Gregmal

Sometimes I hedge with index options. Mainly though I just view things on a look through basis. Stuff like FRPH or MSGS or even BRK are pretty easy to model stress related drawdown expectations. So from there I can determine what’s worth borrowing against. Obviously if you say Berkshire doesn’t have 50% downsides from here, you’ll get feedback that “there was this one time”….but I ignore that because in order to get to 50% drawdown it has to get to 10 or 20% drawdown and during that period of time I can adapt and adjust. Or stated another way, if you don’t think Berkshire has 50% downside, and the market wants to challenge you on that, and you didn’t think to have something on somewhere to capitalize on that…then you shouldn’t be using margin. But the example I stated a few years ago still sums it up well, you can be 70% long Berkshire, 50% long MSFT and GOOG, and have 10% long index puts….you’ll be fine.

Can we please find an $SPY 3000 greatest hits compilation from 2022? It was glorious watching then and even more so now. Mind you most of it occurred with $SPY at like 3800 and the greatest straw grabbing reprieve we had was that on October or something we had a brief intraday low at like 3500….yea they’ll all try to scare us with the “fear the pullback” rhetoric, but once you learn to embrace it rather than fear it, you improve greatly as an investor. Don’t let your brain turn to mush fellas. Listening to folks whom sound smart but don’t put up numbers is the easiest way to do that.

MGM and ALCO plus a tracker in PDD

Look, lets face it. We know being a bear is a perpetual thing. But even if it wasnt, and you got all bearish in H2-2021....we re now pushing 4 years with not much to show for it, and probably(as evidenced by all the hedge funds you heard about after 2022 that proceeded to then blow up) have losses to show for it. When you coulda just bought Berkshire or Apple or an index.

Yea if you guys just stick with it, stay open minded, and continue to learn and refine your process you’ll be in great shape. Everyone who is young and smart naturally gravitates towards the bearish macro stuff because it sounds eloquent. But it’s largely toxic if taken too thoroughly. Been there, done that. Now I often get confused for a permabull LOL. But believe me, I’ve paid my fair share in bearish premiums to Mr Market!

Overall it’s a huge waste of energy getting too much into the minutiae with respect to “yearly returns”. Who decides that Dec 31/Jan 1 is such an important date? It’s not and most worthwhile investments take longer to play out. Each persons returns in the overall context are part of a different story, and it might not seem like apples to apples if we don’t know everyone’s exact method of calculations. But the truth is that even if we all used the same metrics they are apples to oranges.

Yup it’s definitely a choice and frankly I still look at the evidence and trading even half assed the returns are north of 50% on those things on average, but at some point you have to live. The incremental returns to me aren’t worth the time I have to put in. And I feel I’ve narrowed the criteria for core long term holdings so much so that trading around the core will be more than adequate. Time will tell whether I’m taking things for granted or not but after putting together a near life changing run over the last half decade, on top of already being in good shape, I just wanna enjoy the things you work to enjoy. The kids, my hobbies and a young good looking wife lol. Doing 15% or 40% isn’t really changing much for me. But everyone’s different. In late 2021 I just decided I wanted to simplify across the board. @dealrakerwas actually hugely inspirational for me. And the most obvious part of that was avoiding having 50 pages of trade logs a year while simultaneously avoiding, as @LearningMachinewould always say, partnering with Uncle Sam in a way that resulted in frequently writing checks.

Didn’t see this originally, but yea, didn’t trade them. MSGS came through. MSGE in fact I added like 30% to an already piggish position last 6-7 weeks or so.

Daughter makes it. Dad wears it. Just the rules.

Indian juice that’s not allowed to be called bourbon or scotch because it didn’t follow the rules!

Looking like low teens not counting private traded stuff and real estate. JOE was a huge dog but otherwise things were decent if not better. Standouts were eBay, the FNMA trades, Fairfax, and Hamilton Thorne. Credit also goes to the margin. Being 130% long helped alleviate concentration that didn’t materialize the way it did last year. Probably my worst year in recent memory but I deserved it as I had the highest quality of life year I’ve lived and did nearly nothing in terms of work on new investments.

Bitcoin for its entire existence has been summed up as believers spreading the word because they’ve made a fortune vs non believers making fun of them for not making the fortune “the right way”.

Eh, I think theres a tendency in the "investor" community to dismiss "trading" because its largely a quantitative skill. I spent a bunch of years earlier in my career doing it. Its not hard, you just need the right mindset and temperament. I dont think 30-50% gross returns are "that" unrealistic, especially if the market is choppy and you have lots of volatility. What anyone who's decent at it eventually runs into though, is that the real problem is the 40%+ haircut you have to take on your winners, and the pain in the ass that is the wash sale rule. After all those adjustments to your "real" returns, you get to the point where adjusting for the time, theres likely more productive ways to make a buck.

@SharperDingaanis definitely the guy who’s brain Id pick on energy investing. Rule of thumb imo has always been pillar 1 of any thesis is how to get all your money out in 3-4 years max. Anecdotally I’m now pushing 20 years in the market and frankly never been impressed with outcomes. T Boone Pickens was considered a legend and every name I followed of his had a magnet to doughnutville. Lee Cooperman always talks energy and gets spanked. Icahn, very little to show. So idk, best outcomes over my time have basically just been the small shop guys who tread water and then once or twice every 5-7 years hit the turn and make a fortune. Few I’m aware of who just have quiet and consistent above average returns.

Haven’t looked at BRY enough to give you an opinion worth a damn. If you think they can produce the FCF they seem to be projecting it’ll surely do well. But yea, oil needs to be managed/scouted, extracted and transported. By itself? Oil is a great asset. But the industry itself is just full of cowboys. You ultimately need them, but then you live and die with them and not many have thru the cycle discipline. Let alone incentives. These guys think that the end result of successful drilling is that you have more money to drill lol. Cycle turns, poof.

Cuz most of them are awful allocators. Drill baby drill ain’t a slogan, it’s a lifestyle. At the large cap there’s too much ahead of shareholders in the food chain, and the small caps are largely just ticking time bombs. If you could find a pure royalty, that could work, and it did for a while with TPL, but then the scammers took that too.

Like I hate energy, period. But nothing in the entire energy space is expensive at all. Even remotely. Got cash? Go sift through energy companies and sort the top 10% in terms of quality, ie balance sheet, management quality, historical cashflow, asset location, etc. Problem solved. Energy just one example, you can do this with many different sectors. Or you can talk about the index and let the influence of like 8 stocks keep you on the sidelines.

Everyone always says this time is different. Go back 4 years. In May 2020, pretty much at the bottom, there was a huge clan of Buffett parrots who used the excuse “Buffett is selling hand over fist and said he isn’t ruling out another Great Depression at the AGM” for missing it all. When there isn’t Buffett to play the appeal to authority card, there’s always the Gundlach, Drunkenmiller, etc crowd to cite. Neither bullish nor bearish I just don’t think folks help themselves at all appealing to authority or playing into their biases. Just put your head down and look for places and ideas that should work. Separately but relatedly, it’s a very obvious giveaway in regards to who is being lazy because the dead giveaway is just pointing to “the index”. Dissect the index or many different areas and sectors, there is a TON that’s not expensive or “in a bubble”….so yes, calling a top based on index levels is the epitome of lazy and uneducated, and should have near zero bearing on one’s ability to find investments. But when one’s wound themselves up thinking the indexes are a bubble that’s about to pop, it’s easy to see why they confuse this with a widespread “don’t go in the water” alert.

Starter in AN

So an investment that is dependent on rates, the economy, regional occurrences, management, or a cycle, is something to write off? Oh and if the stock has gone up too much recently as well, cross it off? I guess in that case all thats left in cash. This is kinda the point. It always happens like this. People have investments and others always have excuses not to invest. You can list your investments and then theyre picked apart for the purpose of invalidating them; but the point being that anyone who puts in the works can easily find investments. Or you can be lazy and just find excuses to hold cash. Im old enough now to remember how hot shit everyone holding cash felt after 2022, only to then whiff and play the same game in 2023 and 24. Same happened because of a month long panic in 2020 and in late 2018. Fact of the matter is volatility is part of life in the market. Deal with it, or dont...

The “smart money” active guys are great at maximizing their earnings. Only a fool believes that these guys actually have “maximize investor returns” as a top priority.

Totally; there’s so many cheap stocks right now I find it hard to fathom how so many people are currently obsessed and brainwashed with thinking they need to be in cash or that there’s some sort of widespread bubble.

Before Elon, it was basically everyone vs Fox News in terms of left vs right in msm. As we saw in 2020, they left and big government were easily able to control news flow to distort the widespread perception. Elon, a formal liberal hero, buys Twitter and then unleashes the internal trove of documents showing the scheme and most importantly blatant and widespread collusion between big tech, big government, and “the news”. That had more impact than anything else. What he does now doesn’t really matter, because the scheme has been blown up and no one trusts msm or government “agencies” anymore.

MGM and MSGE

It’s stunning people still deny the significance of Musk buying Twitter. As a result of such, the deliberate censoring and collusion between big tech, MSM, and US government was unveiled. The corruption of the mainstream media was unveiled. And as a result, the scheme unraveled and became toothless, which is why the 2024 Democratic Campaign was a total disaster. Enough people finally saw they’d been getting lied to and said enough is enough. I mean just in the Covid saga alone, there’s enough fraud and lies that no one would ever have a reason to trust a msm news source or government agency again.