Gregmal

That is kind of what’s always rubbed me the wrong way. He hasn’t really demonstrated he s all that great of an investor and really has been handed everything. From how he started off to getting credit that wasn’t deserved. He “called the GFC and Lehman” but owned New Century(was on the board actually!) and lost almost 1/3 of his fund in 08….When it doesn’t go his way he whines like an entitled brat. Ackman minus the investing acumen. Not quite Peter Schiff though. Who reportedly lost over 80% of client funds in the crash and then a year later wrote a book saying he told us all and that next gold was going to $5000 bc of hyperinflation in 2012. I’ve brought it up before but you have to admire Prem Watsas resurgence. Ackman too although he’s quickly blowing it again…but those guys shut up and reset and got back to their bread and butter. Einhorn did +36% last year and it’s classic blind squirrel getting a nut. Why? Bc the process was the same one that caused him to squander the past 15 years. Ego driven and petty….IE betting against Tesla and tech stocks and it finally fell and bizarrely thinking he was sticking it to Musk buying Twitter which also worked. But nothing at all changed in the process and I’d wager he turned in a turd Q1 ‘23.

Totally. Like I said, that book taught me so much about so many different avenues on Wall Street. You know who nails it? In the last chapter Dave is talking about a chat he had with Buffett(of course not mentioning that he paid for it) and how Buffett on his Allied short opines something along the lines of, “don’t know the company but these generally aren’t good ideas because your short position is just a small piece of your portfolio. Whereas the people you’re attacking it’s everything to them”. Spot on from the legend on the difficultly of shorting. Another thing I learned over the years and that this book validates, is that much of this short term, market moving game is about controlling media and narrative. That’s why short sellers are always so crazy about grabbing headlines and seizing every ounce of the discussion. It’s why they hold press conferences(laughable in its own right considering the positions are typically sub 10% allocations and they…the fund managers, don’t really have anything to do with the company) and immediately respond to anything the company does to defend itself. The book itself is a great example. Controlling the narrative. In 2002 Einhorn pitched Allied short as his best idea. It was a total bust for what? Half a decade? Until he was bailed out by a generational market wide event. Again, narrative control..one he’s conditioned people to think “he called”…except “the guy who called it” was long a major position in New Century Financial from the top in 2005, and in 2008 lost like 25% LOL. He was so well prepared from calling it, that he then proceeded to bounce back from his -25% in 2008, by putting together one of the most embarrassing 15 year runs you’ll ever see from an “investing legend”, a status he “earned” by coming straight out of school, with no resume or real world experience, and making money in the mid/late 90s(who wasn't?), with a hedge fund that was practically given to him….so yea. And Chanos is another one. Look at him...he sits around all day "tweeting for alpha" and using almost every opportunity he gets to go on TV and monetize his name to move individual positions. I remember that clown pitching a "short Caterpillar" and knocking the stock down 5% to like 80 in like 2015...great call Jim....Not how I envision making money in my 70s. Compare that to a guy I have real respect for, Steve Eisman, who when he's asked for examples of stuff he is short, gracefully declines and states that he doesnt like publicly talking about individual company shorts...you know, cuz if your work is right, you dont need to manipulate or move the markets using the media or other scumbag avenues.

I feel like this has been engineered to a house advantage in what currently is called historical horse racing.

Learned so much from that book. Lot of useful direct and indirect lessons to be learned there.

Was doing some weekend cleaning. Found an old book which concluded with this gem.

Yup, make everyone poorer by hiking interest rates!

Grabbed a flyer on BUR into weekend. Pure gamble on ruling

I mean the market still thinks its a homebuilder lol. Give me some Berkshire at $175k an A share cuz textile mills should trade at 2.5x NTM....Joe trades conservatively at a mid teens multiple of just the income to be generated from like sub 3% of its land holdings over the NTM. Which is growing double digits in perpetuity.

Hmmmm. I know one. Especially when you look at say, their 2018 Investor Day material and compare to TTM metrics 5 years later. Or 2013 vs today. Did a little better than not issue a single share either. Reduced shares outstanding by like 35%. But none of it’s real.

Agreed. I know more people who worry about Berkshire than ones like me who are just like yea buy it without any research and never follow it and you’ll be fine. At least for the next 5-10 years that’s how I feel. It’s almost as if all the flexing you see in respect to folks pimping “their Berkshire analysis”….is totally pointless.

LOL Tilson. Guy has done it all and tried it all. Coat-tailed IDK-what outta business school into his own hedge fund without any resume or track record. Piggy backed Ackman to gain cred. Was one of the pioneers of using media/social media to promote his positions. Stole some college kids LL thesis and went on 60 minutes in one of the most underrated performances I've ever seen...probably what inspired Teary Eyed Bill's "Hell is Coming" schtick. Now sells subscriptions and does philanthropy LOL. Legend.

Berkshire is basically an index for smart people. I dont own it currently, but have an eye on it as I hope to get there eventually. Not because I wish to wildly outperform, but because I dont wanna do shit and want something I can buy and not worry about.

LOL. Long term buys = sell after an 8% move. You didnt get the update? The last few years have really highlighted how many market participants, especially ones masquerading as experts on the institutional and industry side, have very little clue what theyre doing; or simply have such a low bar for executing whatever it is they are executing, that its indiscernible. If you exclude workout stuff like arbs, I really cant think of any long term investment worth situations where 10-20% changes anything materially. If it does, why is one wasting their time for such low upside?

MSG, JOE, AIV, Nintendo, PCYO, Hamilton Thorne, UBS are collectively > 100% for me with MSG and JOE over 50 by themselves.

I am agnostic to and even embrace volatility or hard to value stuff, but I avoid like the plague things where fundamentals can change overnight. Banks seem to fall into that category.

Yea Glen Rock and Ridgewood combined have like 30 homes for sale LOL. Even worse, everyone knows if you’re under $800k in that area you’re buying someone’s long held “As Is”…there’s nuffin and the market is just that strong. Higher rates have just added to the pressure cooker. Liars told us demand was crushed. Even today on CNBC there’s an article that states demand has tempered. This is wholly untrue. The Fed just created a situation where people are at an impasse; sellers have no reason to sell, builders have no reason to build excess or give on price, and buyers just sit here and compete in a death match for scraps. But demand continues to be pent up, big time for housing. And at some point our champion of the people, Elizabeth Warren, is gonna channel her inner Indian and scalp Jerry Powell for being a dumbass with the rates…and at that point the Kraken gets unleashed on areas that have held tight…..or just the market corrects on its own. With 10 year at 3.5 the current 30 year fixed should theoretically be low 5s.

Twitter summed up

Yea I dont know how well you know the NJ suburbs of NYC, but my sister in law is looking for a starter. 28, nurse with good w2, wants to be around $400-500k. Willing to be travel a bit too for a good place. Just nothing. From Dumont to Parsippany, Verona, Midland Park, Scotch Plains, etc. Same shit. No inventory. On why are you looking in that area.."Im not, im just looking at a price range and theres not much showing up anywhere so I am willing to go where theres houses". And still, when you find them, theres dozens of bids right off the bat, ask or better. Seems $400k is the new $250k, which is crazy considering theyre also many cases 1920-1950s built homes and often 2/2 or 3/2 at best. Brother is in Philly, same thing in a decent area. Same in most of FL where I look. Meanwhile....on the airwaves... "housing is frozen/crashing"....

Anything on financial news shows/sites, the majority of the "big follows" on Twitter. There arent many who are saying what this guy is, which is weird, because what this guy is saying is the truth.

Yup. I already had great disdain for Twitter and the financial press. Last year Ive just begun completely tuning it out. Theyre self serving shitbags and by and large total liars who are pushing something. Youd think MF units were distressed and trading a 6-7 caps for class A or that no residential SFH are moving listening to most of these assholes. And that couldn't be further from the truth. You still cant buy a desirable MF complex without paying the numbers you mentioned, and while Ive stopped looking at acquisitions locally, recently was shocked to hear several friends and family members in the market for a home, detail to me what the NYC suburb area market looks like. Same in Philly. Its bonkers.

I know we talked a bit back, and I actually like some of the names you mentioned quite a lot given my real estate and housing skew….but…. doesn’t this sort of kinda teeter along the edge of buying economically sensitive cyclicals? Which is then making a bit of a timing call. If rates go 10% I think washer dryer sales plummet. Am I missing something? I got intrigued enough with your obsession probably two years ago, that I looked through some stuff that met the thresholds, but they largely fit that above criteria or had tons of debt. I did find quite a lot of value if I lowered the 10% FCF figure moderately though.

Exactly. And this can be emulated through public markets if you can import the owner/operator mentality and select companies and managements who share your values.

This sounds like the kind of thing people wait around years or decades for and during which, rack up really sub par returns. If it comes, great, but baselining something like this is a sure fire way to not make money. Flip side is if it does, you don’t need much spare change to make life changing long term investments.

When you think about it, I honestly think this is the difference between the big fish and the little ones. The big ones are busy running businesses or making real world decisions. Gates, Buffett, Musk, Bezos….all the way down to the dealrakers next door, you think they’re doing that nonsense above hoping to scalp 10%? At some point, to get big, your money has to start working for you, rather than you working for you money. And that doesn’t happen when you can’t even decide or commit to where you want to put it, with weekly or monthly fluctuations being difference makers lol.

When you look at people who have really made it, the bulk of the self made did it through ownership of a business or assets. With stocks, both the rich man and the poor man can do this as long as you stick with it, and pick quality. I had several investors back in the day who bought Accenture stock at IPO. Did nothing with it. It was just obvious Accenture was a special business and one you wanted to hold at 10x or 30x. I tend to agree with @dealraker in that you can kinda tell the good from the bad, on average. Is a business or stock popular? Is it near an arms length guess of peak earnings, is it super cyclical or stable, etc. But just like in the thread about the bottom, the impulse is often to overstate the risks. By and large, stocks are the riskiest and most of the reasons arent inherent to stocks. Theyre because of people. AJG is such a good case study of this, and was probably obvious to ole dealraker much more so than he cares to admit LOL. Off the radar, great high margin biz, long runway, few real competitors, etc. None of those items would have told you the stock performance but they all tell you the quality of what you're buying and if the excuse then jumps to "well gee, I dont like paying 15x and 20 is certainly too rich"....well, dont buy stocks. But you have to be in it to win it as they say. Ive yet to meet an 8 figure person who got rich by prop trading small fluctuations with his own money. Ive met several who got there using OPM and many more who owned businesses that catered to people prop trading their own money.