Gregmal

https://therealdeal.com/2022/12/23/wall-street-has-110b-for-homebuying-spree/ Ain’t it funny how amongst all the noise and commotion, homebuilders stealthily cranked out some pretty solid returns in H2 of 2022? As part of my multi year housing super cycle thesis I often wondered how we got to that next level. You always need skeptics and ideally short sellers too. Especially after last year. Last year was just too easy. Nothing does a straight line…. Well, we found our patsies this year. Welcome aboard skeptics. Glad you’ve chose to take the other side here. Especially when there was just oh so much other easy low hanging fruit to short. Better hope there’s KY in your stockings this year.

Same place where we got our intel that the evil Qatars killed that journalist cuz he wore a gay pride shirt.

Wasn't twitter going to shut down a few weeks ago or were we lied to again?

Already a full and happy position for me but added another 10% to MSGS. In light of the Suns the current price is just stupid.

The idea that wage increases are bad is farcical and derived by the elitists who control resources. Look at how long it took to get ANY real wage growth coming out of GFC. It keeps people subservient and reliant on the system. Companies like Costco and Publix are exceptions but generally speaking corporations treat people like shit and pay them the absolute bare bone minimums. And now they’re being forced to cough up more cash and the establishment comes rushing in to bail them out again. Go figure.

I’d also ask the question, if “wages are laggards”…why are we doing the COVID thing again? The selective inclusion of this but not that? What I mean is, these guys wanna raise rates endlessly just claiming wage price spiral, despite zero current or real evidence, simply in theory. They’re giving a lot of credit for things like “it’s a laggard, so we KNOW it’s coming down the line”…meanwhile, equally obvious and significantly more “knowable” laggards, such as housing and rental data, REAL and significant contributors to actual inflation….these same people want to ignore and play the “wait and see” game. Why not just be consistent?

Yup, and this is what’s scary. Just like with COVID, many people just have these “things” in their head. They are targeting and fighting these “things”, when these “things” have pretty much nothing to do with this problem and when they’re told that, they fall back on academic crap that can’t be proven or ideas that are theoretical and just keep making these unsubstantiated claims in perpetuity.

You can buy brk or and index that’s not heavy into dogshit on margin or with some sort of leverage and then hedge it out. November 2020 I posted a theoretical suggestion 80% long BRK, 30% long MSFT, 10% short ZM. Shit like that. Or you can simply find a handful of things in the personal wheelhouse and really concentrate. Using leverage is a personal decision but I know plenty of people who knew nothing well but one or two things and really turned that expertise into crazy money.

Peak Berkowitz was a modern day value investing God. Another guy I admired but was also quite a sobering case study was David Winters. Classic value guy who got eaten alive by not adapting.

Finance people on Twitter all pretty much fall into one category. People who a) try to use the platform to pump their stocks or push their investment/career agendas b) generate likes, retweets, followers and whatever to give themselves ego boosting self congratulatory pat on the backs through manufacturing as many retweetable “I called it”s as possible, which also works to enhance a) From the smallest blokes with anonymous accounts to the William Ackmans…they all fit the same box. Cathy ain’t special in that regard, she’s just obnoxiously obvious.

There’s probably only a handful of macro guys at the institutional level who are any good at it consistently. And the dirty secret amongst all of them is that they use leverage so as to be almost always invested. When retail investors try it they almost always end up chasing their tails and holding way too much cash for extended periods of time while losing money on their short bets. This conundrum is all easy to solve. Either use leverage(responsibly) or simply focus on fundamental businesses and assets you understand. Then you can think like a big boy; an owner; versus just some punter who’s petrified of losing 20-30% on a drawdown. That’s been a big theme this year. Punters panic and the big boys pounce.

In a way it all fits in with this whole “going to where the puck is”. Folks who watched the market saw the top happened and the individual types of stocks took their own time to pass through the meat grinder in ways not uncommon previously. Confidence termites we discussed in summer 2021. The folks who waited and “needed” to see the SPY or whatever reach a definitive top? Lol didn’t fare well and were behind the 8 ball. Same right now. The FANGs? Who cares? They’re last decades leadership group. Going lower. But I don’t think it’s a stretch to say that more companies than not probably touched their bottoms already. These 2-3% weekly up or down moves don’t really change that. It’s more about sentiment and time passing and risks getting crossed off. Look at a lot of REITs. Same shit. They’re not zeros which was a huge screaming point for a rather large market segment. But not relying on SPY is harder than relying on it. And as such this “bottom” search will continue until we re like 20-30% off and indisputably already well on our way into a new territory.

A lot of “the bottom” I suppose depends on what people define as “the market”. There seems to be this wild obsession with S&P levels but that’s not really the most intelligent market marker IMO, for a number of reasons but largely the large cap tech concentration. There’s still plenty of evidence that many smaller tech names bottomed in June. Let’s call em SoftBank/Tiger companies. Some haven’t but a lot hit and moved well off those levels. Since we have seen lots of other, recent example the homebuilders. Even Goldman and Fairfax or Berkshire type companies, hard to see those levels again. What’s left? Those FANG stocks everyone’s still raging about. In a way it’s almost an exact domino of the “market top” and how it unfolded. I recall last November people wanting to argue that the market hadn’t seen it’s top because SPY was still elevated. But in hind-site the clear “market” top was around February 2021.

LOL @dealrakerhits on this sometimes which makes me laugh. But it’s true. Probably the 3 most influential investors in term of style, positioning and risk management in my book are Tepper, Ackman, and Berkowitz. Big fans though the later two certainly have some glaring flaws. But starting out when I did, I found it odd how Bruce had this aura about him. The ponytail, Gucci loafers, glasses that seemed to be for show, half buttoned shirt, etc. After a while he too became mockworthy. I was invested in what seemed to be a much better and high quality version of JOE at the time. And whenever something bad would happen, the joke was, hey, it could be worse, you could be St Joe. All while marveling at what kind of conviction Bruce and Eddy must have to be down 75% on the SHLD investment and bleeding billions while cool as a cucumber doing round tables and with a straight face talking about how Sears was worth 10x their cost LOL. There’s a lot to learn for sure. Over the years I have come to appreciate all the different angles to the game. I’ve also kind of just lost it in terms of having an appetite for the guys who just suck and make excuses and then just sit around cheering or rooting for the failures of others cuz they have nothing better to do and it helps their egos.

Are they going to abandon their efforts to “flatten the curve”? Remember when we believed that shit? Lol

I wouldn’t be shocked if she’s still got a better 5-10 year record than guys like Einhorn and Paulson. Many of the weasel funds are basically designed to just not do anything remarkable one way or another. Almost none of them do what they advertise. The majority of the fund business is filled with conmen(and women).

https://finance.yahoo.com/news/david-einhorns-kid-dad-why-160601338.html

Still doesn’t outdo Napoleon Einhorn. I forget what year it was, but the guy managed to be short 2-3 of the top 10 performing long stocks while simultaneously long 2-3 of the top 10 worst performers in the S&P.

Yea @dealrakerhas been such a refreshing voice to hear….the wisdom seems to have more substance and duration than the screaming about (insert crisis) and what’s this or that guy/thing/fund saying/doing/eating for lunch nonsense. Not only is it practical but it can be verified. Versus all the noise makers who lack transparency, always claim to have bought just before the move went green and sold just before it went red despite never mentioning it, and oh yea, always doing 20% a year…leave that shit for the seminars and newsletter crowd. It’s great having investor perspective that varies. Key word is, investor.

Started some vampire squid.

Lennar expecting rate of build to drop from 1.5m annualized to 1m. There goes the overbuilding leg of the GFC 2.0 housing crash short thesis.

This is where we go back to "because we need to save the expiring puts most vulnerable"! If we look at why the inflation hoax story is so potent, its because its snared like 85% of people. In it, we have... -the interest seeking cheapskates....this year we've trained them that after being starved for a decade, now all they have to do is scream inflation for better rates -the Biden and Democrats suck and are causing inflation Republicans, they were right last year and can't pivot this year because emotionally theyre blinded -the most resilient cult ever, the 2014 money printing bubble crowd....they just won't let go -the boat of folks who said "transitory" in 2021 and now feel stupid and have to say its here forever, again being the tail chasing bellwether. Most of these people could still probably also get fooled by another covid variant story. -finance folks shorting the market -academics who only see textbooks and theory is reality Its been great to watch. But its over. Next up is recession fear mongering.

Dude the amount of people who fell for this is hilarious, and also, the amount of people who fell for this is way smaller than one would think. Half the folks pushing this hoax were finance people with bets on higher rates and recessions. It was a clear covid related digestion issue. Once the turd passed through the intestinal tract, it was over. Just a matter of time.

That’s 100% it. It wasnt the inflation hoax…but the accompanying rate floor going forward which changes a lot of the strategy viability going forward. The decade of carrying Googles, Mastercard/Visa and Costcos on margin cuz 1-2% carry cost is basically free is done. That’ll take a while to unwind. But there’s plenty of other stuff to buy anyway so who cares.

Sticky icky, icky.