Gregmal

The biggest thing I think every investor should realize is that it’s terrible to invest from a position of fear or weakness. Being constantly bearish is counter productive. But I also think symptomatic of not really getting the hands dirty on the deeper fundamental stuff. Think about the thought of buying a home. Or managing a store, or running a business. You do so with an eagerness and excitement for the future. It’s definitely possible to invest the same way. You buy a great asset and are excited about owning it and that trumps what the stock does next week. Too many people obsess over the daily quotes and only have an affinity for the p in p/l which of course feeds right into the transaction inducing Wall Street machine. If you are 20/30/40 you should looking to acquire assets. Berkshire I agree is probably the best one to just own and stfu. FRPH and ALCO are two others I just buy and on one end I get a fat dividend while they sell oranges to Tropicana and land to developers. And FRPH develops trophies while holding a war chest for the down times. Internalizing what you own is a huge mental edge. Ultimately, good market, bad market, whatever….the more noise you can eliminate from the process then better.

Yup. It’s a boa constrictor type fundamental situation. I think VRE here too is extremely interesting now well below tangible book. I need to catch up on the day to day there but I also believe their standstill with an activist ends soon. That’s a double from here if it sells, at least. Housing is the only market in the world where you can have all time high pricing month after month, yet still have some clueless “pros”, analysts, twitterers, and hedge fund guys claim it’s imploding LOL.

Meanwhile public market participants largely shit their pants

Just some general thoughts to balance that which may or may not help you. 1) A lot of people I know think this but then you ask for a show of hands as to who was margined out long the whole way and no one thought this was such an obvious thing that they felt compelled to take advantage of it. It’s largely only a feeling that gets emboldened when the markets go down. Also, what is a “meteoric” rise? Why is the bottom in 2009 the starting point? Why not 1999/2001/2007/2012? 2) again, what is sharp rise? You mean recovery? Sure some stuff definitely got out of hand. I kind of view that whole thing differently. The markets had no business going down the way they did in February/March 2020. It was driven by a lot of charlatans screaming fire in a crowded room. Much of the market is basically back to pre COVID levels. Not a big deal from either bullish or bearish perspective IMO 3) Personally I think rates going up or down are irrelevant to this inflation issue. It’s not a Fed solvable issue and folks keep moving the goalposts. Cars and commodities where the problem and they come back to earth and then they just so “oh but now this”. It’s like don’t worry “now this” will follow the same path. But just generally speaking I don’t totally disagree with your thoughts on 3, but the bigger question is, who’s incentives align with shit being bad, markets falling big, economy going to hell? Virtually no one’s, so you’d not only kind of have to be fighting all the bankers and politicians and most powerful people in the world, you’d also kind of have to think normal people tolerate it at the polls. I don’t think being on either end of the extreme, positive or negative is healthy per say, but there’s definitely a preference to keep shit out of the gutter.

It’s all possible but wasn’t the argument for inflation commodity price volatility? And wasn’t not too long ago the reason for justifying all the aggressive Fed action that the bulk of the labor force was too dumb to take advantage of the job market? Now they’re going to get a brain and push hard? Plus, there’s plenty of ways to play a boon to the consumer. Im not looking to do much other than pick off low hanging fruit, but both the commodity prices and labor strength are actionable. If shit picks up labor wise, rents and housing prices go nuclear.

The other thing that makes it compelling here is that if inflation persists, it’s pretty much a given it will be commodity market related. With so much of the space trading at 1-4x earnings, you can almost hedge just by owning some of them. Or options because the thing with commodity cycles is that they go batshit sometimes so LEAPs could really pay off. Similar to what I’ve been doing with oil.

Same chart as available homes in many markets. Much is being made of “OMG supply going up massively”….deliberately peddled by folks without mentioning it’s still well below pre COVID levels. Any idiot can build a house though. Certainly not easy getting a rig up and running.

Those are good points on the 70s. It remains to be seen if that’s likely here but so far everything’s kinda indicated it’s not. We expecting another wave of 25% run ups in used car pricing? I don’t. Once you settle the supply demand equation for most stuff, it’s hard to recreate and demand imbalance. And sure, we all move inside of two year periods with our approach. I generally target 12-18 months for stuff…but what I meant is that everything has a price we’re you say fuck it who cares. COVID it happened quickly but a half sensible person saw that 1000 points coming off the Dow for every couple hundred new cases was bullshit. Well, not everyone. There were still plenty who even after 20/30/40% said “still got a ways to go”. But to most sensible people you see something like Berkshire at $200 or $190 and say “who cares”.

Pretty much. It’s the last wave of the COVID cycle.

I actually do know that there’s certain data suggesting that violent crime in the hood, IE NYC, LA, Chicago, drastically increases in the summer. Given that these people are incapable of being accountable for anything, it’s obviously climate change and seasonal swings that are the culprit. That’s probably the angle on sex assault too. Better weather, more skimpy outfits. More skimpy outfits, more scumbags harassing women. But it’s not the scum bags fault, it’s the climate.

I don’t even think it’s what rate, but how long. Who cares if we temporarily get 5-7% treasuries if a couple years later we re back at 2-3? Maybe the Twitterers and hedge fund guys who just wanna create their own noise to trade but as we learned during COVID, a year or two of earnings is meaningless. If you say fuck the next 2 years and after that I’m buying Costco at 15x, or Microsoft at 12xc why wouldn’t you take that opportunity and run? Cuz some doomsdayer says you might incur a 20% paper loss?

It really is a systemic rouse being perpetrated on the common folks. Hook ‘em in, drum up the noise, flush em out, let the smart or wealthy folks pick up the pieces…rinse and repeat. I’m just a little peeved real world real estate hasn’t gotten cheaper. I really want a southern home. We ve had 3-5% rates before, not even terribly long ago in a historical context. Many existing companies are not only better off than they were the last time around, but have created tremendous value since. I was joking with a friend how the first time I bought a home the 10 year was at 3 and I got a 4.25 mortgage. Then a few years later we were back at 3 and it was a really big deal to some but it turned out to be a nothing burger. Here we are again and mortgage rates are near 6% and my home value is nearly double. But nevertheless there is a whole contingent of disaster callers mouthing off because 3-5% rates will be permanent and also the end of the world. Bet against those people. They’re pretty much never right.

https://www.reuters.com/article/usa-fed-bullard-idUSS0N2UR07L So weird! Maybe this is why the dumb dumbs thinking we need to price in perpetual 8% inflation don’t understand why the market may be forward looking? Well, first, the worst of the inflation is behind us and forward looking, rates will be a lot lower than one thinks. Remember in January all the predictions for 7-8% rates? Not happening.

Dude I’m not even kidding someone showed me a Twitter video of some Prime Minister legit claiming that climate change poses increased risk of sexual assault for women. Yup. These are the people driving the school bus and making policy decisions.

Shitty hospitality property sells for 98% of list price and sub 5 cap. Let’s hear more about rising rates! Obviously the stonk market knows best, just like it did during COVID and every other knee jerk panic period I’ve ever witnessed.

Is it weird when you see media publications saying inflation remains stubbornly high when literally every input minus housing has been plummeting? Even energy now? And I mean housing, the fintwit hacks all seem to be predicting GFC 2.0…. Seems like everything is pointing towards an August/September pat on the back and “we re done here” from team Biden and the Fed. Perfect timing for elections.

Fun fact in the early 1980s, amidst double digit inflation, yes much worse than the fabricated crisis we have now where people are saying omg 8%, MetLife supposedly bought their NYC office tower from Pan-Am at a 3! Cap rate!

Is there any inflation input not coming down? Oh yea, housing....everything else? right on cue. Amazing how that works.

ALCO from the golf course

Is it a celebratory day? Weekend? Week? Month? Dunno nice day though

What’s funny is I never hear people refer to the MIT blackjack team as “gamblers”. Certainly, with investing, there’s an overlap in principle and fundamental strategy.

At the end of the day some people mistake value investing for something that requires putting a multiple on cash flow. But simplistically, if you can determine that a trade has a 90% probability of a favorable outcome, that’s the same thing. You’re using math and probability to stack the deck in your favor.

Crazy isn’t it? That the overwhelming majority of WS money guys make decisions based on their interests even if they are detrimental to the interests of the people paying them?

Everything has to be put in context. Stocks or crypto can present unique, well adjusted casino like situation but with odds far better than 52/48 or whatever. If you can identify setups with 85% probability of having a positive outcome, you take it all day. Whether one wants to call it casino, gambling, investing, or anything else, who cares? Crypto is almost entirely a sentiment trade.

This will all be over once gas station owners just stop being greedy, obviously.