Gregmal

Yea I always chuckle at the DCF argument. Know a few fairly well regarded investors. They have to file publicly. One of which was very much a “I require a 12 discount rate” kind of guy. Been negative 3 or the last 5 years and only once beat 12%. Arrogant schmuck….perception meets reality. You require a 12% return, but can’t hit the broad side of the barn at half that…keep at it.

I dunno but there’s a certain beautiful irony to the fact that people who base their businesses on charging bogus fees for their investment acumen and stock picking prowess….get a stock pickers market, and then complain that it’s not fair because it’s wasn’t their stock picks that went up! Typically Wall Street eh? Same on the short side. Is Chanos still whining about “the markets” misreading CAT, GE, DLR, and VRE? Wah wah, not fair!

Underperforming fund managers everywhere: Only 7 stocks went up so its not our fault we didnt own them or come close to perming well so far this year! Gregmal: Weird, who'd have thought JOE, MSGE, SPHR, PCYO, AIV, UBER and FRFHF were the only stocks that went up this year? Jokes aside, the professional level bullshit and excuse making is so fun to watch development. The headlines say the entire market is only up because of 7 tech stocks...but this just isnt true.

Do they not have any underwriting standards in Canada? I dont know but here in the US it doesnt matter "what people think" because the mortgage underwriting process requires you to have a certain credit profile and income ratio. In other words you can either afford it or you cant and unless you lose your jobs after closing, you can afford the home you are in.

The problem is everyone is a total expert on telling us, with 100% certainty whats happened already. I love talking to folks who go on about money printing bubbles, Fed puts, FOMO, TINA investing, etc....It was so easy for the past decade right? Forget all that happened in between, the debt crisis, flash crashes, pandemic, and late 2011/2018/2022/2023 Great Depressions that weren''t....forget that....I just ask them..oh so you must have made a total killing knowing all this as it was happening and been levered to the gills on the most speculative corners of that market, right? 100% of the time the answer is...no I held cash, gold, puts, etc.....LOLz...Ok genius, you KNEW IT ALL, had the playbook, and did the EXACT OPPOSITE of what you shouldve done? Nice! Folks complicate the shit out of investing. If your focus is the next day/week/year and thats your horizon...yea go for it. Own bonds. If its longer than that...stocks offer pretty decent opportunity, especially if you want to look at specific names.

Cough. Spreadsheeters.

Its funny but St Joe land is actually another good example of the silliness of "sell!"...Pretty much every piece of land ever sold in that area is worth more today than what it was sold for. Watercolor and Watersound Beach were $150-250k lots that are now $1-3M lots with $4-10M houses on them. Pier Park was $200k an acre when Simon Property bought it in 2006. Its further example of the baffling nature of needing to apply a "they must sell the land" approach which is clearly just an agenda driven ideology. When pressed, no one can tell me why Joe has to sell its land fast enough to equal its market cap while Gold doesnt; Amazon never has, and even today....Apple? St Joe is the only company in the world I guess where you need to sell land and produce hefty earnings in order to justify its value......OR....not! Theres a lot of this sort of stuff out there; Joe provides a good micro example but on the macro its embedded everywhere and you look and its trap snares plenty, as we can see. Tangentially, Ive been amazed at how much St Joe and Fairfax have in common today. I own both and the story arc of dated perceptions and 180 degree differences between those perceptions and realities is still very encouraging. If I had cash Id plow it into both without a second thought. See little reason to be "waiting with dry powder for an opportunity" thats sitting right in front of us all. Like you I have my predispositions. Every few weeks I look for a reason to sell Fairfax because my bias says its a trading sardine. I give it some thought, look for reasons to sell, and conclude theres just no real justification for doing so. So much of investing is about challenging our biases and perceptions and evolving into situations that might seem uncomfortable before everyone else finds them comfortable.

I think when we own real businesses we are always having to do something, so we dont really need to do the "do something" thing. When we own stocks, and dont really understand or appreciate what we own, we tend to think, since we arent really doing anything, that the whole buy/sell all the time thing, is how you do something. Its certainly one of those weird things people do. Me? IDK, I think its great I can choose my assets and business partners, have people way more qualified than me do all the work, and just participate without lifting a finger.

Yup. Office is fucked. Predictions like that are pointless because it’s like predicting whether or not the sun comes up.

Yea idk but it’s seemingly getting harder and harder for folks to deny that there is no secret or magic; just buy quality shit and stop trying to be a know it all in absolute terms with respect to the valuation. One man’s PE is forward, the others is trailing, and another’s is 3 years out. Markets over the long haul, tend to be reasonably accurate. Short term you can get weird opportunities and pockets of dislocation, long term once in a very rare while. But we ve seen plenty of the choruses of “too rich” around stuff like Costco or Amazon for decades now. Maybe it’s time to give less weight to the variables that don’t yield results?? If something trades for a certain multiple for an extended period of time, barring total fraud, chances are, that’s generally where it should be trading. Not where your outdated textbook says it should.

Sinister 7

Exactly. That and two other things. Valuations aren’t very heavily influenced by one or two year periods despite what everyone thinks. The second issue is that it seems everyone sits here and makes up reasons for everything; why “the market is doing this or that”, which is entirely influenced by hindsight bs and short term stories. Last few years for instance, stocks go up and it’s because of money printing, then they go down and it’s because “rates are rising so investors are requiring higher discount rates” or whatever. Both probably play a part in the narratives but in general just seem to be fodder for folks who need to explain and micro analyze everything when really you don’t need to be doing that. If stocks were down this year we d be hearing clamoring and bragging about “higher rates, competition from bonds, and not fighting the Fed”….All those things STILL exist. But because the market is up, now it’s rate cut hopium(even though this hasn’t occurred and no one important is saying it will), tech bubbles, and easing inflation(except from change! J/k). Over the years I’ve gone from doing the mandatory finance shit like always having Bloomberg and CNBC on, reading every headline article about macro, scouring Wall Street Journal, and “watching the Fed/big hedge fund guys”…to literally paying zero attention to any of that stuff and just focusing on specific investment situations that I think are interesting. I’ve also started evaluating investments through the lens that they are private investments or businesses I wholly own. Anyone see Buffett, Prem or Flatt day trading their company stock price fluctuations? And that is not to say that each of those dudes and their businesses have not seen absolutely massive potential macro clouds here and there over the course of the past 5 years…sometimes you just have to realize stocks are businesses. You need to think like an owner and not a piker.

Posted it somewhere awhile ago. Will try to find it. EDIT: page 14 of the JBGS thread.

Early on got burned following Cooperman, Watsa, Chou and a few other geniuses into Sandridge. Didnt end up being a huge loss, but a very productive experience and valuable mistake to make. Felt worse than it was too. Had bought in around $5, remember almost to the tick it peaked at $7.43 give or take a couple pennies, and then the rest is history. Ended up getting out at $4 but the whole thing really taught me the value of not being a lazy schmuck and just doing my own work and sticking to my circle of competence. Also, earlier on I was super streaky, which led to forcing things, which made the streakiness even more amplified. Have definitely learned to let the ball come to my court, plan in advance, and manage resources rather than just always having to do something because there is some potentially tradable datapoint. Shorted some Tilray calls during that epic squeeze. Stock was at $70, shorted some $100 calls for $7. Got bought in at $125. Fun. Dont take stupid risks. Being right and making money are two different things quite often in the stock market. Learned a million things from my adventure with CTO. Wouldn't call it a mistake though.

Exactly. as. expected.

So sinister

Let’s just get Ripple to an IPO. That would be great.

Another NY firm dumpster diving in NY junk eh? If I was fishing for NY bros they’d all be caught on the same lure. Jokes aside office is so extremely beaten down, as is a lot of the sketchy reit stuff, that you can probably make some money on a bounce. But to actually be investing here I think it’s just a much tougher proposition that requires a bit of blind faith. The whole occupancy issue and spiral is gonna take time to play out. Still think ESRT is the best of the bunch.

One of the most underrated traits in some of the better investors I know is simply being humble enough to admit they dont know and dont need to know every detail or risk. Some things just fit into generalized boxes and can be left at that.

Once upon a time there was discussion about margins at Pepsi.... Operating profit grew 76% and operating margin improved 6.1 percentage points. https://investors.pepsico.com/docs/default-source/investors/q2-2023/q2-2023-form-10q_nm3t7xov1rohgaf2.pdf Obviously a company of this size is near impossible to pinpoint everything involved in the causes, however its clear 2022 was a year of one off hurdles not just with inflation related costs but also the war. Its also interesting how in the headline releases, a lot of these companies purposely dont seem to mention margins much at all....would indeed be a bad look to show pricing power improving margins. Nonetheless we wonder how margins could possibly expand after 2022....answer was? Very simple.

Will try lol.

Swapped some SPHR into CPNG leaps last few days.

Anyone got a good stick a fork in it meme? This was only June. Wait til July and August prints come in. Once we start seeing the moderation in housing which started last August...still wondering why we rallied?

Yea we’ve talked privately but publicly, congrats! That’s the type of optionality that is unmatched by any other asset class.

I can’t quite think of any other asset class where people routinely argue “it’s not worth what it’s worth because of this and that and this and that”….quite like land. A long carried over byproduct of the GFC trauma IMO and something that’s soon gonna change.