Saluki

Rather than wait for an SEC Filing, maybe it's a good idea to have a post where people can list upcoming spinoffs so we can start our research early and have an easy place to find upcoming spinoffs. Here's a few that I heard about: Danaher (DHR) is spinning off a company called Veralto: "Veralto is DHR’s Environmental & Applied Solutions unit and post-spinoff, it will be the global leader in Water Quality (59% of 2022 revenue) and Product Identification (41% of 2022 revenue)" https://finance.yahoo.com/news/dhr-target-industrial-healthcare-firm-095800056.html?.tsrc=fin-srch I've also mentioned on another post that Vista Outdoor (VSTO) is splitting itself into two companies this year. One focused on outdoor (hiking, biking, fishing, camping) and another focused on ammunition. A days ago Imperial Tobacco (IMBBY) announced it was spinning off 60% of their hotel business to shareholders. If you know of any other upcoming spinoffs that look promising, post them here.

Great new interview with Gio. In addition to the Warren & Charlie little rubber duckies on my computer, I have a post it with a quote from him "Deploy capital proportionate to the the opportunity that presents itself in the moment" on my screen. He makes some interesting points. If you're not smarter and can't outwork the pros who do this all day every day, then you're best bet is to have a different perception (Buffett seeing Apple as a consumer brand, or Washington Post as a SOTP, not a company whose broadcast licenses were going to revoked by Nixon, or Geico as a company with a better business model and long runway, not a bankrupt insurer), hire someone to do what you can't (hedge fund?), or have a better process. I think the process part is where people go wrong. Tyson said everyone has a plan until they get punched in the mouth. People can value things quantitively when the markets are calm, but they succumb to FOMO when a stock is ripping upwards, or sell in a panic when they see losses. They improvise instead of following a process, because most of them don't even have a process.

https://finance.yahoo.com/news/ammo-inc-issues-letter-shareholders-123000873.html We are also developing and testing a new suite of AI (Artificial Intelligence) tools to enhance the user experience. AI applications include FAQs, real-time instructional/ factual outdoor related inquiries, digital buyer assistance, reviews of inventoried products, and internally by employees for ad hoc data requests to help improve customer service. This company said it will take them about 9 months to add a shopping cart to their website so you can purchase multiple items at once, instead of one at a time. Now they are talking about integrating AI. Did they suddenly get so good at tech, that they are leapfrogging in skills? Or are they trying to ride the AI wave? During the height of the dot-com boom, I remember companies would change their name to "Name.com" and their stock would shoot through the roof the next day. That was shortly before the crash. Once I see companies start to try this AI schtick and the market overreacts, I will think we are close to a top. But the market doesn't seem to be responding to everyone trying to cash in on the hype, so I don't know where we are.

I've been thinking a lot about longterm holdings. Besides the advantage of not paying taxes, if you are still in your working life, there is no reason that you have to sell to invest in something else. You just keep investing paycheck to paycheck in whatever is available at the time. Three examples recently got me thinking about this. Buffett talks about Citi Services preferred, which he sold shortly after he bought it, for a small profit and it went on to be a multibagger. He did fine, but if he held onto it, it would've worked out fine too. Munger's mention last year of the oil royalty that he bought for himself for $1,000 in the 1960s and it still pays him $70k a year even decades later. Joel Tillinghast still has the first stock he bought when he was a child (!), which went through several mergers, but currently pays a dividend that is much higher than his original purchase price. And one of his 1000 baggers was Hansen's Natural, which later became Monster Beverage. At times it got pricey, but he just had the patience to sit on it because the company was getting better. If the company isn't in decline, and you have capital available to buy the other things you see, why sell when the compounders are so few and far between? Some of Peter Lynch's best returns came from things like Dunkin Donuts which he held for years, not ones that he sold after a quick pop. Even Phil Fisher's record wouldn't be worthy of talking about if he didn't hold Motorola until the day he died. I can understand dancing in and out if you're going to invest in a cyclical business like energy or shipping, but I definitely think that there is something to deciding which stocks are Tinder dates and which ones are marriage material. If you are getting a deal in a cheap stock, in an industry with bad economics, then it's a trading sardine. But if you managed to get into something with a long runway and in a business with a higher than average return on invested capital, then as Munger said, over time your return should match the returns on the business. If those businesses are rare, then why sell and pay taxes to look for quick hits when these businesses come up so rarely?

Maybe because I was a M&A lawyer, I'm programmed to look for things that can go wrong, but lately I've had a feeling that we're due for a correction. "The market" which mostly index funds buying the magnificient 7 is doing well, but when I look at my portfolio of individual stocks, which is doing well, I can't think of anything cheap enough to buy more of. I see a lot of okays, but nothing really says "cheap," except for Televisa, but I don't see a catalyst there yet to make it not cheap. Of course, because I didn't buy it, it went up 10% in the last couple of days. But, if I had bought it, it would be down because the ancient curse is relentless and unforgiving. This morning I decided to buy some BTI if it was still under $34 today, so the curse made it $34.08. Damn you, curse! If the index funds are all cap weighted and fund flows are driving the momentum, then a few layoffs (or fear of them), or some inflation could make people contribute less and then the big run up will be a big run down. Last year I saw so many people asking on Facebook (in forums like ChooseFI) whether they should go to cash because "higher interest rates will make the market go down" and buy back cheaper later. These are people who are no where near retirement age. How much did they miss out on? It doesn't take much to cause a stampede. My thought is that if I happen to have cash when a crash hits, great. If not, just stick to the process and the guard rails I set in place for myself : sell only after earnings release (data point vs noise) or price target is reached. If I have a certain % in mind for a stock, but something else I own is better buy, buy the better deal. If I buy, don't sell for 3 years, unless something in your thesis is proven wrong. Do your due diligence for every purchase (10k, investor presentation, CEO interviews, COBF Forum) before buying.

She said she was working on a book on investing, the last time I heard. Snowball took several years to write, so it may be a while before the other book comes out.

NFTs! I had my doubts about crypto, but NFTsseemed like a grift from day one. I just read that the NFT of the first tweet which sold for several million dollars, is now worth less than a cab ride. I don't think you need to find new ways to lose all your money, the old ways to lose all your money still work fine.

Not very familiar with them, but I heard speculation that it might be a bet on commodities, in addition to a bet on Japan. Apparently those "trading houses" in Japan operate like Cargill or Glencore, not like Merril Lynch, and have a lot of exposure to other economies in Asia.

Alice Schroeder talk that I haven't seen before. It's got some Buffett tidbits I hadn't heard before either. Apparently it's from 2018, but I haven't seen this posted anywhere before. It looks like the rumor that she had a falling out and Buffett wasn't speaking to her after the book came out were exaggerated since Buffett still meets with her and approves of her new husband.

Just started watching a Norweigan show on Netflix called Occupied. It's set in the near future where Russia invades a neighbor (who saw that coming?). Norway's green government stopped producing fossil fuels prompting an occupation by Russia, supported by the EU to secure production. Lot's of plot twists and great character development.

It still is. With my work 401k +IRA my retirement accounts are almost as big as my taxable account. But with my IRA, where I can buy individual stocks, it's about 10% vs 90% taxable accounts. And I had been owning the same stocks in each, but I'm trying to take advantage of the no-tax consequences of my Roth IRA, so I sold and redeployed. Still have about 90% of my original position in BRK, but it's in my taxable account. If a stock gets ahead of itself in my retirement account, or I have no better ideas, I may park the money in BRK again, even at these prices, since it will do much better than cash. But FFH is less well followed and cheaper by comparison, and is a good place to compound steadily too.

It's talked about in the Televisa thread I think. A breakup (or spinoffs) are the best bet. It would be trading at 2-3x what is now if MegaCable had agreed to merge with them instead of overbuilding in TV's territory and fighting city by city. So that and the capex for upgrading the cable network are probably what is dragging down the stock. Satellite TV is a melting ice cube too, but still profitable. A spinoff of Univision would be great, but that hasn't been talked about. They did announce that they will spinoff the Soccer Team, and the Soccer Stadium ahead of the next world cup. That should help with unlocking value because the pieces are hard to value. How much is a stadium in Mexico city worth? So if they are publicly traded that should provide clarity. Spinning off the stadium will prevent them from incurring capex to upgrade the stadium before the games, and a spinoff of the Soccer Team in Mexico city should help with visibility too. Some teams, like Manchester United trade at incredible values, but how much are the non (Yankees, Red Sox, etc) teams worth? There are some other things that aren't core assets, like publishing or TV and Radio that could be sold, but I haven't heard anything about that. I think cash-wise they are fine. They got $4bln in cash and stock from Univision in exchange for giving them all Televisa's prior content.

Sold the last of my BRK in my retirement account and redeployed to FRFHF, FFXDF, TV and BTI.

Twitter is free and it's a cesspool. I'm glad there is a small fee that cuts out 95% of the trolls and wallstreetbets crowd.

FFH, Fairfax India, and a little BTI and TAYD.

Sold half of my BRK in my retirement account and moved it to FFH, Fairfax India, and a little BTI and TAYD. Still have all my BRK shares in my taxable account and they will probably have to pry them from my cold dead hands one day (far in the future, hopefully).

I have mixed feelings about this book, which I just finished. While it's interesting to get a take on Lehman from someone who was working there at the time, you don't see all the moving pieces from the trading desk. The book by Ace Greenberg on Bear Stearns was much more illuminating. Some things which were not to my liking: The author. He talks like every other overconfident trader I've ever met and doesn't consider that he could be wrong. Just like a car salesman can't tell you what is going on in the auto industry, how much insight does a trader hearing bits and pieces second hand really know about the risk management part of a trading house? He says things that he heard, but are clearly wrong, like blaming the implosion in real estate on that right wing shibboleth of saying that allowing low income borrowers to buy houses that they couldn't afford was the underlying cause of the cracks in the market. 40% of home sales during that era were homes that were purchased for investment, or second vacation homes. But why let facts get in the way of a good bro story? He overstates his role and Lehman's role in the grand scheme of things. He couldn't get into Wall Street out of school, and actually peddled meat to supermarkets to get sales experience. Then he started a blog where they analyzed new bond issues (ONLINE!) and when it was bought out, that got his foot in the door at Wall Street. He got in by the back door. He really lays it on thick about how respected and storied Lehman was and how they admired his trading skill. He is obviously biased and won't admit that he's talking about how hot his girlfriend is, who you've never seen, because the other trading houses weren't falling over themselves to hire the meat salesman with a blog. He talks about Lehman like it was in the same league as Goldman, Morgan Stanley or JP Morgan, and not that many people (including me) looked at Lehman as the second tier and did business with them because they took clients and risks that other more respectable houses could pass on. He has some weird hang up on diversity and kept making snide comments about it. He thinks it contributed to Lehman's demise because managers were encouraged to go to diversity presentations and "shake hands with lesbians". He points to the appointment of Erin Callan at the 11th hour as proof of this thesis. After all the overconfident straight white guys with full heads of hair loaded the company up to 44x leverage, their hedge funds imploded, David Einhorn shorted them, and they wasted the little cash they had left to buy back their stock, he thinks that the Callan was a diversity hire and therefore she's responsible? By the time she was elevated in 2007, you could've put the most overconfident, straightest, whitest guy with the fullest head of hair and most expensive suit there and it wouldn't make a difference. Some of trading stories and characters are interesting, but I feel like this is a Rashomon retelling of the great financial crisis where everyone has a different take on the same facts, but one in which they are the hero and everyone else is the villain.

Not all heroes wear capes. This person put all the Berkshire AGM videos online and edited out a lout of the dead time, long questions and pauses and knocked off about half hour in each one. Since I like to listen at 2x speed, he or she saved me about an hour of listening time on each one.

If you love grilling, get it, you can afford it. My dad has a "quincho" which is like a covered gazebo with a special large charcoal pit for grilling, where the grill can go up and down with a winch (?). I'm sure it costs more than an Egg, and he loves it. I'm sure the people who buy these, are in two camps. People who love old school grilling and people who want to show off. I see the same phenomenom everywhere. In jiu jitsu, a common brand of uniform is Fuji (like the Honda Civic of BJJ Gis). It's $80, and people usually have several because they take a couple of days to air dry. There are several "high end" brands like Shoyoroll which are $350. And there are some minor things that people love about them (the inside of the collar is foam, not cotton, so it dries faster; it has a liner on the inside which makes it less harsh on your skin etc.). And the people who buy them either train everyday and are really good, or they are the people who have a lot of money. If you have ten Shoyorolls, that's the price of a used car. When I sold cameras, a lot of people bought Nikon SLR cameras. Some where professionals who appreciated that it had metal everywhere vs brands like Canon where the flange that attaches to lens is plastic. Other people had no business buying an SLR but they bought it because it was a signaling device. So I don't know which camp everyone is in, but if it makes your grilling experience more enjoyable, even if you are grilling alone, then go for it. I'm not the ideal customer. I used to have a charcoal BBQ and I enjoyed the process but eventually switched to propane b/c it's just so much easier. But I have friends who have smokers and will cook something for hours and I love being invited over when they do.

Telemundo has improved a lot. It went from 80/20 Univision/Telemundo to something like 40/30. For must of the competition Univision had programming (telenovelas) imported from Mexico and the longest running, most popular variety show (Sabado Gigante) in history. Telemundo tried to compete by buying programming from other latin american countries that was very country-specific and didn't catch on, or later stuff from Azteca in Mexico, which was like the wanna be Televisa. Telemundo also tried to produce Spanish versions of US TV programs, like Charlie's Angels, in the US which was expensive and never caught on. It was like they were trying a lot of different things and none of them worked because it was like a Buffet with lots of different foods but where all the food was mediocre, instead of a restaurant that only sold burgers but did it well. Eventually, Telemundo got a few things going for them. The host ofUnivision's Sabado Gigante retired, Telemundo got a hit with "Ugly Betty" and a few other shows, and the sports helped a lot. Part of the decline in Univision's market share is the growth of digital media. Unlike immigrants, US born Latinos can watch programs in English on other platforms, or use their time online with YouTube/Facebook/TikTok etc. I think the shrinking of the dominant position because of digital alternatives, and the fact that US born Latinos may prefer to watch English language programs, is something that I didn't fully appreciate until I read this book, but Televisa/Univision still looks cheap to me and I still think the parts are worth more than the whole and I'd be very happy if Univision was spun off to shareholders eventually. Hell, a tracking stock with Telemundo might be interesting to me too, at the right price.

I think it's outrageously priced, but the distinctive green color and shape is a clue. It's like the red bottoms on a woman's shoe or the little alligator on a polo shirt. You want people to know that you bought something really expensive, so that people can envy you because you are the type of person who can drop that much money on a grill.

http://openinsider.com/search?q=An Cannon ,Coleman and Lower have all sold over $1mm in the past few months too. I'm not long or short AN, but if I was I would ask "well, that's Eddie's reason for selling, but why are the other ones selling?" You may be right and it's a great company selling at a 6PE with nothing wrong with it, but digging deeper and understanding the bear case might help you avoid an unforced error. Usually the really cheap stuff has some hair on it. I've made money dumpster diving, just know what you are buying and the what the problems are. Good luck.

Eddie Lampert sold more than $20mm of AN stock in the past couple of months. One way to look at this is that the buybacks are great for current shareholders. Another way is that the insiders are using the cash register to keep the price high so they can sell out and leave you holding the bag. Which is it? I don't know. Olin has a similar look. They are buying back 26% of the shares but several insiders are selling hundreds of millions in stock. Why? STNG is buying back 20% of their shares, but I haven't seen insider selling, so I'm holding. But if I saw the company buying while insiders are selling, I would definitely want to understand why.

In my work provided retirement account, I have index funds so I like to think of my portfolio a little like what Nassim Taleb describes as a barbell. The SP500 is cap weighted so, regardless of whether you agree with the valuation of the high flyers, it is set up to capture the high fliers because they are added to the index as they start to get big. With that exposure to large cap growth on one end of the barbell like a ballast, I feel okay investing on the other end in small caps, special situations, and commodity shitcos that are dirt cheap. Overall, my risk weighting is moderate.

Bezos had an interesting take on the internet many years ago. He analogized it to electricity. When people got electricity into their houses, they only used it for light. Then they figured out other things they could do with it like a washing machine, then a radio, then a TV. So the internet, he said, was only in it's early innings. It's entirely possible that AI will continue to improve and do things that we can't even envision now. But like the internet, there are winners and losers. Amazon won, and arguably consumers, because by putting all the retailers online, it drove down margins and wiped out a lot of retail. So early retailers thought it was great until everyone else showed up. If you are a copyrighter or graphic designer this is scary. When Apple started using multiple fonts and automatic Kerning, the work of a lot of low level typesetters and graphic designers disappeared overnight. Instagram filters make it easier to take pictures so it's harder to be a photographer, but easier to be an influencer. Like the early internet, it may be hard to pick the winners. Where is Pets.com and where is Netscape? But like the gold rush, the people selling the picks and shovels will probably do well. So maybe not ChatGPT, but the servers (AWS, GOOG, MSFT) where the data is stored, or the chips needed to make AI work by crunching the numbers. The problem is that everyone knows this. So is it better to buy now and put it your coffee can portfolio or wait till the next tech crash like in 2000, when AMZN was selling for single digits per share?