Gregmal

I don’t think capital allocation or the opportunity set really have anything to do with inflation. Going back as long as I remember, people and market participants are always screaming about something. A good investment should always be obvious. Separately, folks should or would be wise to operate like companies. Always trying to carry some debt. Operate at a reasonable net debt to EV. Stagger it and roll through the cycles. Maybe take on a little more when the opportunities are greatest but mainly just be consistent.

On a year by year basis I don’t think one has ever passed where there haven’t been glorious opportunities at various points. So it’s like decade schmecade, who cares? The market is what you make of it. It’s only lost if you let it be.

I’ll take your word for it but I’m pretty sure a w8ben form clears the withholding. If I am wrong then I guess it’s a similar jurisdiction to the islands like cayman and Bermuda were there’s no treaty and just straight 30% which sucks. But I’ve had managed accounts in Singapore before and don’t recall this being an issue.

Little more Fairfax

Who cares what Powell has to say? It’s still rather remarkable to me that people sit around and make investment decisions based off of what some guy might say or do. Worst case they read this wrong just like they did last year and raise rates too much and then you get to buy some stocks when the computer boys bid them down cuz they don’t want to hold anything for a few months.

Idk man. There are few things in life worse than messing up a boat launch. Hard pass for me.

Its of tremendous value being a blue collar-lite type where you can launch/trailer your own boat and do basic engine maintenance. If you can, your cost is little more than the boat and basic cost of supplies/fuel. That is not me, so I own the boat and the slip, and just pay for winter storage up north. In the Keys the boat basically just sits in the carport all year.

Perceived liability. I know shops that buy used pontoon boats for $10k and rent them for similar amounts. The spread has come down. But you used to be able to buy and rent a boat and make your money back in 2-3 months.

Nice things arent for everyone and I am not sure when as a society folks decided they were. Housing is totally affordable; housing in happening areas though is getting much more expensive. Other than that its basically what Castanza just mentioned. You wanna work like a dog until you're 60? K. Keep up with the Joneses. You wanna have control of your life by 40/50? Sacrifice a little of that ego and just invest it and you'll get there in no time.

Certain areas will never be first time homebuyer markets. They’re status areas. Those don’t go away.

Tell me about it. I started off in 2010 taking the 11pm train to NYC, walking through drug addicts and hippies during the height of Occupy Wall Street, so I could get to work on the Asia/Europe shift at 2 am. I made dog shit to start. Opportunity is what you make of it. No one wanted to do that shit.

The thing is they whine about rent but don’t mind it at all. My little sister embodies this. I recall staying with her when I was in town for an investment meeting in Orlando in like 2015. She was renting with 3 friends a 4/4 in an Orlando suburb. They had to move because the landlord was selling. I looked it up and they wanted $180k and I asked her why not just buy it? I offered her the money too but she said they preferred the convenience of being able to move as they wished and the flexibility to change scenery often. People like us view it as an inconvenience but they view it as a luxury. I don’t get it. That home today is worth $550k.

I think this generation has become one who’s much poorer but still lives a higher quality life than the predecessor. It seems impossible to have that equation but somehow it’s been rather consistent. Previous generations placed emphasis on ownership, saving, and stability. On average there was probably a lower but more secure lifestyle. Today they live a rent/lease type lifestyle which I don’t understand, but it seems to work for them.

No such thing as lost decades, just lost people. For instance there’s people who did not even make money this past decade.

Watched the SpaceX documentary on Netflix. Man it’s impossible not to marvel at the brilliance of Elon Musk. Yea, I get the one dimensional financial people who create next to nothing for anyone but themselves hate him, but he s doing so much utterly remarkable shit that you can’t help but respect the guy. Especially the scene where he’s running out to see the rocket like an enthused 7 year old on Christmas morning, his passion and personal investment in his ventures is nothing short of remarkable.

FANG stocks, minus META are 100% an exercise in the psychology of crowds. You don’t even need to pay attention to fundamentals at this point. They’re poor risk/reward all around.

Another kind of interesting philosophical quandary…who is the almighty that decides 2% inflation is perfectly cool and kosher but 0 or 4% isn’t? Or that 3% is bad but 2.5% no big deal? Especially when anyone with a pulse gets 3% raises annually and thankfully today, those with some ambition can get way more?

Now even rate rise advocate and fear mongering Bill Ackman is ceding 3.5-4% a year out. So now the ominous stealth tax that must be reigned is in costing those with jobs 50-100 bps of purchasing power per year. Sounds like a reason to wipe out 2 million jobs.

Yea. Gold. The other tell tale sign we’ve got some wild, entrenched inflation on our hands….

Strange. I keep hearing from the inflation crowd that it devalues the currency.

Yea we shall see and it’ll be interesting. Win/win if you own good allocators who have FCF to work with for sure. While never in a million years would I buy a 5 cap Taco Bell, I guess the case to be made is if inflation is real, and even at an obnoxious level for a little bit, say 5%…you get zero net yield but the underlying land and building value should hold well given that’s what inflation actually is. Those sort of inputs going up. And even if it’s 5% for a few years, it won’t be for the duration of the lease. In the meantime, we will continue to watch as things comes down and see if the Fed believes millions need to lose their jobs(IE 100% of their purchasing power) so that those that are working aren’t losing 1-2% of theirs. Which is essentially what the case would be if inflation next year is at 4-5%. I just can’t see how that’s warranted, but I ain’t Bill Ackman or Larry Summers rich.

Yea I think those are good descriptions. You are basically valuing what you can’t value in the entire equation but rather than doing the typical value investor thing and claiming that this figure represents an overvaluation, you are assigning it to “something”.

My friends family owned a big parcel on route 17 in Paramus that they leased for 30 years to Staples. The rent was a joke. And by the of the lease Staples basically had free rent and made 2-3x the lease subbing it out. They covered it all and then some just by leasing 1/4 of the entire thing to Trader Joe’s. You basically have no optionality with retail NNN.

Even outside of this manufactured inflation crisis, since like 2013 I’ve just scratched my head wondering why someone finds a triple net lease at a sub 5 attractive, at all. I’d rather pay a 3.5 cap on multi family knowing the rents roll every 12 months than sit on one of these 4-5 cap retail assets that’s locked at the business owners discretion for basically 25 years.

Outside of the fact I think someone like EQR buys VRE, I think the private market sees the opportunity. Fed sees all inflation indicators are ticking down and in many cases big. Everyone wants a victory. The Fed and most of their liberal participants see the setup. So they see what the market did(IE rally big in July) but also want to hold things in check til more verification occurs. So they talk tough at Jackson Hole, basically saying “please sit tight til more time passes and more data comes out”. Then they pivot and these assets rip.