of asbestos. Same as the guys in the article when it came to Silicon Valley. Just constant running in the hamster wheel and too much is never enough. The shallowness of constant materialism and degree to which people(particularly in the financial biz) place value and self worth into the amount of money one has; I wanted no part of this pathetic "sport". Over the years Ive even had some pretty generous offers to jump back into the wheel, but there isn't an amount of money that's worth sacrificing the things the are really important. Especially if you already have the things you need and don't live extravagantly. There isn't a person on the planet who shouldn't be able to live on $5,000-$10,000 after tax dollars per month. When you look at guys like Buffett, yea they won the money game, but even by Warren's own admission, he was a shitty father and husband. People just need to decide which they want to be great at. Staying humble and reminding oneself what they desire is easier when you live normally and see the pure gratitude when you tip a bartender $20, vs going out on the town with your colleagues and seeing who can rack up the bill with the most zeros as part of some pathetic competition to show off who can act like large and meaningful amounts of money are meaningless...

I think your interpretation is wildly off base. His idea isn't really groundbreaking, many have been using the framework of this idea forever. Its not really controversial or risky. Its really just called managing a position. For those of us capable of doing fundamental research and investing based off of that, doing this makes perfect sense. Ive never understood why value investors consider it perfectly acceptable to buy the dip over and over but find it blasphemous to sell on the bounce back up. To me it seems both perfectly reasonable, and just logically the proper way to keep you portfolio balanced and flexible. This is irrespective of the parameters one places around risk management and position sizing, which is a totally different subject.

Well, now that I have these data points and various tidbits of analysis I can start making money in the stock market!

Ding, ding, ding. We have a winner.

Thats another good point. $0 commissions and 3% margin rates....Seems look a really good or really bad environment, entirely dependent upon one's trading abilities I suppose.

This is absolutely the wrong way to think about it. If you don't have a stop loss, then you are risking 100% of the capital to make 11%. It could make you feel good but you have to be right 9 out of 10 times just to break even. Sooner or later your portfolio will be filled with failed BACs, each down 50%-90%, and no cash in your portfolio. (Who would have thunk of GE going down that much last year?) You can do technical analysis and trading instead of FA, and it works, but it definitely won't work in the way you described it. And in that case he'll have plenty in common with all the buy and hold value investors who would inevitably ride BAC to 0 as well...

Another strategy based on buying a starter position in a quality company perhaps at prices slightly higher than one would like and then either making some quick money or then build into it at lower prices. Seems like a way to make money. Some people don't like to make money I guess

Solely on principal, I have a hard time reconciling companies being forced to allow people to use their products in certain ways. Isn't it simple enough. If you don't like it, dont use it? I have never had a Facebook though so maybe I'm just out of touch.

Picked up a few CTO and have been filled on 5 GRIF. Lucky me!

Sanjeev its not just value investing that's the issue though...it's the investing! Maybe I'm gifted, IDK. But it really doesn't take long to size up a public company and determine if it's worth considering an investment. Even average investors should be able to look at something and kind of figure out what it's universe of outcomes will be, with a certain degree of accuracy. Which is why its just baffling when I look at some of the decisions these guys have made over the years. Like how many examples of broken tech companies(let alone gadget companies) do you need to see(cough Palm) to know that Blackberry was a lousy investment? Is there anything really that jumps out and screams "I need to own me some Resolute Forst Products?". I get they may be cigar butts, or turn arounds or whatever; the textbook "value investor" stocks...But these are just downright shitty businesses, with high risk and rather static reward(especially if you start looking at the entry points these guys had). So it's not just "value investing is out of favor"...one really needs to question the judgment being used. I criticize some of the BRK investment performance, but at least they almost exclusively buy high quality companies/businesses...Prem is buying garbage.

Don't like it? Dont click on it. Real Simple. Dont want to have to scroll through posts??? God help you when it actually comes to scrolling through something laborious like an SEC filing....much more tedious than just dragging the mouse down and ever so slightly moving your eyes...

Fixed!

Bought some more AYR. Here's hoping this bitch finally bottomed...

This was mentioned in another thread but deserves its own topic. Really great piece on the incredible events that took place shortly after the GFC. Really highlights why investors need to be flexible and open to making money in whatever setup presents itself rather than just remaining married to one strategy or philosophy. Been a fan of Dan David for sometime but really didn't know the full story behind his involvement here. My only surprise was that there wasn't any mentioning of Benjamin Wey who was quite possibly a bigger player than anyone mentioned in the documentary.

I'm not familiar with this kind of company but the numbers look interesting. How do you evaluate the risk of leasees not paying? What do you mean by leasees not paying? They do not have the model that relies on leasing. IIPR, which is basically in that line of business and is actually quite interesting as a REIT but not something I own or have gotten intimate enough with the expel certain question marks tackles this kind of stuff. AYR has the bulk of it's forward guidance hinged to its wholesale buildout. To date they've been successful with this and there is little to see why this can not continue. Demand is easily there and they produce basically at a $1400/lb rate with the market somewhere around $2800-$3000/lb. So they have stupid margins on this stuff with demand through the roof and really very few viable competitors on that scale AND existing relationships with about 65% of the MA businesses licensed to sell. The stock is crazy cheap on an absolute basis for ANY type of business, including even melting ice cubes and cigar butt stuff but when you then put into perspective that this is a hyper growth market with surrounding states likely legalizing in the near future(especially if blue states get more blue next election), and I think it solely comes down to walking the talk so to speak. I get it, this is the most disgusting and vociferously contested optical investment known to man. The post deal SPAC. So it's absolutely astute of investors to heed that. And maybe this time it's not different. My one internal assessment of risk is that I attribute the expectation of certain traits...ie relentless volatility and price declines during certain expected periods, as things that support the "why the opportunity exists" question, but also, are characteristics of other totally unrelated but more malignant signs of a different thesis... but that's what makes a market. All I know is if they hit numbers next year, or even just top $100M in EBITDA, this should be at least a double. Whereas if they miss by 50% you still can kind of justify the current share price quite easily. I think it's really just about doing what they are saying and so far have proven that they can do. Once its been shown, fundamentals will be valued in a more traditional way. Until then it carries the skull and cross bones of the putrid post deal SPAC...

Almost doubled my position in AYR. Possibly the best risk/reward and margin of safety Ive seen in a very long time. Now trading at basically 2.5x 2020 adjusted EBIDTA. Buyback starts October 1st.

Sold the last of my FNMA common

Timing is everything(see today). If you're going to trade, rule number one is never give up a profit. Rule number two, if you make money too quickly, take it off the table before you become the victim of mean reversion.