Gregmal

Added a small bit to HHC at 74. Not thrilled about having to deal with crummy management now, but very keen on being a pre IPO investor in Ackman Enteprises.

Like can anyone imagine the calamity and chaos at firms like Bloomberg for instance, if it became widespread common knowledge that you don’t need all this instantaneous info and god forbid you can actually be patient and practical? That 95% of the time the correct move is to just do nothing? I’d gander the returns of many quiet individuals like @dealraker beat the shit out of pros paying a quarter mil a year for a terminal! Nah…those secrets must be kept as they are the key to active management alpha! Folks in general need to wake up to the idea that the game is rigged against them and 1) there’s a reason they don’t educate young people on financial matters and 2) it’s the bread and butter of all these leach firms that you constantly need to do something in the name of being conservative and well prepared.

The problem is that all those returns are based on hopium and money printing. Then add in 9% inflation and really you need to discount them bigly! Jokes aside, the biggest issue is largely that many have very inflexible framework. For much of the last decade or so, every time the market goes up, we have people claiming it’s undeserved. Like how many times recently have we seen every downturn met with “I knew it” and every updraft met with skepticism? An underlying belief that the market “should not be up”. And I mean if that’s always the subjective analysis, then what’s the point of even paying attention to the market? Shit should just always be down and when it goes up it’s invalid…. I don’t get it.

Even intraday, there’s tens of thousands of stocks that based on the hour could’ve produced big returns or big losses depending on the hindsite interpretation of the charts. I used to scrupulously fixate on them. Now I just shrug my shoulders and am thankful I don’t have to be busy and devoting all my time to what is largely guesswork and a distraction from investing. In 2021 the SPY did +29%, in 2022 it did -18%, and ytd 2023 it’s up about 8%. So even there, it just seems like a whole lotta effort and fretting and transacting for little general long or even medium term benefit. Like we really need to get creative short term cherry picking and even there you have to make assumptions like picking exact dates here and there; a behavior of which typically isn’t indicative of a one off, but systematic approach, and extending that systematic approach anything beyond a very short term window has created horrible back dated results.

Its one thing if folks bought clear bubble stuff like post deal spac stocks or iPads on bikes and stuff like that, which ain’t ever coming back, but in terms of just owning equities that any reasonable investor would look at, there’s just hardly anything all that spectacular that’s unfolded. Prices fluctuating and volatility is a normal function of the stock market. Going forward it seems The Fed realizes it got goaded into too aggressive of a hiking campaign so that risk is largely removed. The debt ceiling is probably the last real gasp of air for the fear mongering crowd…and I have no doubt that the politicians will bungle that whole thing, but it’s also the very definition of a temporary issue. And past that, what’s left? Just regular old run of the mill recession forecasting/fretting? Which to be honest I’ve heard just about every year I’ve paid attention to the markets.

Why is there never any context and always a cherry picked starting point in the case of using the peak to trough numbers? Some stuff might be down 20-40% and some stuff isn’t. If you’re a multi year holder you probably have a lower basis. If you bought at the top you’ve had plenty of opportunity to buy in at better prices. The only caveat being you didn’t buy a turd that was trading for 1000x PE. But again, using this sort of jaded, must avoid any volatility at all costs logic has cost so many people so dearly for decades. If you’ve owned say Google for the past 5-10 years you’ve done great even off the tops. Every single year during that stretch there’s being critics both macro wise and other of Google. This obsessive focus on “short term” is cancerous. I personally think there’s more enticing stuff out there than Google today, but again just using it as an example, stating, with the benefit of hindsite that “there’s this short term period of time where it was devastating owning stocks” is kind of missing the point and focus of it all. The popularity of the Fang stocks obfuscated the value present in many other pockets of the market for a long time. There is and has been plenty over the last few years that’s reasonably priced and opportunistic and everyone I know who’s operated from a position of fear has largely missed out. It’s like saying oh Berkshire is still off over 10% from its highs and at one point declined 30%+ and the returns have been devastating….and that just encapsulates an approach that is all about focusing on the short term guessing game which isn’t something an owner of Berkshire should likely give much weight. And then there’s also the aspect of it all in which one who is investing is utilizing cash they don’t need. In which case, again, if it’s a long term proposition, with something you do not need, becoming preoccupied with stuff that is 100% driven by temporary fears; that is counter productive.

The majority of the 29x was produced by covid related mechanisms and tech euphoria. It certainly wasn't the "average" company. As bearish as @changegonnacome seems, he and I have been talking about the 2019 reversion since like mid 2021. The vax announcement in late 2020 was the beginning of the end. The end is now near its end. Im not sure how it wasn't that obvious to everyone, but the entire way was met with "tech is here forever" in 2020, "inflation is transitory" in 2021, "just buy FANGS" in early 2022, inflation is definitely NOT "transitory" in H2 2022, and throughout the entire spectacle, cries of the housing market crashing and recessions causing massive meltdowns and at best all we got was a very brief intraday, hype driven, move back to what? 3500 SPY for a split second and there been in a range between 3800-4100? Nobody paid $300 for TDOC or $100 for PTON because they were excited about growth. They paid that cuz everyone else was paying that for the get rich quick hot potato. You could have bought plenty of reasonable priced stuff, and in the worst cases you maybe have a modest 2 year mark to market loss assuming you never bought another share...big whoop. I still dont understand this notion that one should seek to never experience paper losses or drawdowns in the stock market. Thats just kind of what the stock market does and why its not for everyone. And inherently, thats where the opportunity is. It just seems like theres oh so many talking points and reasons to make all these sensational declarations, but if the goal is investing and making money, its still just as simple as its always been. End of the day we revert back to the 2019 trend line and perhaps have somewhat higher "average" multiples because over time, thats just what happens.

The recession forecasting and stock market timing stuff is a grand illusion because on paper it’s so simple. Everything is with the benefit of hindsite. If you just followed a, b, c indicators and bought here and sold at this point on the chart, and then bought back here…voila! On top of this, well, short term, stocks will either go up or down, 50/50 right? Every time this has happened, that has happened…until it doesn’t. Then we debate of this time is different. There’s literally an academic playbook for everything. Except what makes the markets so awesome is they are adaptive and evolving and almost always 5 steps ahead of everyone. When you look at folks who make claims of forecasting success, the most successful ones are very often the ones who aren’t actually doing the buying and selling. Well, correction, they’re doing the selling but it’s in the form of newsletters and advice which to anyone who’s ever laced em up and stepped on the court knows…ain’t even close to the same thing. The majority of the business on WS is….selling! Selling investors everything they need to get rich. Selling companies everything they need to grow forever. Selling those in the middle whatever they need to get to where they need to get. But the great illusion is just that…the game is simple. Build your shit. Buy quality. Be disciplined. Do what’s unconventional. Bet on yourself. That’s it. You don’t even need to “beat the index”…just don’t do stupid shit!

Yup. We have had plenty of recessions before and will have plenty more. This is just a risk you accept if you’re going to invest. If you can’t, then buy CDs or munis or whatever. Great returns aren’t for everyone. What I think is crazy the last two years is the hollow, dishonest framing around the “earnings are going to decline” scare tactics. Who exactly didn’t expect some sort of reversion to the mean after covid mania? Acting like an obvious reversion is not such, but rather an ominous sign that the economy and world is going to collapse is ridiculous. Further, we ve given credence to people who don’t deserve it, namely these bums who put up stinker returns the last decade, the ones who told us stories of money printing bubbles that were so obvious everyone but them took advantage of it, all that stuff….all the stories and scare stuff…when, much more boringly, we just kind of eventually get back to the trend line from 2019. In other words, COVID was one hell of an event. It disrupted the world. And then it went away and things went back to normal…..that don’t sell well though.

Yea idk I think the only real way to win the recession game longer term is to just not play it. If I see something attractive I just buy it. Tone deaf and happily oblivious. We ve already seen tons of fruit bore from last years crop. Imagine waiting it out over fear of something that still hasn’t happened? I’ve spent a lot of time studying this and have yet to really find a good company, that was reasonably priced, that was permanently impaired/done in by a regular old recession. They just come out stronger and often times, significant value is created during those recessions. Just play the long game. Problem easily solved.

Shhhh! If you listen closely, you can hear the sounds of the recession goalposts being moved!

And it continues. Greenbrick just murdered the Q. Following pretty much every builder to report. Shorting near dated puts and buying longer calls continues to be free money.

All this guy is doing is wrecking the banks he s in charge of regulating. It’s glorious. Been saying it since before the first raise last year, but interest rates don’t really have anything to do with solving the “core” issues….but keeping raising em anyway. Total fool this guy is.

The same reason he let inflation run wild so he could get renominated is the same reason he’s doing the tough guy things here. It’s all about Jerome and what he thinks his people think of him and his “credibility”. Literally Fauci 2.0. Guy needs to go find a parking spot on the train tracks.

This guy has been lost and following the wrong data for 4 years now. Nothing new.

What are the magic words we are hanging onto our hats waiting for during the presser? Any specific phrases? Im eagerly on standby waiting to mash sell buttons!

And yet another example of why I think it’s totally bogus to look at what todays participants largely refer to as “the market”.

Was just looking through one of my accounts and found another I had forgotten about. NATH.

This is part of the reason why overtime you just simply want to be an owner of assets. Fools and their money(cash) always part ways. The bigger economic turbulence sucks because it often causes people who aren’t fools hardship. But at the end of the day the accumulation of assets wins because useful assets are fixed in quantity and just become more entrenched over time. The IPhone is lethal because it’s the only status symbol where the poorest man in the hood can have the same product as a billionaire. But Costco, Pepsi, types? Entrenched, powerful, dominant. Wanna cutback spending? Go to Costco and drop $200. Then go home and watch TV on your Amazon device while stuffing your face with potato chips and some beverage. Even if the American dream isn’t totally attainable for everyone, I see no evidence that as a person with means to invest, that you don’t want to be long term levered to the things that represent it. Nice home in a postcard or tv show neighborhood. Kids. Vacations. Fancy toys. Experiences. Stuff people boast to their friends and family about.

Yea speaking of London stuff, Oxford Metrics is another gem.

Shit almost always rhymes and often the same playbooks are carried out until they no longer work. Literally word for word the same bs logic and rationale that was used to defend absolutely asinine things being done during COVID….because “we must protect the most vulnerable and susceptible to hardship because they can’t fend for themselves”….and, as it turns out, drumroll, not unpredictably, if we haven’t already yet learned, that’s bullshit because those people are always going to end up in the same position regardless of what we do for them and at some point interfering with much more important and larger things that effect larger amounts of people who are actually capable is utter nonsense. Give ‘em more money and lock em away in their houses and tell em they don’t have to pay rent…they overspend like crazy. They run out of money and have to go back to work in the best job market they’ve ever seen and they bitch stuff is too expensive. We kill inflation by whacking some of their jobs and they’ll be right back at it asking for assistance. When will we learn?

And the math on a lower middle class family, who got how much in stimulus over the COVID saga?; let’s say making a combined pre tax $65k(so sub $40k a working person); factor in annual pay raises, assume a budget that is 110% of their non stimulus check after tax wage(IE getting by but slightly overspending), and then account for the annual inflation on that after tax budget to determine inflations “toll”….the argument is really that, well, they chose to spend their money? Like @dealraker and others have mentioned, seems so very much of this is not actually hardship driven by outside circumstance, but rather one’s own decisions.

The ones I follow and/or own off the top of my head PCYO-tons of cash and no debt. Good assets. Super conservatively run HTL- great business, well run, classic compounder FIZZ- great balance sheet, great brand, quirky management but opportunistic and conservative FRPH- great assets, tons of cash, great management CKX- tons of cash, good enough assets, management neutral but incentivized ALCO- good assets, solid management, strong balance sheet, mediocre primary business Might be missing a few but it’s Saturday

The 2-9 was caused by COVID lockdowns and monthly checks. Once those stopped, it allowed things to begin normalizing. COVID was obviously not a stable period, but that is over unless we expect either of those two things to begin again. 5% wage increase absolutely won’t move the needle. There’s virtually nothing that is remotely in the cards at this point that will create any sort of major reaccelerating inflation surge. So if we aren’t headed back up in any meaningful way, it’s either stable or declining. Personally I don’t see how it doesn’t keep declining bigly at least into Q4.

Haha enjoy your weekend. But be forewarned, you are walking into the lions den tomorrow. Be prepared to get hammered by the inflation entrenched menu, which will almost certainly be ground zero for evidence of the wage price spirals crushing the economy. You will probably see hand written price increases on said menu as costs to get stickers or publish new ones have become too prohibitive for such establishments. And hold you hats when the bill comes and your tipping options begin at 18%. Tough times for those daring enough to go out and enjoy the luxury of pay 5-10x the cost of the food you could make yourself at home.