Gregmal

Outside the box thought. NYC specifically has a pretty big labor shortage problem and a pretty big homeless problem….hmmmm. I don’t think you need a Ron De Santis to solve this.

It all depends on case by case but the larger question is how unique are the assets, how severe the downturn, and whether you like the way the company is managed. JOE was at $22 pre COVID and if you don’t think 170k acres and some trophy resorts has seen some value increase in an area where home values have increased 2-4x then just move on lol. Fundamentals are great and just cuz folks who would have rather owned HHC 100% higher than JOE 50% lower still feel the same way doesn’t mean anything more than that….i kid, I kid, I know! AIV a monkey can look at, see Jon Litt…and get to 12/13 minimum. The assets are greatly spread location wise and you have hard catalysts. A sale probably occurs and if not you still just own great assets at a discount to a fast growing NAV. Housing is fundamental to everything and so systematically important it’s probably one of the least risky places to be IMO, especially longer term, especially in light of the overall shortage, and especially in good areas. So just do what you are comfortable with and try to carve out the noise and focus on what’s really important.

All you need to do to see how this plays out without some sort of academically inspired interference is look at tech and see what happened to all those companies that 12-18 months ago totally misread the COVID inspired demand surge and hired way too many people only to start laying them off a mere 3-6 months later. Before rate hikes and all. Peloton and Zoom certainly didn’t need the Feds help with anything. Supply and demand usually work on their own if given appropriate time.

This again though is where it’s like ok wait a minute, can we apply some common sense here….look at that time line…is it really shocking that in city like NY, which only went full open around…March or so, that demand is off the charts for restaurant and entertainment? This is unhealthy and needs to be stopped? I mean I’m sure you recall that even as recently as December and January the city was forcing closures and carding 5 year olds. Now these businesses get to have their day and the academics say it must be stopped? Look at the reporting segments at MSGE or if you know anyone in the restaurant space ask them…and tell me the labor shortage is really hurting business. These business are finally open and able to literally charge whatever they want for the time being, after enduring absolutely ridiculous circumstances, and folks want to take that away too? Again, some of this shit is just beyond comprehension.

Bad news for everything but AIV. Since obviously stocks are down on the year and short term stock market prices apparently equal the fundamentals. Only AIV is doing well by that metric. Thankfully you and I know how to pick ‘em @Ulti

This was last trip with Paul.

Few cod and a blue shark on a day trip with Dave. Which are awesome eating(the cod). Always wanted to try Thresher. Fun fact is Paul Hebert who is a fishing genius got into trouble claiming disability while the fucker was fishing on the show. Gives perspective to how fortunate people like us are while guys like that deal with real shit just hoping to make a few hundred bucks. My main guys I fish with are in the Keys are never on shows like that; Paul Ross on Relentless is a fishing god as is Nick Stanzyck. But TJ and Tyler from Tuna most of their money not related to the show is out of Florida.

Maybe it’s Toll or Lennar short term, but long term those getting fucked and going out of business are the ones like my buddy who’s a three man construction shop seeing demand in his are go to zero because his market is folks who think the system is about to shut down

Those are indeed mediocre; they can’t really compete with big established ones, and most were either destroyed or put on life support with COVID. I’ve mentioned before all the great little toy stores my kids loved pre COVID. They were on life support before, obliterated during, many left, and what’s left is hanging on by a prayer and currently getting hammered by their higher end customer pulling back because of fears of the “great reset”. Perception after a while matters. Especially with such a narrative consuming MSM. If you don’t think do, see how many financial firms were harmed during GFC on little more than rumor.

What’s cool if you’re really into it and live somewhere around the northeast is you can book those guys for fishing trips at not much more than you’d pay for a regular trip anywhere else. Dave Marciano and Paul Hebert are awesome dudes.

^^ Yup. People forget that this was the first summer much of the country was fully free and open again. Theres an immediate rush. You'll pretty much pay any price to go do those experience/lifestyle things again that were taken away from you, and then you get over it and revert to how you lived pre covid. Especially when prices in the long run are exaggerated to the upside. This is like capitalism and economics 101. I would have paid $1000 to go to a baseball game in 2020. When I was able to again, I did. Then it was out of my system and I haven't been back even for $250. Im at Crystal Springs this weekend with the family for Oktoberfest. No joke crowds are like triple what they were when they had it last year as a scaled down half assed event. Probably a little bigger than 2019. Its again, normal and expected human behavior to want to play rather than work after the past 2 years. But eventually they'll need to pay for it consistently, or stop. The free money stopped last year. Probably by Spring '23 things across the country look like 2019, IMO.

Wicked Tuna is neat too. Many of the same characteristics. A bunch of rich kids but also some of the old timers. Spend a week at sea, hope for no mechanical issues and reasonable weather, spend 5 hours fighting a 200-500 lb bluefin, come back and hope for $5k gross before crew splits and fuel/bait costs.

I mean we don’t recall when March/April 2020 rolled around and folks were flabbergasted there was soup can and toilet paper shortages? Prices went through the roof. Where were the academic studies calling for rate hikes because of insidious inflation? Were we still waiting on Fred Mishkin and the like to ink their consulting contracts before taking our short positions? Or maybe we just realized it was a product of the time and would pass in time….

If one modest and run of the mill business input makes the entire thing unviable, that sounds like a bad business to begin with. Does it matter if it is wages, or freight costs or taxes that went up to erode that margin? What does a bad or unenviable business have to do with inflation? I mean stepping back it’s highly simple and logical. You lock people in their homes and…there’s gonna be a huge short term boost for goods. Let them out….huge short term boost in demand for services. The former fell off a cliff already like 3-6 months ago when even NY/CA said go be free, and now we re hung up on the later, but it’s because of…..the whole 2014 money printing inflation thesis?

Inflation should not really exist for extended periods of time in developed first world countries where there is a capitalist economy. Everyone keeps blindly quoting the 70s bc it’s the only thing they know where inflation existed but there is virtually nothing in common with the two periods. Japan is proof of this as is the decade prior to COVID here, something that always seems to stump and bewilder the inflation crowd. Governments created the current problem with their COVID response and only time will fix it. Claiming there is a problem when people get raises or have better job opportunities available is basically advocating for communism. You are what you are and don’t deserve to ever get beyond that place. If too many people do, we need to stop it! WTF? It’s an elitist ruling class perspective.

Billy Ackman is always a good barometer. In Spring he was saying the market was tanking because the Fed was refusing to raise rates. Now he’s saying the market needs them to stop to go up! Obviously his agenda is shifting. So are his core inflation predictions which not surprisingly have now come way down.

Of course, everyone does. But some of them actually have it right. Relying on old data and determining that jobs are bad and the answer is to destroy everything just isn’t very logical. If 4% FF rate is the end game that’s no biggie. If they buy into much of this academic nonsense and decide to go higher it’s obviously going to be problematic. You saw the same sort of nonsense which actually exacerbated the GFC in the sense that the academics, who were paid by the hedge funds and banks, pushed theories to the Fed and legislators, aka derivative deregulation stabilized the economy, things that were preposterous, while simultaneously taking positions betting against that…only to flip the narrative once convenient and in a position to profit off screaming fire…same exact shit happening now. No one is playing the inflation trade anymore, it’s all economic collapse. And they’re betting on it by hoping the chumps at the Fed follow the academics. I mean people were screaming this week for an emergency Fed meeting and a 100-200 point hike bc of ONE cpi release LOL. End or the day I don’t think the Fed is that stupid. The fact that they have to continue to take action while seeing the potential damage they may do inclines me to believe there would be a point where they see how dumb and counterproductive it all is.

This is a replay of COVID where everyone sits around hanging in the balance for every little data release and then makes bombastic extrapolations in perpetuity based off it. This weeks CPI just being the latest example. The overall trend will be lower, much lower, but if you expect it to happen overnight, there’s just nothing that’s gonna make that happen because of the way all this stuff ebs and flows.

The notion that higher wages = inflation is academic and unsubstantiated. It’s also a fallacy that companies need to raise prices or go out of business. Homebuilders for instance represent the holes in this argument well. If all the commodity inputs revert back to normal pricing ranges, the margins expand on existing contracted sales. Going forward, new ones are negotiated based on prevailing rates and inventories. If there’s real, widespread inflation like there was all of last year, that’s problematic without saying. But scenarios where all the inputs go down and labor goes up, is hardly a big deal. Bigger than all of this, is the ramifications that may occur if for instance folks that don’t understand how much of this is just related to supply chains and will resolve on its own over the next few months, and subscribe to the idea that job strength alone = inflation, take actions that permanently impair demand. It’s like the whole idea that someone should lose 100% of their purchasing power due to layoffs rather than 1-2% because of inflation. It’s all twilight zone shit.

Well I also think we ve mentioned before that when you are basing your idea of TODAYS inflation on what happened months or a year ago, you’re constantly going to be behind the 8 ball and out of touch with reality. Sternlicht had a decent take earlier this week on that. Ask Scots Miracle if the wage price spiral is moving fertilizer. Too much bs academic input here.

I don’t really worry about fundamentally sound core positions with respect to upturns or downturns. Cycles are part of investing. You’ll never make real money worrying about mark to market fluctuation. I can give you like a dozen examples here just in the past 12 months. JOE for instance I stayed disciplined on with regard to purchase. The volatility makes sense with respect to the overall nature of the company and its trading. It’s volatile and surface wise a great target for speculators who still live in 2007 and ignore anything but certain academically taught notions of PE multiples and cycle monitoring. Nice Rolex, is it for sale? No? Must be worthless then! I’m still in the accumulation phase and happy to go way bigger at lower prices. Much of my thoughts are detailed throughout the thread going back several years now. Folks right now are mistaking widespread stock market price action with fundamental victories just look at how some Homebuilders or stuff like HHC have done…garbage; a classic and common mistake of novice investors. See AIV. As recently as this week I’ve been on the ground getting info and macro wise the Fed isn’t solving the housing issue by making it more unaffordable; they’re making it worse. MSG stuff too. I don’t own much that isn’t in the unbreakable camp. For broader market, I’ve just been rotating October and November IWM puts. You want to be vigilant and when the system is manipulated the way it is, take those dollars when you can get them. Right now everyone is looking backwards for inflation because it’s en vogue. Everything seems to be deflating and sorry but a strong jobs market isn’t bad. At some point we turn and then it’s off to the races.

Gas prices have come down to pre Russia levels. Off 30% from June. Rents as mentioned a couple months ago are hitting the August comp and moderating. Most groceries too are in that category as the transport and production costs come down. The average family will still focus on what is in the news the same way they do with everything. COVID a good example. Forward looking with the market though, it’s hard seeing much evidence in anything but rates that there is much prep or positioning for higher inflation. Inventories everywhere are bloated. That said I don’t really see a whole lot of truly actionable events other than big time positioning for a big economic downturn. Which IMO now really does come down to how much the more “demand destruction” needs to be seen. Gundlach had good commentary on a deflationary setup. FedEx was also very enlightening. At the moment I lean towards the current situation setting up a regular old run of the mill recession. One with a strong jobs market isn’t anything that is gonna be too painful, but at the same time, the academics and the economists and policymakers should play a decent role in shaping what the course of action is. The troubling trend of changing the definition of inflation and attacking any economic strength is certainly troubling, but at some point it should become clear that the trade offs aren’t worth it. I posted in another thread watching Inside Job again recently and it’s just so devious how interrelated the academics, hedge funds, and policy makers are. Larry Summers has been mentioned in some of these threads. Talk about a totally corrupted scumbag! So the situation is ever evolving but if the Fed wants moderating data they’re certainly going to see it. My take of the Fed is they’re well meaning but way too academic and often a few steps behind the ball. So in some respects, as Kuppy has mentioned, it’s about timing the pivot. I wouldn’t be shocked at 50 points next week, but 75 is fine too. What they do from there is probably the main thing of importance. They’ve already successfully created a lot of problems that didn’t exist a few months ago.

Rewatched Inside Job recently. First, reinforced how todays risks are absolutely nothing like what occurred back then. Second, noticed how the financial firms and hedge fund guys, very similar to today, did their best to manipulate the narrative until positioned to benefit from the situation. Third, how utterly clueless the Fed was, much like today. Interesting but different times for sure.

Yup. Across the board it seems. What happens with easily producible commodity products….well you get as much of them as you want. It seems to be getting clearer that no one really believes the inflation story, except maybe the Fed….look at price action in everything inflation protected/related…especially gold, instead it’s the R word.

I’ve seen a lot of different variations of the OPM stuff and there’s just always headaches. If you are too prudent or cautious, folks get tired of not seeing things go anywhere. Some even wonder why you didn’t buy those tech stocks that do nothing but go up. If you’re too aggressive it is great but then how come we pulled back more than the market? If you balance things it is generally like why don’t we own more of what is doing well? I had a friend who last November lost one of his largest HNW clients despite returning over 50% ytd because the guy said he could make more trading options on his own. So you see a lot and to pupils point, the only way that works is on your own terms and with a hardline on that. But with all of this, you certainly learn to understand and respect the psychological element that is in the market. When you see dozens of investors and hear their thoughts throughout the cycle you learn a ton about what moves markets.