Gregmal

Yup. They’re probably do one more 75, maybe another 50 hike and then it’s a job well done. Last week someone asked me why we re so laser focused on the inflation reports when they tell us what happened LAST month and I just shrugged. Anyone with eyes can see what’s happened recently on prices of just about everything. It’s funny watching the 10 year though. Recession. Inflation. Recession. Inflation! Red light. Green light. Fed light. The brokerages must love this.

I dont care for management but this was shook up via the previous activist campaign and its essentially a low hanging fruit for an acquirer or future activist. Jersey City and Park Ridge are absolutely good assets given the supply constraints for the great NYC region. Especially the suburbs. I know the Morristown area especially well, and thats similar to Park Ridge. There's takers for these assets all day long, 8 days a week. Office is what I hate. Land I like but theyre trying to unload it. Ill have to stomach the vomit inducing woke verbiage for a bit, but I think from these levels this is super interesting vs at $17 it was good enough for a smaller position but also not unique enough to pound the table. What I'd watch and dislike is the idea these guys think theyre gonna grow a MF REIT. Get the fuck outta town LOL. Especially with your shares at 40% NAV.

Lot of approaches and opinions have waxing or waning value depending on the situation. As an investor you have the ability to piecemeal or pick and choose the appropriate ones. That’s why in the other thread there seemed to be an implication that if you quote Buffett once that you have to be 100% committed to everything he s ever said. Quite the opposite actually. Even Kyle Bass and David Einhorn will be right once in a while. So if you’re an investor, revisiting every so often, even if it seems redundant, could have value if there’s an open mind.

I actually think this is the first time you’ve had a clear market. There was this huge rush to gain share basically up til IPO and definitely competition with LYFT. COVID in a way purged that and established what I view as more of a mature market dynamic. The way Kalanick built the platform, is was meant to burn cash, build market share, and kill competition. My thesis involves the assumption we are done with that. Now is where you focus on the economics. LYFT I knew a bit of pre IPO because it was always being hawked to folks that wanted Uber. It’s horribly run and I wouldn’t touch it.

More totally agenda/narrative driven and misdirecting headlines. The death blow that we were told of a 5-6% mortgage created an uptick of a whopping 2-3% increase in cancellations. Cancellations are almost always a low teens number. Now it’s a headline. Rents keep “slowing” but have not only failed to come back to levels that were said to be unsustainable by the experts, but they’re still INCREASING! I guess eventually the housing bears will be correct, just not anytime soon. https://seekingalpha.com/news/3855756-home-sales-face-highest-cancellation-rate-since-pandemic-start-redfin https://www.cnbc.com/2022/07/11/homebuyers-are-canceling-deals-at-highest-rate-since-start-of-covid.html

Been a position I’ve slowly been initiating and building into the sell off. Main thesis is that LYFT and yellow taxis aren’t a real threat, at worst duopoly like market dynamics, increasing pricing power. Gig economy benefactor(even though driving doesn’t seem economic people still do it because they want to work on their own terms), free upside on the delivery business. You can tinker with the numbers but should start generating substantial FCF over the next few years.

Orphaned non dividend paying, newly rebranded class A multifamily REIT with some remaining office and land assets waiting to be liquidated. Decent likelihood of a sale. It’s the old Mack-Cali. NAV probably $30. Worst case sale low $20s. Downside is that they think they are a growth reit and keep making acquisitions at 4 cap rates. But as long as they’re buying class A it’s not the end of the world.

Added to VRE, MSGE, Nintendo, UBER

Pick your starting points however you’d like. I am a firm believer that cash is overrated in a world where one is able to have liquidity. Especially if you have an earnings stream/income. Cherry picking start stop points is generally dangerous because it can produce whatever result you want. Remember Hussman or whatever during COVID? “Ay made like 3000% in a month!”, and it’s like dude you’ve sucked a big one for a decade shut up. Of course having been in different situations as well, I’ll say that when running other peoples money, cash may be more necessary because you can’t always rely on having additional buying power. But for my own personal money, I’ve never seen a reason to hold much of it because there is overwhelming evidence, spanning decades, that cash is inferior to pretty much anything. What is $1 of cash vs $1 of index vs $1 of land starting in 1940, 1960, 1980 and 2000 worth today?

Eh Greg’s top position did 40% ytd and got bought out. Second biggest is PSTH which is modestly higher. Greg was on the short tech trade back when you banned him in Jan ‘21 where everyone swore “you just couldn’t short this market”, and yes, Greg was on the futures and options for oil and gas summer 2021 when everyone said $100 oil wasn’t possible and was sitting around with their thumbs up their butts worrying about Deltacron or Omicron or whatever stupid variant caught everyone’s attention at the time. True story!

Inflation last year was significantly worse than the inflation we ve seen this year(unless you believe the CPI junk), the market did OK and some individual stocks did wonderful. If the approach is that no downward volatility is acceptable then it’s going to be hard to ever invest. And I’m not looking for a debate on inflation but keep in mind oil was negative in March 2020 and housing prices 30% lower and CPI, which is the measure of choice for the sheeple; will tell you March 2022 was worse than 2021! Not in the real world.

Same as the question to the other guy…from any given point we can draw whatever conclusion we want to. Why is January 1 the starting point? If you think inflation is a problem then holding cash is fundamentally opposed to that idea. The only basis otherwise is if you believe in the efficient market hypothesis. In which case there is no point to anything. There are currently plenty of businesses that have not been impacted one iota that have sold off. If your business is not impacted and is growing value, is there a point to worrying about the daily stock market quotes? Or conversely, if the only thing that matters is the daily market quotes, what’s the point in owning anything?

How can you believe inflation is the big threat to the market and be holding cash?

Yea crypto is huge in Miami, for better or worse. The chart says it all though and it’s why those still holding out hope of the CA/NY vs FL blue state resurgence just don’t get it at all. Money talks.

What’s tougher with businesses vs asset based companies is that businesses have a higher risk of impairment for many reasons. That’s why BRK is nice because it’s diversified and has a track record. But largely, share issuance, taking on debt, mergers, or just bad decisions in terms of deciding which ventures to pursue. IE FB and metaverse. Sears is a great example. The business changed and destroyed the assets. FRP or Alico? Try to destroy that? Even if you tried, it’s so slow moving and would occur over time in which case you’d have a period of time to exit without getting hurt. Or the liquidation theory. a company with good assets, says BGs Clipper….dude I’d fully welcome a liquidity crisis in 2027 because it would force asset sales and at 50c on the dollar I win. A business in need of liquidity is fucked on so many levels.

If we are not more done than not, IE Q3 produces a downdraft in excess of say 20-25%, then Kyle Bass may be right for like the 3rd time in his career. I think should this occur, the opportunity set would be once in a lifetime. These are all short term, solvable issues and if it means low teens multiples on the highest of quality stuff money can buy, and 50% discounts to current private market on RE, we should be excited.

The answer is simple, find energy/oil companies who are profitable at $60 a barrel trading in the single digits and residential RE related stuff trading at 30%+ discounts to NAV. Fill out with a few financials trading at or around book. You’re setup up to do well in both scenarios.

The above will fix most of the supply chain stuff. In a capitalist world, once the imbalance is solved, it’s very hard to fuck up again. Outside of a 1/100 year event, imagine everything that has to go wrong for folks to be paying double or triple for used cars and 25% premiums to MSRP? I’d even go as far as to say that’s a once in a lifetime event. Labor market cooling off IMO would be bad, but once that occurs then the mouthpieces can stop talking about wage inflation. I’ve probably talked to 5 dozen people in the last few weeks who have expressed concern about Q2 earnings. It’s certainly close to consensus and frankly at -20-30% on the indexes and more on most individual names, I think it’s closer to baked in than not baked in.

Every inflation input I’ve seen people fussing over has fizzled out, with the exception of housing. Housing should ease with more time as building products create more inevitable. Otherwise, it’s just a time solved problem. Beginning of the year half this board legit thought car prices were staying high forever. Or the commodities wouldn’t come down. Then they did. Then we got the war and war related stuff spiked. Then that would last forever; the poster child being wheat. Then that came down too. I almost feel like if we punished people for being wrong you’d get a much more accurate representation of what reality is. I’ve been a broken record on housing, but we ve been hearing about the coming crash all decade, we heard about the train wreck is progress after COVID, and even the last 3-6 months we ve been told the implosion as happening just as every month a new record for average sales price occurs. If a 10% pullback happens, we’re these folks worth listening to? Nope. Further, the consumer and average household doesn’t really have a lot of debt. I don’t know why that notion is floating around as much as it is. Most if they own homes have tons of equity.

Since I’ve started paying attention to the markets, now over 15 years ago, folks have always been claiming that the Fed is backed into a corner. Except, they never really are. Also don’t forget, what the Fed can’t do, politicians can. I’m all for avoiding obvious bubbles, and being ready to pounce on a big move up or down, but the assumption that everything is a bubble can’t really be true if you believe in the notion that capitalism and global supply/demand exist. I hear everyday how housing is a bubble. Been hearing it for basically the whole decade. Then a good asset goes on the block and there’s 20-30 buyers most are cash buyers and the sale prices sets another record.

The problem with this sort of thinking, is that the types that generally do have these hunches, are consistently having them. Over the past half decade just off the top of my head, the same group was worried about....2016/17...Trump. 2018/19..the punch bowl, 2020-21 Covid, 2022 the Fed/rates. Its just always something with them and if I missed my top 5-10 investments over this timespan it would have been hugely to my determinant. As some have stated, theres always something going on, you just need to find it. Shutting off the creativity or adventure seek valve over the fear flavor of the year is counterproductive to this. Every day you should wake up wanting to make investments but also having the discipline to sort them. Some variant of dollar cost average or time disciplined purchases is also so underrated. I just finished up with my APTS stuff and chuckled printing out the transaction log for my accountant. Taxes are a bitch. Over a 12 month period from January 2021-January 2022 there were 178 different purchase transactions between stock and options. Berkshire early 2021 I bought the same dollar amount every day from Jan 1 until end of February. Find something, and then just stick with it and execute. Paying attention to the other side is important but too scrupulously just causes undue hesitation. An investor and friend of mine earlier this week asked what to make of MF REITs selling off like 20-25% this year. And again I asked "why is it, that things that have absolutely ripped face the past few year, pullback, pullback mind you, the same amount as basically everything else in the market, and we need to conclude it s proof of something that should prevent you from investing?", especially when the real market, the private market, didnt move anywhere near there and the only evidence one has to make that case is small timers buying class C assets claiming theyre getting better deals LOL? I dont really like BTC, but the argument and point is best highlighted there. Ignore that its Bitcoin. The negative clowns have been hating on it since $1,000-$5,000. Its now come back from $60,000 to $20,000....THAT?!? is proof they were "right all along"??? You wouldnt know it from how they cheerlead, but again, perspective is everything. If you cant get excited about an investment or sector, just move on to another one til you do.

Another thing I’ve heard is helpful is just sidepocketing $50-100k in a small savings account. One of the most obvious things people seem to overlook when investing is that they don’t actually need the money they’re investing. It’s excess. So again it shouldn’t matter what it does short term if your horizon for it is not short term. A year or two worth of living expenses will greatly remove your need to fret about what the stock portfolio does tomorrow.

They’re in the process of monetizing them. Same for a bunch of their land bank. At the current valuation you don’t need a 6 cap on the office for it to work. Debt is going to continue to be paid down and company simplified. We ve seen this story before. It’s just totally unloved and off the radar. Basically an orphan stock. No dividend reit with shitty screening metrics and a dumb name.

Yea the PRs make me wanna vomit. But those new waterfront properties…..