Gregmal

As we see repeatedly, simply being in the market is hard work. I’ve overcome this by being margined at all times, but am still guilty as any of throwing money in the toilet putting on bearish market timing type trades as well. It’s seems the more clever and sophisticated folks think they are, the more their returns suffer. Really Ken Griffin is just taking their lunch money. I was lectured so extensively over the years by many I keep in contact with about being too bullish, using too much margin, being over concentrated, the bubble bursting, all that shit. And I was reasonably up last year owning real estate (which I was told I wasn’t allowed to own in a rising rate environment)and stuff that’s hard to value while the smarty pants Dr Dooms almost all printing negative, and some, really big negative returns. This year is turning out even better. So again the real question is, why does anyone waste their time with this shit? Just focus on what you’re good at and if you don’t have the temperament for owning stocks, don’t own them or don’t own much of them. I briefly even saw a few today trying to act vindicated for missing this rally because they “knew” “Powell is gonna tank the market” and for a split second they had volatility which seemed like a big win for them, and by the end of the day SPY was flat. This is a suckers game that’s used to sell management fees and subscriptions. It makes no one who’s actually investing their own cash, and in search of a return, any money.

Lennar reports. Housing experts still waiting for impairments.

Outstanding returns aren’t for everyone. Much of this stuff above on indexes and tops and bottoms and cherry picked starting points is really just an oversimplification of a lot of stuff in hopes of lazily arriving at “the answer”. To be excellent at anything, you have to put in the work. If that work is simply taking risk or trying to see beyond what everyone else is saying and doing, so be it. It was a certainty at the beginning of the year that equities would do poorly. After a meaningless 5% rally in January, it was a certainty that fixed income would outperform equities going forward. And despite this, the DAQ is pushing 25%. How many years worth of fixed income investments does that translate to in just 6 months? To the victor go the spoils as they say.

Uh-huh.

I like some homebuilders but have exposure limited to my short near dated puts and buy longer dated calls trade which is getting sizable as more put become worthless and the longer dated calls appreciate, but overall it isnt like the homebuilders in general are expensive yet either. But I do like pick and shovel stuff. LII is a beast. Bought a small starter end of last year but think somewhere in the HVAC ecosystem theres good money. Especially with migration to areas needing year round cooling systems, those should crank out. CARR is cheaper, but I haven't fully dove into either and do eventually need to get off my ass and do some work.

It probably is contradictory. I guess I just have a different perspective on things like standard of living, retirement, funding future life, etc. But Ive always seen it as a sliding scale that can be modified. At my peak thus far in life, Ive had months spending $50-70k when times were really good. Ive also had good months where I get by on like $2000-3000. So a lot of where I am coming from is the realization that you make modifications to account for life circumstances. I see no situation in life where I wouldnt at least be working a 20 hour a week bs job just to get some socialization in and have healthcare or something. Shit working for the municipality doing a 9-4 with a 2 hour lunch break making $50k a year. Thats stuff seems fun to me and its working by choice not out of necessity. If I needed to live on $70k after tax a year, I could 100% do it, and quite happily. So back that into what it takes to "retire" and its not as farfetched to have a low withdrawal rate and immunity to volatility. BS job. Some dividend and rental income. Withdrawal for rest.

What I am trying to do is disprove, largely just for my own mental framework, the @dealrakerguide to long term wealth. And it does seem, pretty concretely, if you avoid secular decliners, it’s almost impossible not to do well with this strategy long term. Especially if you also avoid companies with unhealthy amounts of leverage. Valuation itself is almost irrelevant if you apply a DCA approach. So in this example, even if you blew your entire load on Horton in 2005 at the top, at $40, less than two decades later I’ve got a $116 stock. And again, that’s being both an idiot, and terribly unlucky on timing. Meanwhile, I’ve heard just buying zero coupon bonds is the best way to go. And if I’m looking correctly, the current quote on a 20 year zero coupon treasury is like 45. Stock still wins.

So the stock peaked at $40, spent tons of time between $10-25, and wouldn’t have been a worthwhile investment? Especially with a common sense DCA strategy?

I don’t rule that out. I’ve said I think Q4 probably gets a little interesting on how these things break. But I’m also not as bullish as he is on energy and commodities.

Yea we all know the real reason for the Ukraine support rests with Burisma and is more about creating sideshows and distractions. Personally, this isn’t our problem stop wasting our taxpayer funds fanning the flames. Ukraine is a corrupt dump and Russia is Russia. What’s the end game? Another Iran/Iraq situation lol? That worked wonders despite us doing everything we wanted there for two decades. US needs to leave everyone else alone.

Yea once upon a time mushrooms were pretty awesome.

I mean if there’s life on earth it’s pretty low probability that in the entire galaxy, that’s it, just here and nowhere else? no? Like why wouldn’t there be life elsewhere? These topics are always overrun with sensationalism but the probability of life elsewhere has to be near certain.

I dont think change is ever gonna come around! When something stops working in terms of an investment variable, you move on. Focusing on this micro granular crap has had zero payoff. This whole rally and inflation deceleration was visible from 100 miles away. If they do another 25 bps here or there, again, who cares? whats your payoff? Another stupid 5-10% blip that instead of taking advantage of, folks sit there and just like last time claim is "just the beginning?". Its ridiculous. Add in, as talked about to death already, that so much of the inflation is still housing and that raising rates just makes that component even worse...they have zero leg to stand on anymore. They've made the inflation problem worse, not better...but it wasn't terribly bad to begin with because so much of it was one off. As Kuppy mentioned, you dont even need to bother with most of this nonsensical noise. Just stay in your lane and focus on what you do know and pick your spots.

You aint buying 3M for growth and you're not buying it because its clean on the liability side. You're buying it because its stable, irreplaceable American brands trading at 10x with roughly $40B of liability priced in. One of the most head scratching things I repeatedly see with investments is when folks look at the opportunity, and then declare the reason for the opportunity, as the reason not to take advantage of the opportunity. Heard it in 2013 that "you just dont know the magnitude of the London Whale losses" at JPM. Well, yea, thats why its at $32 a share, duh! If you didnt have the liability side, this business wouldnt be trading at 10x.

Bears looking for 3000 SPY

Just gotta make some loose assumptions and be comfortable with the unknowable. Not everyone is capable of that.

Uh oh! Core cpi, the one with housing weighted 1/3 and cheeseburgers from restaurants part of the equation weighed in at a sticky icky icky 5.3! Anyway, next month we start seeing headline 3 prints. Even if these assholes wanted to display incompetence with more hikes, their hands are gonna be tied.

This whole war has been a great and amusing exercise in highlighting the bias of Western reporting. US GOOD, THEM BAD! How many sources and people and outlets said Russia was responsible for the pipeline? Or the Kremlin drone attack? Or the totally fabricated “ghost of Kiev”…Anything to keep billing the US taxpayer for this political game being played.

It’s literally never ends.

Saw on feed I saw some silly little headline with one of those "here's how much" titles on DR Horton. Turns out if you bought DR Horton 15 years ago, yup before the market imploded during GFC, a $100 investment would be worth about $1000. This thread is called "so what exactly is the short homebuilder thesis"....but in general I also think it's become super clear, if it wasn't already, that buying and holding great companies is a fool proof way to invest. Id ask "what is the thesis for short term, speculative macro market guessing at this point?". Because it always used to be "well if you bought at exactly the top....you woulda been in trouble"....but more often than not, even thats not the case. And if you bought anywhere else, you are doing A-OK.

Yea that’s why 10x or whatever territory we are getting into is important. You’ll have issues but eventually start getting buried in cash. With no issues this is a 20-25x type of company.

Hasn’t this been true of tobacco now for like 4 decades? I was talking with someone on this recently and another prevailing thought was simply the 30,000 ft view acknowledging that hey, DuPont is still around when they’re like the king of liability related issues. So it really just comes down to price. Which here, is definitely reasonable.

The past decade was in response to GFC. Perhaps it was overdone, but that’s why it was like that. Going forward it’s just gonna be normal like pre GFC type environment. It’s just doesn’t seem normal to most people now because they’ve convinced themselves post GFC was normal and it wasn’t.

Exactly. That’s like the 2nd question on the Series 7.

This is a classic 20x high quality American blue chip if none of the litigation existed. So back tracking that into the current valuation, what is the market pricing in? Seems like it’s at least $30-40b.