Gregmal

I dont think thats whats going on though. Whats being highlighted is simply to combat the widespread and rampant "this is what Buffett is saying or doing" stuff thats often thrown out as an excuse for taking a position. First rule of investing isnt as Buffett says "dont lose money", its "think for yourself".

Things were so extreme and emotional in Spring 2020 that there was only one direction we could have gone, and that was up. It was so screamingly obvious then, almost as much as it is in hindsight. I know plenty of people even on this board who murdered it. Was one of those generational setups.

I think CPI reporting is total bullshit and not at all reflective of inflation, but its fairly consistent in terms of what youre gonna get from the gov.

It’s hilarious reading this in the context of how he just blatantly ignores that the current administration has been cooking the books with the jobs numbers….TDS alive and well.

Well, it’s also fair to point out, in light of the ease with which we appeal to authority regarding Buffett, that much like when “Buffett was really bearish” around May 2020….he also sold much of his AAPL….like 20-30% below todays prices. Clearly not a great move if we judge it marked to market.

Theoretically you should. I don’t go to many weddings and the ones I do it’s close friends and family so the check we drop is way more than Id recommend for some bs acquaintance type event.

I think it’s a bit of both and the delivery is important. Charging people to attend is bush league. But there’s an implicit understanding that if you attend you at least pay for your plate. Today’s day and age it’s basically $250 a person. That’s not just your meal being paid for; you’re in effect paying for your share of the celebratory event for the couple getting married. That’s a gift. If it’s close family you obviously do more. The shit I don’t like is the no kids notices. If you’re inviting me, you know I have kids, either invite us all, or don’t. If I don’t want to bring my kids, that’s my choice, not yours.

I would take as much time as possible with the warning that the first little bit is a total nightmare.

Haha deep down I feel like you really know how to party. We re trying to do 4 nights in Montreal. Wanna see a Habs game. Wanna do some fishing. Wanna do some Ville-Marie things. I’ll probably fund most of it. Just asking these kids to take off a Thursday/Friday but they’re the late 20s top 5%ers who are glued to their careers and afraid to say I’m out for a few days. Doctor, Dentist, and a couple biomedical wizards. I’ll easily be the dumbest one there.

Yea I’m planning a bachelor party for my little bro and already running into “can’t get off work” for a few days from multiple people…can’t imagine living under those conditions.

Deo I’ve owned for a bit already and both TAP and STZ just seem like low hurdles that are better than bonds. MGPI has been a no brainer short since $110 but now seems fairly attractive given the portfolio, inventory, and credibility in the bourbon space. It’s got hair, but can easily see one of these undisciplined large caps throwing a couple billion at it.

Ex LMWS cuz that’s kinda a different animal; short term putting the 3 sub communities together it’s Ward Creek. Ward Creek is probably something a builder would pay $90m or so for today given its very clearly defined and has about 1200 remaining homes to be sold. There’s two types of communities JOE runs and it’s finite stuff like Ward or Park Place and then in perpetuity stuff like LMWS, Origins, Windmark, etc where they basically can build forever around them. Those you have to use the same approach as you would to valuing Ward Creek as a starting point, and then extrapolate quite a bit. My opinion is that the most valuable MPC has yet to even be built and that’s Lake Powell.

Generally, yea. They’re done and paid for, it’s cash in the bank.

A typical MPC would simply be its total entitled roofs at a blended through the phases profit per roof plus any commercial minus development cost spread across the time it takes to complete the project. With JOE, again it varies. CC you know is done. Take the remaining lots, ASP, tax rate. That’s your cash. At Windmark? You have to look at what’s listed on the table which is easy. And then make assumptions about what if anything they can do beyond that. I’ve just assigned value to the nearer term stuff listed on the table. I don’t need to know the totality of it or of Origins because I’m not paying for it here.

Like this is legitimately part of the “it’ll never get a real mark” thesis that to date has really been the only thing I can’t totally dispel. Bruce will stop eventually but, at the end of the day, even when it’s super easy and laid it there’s a complete refusal to do anything but use kinda half assed slapstick framework. Because the nature of selling lots is that they’re contracted well in advance. They take time to deliver. Pricing lags. Getting a full steam ahead market tomorrow has almost zero bearing on what you deliver NTM. Camp Creek lots where probably the only reflection of that, and those pricing were at 1/2 to 1/3 of what they are 2-3 years later. None of this has to do with a peak margin.

I’m saying you have great clarity into the future cash flows by looking at each specific community and then valuing it. If you get to $500m or $2b or $4b you then have to bridge the rest of the assets and commercial development plus non sector land with that number minus $1.5b/2b/whatever you or I or Kuppy wants to use for the defined CRE. The point is you don’t need to be exact cuz it’s like a half foot hurdle.

Yea see above. And otherwise, yea I guess talking past. Theres just so much not even in the ballpark and nitpicking it seems destined for fruitlessness. “A blowout re market” margin is reflected in 2021s financials where you had contracted lots from 2017-2019 delivered and a period from 2020 where nothing got done? For real? Not to mention margin is important but so is volume and there’s times when both work and there’s times when one does but the other isn’t. It’s always the same. Forecast based on past numbers, ignore substantial majority of assets, then be overly punitive x2 on existing, then say “it’s too hard” lol.

lol true that. I wear sweatpants 75% of the year and all I want is to upgrade that to board shorts. Drink Natty and Bud light. Seek to play 10-15 hours of Nintendo a week with the kids which will soon be replaced by golf and tennis. Who needs more?

But it s totally relevant in the opposite direction. Example College Station in 2019 did not exist 2020- started selling lots to builders at $50k per. Phase 1 costs plus standard lot development came to about $25k per lot. Throw in a tax rate. Very possible in 2020 and 2021 they were reporting an $18k-$20k per lot profit to shareholders. The last year they had inventory sold was 2022. Lot pricing about $63k per. Based largely on 2019-2021 prices. Developing in 2021-22 also involved massive covid based inflation spend. At $63k your startup costs are past you, but you’re probably still around $30k per lot. 25% tax rate. Profit to shareholders somewhere around $24k-25k. Yet to be reported but showing up soon the newly reset lot prices at CS are $95k per, based on 2023 home prices, with no covid inflation costs and standard lot development for latter phases in that type of area…$20-25k we can call it. 2019 “simple financial statement” showing- nil, the community didn’t exist 2020- $18-20k profit per lot, 38% margin 2022- $24-25k profit per lot, 40% margin 2025-$51-55k profit per lot, 55% margin Now, these numbers are lower than average and fit into you’re assumptions, but where it’s wrong is that this is exactly the type of lower end, low profit, margin consuming MPC that has been bringing down JOEs margins. Camp Creek you’re selling $1m lots that cost $80k to develop. Stuff further inland costs $25-35k a lot. Some of the smaller communities they sell the land raw. With home prices where they are now the floor on per lot profit and margins is in and only inflecting higher. On the $2.2-2.5b pipeline estimate, as was described in the thread, column one is basically inventory; cash pricing is for much of it locked, just need to slap a tax rate on it. Column two is profit per lot, pricing marked to market, and column 3 is eventually the same as 2. Excluded in this was LMWS which is also another fairly easy valuation exercise. Which leaves little left other than the standard discount rate argument but go ask Sahm his discount rate for Camp Creek or how $30m made sense for all of Origins….when we get an answer or a person who’s demonstrated the ability to appropriately apply a discount rate that’s fine, but the margin of safety there is simply as existing continues to build out the growth easily exceeds the discount rates assumed. So if you’re at an $80k per lot profit on column 2, we don’t need to apply capex and taxes to it because it’s net, and we also need to factor in that in 2026 it’s like $90k, and in 2027 in $100k. Which is still low considering the average home in Bay County is older, shittier, and low-mid $400s on average, meaning we should already be considering using higher figures than we are.

Using 3/5 year intervals here shows this is completely false. Then you realize that those specific 3/5 year numbers represent backdated contractual figures, and it’s even more clear. We went over this with lot pricing; how date x likely represents contracts negotiated x-2/3 years ago pricing, hotels…capex today equals margin tomorrow, clubs; revenue go forward is higher than last and margin accelerates with scale, with LMWS; startup costs +22/3 Covid inflation leaves the equation and MPC ramps, leasing; relationship between capex and margin. If 3-5 years ago Bay County lot pricing averages(or just say whatever the “simple financial statement said”) were $55k per, and largely influenced by Breakfast Point sales(ie way smaller active selling community count), contracted based on 2018-2021 homes prices($280-400k a home), I don’t know how we can extrapolate ANYTHING useful about 2025-2028/9 lot sales in Bay County from that. Even using 2022-24 is giving us a lag not indicative of current prices. We can though, very easily determine what communities are now selling, their price points, the builder takedown schedules, and easiest of all, the cost to develop a lot and the tax rate. We ve done this with pretty much every facet of JOEs business over the years and the backwards stuff has literally never been in the ballpark but at the end of the day, it’s even easier to summarize. If you’re buying a growth company, the future numbers will not resemble the past ones.

This isn’t what’s being done though. What you CANT do, is We ve been over this like a million times and every single time the Has offered zero or negative value to projecting the forward based stuff. Whether it lot prices, club or hotel revenue, margins, leasing, LMWS(remember not long ago the “LMWS doesn’t make any money” stuff), etc, this has just never been a way of going about it that’s produced any forward guidance of accuracy. You actually need to know where and what’s being sold, and how it breaks down. There is NO other way of doing that than knowing the MPC level pricing, margins, and most importantly, volume. So again I would just say, if $500m or getting to $40/50/60 a share without valuing 85-90% of that assets makes it unattractive, to each their own. Even just focusing on CRE, it’s gonna grow 15% annually for the foreseeable future. So trying to exact a penny out of a Is pretty irrelevant. Why? That simplistic spreadsheet tells you not what any specific lot or land sold for, but a blended average from years ago, that isn’t indicative of today or tomorrow.

You could do that too but I’d probably be inclined to take a shot on MGPI if we re playing bourbon which is big for BF

DEO, STZ, TAP. MGPI finally off the short list and maybe looking interesting as a long.

You have to treat each column differently because there’s various stages of development and cost, as well as escalators the deeper into specific phases you get. IE best recent example see College Station. Column one is clearer and nearer then two obviously and two nearer than three. There’s also variables such as assumption to whether you assign LMWS West Bay or just keep that separate. Or how soon and how many custom lots you get around Lake Powell. (An new Club amenity that will replicate Camp Creek which is currently part of the free bucket). Larger point again being, you don’t have to do very much to cover the current value you’re seeing quoted. The other cool thing is that you’re in Florida, there is a state entity willing to pay you to eat conservation land. So while you’re probably only looking at 90,000-110,000 actual development acres, you can still value the rest as something.

The land is a good bit easier in certain terms than people ever know because laziness takes over before any work really begins, more often than not. But you can clearly value a good chunk of it, as I suggested in the thread, based on already contracted and defined community pricing. Just the current pipeline is about $2.2-2.5b which covers about 12% of the Sector plan, and is only talking residential. So if you wanna be scrupulous we have $63 a share in easily defined value along with 88% of the BW Sector Plan and then another 60,000 non Plan acres thrown in for free. I get why people hate on him, after the years he’s had especially, but no one’s forced to pay attention to him either.