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Saluki

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Posts posted by Saluki

    The coming electricity crisis - $ impact

    in General Discussion

    Posted

    Well, in Bill Gates' book on climate, he mentions investing in companies where the technology isn't currently feasible in order to move the ball forward.  So some of his bets may not be economic, but more like a charitable investment. Maybe the nuclear stuff is in that basket? 

     

    The obvious names that will benefit from upgrading the grid have run up a lot, so that ship probably sailed.  I think you might have luck in some of the smaller names or adjacent tech.  

     

    Tantalus systems is a very small cap so my broker won't let me trade it, but they make smart meters and sell them, plus recurring revenue, to utilities. If using your Tesla as a battery for the grid becomes a thing, companies like this will probably benefit.   I own some ATEX, which has FCC licenses that are used for 4G/ internet of things, for grid reliability (like being able to deactivate a broken wire before it hits the ground).  NextNav is a company that I don't own, but they have some frequencies that are used for emergency services and GPS.  They are not profitable, but one of the selling points for their bandwidth is that it's less susceptible to hacking than current GPS.  Maybe that has some applicability to prevent North Korean cyberattacks on our grid? I'm sure there are some companies besides Tesla that will be making whole house battery backups.   

     

     

    What are you buying today?

    in General Discussion

    Posted

    3 hours ago, Kizion said:

    A bit Coupang (20% position now) and Pluxee, LVMH and a bit more Solvay

     

    I picked up a few shares of CPNG too, but it's less than 5% for me.  The article I posted hasn't been on Yahoo yet, so I suspect more selling when it does, and if it hits the teens again, I may start buying in bigger size. 

     

    I trimmed some VTS and STNG, and added to some smaller positions that I'm still building. (Tsakos, Kraken, FRPH). 

    Is Europe becoming uninvestable?

    in General Discussion

    Posted

    I think the EU is a bad idea, but that doesn't make Europe uninvestable.   It's like saying "Is Asia uninvestable?".  China is much different than Japan or the Philippines.  

     

    The underperformance of European equities has more to do with the fact that they don't have a silicon valley.  Without MSFT, GOOG, META, AAPL, and NVDA, the S&P500 wouldn't be running circles around Europe. 

     

    In a study I saw of countries with the most 100 baggers, it had the usual suspects: US, India and China, but Sweden was also up there.  Most European countries are higher taxed than developing countries, but they also have a lack of corruption, good infrastructure, a highly educated workforce, and respect for property rights. 

     

    You can argue that the industrial revolution kicked off in England because wages were so high, so it made labor saving machines worthwhile.  In China many farmers still plant crops by hand.  Labor is so cheap that the outlay for industrial equipment to produce food that isn't expensive is not worth the money. 

     

    So, just as there is a reshoring in the US for some manufacturing to prevent another global disruption like what happened in 2020, there may be some bright spots in Europe for manufacturing that requires a lot of capital per worker (the company that makes the machines that TSMC uses to make chips is manufactured in Holland). Iceland produces way more geothermal electricity than it needs, so it became a world leader in Aluminum production, which requires large amounts of electricity.  Maybe that will be attractive for crypto?  Since there are no trees in Iceland, maybe it's a great place for wind power? 

     

    I hate shipping, but who dominates in operating shipping companies?  Greeks and Norwegians.  The only American I can name who did well in shipping besides Vanderbilt is George Steinbrenner. 

     

    If you look at individual companies, not countries, and focus on bottom up, not top down, I'm sure there are some gems there.  It's like that old joke about the kid who's an optimist and the dad takes him to a barn piled with sh1t to the ceiling.  The kid is ecstatic, and the dad asks what's the bright side of this? He says "with all this sh1t, there's gotta be a pony in here somewhere!" 

    Tidbits

    in General Discussion

    Posted

     

    The post (I think it was deleted) bemoaning the value of this board reminded me of this clip of an interview with Steve Cohen's performance coach.  There are lots of things that are too hard for you individually, but collectively you can do a lot by putting your heads together and problem solving. 

     

    Even Buffett had Munger to bounce ideas off of, and people like Bill Ackman are the public face of their funds, but they don't run one man shops.  

    Public Company Share Repurchase-Cannibals

    in General Discussion

    Posted

    1 hour ago, valueventures said:

    Just to further narrow this down, would be curious to hear some stocks that meet the following criteria, ideally with a long runway still:

     

    1. P/E under 20

    2. Started buybacks, but only last few years

    3. Still growing operating earnings on an absolute basis

    4. Consistent margins and stable business

     

    Also, helpful to name companies that could replicate the cannibal model. Obviously, some of the most successful names to do it are MUSA, NVR, AZO, ORLY, etc. I'll start - I think DFH has a similar business model as NVR and could potentially follow in its footsteps. It has a much lower size and base from which it can compound from here, albeit with what will be lumpier, more volatile returns.

     

     

     

     

     

     

    It's a small cap, so I'm hesitant to mention it because it's not very liquid, but check out Taylor Devices. Currently P/E is 17, they bought back 15% of shares in a block trade from an insider this year.  It's growing earnings and backlog for orders, and although it's structural business is tied to construction, it's aerospace/defense business is stable and they have been doing business with defense department/NASA since before I was born. 

    Deep F______ Value

    in General Discussion

    Posted

    9 hours ago, schin said:


    @Saluki - So, what is the final line between this pump and dump and what they do in the movie "Boiler Room" or early "Wolf of Wall Street" staff?

     

    That's crazy. It just promotes bad behavior.

     

    I don't think there is a difference.  And they may re-file against those defendants. When they charge you with something, they have to cite the statute (or federal regulation), then show how you violated it.  When they charged these guys, their case was submitted using the "right to control" test, which was easier to prove than the "fraud on the market" theory.  

     

    Because a higher court said that the "right to control" test is not how you should determine if someone broke the law, they had to dismiss the case, but they can be charged again as long as the statute of limitations doesn't expire. 

    Energy Sector

    in General Discussion

    Posted

    Part of the appeal of crypto is that it can't be inflated away by printing more in the same way that fiat currency can. The other half is FOMO.  Buffett had a famous essay that was titled something along the lines of "how inflation swindles the equity investor."  Fixed assets seems to do well in inflation because accounting doesn't properly the replacement costs in an inflationary environment so it looks like you are earning higher and higher returns on capital until it's time to replace that factory or make repairs to that refinery. That's the appeal of brands which are idea, and can raise prices to keep up with inflation.  

     

    I think for the energy majors, inflation doesn't help much because they sell oil, and have to find more at higher prices.  But people with oil royalties or people with large reserves (Texas Pacific, and hopefully VTS) that they can monetize what they already have and don't want to acquire replacement acreage should do well. Energy goes into every facet of the economy. I remember seeing something where if your dinner plate was a pie chart, more than half of the cost of it would be from energy.

     

    If 100% of the cost of food was energy ( and everything else), then it's an interesting thought experiment because you can inflate dollars, but not energy.  So as you depreciate the dollar, the energy stays fixed (or goes down because you are using it up) so the remaining energy should go up in value at least as much as the depreciation in currency.  But if you have a currency that is being depreciated by printing, and you have increased demand for energy (AI, computing power, more protein consumption in developing countries, more air conditioning and cars in developing countries), then you have that force multiplier.  Throw in peak oil and it really gets interesting. 

       

    Deep F______ Value

    in General Discussion

    Posted

    I hate to chime in on this because it's a very complicated area of law, and I don't do it anymore, so I am wary of giving bad information. However, this infuriating video gives a pretty good explanation of how this stuff happens, and why it's hard to bring cases against these dirtbags.  

     

    Towards the end of the video, he mentions a legal theory that was used a lot in prior cases to sue people for this type of behavior.  He doesn't mention what it's called, but if you want to read up on it, it's called the "fraud on the market" doctrine. Basically, you don't have to identify specific persons who were defrauded because you defrauded the market by disseminating false information or did other things to manipulate the stock price. 

     

     

     

    Tidbits

    in General Discussion

    Posted

    I heard someone mention that the NY Times now makes more from games like Wordle than they do reporting news.  It sounded wrong, but I looked it up:

     

    https://www.axios.com/2024/01/29/wordle-nyt-games-news-media-layoffs

     

    • The company's subscription revenue increased nearly 10% to $418.6 million in the third quarter of 2023 — with digital product earnings rising nearly 16%, to $282.2 million, driven in part by bundles.

     

    Buffett realized that Textiles was a bad business and he didn't keep the money losing arm because Berkshire is a textile company. By contrast, Sears always saw itself as a retailer, and the people at the top were jealous of the fast growing and highly profitable new parts of the company because it was a threat to the power of the retail executives. So they spun off Allstate, Dean Witter and Discover card, and stayed a retailer. 

     

    I wonder if the NYTimes will eventually realize that they are a gaming company, and get rid of all those reporters, printing presses and news offices and just focus on what is actually driving the train forward. 

    Dr. Gio Valiante

    in General Discussion

    Posted

     

    This is the second part of a two-part interview on the Knowledge Project Podcast.  It's audio only, but has some good ideas about process vs outcome and dealing with setbacks.  

    Grid Reliability Companies

    in General Discussion

    Posted

    12 hours ago, Eng12345 said:

    I've been meaning to respond to this.

     

    I think you are a bit behind the 8 ball on this one - a lot of the run up has already occurred and potential been realized by the market. 

     

    One of my best ideas and biggest mistakes of the past few years has been ETN. I got in at $128 in '22 on essentially the same premise you have here. I later sold for nearly breakeven as I typically don't like pure macro plays. 

     

    Thanks.  Yes, when I looked at a few companies in this area it seems the ship has sailed already.  I'll mentally file away the idea in case something changes so that I don't miss the opportunity if it presents itself again. 

    Got This Today

    in General Discussion

    Posted

    3 minutes ago, Gregmal said:

    Yea I don’t get the hostility. If you don’t like something just don’t pay it any attention lol 

     

    My guess is either borderline personality disorder or some serious insecurity.  With the former it would explain the outbursts and attacks from any perceived slight.  With the latter, I've seen that up close from an old boss that I had.  If you are incompetent and insecure then you can't receive feedback because anything that isn't praise feels like an attack. 

     

    Even after my old boss retired she would rant about things we had done since she left when she ran into someone from work on the metro or in a restaurant. But when someone told her that her former protege had a death in the family, she didn't even send an email. What a horrible way to go through the world and deal with people. 

     

     

    Got This Today

    in General Discussion

    Posted

    7 minutes ago, Gregmal said:

    Yea that was one of the most bizarre exchanges Ive had with anyone. Guy tells us all we're idiots because we dont understand the future of investing. Says housing is going to crash big time. Says his top positions were Moderna and Tesla in late Q4 2021. Disappears for 2 years. Then comes back claiming he's been in cash and Im a San Fransisco real estate bull, which, out of all the things Ive ever been accused of, is probably the most headscratching LOL.

     

    If he ever comes back, I'll send him an email and say that your real name is Paul Pelosi. 

    Berkshire Hathaway Energy

    in Berkshire Hathaway

    Posted

    I think one of Buffett's underappreciated skills is his ability to "see around corners" as Alice Schroeder described it.  He didn't foresee the 9/11 attacks, but he knew that terrorism is an underappreciated risk in insurance and had been pushing his lieutenants to reduce their exposure to liability in marquee structures that might be targeted.  

     

    When he purchased the railroad, there was speculation that one of the reasons that he bought it through one of the insurance subsidiaries is that it was partly to use the float (free money) but also because if it was in an insurance company, the state regulators might not let you sell it off because it would reduce the capital your insurance company had. So in essence, he was making it harder for his successor to split up BRK and sell off pieces. 

     

    I may be misremembering, but I think BNSF was transferred out of the insurance sub by Warren.  He may have been removing the handcuffs or maybe it was something else.  He mentioned in the last meeting about regulators in the Utility space and Insurance litigation possibly causing future returns to lag compared to past returns. The recent PacificCorp payouts from wildfires may be a trend. Maybe he is making moves to make the insurance subs and utilities not be a target for litigators looking for a fat wallet, or politicians looking to upgrade the grid at the expense of utilities instead of taxpayers. 

     

    It's one thing to say that you won't keep investing in energy if they don't provide adequate returns, but the assets you have are stranded and they have to be maintained.  If you don't keep much cash in the register, it's less tempting to try to target them. 

    Got This Today

    in General Discussion

    Posted

    You wouldn't go to a vegan restaurant and say "this place sucks, why don't have real meat?".  Because there are lots of places that serve meat, and those are for you. This isn't for you, and that's fine. There are lots of places on the internet that have forums that are free and anyone can join and people are free to use ad hominem attack they want when they disagree with you. This place is for vegans.  

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