Saluki

I've been guilty of sitting on losers too long while waiting for them to come back. I think Buffett had a great quip about the stock not knowing that you own it. I was listening to a podcast yesterday from an investor, who has a concentrated book and he had a great line about not cutting the flowers and watering the weeds, but doing the opposite. Rather than throwing good money at a bad business and hoping it will turn around he said "It's much easier to give birth than it is to resurrect the dead."

Small adds to ATEX. Taking it up to a 1% position.

Started watching Vice Principals on Max. If you like Eastbound and Down, and Righteous Gemstones, it's got a lot of the same cast and type of humor.

Sold out of a small position in KNOP for a small loss after earnings came out and bought some NTDOY, FF India, and sprinkled the rest around in a few small positions.

There's a lot of sharp traders on here. We gotta find a way to arbitrage this.

I don't know. If I went to Wendy's and the sign said a burger was $5 when I got in line and when I got to the front of the line they told me it was $8, I didn't think I would go back.

He's obviously a bright guy, but sometimes his actions contradict his supposed operating manual, as with Valeant. More recently, HHH, which has been disappointing, paid $50 million for a minority interest in a celebrity chef's company. In this interview he says that he likes restaurant brands like Chipotle and Burger King because they have a system, and the system is very efficient and not prone to human error. That's the exact opposite of how a high end/ celebrity chef restaurant operates. The workers at a place like that need a LOT more training, and the menu changes constantly, which is why Chipotle with a limited menu that stays the same and where you can train a high school to make the dishes in a few hours is so good. He says he likes companies that generate a lot of cash, since when have minor league sports teams been known for their cash generation? Even Ryan Reynolds is losing money on his soccer team. And the anti-woke college stuff and buying into Twitter seems like he is setting himself up to run for office.

I'm just finishing up this book which piqued my interest due to my deep dive into the gun industry before I invested in Smith and Wesson. Sam Colt was an interesting figure. He was like Elon Musk, in that he was a really smart guy and also something of a showman. A less flattering description would be that he was scammy. This book is extremely well researched and clears up a lot of the misconceptions which are so often repeated as part of Colt's marketing that they have become accepted as truth. He did not invent revolvers. He probably saw one on a sea voyage he made to India when he was 16 (a Collier flint lock rifle) which had multiple chambers that you advance by turning it with your hand. He thought up the advancements that made it advance one way by pulling the hammer back (like a ratchet or a bike gear that only goes one way) and came up with a few modifications to prevent "chain firing" where the spark ignites every round at once. His life was crazy. His company failed a couple of times before he managed to get rich on the back of an order (and the marketing) from the Texas Rangers. When he needed money he used the knowledge of chemistry that he learned from making dyes at a textile mill to make laughing gas and would go from city to city as "Dr Coult" and get people high on it in auditoriums as entertainment. He came up with the idea for the revolver pistol with the innovations but they were just drawings and a guy named John Pearson, who is never credited, figured out how to turn those sketches into a working gun. Colt was genuinely a smart guy. He worked with Morse to develop the telegraph and also had another failed company that used wires and underwater mines to blow up enemy ships. The world was smaller then and everyone knew each other so the amount of famous people you run into seems implausible in today's world. Two of his investors were brothers in law. One of them, named Whistler, had a son who painted...Whistler's Mother. In a demo of one of his pistols, it spooked a horse which was pulling John Adams carriage and killed the driver. He was so upset by this that he asked for a postponement in the closing argument he was giving. The case was about the Amistad. He didn't have a factory when a big order came in, so he partnered with Eli Whitney's son. This book did a great job of separating fact from fiction because Colt was such a braggart and salesperson that his facts would change in retelling to fit whatever would help him sell more guns. He claimed he read about a slave uprising and imagined a pistol with many bullets to help the slave owners defend their family (the story he referred to happened a year after he came up with the gun). He claims he came up with the idea for the revolver by watching the ratchet wheel that picks up the anchor on a ship (he probably, like many people had seen the early Collier revolver rifles, or "pepperbox" pistols which had several complete barrels which rotated.) Not something that will help your investing, but an interesting read.

We are on Season 3 now of The Righteous Gemstones on MAX. One of the funniest shows I've seen in a long time.

Recent update on the business side of the Red Sea attacks.

small add to NTDOY

I wasn't a shareholder back then, but short shrift - The Globe and Mail

I read this as "I didn't cover my shorts in the 24 hours that my hit and run was in the money and I'll try to sling some mud in the conference call to let me walk home with some money for all my work."

Tiger Cub Stephen Mandel and Burry both have good sized positions in Square. DATAROMA Superinvestor Ownership It's trading at less than 2x sales and the restaurant checkout appears to be everywhere now, but it's down a lot from the high $200 price after the news articles came out about their Cashapp and lax anti-money laundering making it the preferred app for drug dealers, hookers and other con artists.

I noticed that also. Big position for both Burry and Tepper. It's strange that Burry has bought (and sold) BABA before at these prices and not held on. So much churn in Burry's portfolio, that it's hard to decipher what the thinking is.

Protesting Indian farmers clash with police for a second day as they march toward the capital (msn.com) If I recall, FFH had an investment in Indian Ag (pulse crops?). I wonder if this will have an effect on that business? I did notice that FF India was down yesterday (so was everything), and I still like both companies, but would add to FF India before FFH. Although protests are obviously bad if you own an airport and make money from tourism.

I'm sure everyone enjoys today because in addition to being Valentines Day, it's also when the 13Fs are due. Has anyone noticed any big adds, or new names that aren't usually on the radar? I'll start: Pat Dorsey, who runs a concentrated portfolio with 9 positions, just added a 9% position in Danaher this quarter. https://www.dataroma.com/m/holdings.php?m=DA (He trimmed Meta, Alphabet and Smartsheet)

Small adds to OXY, JOE and TV. I had a resting sell order for some SWBI shares at $14 and I got a fill yesterday, so I had to do something with it.

Trimmed a few shares of GOOG in my retirement account and bought a little OXY and TV. I placed a limit order on Fairfax India after the dip yesterday but I didn't get a fill I was tempted to trim to HHH, but I think I'll wait for after the spinoff which should allow me to sell the part I never liked in the first place and keep the good part.

Mojo Nixon died https://www.nytimes.com/2024/02/08/arts/music/mojo-nixon-dead.html I'm a big Elvis fan. And one of my favorite songs is "Elvis is Everywhere" by Mojo Nixon. I don't think he ever got the recognition like Weird Al Yankovic because, unlike Weird Al, people couldn't tell if he was kidding or just a crazy hillbilly singing weird songs about having a Bigfoot baby with Debbie Gibson or killing Don Henley. He didn't take himself, or anyone else too seriously and he reminds me of that Munger Quote about Musk and Trump that you shouldn't underestimate someone who overestimates himself. From the Washington Post obit: As Mr. Nixon told it, he was “not that talented” but instead had “an enormous, irrational amount of confidence.”

If you play that scenario out further, then people buying index funds are buying the components of the index regardless of the valuation. So the index fund becomes like a fund with a momentum strategy. Especially if they are using some kind of dollar cost averaging strategy like contributing through a workplace retirement plan like a 401k. And the value of the top performers in the index, because it is cap weighted, will be affected more by fund flows than fundamentals. So more people contributing to it through their work 401ks will move it up and fewer contributions will move it down. So it should become, over time, much more sensitive to employment numbers: fewer people employed means fewer people contributing. It will also have a secular headwind as boomers retire and begin to sell from their index funds to meet retirement expenses rather than contributing at their end of their work life, which is when they make the most money and therefore have been pushing the index higher.

I think it's hard to come up with a certain price, but directionally it's hard to think of scenarios where there aren't pressures to make it go up. Nat gas is cheaper here than in Europe because we don't have the capability to export a lot of LNG. If that changes, prices will converge, currently that's bullish. Clean energy like solar and wind requires some kind of backup base load generation. Other than nuclear, the stuff that is ready on demand is coal, oil, or natural gas. So if the ESG trend continues, that's also bullish for natural gas. Natural gas is needed to make ammonia, which is used for fertilizer. There is no substitute, so secularly, it will increase demand for natural gas in lock step with global population growth. IMO 2030 is working on what will be the new clean fuel standard for shipping. One of the candidates in ammonia, which should be bullish also. The two problems are that these trends are well known and slow moving, so they will have an effect some day, but who knows when that is. In the short term, natural gas and oil correlate closely with industrial production, and since we don't export a lot of LNG, the US price is linked to industrial production in the US. That's difficult enough to predict in the short term, but going into an election with the current political climate, I wouldn't want to take either side of that bet. The other thing that will affect natural gas prices is the weather, because it's used for home heating. But again, even though the trend points to warming temperatures, it's not something that you can predict in any one year.

I agree with this up to a point. From talking to gun people, it appears that some guns, like Kell-Tec are cheap and look cool, but have a bad reputation for reliability, so people buy them for fun on the range, but wouldn't use one if their life really depended on it. I've watched some "torture tests" from a vlogger, and the cheap Turkish shotguns all failed, but all the American made ones passed, except for Kell Tec. Others like Hi-Point, are cheap, heavy and ugly but have a good reputation for reliability, so it's something that someone would buy if they didn't want to pay up. I was concerned about the possibility of premium brands, like Benelli, offering main stream stuff, or cheap manufacturers moving up the food chain. Diamondback, like many others, started selling AR 15 clones because they are popular and no longer patented so anyone can make it. They they made a decent inexpensive pocket pistol, then a cowboy style 22 revolver for $300. This year they introduced a $750 revolver, which is squarely in the S&W/ Ruger/Colt target market. It appears they want to take the japanese import car approach. Start with the motorcycles, then cheap cars, then better cars, then the premium stuff. I don't know how many people are going this route though. I'm not a gun guy so I hadn't heard of Daniel Defense until recently. But they went from zero to 200 employees and big government contracts in only 20 years. Palmetto State started in 2008 and, according to wikipedia, has 200 employees also. Is this a trend in every industry like Sir Kensington and Harry's Razors coming from nowhere and making inroads against brands like Kraft and Gillette? I don't have a gun, but if I bought one, as you say I would rather pay $450 for a S&W than $300 for a kelltec because I would probably only want one, and I wouldn't want to take the low bid on what is essentially disaster insurance.

I have a mid size position in SWBI, which is up about 23% in year plus a 4% dividend. Normally that would be great, but when everything is compared to the magnificent seven tech stocks, it's just okay. But I visited a gun store recently and asked a million questions and I'm wondering if I should sell and move on. The reviews are great for SWBI's popular Shield Plus and they seem to well liked by police departments (along with Glock and Sig Sauer) and civilians because their reliability, ease of use, compact size and price. In looking at different models, I was surprised at how similar they are in feature and feel (i didn't fire them, so maybe their are differences in recoil). The SWBI and Glocks and Sigs are least $100-200 over budget reliable models like Taurus. That's one of the reasons I liked S&W. With the increase in new shooters as a result of the pandemic riots and increase in crime in many cities, I thought NEW gun owners would favor brands that they have heard of like S&W, Glock and Sig, particularly models that are used by police and military. It seems that existing gun owners are more willing to have several guns for different purposes and more willing to buy niche brands. My realization for a possible bear case is that although SWBI has great margins from being able to charge more for gun that has the same parts and manufacturing methods as other guns, and that they should be able to recognize better margins from the new factory and also from spreading the development costs of new models across a larger number of sales, it seems like a great combo but there is a catch. I saw a LOT of Glock clones, some which even take the same magazines as Glock. Since the original Glock came out in the 1980s, the patent expired and anyone can make something that looks and works just like it for a fraction of the price. Ditto for the ubiquitous AR-15. Unless they come out with another game changer pistol, in less than a decade there will be knockoff Shield Plus clones for $1-200 less that S&W will have to compete with. So while a lot of the gun companies have been around for a LOOOooooong time, the new entrants keep popping up on the low and high end, and they may eventually move to the middle with these Glock clones, or eventually with the M&P Shield clone, which came out in 2012, and should have their patent expire in 2032, I believe. S&W has been around since the 1800s and Berretta has been around since the 1500s, but if you can make a decent gun using tech that was available in the 1800s, it shouldn't be too hard to make them now with more modern equipment. Glock cranked out his first guns on old soviet metal stamping machines that he was using to make curtain rods, furniture handles and knives. On the high end, Benelli, which makes racing motorcycles, started making high end shotguns. Diamondback, which makes racing boats, started making revolvers a couple of years ago, and now a pistol. So if the new entrants in the premium market decide to come out with middle market stuff (like TESLA coming out with a lower end car) or the new entrants in the lower end (Diamondback, Kahr, Rock Island, Palmetto State, Taurus) develop a reputation for quality, maybe the brand recognition of S&W or Glock won't be something that they can charge as much for in the future. I've looked into the liability issue, and I think it's not worth worrying about. Since the recent federal law change, there has been no gun company that has been successfully sued for a mass shooting. Any thoughts from the members, particularly if you are a gun guy, unlike me? What are you opinions of the guns that non-gun guys wouldn't have heard of?

Yes, I listened to the Audiobook also and it was a little confusing that the author was a woman and it's read by a man. I agree that the grid is a mess for political reasons and that people are making money selling into the grid, but no one makes money keeping the grid going and there are political pressures across state lines that have nothing to do with keeping the lights on, so it's not a good setup. I have a feeling that other states are as bad as New England, but that's the grid that she's most familiar with, so that's what she focused on. If I recall from the book, most grids are designed to have about 1.3x the power needed, just in case, and it Texas it was 1.1, which was a disaster when they had a cold spell and couldn't get natural gas in to work the generators. She made a very convincing case for Nuclear, which I had a knee-jerk reaction to, just like most people.