Saluki

Picked up a few shares of KRKNF on the pullback. Very small adds to a few of the shipping cos in my basket. They tend to move together so I plan to add a little more to the basket and then sell TEN before the end of the year to take the tax loss but keep the same exposure to the sector. Might rethink the whole thesis in 2025 when the new administration and Congress take office, but for now I don't want to make any big moves.

I think overpaying as a passive investor is much different than overpaying as a company acquiring an asset. Why would you overpay for something unless you thought someone would pay more for it, even though it's not worth it. That's psychology, not value investing, in my book. As a company, it's different because overpaying for something, like being the exclusive search provider for iPhones, is worth different amounts to Google than MSFT. Apple gets 1/3 of Google's ad revenue from iphones, and MSFT offered them 100%, but Apple turned them down because the ads were so profitable on Google that they would need 150% of MSFT's ad revenue to match the income. So was MSFT overpaying at 100% or underpaying? You make more money from a tall building in NYC than a short building, so why aren't all the buildings tall? Because the cost of capital is different for different owners, and during different periods of time when interest rates are higher/lower, so someone might overbid for the same parcel you are bidding on because they can make more from it than you can. The marginal buyer/seller always determines the price in an auction, not the average buyer/seller. If you have a business with big net operating loss tax carryforward, you may pay more for a business than someone else because that stream of income (from a mediocre business) is worth more to you than the other guy.

I've always said that the short time horizon trades are hard to make money in because the algorithmic traders have supercomputers and strategies that involve nano seconds and the professional money managers have stuff that they think will outperform in the next few quarters. So that short term time horizon is very crowded. Since they can't keep their job if they outperform for 2 years, then the stuff that takes longer to season is probably where the least amount of research, and the biggest gains should be. Ted's 10x in 10 years in Dillards happened at the end of the time period. This is a weird thought, but humor me for a moment. When the printing press was invented, cities that had one were more likely to kill you for being a witch than cities that didn't. Why? Because false information spreads much faster than the truth. So a short term strategy suffers from the amount of false information (noise) that dominates things like Twitter and TikTok. So the stuff with longer seasoning is probably also less likely to be the subject of eyeball grabbing fake news, and less likely to suffer from the reflexivity, as Soros puts it, of the negative news become believed and hurting your investment. FRPH has limestone quarries that are near valuable areas for residential development. But they won't get them back until 2026, that's why the stock is cheap. Tobacco is shrinking, but vapes and Zyn are growing. It's not enough to offset the loss in cigarette sales yet, but in a few years it might be, that's why they trade so cheap. Individual investors can wait that long, not many fund managers can. BABA and PDD react wildly to news from China or announcements from US politicians, because people are thinking 1 year out. If you think of them as something that will let you participate in the future growth of Chinese consumer spending, then the short term shouldn't matter. Universal is using its own money to build theme parks for Nintendo. They won't be finished until 2026, but how many years has Disney made money from a theme park after it's opened? If this is a permanent flow of future funds, why aren't people looking at it? Because it's more than 6-9 months out, so it may as well not exist for must fund managers.

We are watching the Detroiters and it's very funny. It's the same people who made "I Think You Should Leave." It's the same oddball humor, but it's a sitcom instead of a skit show.

JOE, CPNG and NTDOY are some of my bigger positions, and they haven't done much this year, but I like the setup for 2025 and beyond. JOE is extensively talked about, so I won't go into it, but CPNG is still growing a lot and the operating leverage is allowing their margin to get bigger as they grow and the market doesn't see it yet, so I feel like it's a coiled spring. The only thing I worry about NTDOY is the tariffs under a new administration, which was not something I saw coming. However, the price is what it was a couple of years ago, but the new Switch is only a few months from being released, there are new games coming out, new movies (Mario Bros and Zelda) and Universal is building Nintendo World theme parks, for which NTDOY doesn't have to put up any money, but they get a percentage of the gate sales, and obviously the Nintendo merchandise sold inside. It looks like it's trading at a trailing P/E of 29, which doesn't seem terrible when you consider all those lottery tickets, but when you realize that they have no debt and about 20% of their market cap in cash, it starts to look really interesting. I have some smaller positions in things that look good in 2025 like CROX, RTO and KRKNF, but if it's only a 1% or 2% position, I don't want to make a prediction about it, other than it looks interesting enough for a small position, but there are too many risks and unknowables to make it a big position. Nintendo has been around over a hundred years and no debt and as Peter Lynch said, it's hard to bankrupt if you don't owe anyone any money. And CPNG has a model that operates like float in insurance, so up to a certain point there cost of capital is less than zero. So I'm more comfortable sticking my neck out on those.

Picked up a few shares of PETS and CPNG. PETS had a 35% pop after earnings, probably because of short covering, and is back down to where it was before the pop. I have a medium size position in CPNG and I nibbling a little on the dips to take it to 4 or 5% (plus some LEAPs).

Probably too small a company for most people, and there isn't a separate post on here, but I'll add Mind Technology (MIND) to the list of drone companies that are off the beaten path. They make underwater imaging stuff, like Kraken, which is useful for telecom, oil and gas, and defense industries, but not actual drones. Because I have a terrible track record with stuff that has cool tech but no profits, this is in the too hard pile for now. I'm mentioning it here, to keep all the drone stuff together so it's easier to find. It's a very small company and if you do a search for "Mind Technology" the results will be overrun with websites for mediation, spirituality and healing crystals. What's interesting is that they had some sales, but they also had a callable 9% preferred stock. So the little cash that went in one door, went out the other door. They recently converted the preferred to common. Besides diluting the common, which sucks for the bag holders, the preferred holders who wanted a steady 9% payout were probably not happy about owning an illiquid micro cap common stock and the selling has cratered the stock price. So while it's not profitable yet, by getting rid of the 9% financing, it may get to profitability soon. In the watch pile until then, but if anyone has thoughts on it, feel free to chime in.

There are many doctors who smoke or are obese, yet give you health advice. It's not that they can't do it, it's that it is difficult because of a lot of it doesn't involve math, it's temperament and emotions. A Nobel prize winner, I forget which one, who worked on capital assets pricing model and asset allocation was asked how he invested his own money and he said he put it half in stocks and half in bonds . That's stuff that your grandpa's accountant will tell you to do. The interviewer asked him to justify this decision that was suboptimal, according to his own research. He said that he just wanted the decision that he didn't want to think about and with the least amount of regret if he was wrong. If he invested his money all in particular stocks and lost a bunch of it, not only would he be upset that he lost money, but he would be a laughing stock among his peers and the Wall Street guys would have a field day lampooning his research to their clients and getting rich off his mistakes. That statement is all ego, not logic or math. I think another valid criticism is that the criteria he used isn't incorrect, but it has an obvious overlooked flaw: survivorship bias. You don't see all the companies that tried for the "big hairy audacious goals" and went bankrupt because they stretched too far. Just because something worked the first time, doesn't mean that it was a good idea and that you should do more of it. Maybe the ones that kept doing it stumbled afterwards. Maybe that type of culture allows a company to grow, but growth leads to inefficiency. When Tesla was on the verge of bankruptcy because they couldn't survive if they didn't produce X numbers of vehicles, they wouldn't think twice about laying off someone who's work was slipping because his wife was undergoing cancer treatments. Do you think they would do that now? Do you think Microsoft would do that?

It's my 3rd biggest position, about 11% weighting in my portfolio. My thesis is that it's cheap when consider the price versus he growth and tailwinds. If you take the market cap divided by ~180k acres it's about $16k an acre, which is pretty cheap for anything near the water in any state, so as a friend of mine would say "it's not rocket surgery." I did this video about a year and a half ago, which only has 300 views, but it has most of the good things I saw in it. When I first started buying ($20, then $15), I didn't think the recreational stuff was a money maker, but it turns out that it was, so the original thesis is intact, but their are other lottery tickets in there too. This is the earliest buy I found, but the smarter people bought in 2022 in the $30s and have a much better IRR than me on this. Acquisition Date Quantity Unit Cost ($) Cost Basis ($) Value($) Gain/ Loss Gain/Loss (% 02/27/2019 (Long Term) 80 15.51 1,240.66 4,090.36 2,849.70 229.69 My timing sucks sometimes (because of the ancient trading curse), but it tends to work out okay if my research and thesis is correct and I don't mind paying for something if it's a better company than when I first started buying. CPNG at $14 looked great because it was growing fast and finally went from losing money to breakeven. I didn't mind buying more at $23, because it's still growing fast and is now really profitable with margins getting bigger because of the operating leverage. I think Bruce stepping down spooked some people, but he's still trimming the same way as before, not dumping shares like Buffett and BAC. It probably wouldn't be $51 if he was still on the board, but he was the chairman, not the CEO. All the operations people are still in their seats and still doing their thing to create value.

Added a little JOE, NTDOY and KRKNF.

Two factor authentication is your best defense. When people get hacked, the ruse usually involves calling them and saying that caller is from Broker X and you have been hacked, and that we are sending a confirmation code to make sure we are speaking to the right person, and when they read it back, the scammer gets past the authentication. But that's a human failure, not a tech failure. I don't do this (YET) but I heard an FBI guy say that you should false information on your social media (or multiple social media accounts with different information) so that when AI scrapes your profiles and tries to guess your password, or get past your security questions, using stuff you provided like birthdays, kid names, etc., it will have a lot of noise. If your brokerage allows longer passwords, try a pass phrase that is easy to remember but hard to guess. "WhatWouldBuffettDo$2d@y"

There used to a segment on the Adam Carolla show called something like "Rich man, Poor Man", where they talked about things that rich people and poor people have in common, but not the middle class. Having 10 kids is something Elon Musk has in common with a lot of hood rat dead beat dads. Giving your kids unconventional names, not vaccinating your kids etc. Not going to college, not working, and expensive clothes are the trappings of wealth, but also the trappings of poverty.

Added a little CPNG and JOE.

I thought this was a good use case for the abandoned Google Glasses project, or Meta's project with the Raybans. I have seen where it can translate the speech into text that you can read on the glasses, like the heads up display on a fighter plane, but I didn't know that they had audio in the works. This is an amazing development, and would make it 100x easier to travel to other countries. Your glasses could translate the signs for everything into your native language, and the earbuds could allow to understand what is being said.

For those who want to do the opposite of me to take advantage of the trading curse, I sold all the ENPH in my taxable accounts. Enjoy the double from here By the way, last year I bought a little MELI and quickly sold for a 20% profit because I thought it was overpriced. Even after yesterday's 16% drop, I would be up more than 100% if I did nothing but sit on my hands.

Bought a share of MELI to remind me to study it more. Also added a couple of CPNG LEAPs and a little of the common in my retirement account.

I'm trying not to buy more until I sell off stuff, but I couldn't help myself and bought a couple more CPNG leaps since I didn't want to lay out cash for the common.

Trimmed some GOOG again to keep it at 20%. I also trimmed a little HHH in my retirement account. I know Ackman said that he considering making an offer for the whole thing, but my retirement account is valuable real estate and I've been waiting for this to turnaround since the pandemic.

Trimmed some TAYD, which was up double digits today, and trimmed some GOOG to keep it at the portfolio weight I want. I still like both companies but I'm trimming to get my margin down a little before the end of the year.

I bought a couple of LEAPs on CPNG. Added a little PM, which is down on no news for some reason. Trimmed some GOOGL on the pop this morning to keep at it the weighting that I am comfortable with.

A lot of guys like him and Musk get so rich and used to people telling them that they are right about every idea that they lose sight of reality and become "eccentric" like Howard Hughes or McAffee. I posted a video in the Tidbits post about the "H" guy in DHL. Was a brilliant guy, went to law school, started an international company, then died in the South Pacific after progressively getting weirder and left numerous illegitimate children that he fathered with bar girls in the Philippines and Vietnam.

Besides the inground concrete pool and the above ground vinyl pool, I learned yesterday that there is something in between which is made of fiberglass, built off site and plopped into a hole in your backyard. Obviously, the shapes are not as customizable as the poured concrete, but the time to install seems to be quicker and the price seems to be cheaper than a concrete pool. It appears maintenance is less too, since you don't have to acid wash it, and it's less likely to have fungus or whatever growing inside it. How is the durability though? I noticed that the largest company that makes these pools, Lathan Industries, went public during the pandemic when people were stuck at home and building a lot. The stock was down 90% but recently double on higher than expected sales. Other than installing the pools, is there any possibility of recurring revenue for the installer, for things like maintenance? if someone buys one of these, are they more likely to be a DIYer and buy their chemicals from Leslie's or hire a pool guy who buys from POOL? Other than being limited to the size (the pools are made offsite and delivered by truck and craned into place) and shape, is there anything else standing in the way of choosing the cheaper option for a pool than the traditional concrete pool? For example, some HOAs don't allow above ground pools, are there any that don't like fiberglass?

My resting limit order for NTDOY got filled because of the dip this morning. Added a little more JOE too

A very bright guy I know had it and I asked him about doing one years ago, when I wanted to work as something other than a lawyer. He was an economist, not a portfolio manager, and he said they gave him a hard time about the required hours because of his job title, even though it involved a lot more number crunching (risk analysis and trying to detect market manipulation), and he had to have his boss submit stuff documenting the type of work he did and show it was comparable. He echoed to me what a lot of people are people are saying here, that it is a good credential to get your foot in the door, but after that it's purely decorative. I'll mention it because it's relevant, that he was Asian. And our organization had a terrible record of promoting Asians into management roles, so he thought it would help his chances. He said it didn't, and he eventually left for a management gig someplace else. While he worked with me, he also taught a classes in finance and economics at a college (to bolster his resume for management) and he said the credential helped him stand out from other teaching applicants. The academics didn't know much about it, but if he had it and others didn't, that helped him stand out since he had no prior teaching experience (again, a foot in the door). I have the same opinion of an LL.M., which is something you get after law school to specialize in something like Tax. People of my ethnicity are also not common at my employer and the ones that are here tend to be overqualified, so although I don't use my LL.M., other than an office decoration, I may not have gotten in the door without it.

A resting limit order got hit on Friday, so I have some more JOE from that and a little more this morning. Very small adds to some starter positions that I am dollar cost averaging into a little each day (RTO, ENPH, VRRM, CROX and DHT).