valueinvestor

Just to clarify this 715M will be listed as a liability, but can produce cash flow. Not sure what people are using to justify a 1.5B valuation though... it's literally pricing it as a full-fledged manufacturer.

I don't think so - on a perfunctory view, it was trading at less than cash per share. Basically zero optimism priced in, low trading volume, and then this 715M loan revolutionized the prospects of this company. If the ingredient is really in a shortage, how hard is it to earn 100M to justify TEV? Literally went from melting ice cube to company with optionality.

I agree - they’re sharpening their teeth.

Bought more Sea Ltd, and indulgent but meaningless investment in CGX.

I don't know the underlying approach of the person's trades but it's not as if he was George Soros who took extremely speculative positions, but the his downside was capped. At that moment, there was no verifiable information that could lead the person to think that it would be good trades. The odds in my humble opinion were 60/40 at best, but then again, the person may have a different perspective or thought process that I may not be able to wrap my head around. Secondly, if the person really titled his contribution "Suck It Value Investors!" That kind of says it all for me because people never typically never get criticized by people doing more than them. I admit this is an overly simplified look on this - either way, I rather read this than someone who lost their life savings.

^ True.

Trick is can the monkey get 41 without losing it all

Bumping this because I had one poster reach out to me, but for some reason after several PMs, I didn't get a word back. Hopefully the person see this and gets back to me, not sure if the PM function is working.

I can go one further, I don't think anyone in this board has a traditional value investment idea that trades single-digit PE or they have a catalyst that closes NAV or matches the alpha provided by Amazon, where they are comfortable putting 20%+ of their net worth into... As a person who read annual reports ever since I was a kid and having boxes of notebooks of traditional value ideas, I just don't see how you would place a large chunk of your net worth in any one of those ideas. If you read WEB's letter, you were essentially warned not to do just that. Secondly, if one has any experience running a business (no matter how small), you realize financials only show a very small part of the entire story of a business. Actually, if anyone has a traditional value idea that I've described above, please let us know. You don't have to disclose the idea, but just out of curiosity - maybe run a poll. The only way I can see one doing that is if they are invested outside of North America, maybe Japan. Also, I see a lot of posters in this forum trying to invest, as if it's 1967 where average PE, EV, TBV, etc... is a lot different now. Value investing hasn't changed, the macro environment has changed. WEB invested in Coke when it was not cheap by any metric. If I recall correctly the P/E was 91% more expensive than most stock on a P/E Basis. Yet, most people are trying invest in equities 91% cheaper than the S&P500. Why? Schwab, the first rule of fight club is never talk about fight club. Please delete this post. ;D Anyways, if anyone in the fight club is actually invested in a Ben Graham Pre-Munger WEB idea, I would love any confirmation.

Would you mind giving a summary of this interview please? Is he bearish or bullish on the stock market? Sure! Hope you can watch it, as it's really an informational 20 minutes. However to summarize, fed is driving capital markets, and capital markets are driving equity markets. Interest rates close to zero, hence it is likely the demand for equities will increase, where PE will be around 40, while demand for bonds/cash decreases. Risks of US Dollar Currency Losing Reserve Status is something to think about - where it can have a large effect on US equities, even if the underlying business is doing phenomenally well.

Finally an interview with very few interruptions! Seems like Ray thinks that there's a possibility of the US losing its reserve currency status.

Thanks - much appreciated! ;D I'll admit to that ;D It wasn't intentional and I'm typically a "prepare for the worst, hope for the best" kind of person - hence why after the "future is dim" line, I mentioned what hopefully allows people to be hopeful in a possible contraction. Thank you! That's a good question - I haven't really stopped to think about it. My interest and job experience vary more than the weather in Toronto, much to my parent's chagrin. I think beyond my job experiences, the primary driver behind my investment decisions now, which naturally leads to portfolio compositions is business quality and other intangibles that you can't find on financial statements, such as customer experience, customer acquisition process, etc.. I believe this thought process was derived from my experiences/traumas in starting, running, and/or turning around tiny but very different businesses. I used to bet on businesses based on their valuation (I know, blasphemy) before that experience, which is similar to betting on players based on their performance stats, both yield good results but discounts humankind's resilience and the possibility to capitalize on surprises/luck. However, now that I am finally a "player," for all intents and purposes, I can make bets beyond the stats. Hence, my portfolio composition is not based on my interest or knowing the intricacies of a company, but rather the fundamentals driving it, seeing the direction it's going twenty-five years down the line (this particular point was derived from my mistake with Valeant, and possibly will make the same mistake with GoEasy w/ their potentially usurious not-illegal-yet rates) and having time arbitrage as an edge... as many overestimate what can be done in the short term and underestimate what can be done over the long term. Also the risk of sounding even more blasphemous, I factor in luck now, as alluded before. Some industries are innovating at a ridiculous rate, and some companies get all the attention, therefore opportunities flow to them. When investors ask why this is important, I simply ask what's the ROI of nobody knowing you? What about being Sea Ltd? They are a company in economies that are growing twice as fast as the US, attracting the best talents, great access to cheap capital, and innovating at a crazy pace - so I fail to see how they won't get lucky with an event that no one saw coming - therefore they won't have a chance to include it in their DCF. However, even if the worst happens, and the stock rerates down - dollar-cost averaging and position sizing is the kevlar of getting fair valuations in the short-term (another lesson from Valeant). Hence, why I was able to swallow 50x earnings for Sea and doubling down when it ripped up. Hopefully, this answers your questions! ;D EDIT: Someone alerted me that the last part can be misconstrued, when I doubled down, it doesn't mean I got out of existing positions. Rather, I had more leftover capital coming in and increased my portfolio allocation because for a time price got cheaper, although much higher than my initial buy-in.

;D Still haven't forgotten your advice on my failed takeover of a small enterprise, and thank you! ;D Best of luck to you too!

I don't mind at all - here's my entire portfolio in my main registered savings account. I have others and they vary in positions, depending on the tax advantages. Prudent to probably state that this should not be construed as investment advice and this entire portfolio can be changed on a dime. As most of these main positions have been held for years, and I regularly change my mind... So in other words, do your own research. Now we got that out of the way, Punch Card Positions: Sea Limited - SE - 55% Shopify - SHOP - 20% GoEasy - GSY - 10% Elastic NV - ESTC - 10% --------------------------- Work-Outs/Indulgent/Speculative Trades: Scully Royalty Ltd - 2% GameAccounts Network - 2% Contura Energy - 1% Recent Exit and Possible Return: Shorting Billboard and Traditional Advertising Companies, which I probably get back into after the recent run-up.

Happy to be of service! ;D

With your blessing, how can I not stay a lurker! Thanks Sanjeev! ;D

Thanks Liberty - you stay safe too!

Thanks! I purposely stayed away from specifics because I find people learn more from insights than instruction, as it forces them to think and interpret. I found my outperformance by essentially betting on stocks such as Amazon where valuation always seems to be stretched, but opportunities and luck always seems to be on their side. Is it because their lucky, or are they in the right place and right time? I always try to bet on the “lucky” ones. However to your point, yes - compounding at a rate higher than 15% over a long period of time with just the public markets, if you’re not full time is quite a feat. Luck may come from diversification, extra work, anywhere really. There was a time where anyone in Silicon Valley could’ve been rich, if they simply went there at the right time and associated with the right people. To borrow my uncle’s line, who was a beneficiary from the dot com boom - “You actually had to try to be poor that time.”

Alas, it seems my time has come to be a lurker for a while. I have responsibilities that are growing every day, and it's getting harder and harder to contribute meaningfully. Especially for an auto-pilot portfolio that essentially has 3 stocks that take up more than 75% of my portfolio. The reason why my portfolio exists is to park any residual cash generated from my business, where most of my time, energy, and effort is being spent. However, it's no excuse to not attempt to give back as much as you can, especially with the value I've received from the golden nuggets embedded in this forum. Hence I will leave you all (not that you need it - mostly geared towards those who are just starting out) with what helped me for the last 15 years. 1. Luck. Focus on getting luckier, not smarter. Almost similar to focus on your character, rather than your reputation, as good characters always have good reputations. Many people underestimate the utility of luck, and never attempt to get as much of it. Luck always revolves around certain places around the world with certain people, and it can be attributed to your stock selection. When I started out, I had a folder full of spreadsheets, and my portfolio was always dictated by what provided the most alpha via DCF, SOTP, you name it. While it was good, the process was labour intensive and not recommended if you're not a full-time investor or institutional player. Also, in most cases, even if my thesis was right, my alpha would've been capped because before the thesis played out... there would've been unfriendly shareholder actions, for instance, unfriendly squeeze-outs, acquisitions, management, mergers, capital restructure, etc. The proverbial summation is if you want to be unlucky... let's say get struck by lightning, then go to a mountain and hold onto a metal pole, where lightning always strikes. :P 2. Write. I'm a big proponent that learning how to write makes you smarter. DCF and SOTP are great tools, but only part of a great repertoire IMHO. This skill is present with many great investors, and probably the reason why we have annual letters... idk. However, I do know that writing allows one to distill abstract concepts into useful and actionable ideas/philosophy (e.g. fair price for wonderful businesses are better than wonderful prices for fair businesses, being lucky rather than analytical, etc.) 3. Know thyself. In my opinion, many try to invest as if they are Bruce Flatt, Bill Ackman, Stephen Schwarzman, or worst, rocket scientists. IQ doesn't automatically translate into wisdom, and knowing yourself is critical to investment success. In my case, my portfolio is not going to pay the bills, but will eventually pay for my retirement (if I want to retire). Most of my efforts again go towards growing my business and being a better person, hence I'm not going to compete with people who have a large capital, smart analysts and have greater means to obtain alpha. Therefore, I'm not going to have the same ideas like them. 4. Reflect. In order to "know thyself," one must reflect. It's impossible to know what you look like without a mirror. I reflect twice a day, and possibly more in my head during the day. Constantly questioning my business strategy, investments, and general directions in life. I am a very irrational being, and hence it helps to constantly monitor yourself and make sure it does not bleed into your business, career, investments, etc. Shout out to LongHaul and his Psychology of Misjudgement Thread, which I think is a must-read. Oh before I forget, what also helps with reflection is finding people who constructively disagree with you, as opposed to those who are just disputatious, because they provide another insight that you can add to your mental framework. 5. Grow. I'm constantly growing as a person, whether it's physical or mental. I find that it helps me personally, as a result, it translates professionally. I love annual reports because it provides a makeshift mental map of the world and keeps track of large changes. With the reduction of available primary sources or reliable secondary sources, annual reports are one of many great resources to stay up-to-date. It's not hard either, because you don't need to read the entire report to understand how it fits in the world, but probably wise to read the footnotes, if you're planning to make an investment. There's so much more, but I think these are the largest contributors, and probably what I would leave try to leave with my possible descendants. Should you construe this as advice, no... there are always exceptions to rules, and what worked for me, may not work for you. Most of these are no-brainers, but I feel that many people know them, but it has not registered with them or better yet, resonated. Anyways, with the world divided, on the brink of economic depression, where the future is dim, I wish you all the best. Also, remind you that every great crisis provides great opportunities, and your greatest liabilities can be your greatest assets. More importantly, I would also hope that you are living lives how you see fit, and hopefully, it's full of music, dance, adventure, and/or meaning. It's been real. ;D -valueinvestor

Also very anecdotal - anyone notice luxury watches prices? Recently stainless steel professional rolexes have been sold above MSRP in the grey markets, including Patek Philippe’s stainless steel sport watches too. So far prices have not come down, maybe it’s because of supply, but I thought the scalpers would sell for a need of cash.

I couldn't have said it better, and my condolences. I don't think it can't be overemphasized, but little moments of reassurance, and letting people know you do deeply care about them here and there goes a long way. Most of all, being a person who is there for them, no matter what helps too. I remember being a teenager, and the lots of confusion that comes with and frankly, the 20-year-olds now are a lot more immature relative to the 20-year olds back in the '60s, '70, etc. Not that necessarily a bad thing, people are living longer, hence they are able to spread out milestones farther. I know a few (one is too many in my books) who taken their lives because they thought they couldn't get out, and if their family just could've given them reassurance, it would've been the world. Particularly with international students at a post-secondary level, the pressure is intense and understandably so, where their parents invested everything they had to bet their kid will come through for them and the rest of the family. It's hard not to think about it, and not look insane when telling people they should be careful with what they say and take the time to reassure them that as parents, friends, colleagues, etc... you'll be there for them through thick and thin. I just can't imagine what was going through his head, when he made the decision.

Maybe this helps, maybe it doesn't but I was hoping to book a weekend getaway vacation to take advantage of this slow down in any way possible, but prices are still up there. Funny enough it seems rooms are not available, and the Fairmont Chateau Lake Louise still seems to have the same offering pre-pandemic, pricing is probably just 10% lower. I think since they have a lot of regulars, it is not unheard of families having reunions at places like these annually, so if the economy tanks, I don't think it's because the rich stopped spending.

I don't know, as I don't think I was a member while it was an active thread. However, when looking at Senvest, for sure it's cheap on a tangible book basis, however, any closing of share price to book value typically goes towards the managers of Senvest, and not the common shareholder. Not sure if it is different today, but I'm venturing a guess that the behaviour I described above has not changed, hence the stock is not worth discussing.

EL Financial Senvest Capital

It's more satirical, if you know him from BarStool Pizza and Sports, you'll know lol