valueinvestor

Considering edge for me comes from in-depth research - it's quite hard to research in depth 30 market-beating stocks, hence why I usually reserve to 3-5 max, where 2-3 are over 90% of my capital allocation. Secondly, unless investing is a full-time job and you have analysts, I don't even know a lot of market beating funds that have 30 stocks in their portfolio that beat the market over time. Berkshire has 50 equities I think at most.

At the moment - no. It took months of research and still building a position. May not release ever because I want prices to stay low. Sea and Crescita? It's Crescita - or is it? ;D

Also I subscribe to Bruce Berkowitz (bad performance, but wisdom may not be bad), what happens when a stock goes 90% down? Are you prepared to purchase more? Amazon had 90% drawdowns twice, iirc. Especially with microcap positions, if it goes down 90%, then it means I get to own a meaningful portion of the company. Just because there's a ticker, it does not mean the shares are worthless.

That's what I struggle with. Sure, I will accept we are in a bubble but what do you do with that assumption? Invest in value assets in hopes they don't crash as hard when the bubble pops? Or go hard and play the EV/Crypto/SPAC roulette while it's still hot in an attempt to juice gains before the crash? Find the upside without downside plays. Pabrai loaded up on Silicon Valley Bank in 2000 because it had warrants from dot com startups that weren't showing on the books. +1. Although not true to my name - you can always find set up in other asset classes such as bonds, currency, etc. Equities still have great asymmetric bets, especially in the $100M below range. Found two already. IPO's that fell out of favour is awesome. Additionally, there might be another recession in the near future. Typically dips happens in twos.

Not quite, but about 80% BRKB Thanks! Hopefully we got more, as I am one of those in the camp. Never saw a reason to change it, but if one does come up then more than happy to do so.

I wonder if anyone has a one stock portfolio here. I remember a Jeff who had one.

I think people have an edge when it’s small sums. It’s hard to have an edge with large sums. Secondly - average holding period iirc is 1.5 years. So market is pricing stocks to that period for all intensive purposes. Hence, if one has a holding period that’s longer, that’s another way to have an edge. Thirdly, some edge such as NAV calculations unless there’s a catalyst can be modelled in a computer that can execute trades faster. So when people pretend that’s an edge is ludicrous imho. However things off the financial statements such as brands, strategy, hidden assets, and etc can provide an edge over computers.

I have no reason to disagree with you on the business, or not believe that completely right but it can turn out that even though you're right, your returns will still be subpar. Just because it's not a real business, does not mean it can't be a real investment. There's plenty of businesses that were not real (e.g. selling vaporware), but managed to turn it into a great business/return because they had a vision that was counter to the world's belief such as Apple's acquisition of NeXT computers in a certain extent. Nikola I'm not too worried about, but Virgin has Chamath and Richard Branson, both who are great marketers and if we can learn from Tesla, where I really do not think it's a real business in a sense that it does not generate sustainable profit, it may be best to find other shorts. As they may stumble upon gold because they have been heavily investing, hiring the best of the best, and constantly innovating, and some are investing not for profit but to push ESG forward and voting with their dollar. The stock market is not a reflection of the economy and specifically businesses in some cases, and one should operate as such. If you're looking for shorts, I would look for something in currency or any business/industry that's outdated but have no way of turning it around. Additionally, to spartansaver point - how much did you pay is a factor for these puts.

Agree with everyone above, but just to add I would rather own one stock that I paid a great price relative to future cash flow/margin profile, then 100 overpriced/overvalued stocks. I essentially own a two stock portfolio that's 90% of my net worth. While the third is about 5% and the rest is a basket of workouts about 5%. There are great opportunities in the market. I found an under-the-radar stock that has a couple of businesses and a liquid stake in a grower that's also under the radar, where it has long runway. Priced under cash per share, not even book, but because it's a small company under $100M, and circumstances the screeners are not updated yet. I think position sizing has to relative to price paid, ability to generate more capital for dollar-cost averaging, and stage of your life. My portfolio hasn't had a drawdown yet, but when running portfolios for others, I've experienced 50%+ drawdowns in a holding, but overtime it worked out, especially if you bought at the dips. While the other two holdings haven't gone down. EDIT: Philosophy can change on a dime. Not a portfolio manager/financial advisor, when running portfolio, I meant my family.

I think this is a great comment. I've long said that betting against the "exceptions to the rule" has been almost fool proof, especially right after the exception just occurred. I can name on probably 405 sheets of loose leaf paper the number of folks I know who have missed great investments because they were scared of "MSFT was a bad investment if you bought at the top in 1999". That said, this isnt really an endorsement of the markets. I think "the market" is a stupid and lazy term. A better approach is just really to use common sense. When you see a gazillion no/low revenue spac deals representing BILLIONS going up the way it has, you would be wise to use caution. Garbage companies with no path to profitability are not sustainable regardless of what market we are in. A clever story stock with a long runway? Well, thats a different story. A clever story stock thats already valued at $800B? A robust and durable cash cow trading at 15x? I mean sometimes the market is really simple. I think bubble is definitely accurate in terms of some areas. Being honest with yourself about what makes sense and what doesnt is key to it. How many stupidly academic smart guys over the years shorted things because "30x sales" while ignoring "new tech", "300M market cap", "respected founding partners/investors", "low rates", etc. Its really easy not to become someone who blows themselves up when the bubble bursts, and its also really easy not to become someone who generates dogshit returns because you're scared of the bubble. Just use your head and stay within your confidence zones. Probably two of the best comments I've seen here on COBF.

Any chance you would like to share why you're shorting salesforce?

Put in a small tracker order for AFRM

Any chance you can post your returns? Just curious. Would post mine but since I'm young, I was able to take the concentration risk. Also, my investment track record is only 6 years - so I don't think it matters. However, it is above 50% - still have a long way to go. Hopefully it will provide cushion for the losses to come.

WE.V

Means a lot! Glad to be a fellow shareholder and planning to buy some more ahead of earnings.

I have them at 129x EV/EBITDA (forward 12M). Is the 110x PE a CapIQ / Bloomberg estate? That looks cheap. I didn't realize SE had earnings. Not PE but rather owner’s earnings - how much cash flow can I sustainably take from the business over its lifetime? Optically it has no earnings but looking at the business it seems they are under earning. They can actually generate a profit this year, but I believe that they chose to invest in their moat. Which is about right, as they mentioned they want to “break even” by 2020. Here’s the unit economics. It takes $6 to acquire a customer. Customer orders on average 3.6 times per month and average spend per order is $16. Hence, customer orders $60 per month and if we assume take rate is 10% - they’re being paid back customer acquisition cost in little over a month. Why would you want to generate a profit now? Once they make a profit - I think the huge returns are too late, as it becomes a mature company. Only thing that destroys this is interest rates/deflation on a valuation basis, but I believe they can fund growth from their cash flow if they wanted, hence it’s a temporary problem. It’s similar to Zozo and other e-com in Japan where they did relatively well considering the economy they were operating in where it had deflation or as some call it - the lost decade. Since I always have more capital coming in - I can always average down whenever that happens.

Yep! It's not a great price (valuation-wise) - trading at 110x next year's earnings without considering cash. Wish I bought more at 40-50x earnings, maybe I'll have a chance again!

Not necessarily today (two days ago), but bought SEA in size after cutting my Shopify position by a quarter and the extra capital coming in.

A few shares in SHOP before earnings - thankfully got it yesterday the mild rise today. Averaging down of SRL and POW

SRL

Small tracker positions in 3-5% port allocation to fastly and pow.to

Either way to write so clearly that you understand the man's investing philosphy is rare these days - it is a gem.

BigCommerce IPO shot up 292% in a day. Not sure if this has to do with exuberance or the bankers underpricing their share by a HUGE margin.

;D ;D ;D Quite happy to read this! Although this could've been a 50 bagger, it's a great issue to have - to have sold way to early, rather than too late. I thought the trade was brilliant - a debt-free enterprise that had an obvious tailwind. I can't believe I haven't thought about it myself. However, I rather read about this then not know it at all. Live and learn. Congratulations Sanjeev! Quite happy for yah!

Hey sorry, I don't understand this part. Q1 cash was $209 million, but only $62 million was held within the US. Of the non-US cash, $88 million of cash was in China. My prior discussions with the Company indicate that while it may be possible to get non-US, non-China-based cash back to the US, they cannot get the China cash out easily due to the need to dividend it out of a specific subsidiary which requires both US and Chinese regulatory approval. Assuming all $209 million cash is available, I still don't understand the net cash part. They have $111 million convertible debt outstanding, a $373 million unfunded pension liability, and another $200 million of convertible preferred stock all ahead of the equity. The equity was (and still is?) significantly out of the money and based on some work I did back in April I felt they would require bank debt amendments in order to avoid triggering covenants over the next several quarters. Edit: From what I understand, the government financing is only an LOI and still has some hurdles to clear. Further, their facility has not been built / renovated / approved / etc. Think this is way overdone. On 7/27, 9,312 Robinhood accounts owned KODK stock. At the close today, 113,464 Robinhood accounts owned the stock. Don’t apologize, I don’t doubt your right. For some reason, I was under the impression they were net cash in my head, as I looked at it some years ago. I didn’t bother to verify, as I thought someone would correct me. So thank you! :)