Saluki

Sold about 10% of my NETI shares in my retirement account (It's up 30% in a few months based on a merger agreement) and while I still think it has room to compound, there is other stuff that is cheap now. Redeployed it to OXY, PXD and STNG. OXY is below the price that Uncle Warren is buying, and PXD also has a lot of Permian assets like OXY, and is a similar market cap, but no one is looking at it. Weird. I've written about STNG in another thread. I hope I'm right about my oil basket, but I can't think of a better short term vs long term thesis than buying oil stocks when they are beaten up now. Biden still hasn't refilled the Strategic Petroleum Reserve, the majors are buying back stock instead of digging more wells, OPEC cut production, Russia can't get western tech to improve production, and every major shale basin except the Permian is producing less than they did before because the well production in fracks is front loaded. I had my finger on sell button on META and SWBI in my retirement account today but I couldn't bring myself to pull the trigger. I may sell META next week but I think now that Cathy Woods is in it and people are bullish about the Twitter Clone, there is going to a retail investor pop before it reverses. SWBI is not expensive, but it will take a while for the new factory to get finished, and I feel like Mr Market is puking up some good stuff in energy lately.

Added a few shares of OXY and PXD (both are a wager on oil prices and the Permian basin). Nothing to write home about, just had a couple of dividend payments come through.

I thought about selling META in my retirement account before the big swoon, based on valuation, but I just let it sit there. I bought a few shares when it got ridiculously cheap, but nothing to write home about. I'm starting to look at the valuation again and think it might be worth it to sell some META because it seems that the last bit of good news (Twitter clone) is already priced in. ~40x earnings and still spending money on the metaverse? It's moat is incredible, but there are a lot of bargains out there, especially in the unloved things that are the polar opposite of ESG (my gun stock moved up but, energy , shipping and cigarettes still look like bargains). Hmmm. As far as "the top" goes: the index is cap weighted and the stuff that is on fire like NVIDIA and AAPL are looking fully priced. If everything goes smoothly, they will probably keep doing better, but after experiencing a pandemic, a war in Ukraine, an attempt to steal an election in the US, is smooth sailing the thing we should be betting on?

I'm more than half way through this book and would highly recommend it to anyone interested in the tobacco industry. It covers the development of Juul and some of the other non-tobacco nicotine products. If you didn't have a low opinion of management at some of these companies before, this book will enlighten you. The Altria guys, were slow moving and stupid, which is not a good combination. When Juul (then called Ploom) was a startup and needed a few million of seed capital, the private equity guys and other tobacco companies were falling over themselves and flying out to silicon valley to meet with these guys and see what they were doing, but Altria made Ploom come to Richmond for a meeting and then an idiot Altria lifer named "Captain Jack" Nelson literally put his feet up on his desk and talked down to them. A few years later they would pay $10 billion for a minority stake in the company, at a valuation that was twice what the prior round valued the company at a few months prior. Add the billions that they overpaid for chewing tobacco and a few other bad ideas and soon those billions start to add up to real money. These cigarette guys had a weird fetish about tobacco leaves. One industry higher up thought that the vape stuff wouldn't catch on because it had no tobacco. It didn't burn anything. Why would anyone want it? They want it for the nicotine! Without nicotine, smoking a cigarette would be as popular as blowing bubbles or lighting a sparkler. They didn't get it. And the slow movement was a sign of pride for them--a feature not a bug. One CEO said that over your career "progress" is moving the clock hand from noon to 12:03. If you try to move it from noon to 3pm, you will be canned. The chemistry stuff about the nicotine salts is particularly interesting and it's what gave Juul an edge. About 10% of smokers who tried a vape ending up switching. When Juul mastered the chemistry, about 60% of smokers who tried Juul switched. Fascinating read.

Having lived in NYC for the first half of my life (and worked in construction with my Dad), Ive seen that real estate in some cities goes up and to the right for decades,, but not in a straight line, and it's usually the people that get in late on FOMO and bet everything on black are usually the ones who get wiped out and people like Ackman in General Growth who have money when no one is lending can do well. But you have to keep reminding yourself that this time isn't different. Even Brookfield got caught on some properties that they overpaid for when interest rates seemed like they stay in low single digits forever. I lost a bunch in Florida before the great financial crash investing in some flips with my dad and brother. But I also bought a bank foreclosure condo in 2010 for $20k in Florida that Zillow says is now with $140k. The first was foolish because I knew the prices didn't make sense but I outsourced my judgement to my brother who had already flipped several successfully. The second one was just me sharpening my pencil and making my own decision. So I will always make mistakes but hopefully not the same ones. Over time real estate tends work out because it's a spread bet between housing prices and inflation. If housing prices in NYC drop by 30% but the dollar gets cut in half due to inflation, then you will do okay in real estate especially with a mortgage because you borrowed in today's dollars and paid it back in future dollars which will probably be worth less. And most people here don't know each other so unless you can point to a "what are you buying today " or "what are you selling today" post, everyone should be taken with a grain of salt. I try to be transparent because fake data points don't help me and no one knows me so my ego isn't tied to peoples opinions here. And I've gotten useful feedback on many things by crowdsourcing gaps in my knowledge. I have no specific knowledge about Tesla that would make me invest or short it. Better for me to just watch. It can't blow up if I don't own it or short it. I don't want to bet on it but I'd still like to learn to see if I am right the next time I spot it.

John, I know you were probably kidding, but I was in the neighborhood and stopped by. They wouldn't let me inside here or at the stock exchange and seemed quite surprised that I wanted to see inside. Needless to say the better half didn't find it as amusing as I did when I was questioned by security. "No, I don't have an appointment with anyone in particular...but I work in finance and I'm on vacation so it all makes perfect sense you see..."

Ah! Got it, thanks.

I don't see this holding in Dataroma. Does Hamblin Watsa have different holdings to than FFH?

I have 3 editions, but I'm probably going to order this too. I bought whatever the current edition was in 2000, then bought the new one after. Then I bought a reprint of the original edition which I decided to read but never got around to. I know I have a book problem but compared to gambling, drugs or fight club it's not so bad.

This is one I've always struggled with. I think value guys (as opposed to growth or GARP or momentum) have the same weakness that you have to train yourself out of. Since you like buying cheap, when it gets to a price where you wouldn't be a buyer, you sell. I thought a lot about mistakes like buying Hanesbrands on the spinoff from Sara Lee and patting myself on the back because I made like 40% in 6 months. Then it traded flat for a couple of years and went up 10x from there. Other than having a sell price in mind when you buy, I think one thing that's helped me sit on my hands recently is asking "is the company getting better or worse?" and if it's the former, I hold on for a while longer. If it's the latter, I ask "is it permanent?" then decide from there. Temporary: Google (ChatGPT), Facebook (Apple privacy and Metaverse), Permanent: Hanesbrands. With Hanesbrands, back then the company was getting better even if the price didn't move much (fall in cotton prices and growth of athleisure). And the market recognized that. Whereas now it is impaired (getting eaten alive by Gildan which has newer machines, less debt), so it's a time to sell. I'm trying to recognize that pattern in the future. I overpaid for Fairfax after attending my first meeting in 2018 and having rose colored glasses on, and it was underwater for several years, but I didn't sell because I could see it was getting better and for some reason when a stock has a dividend I am much more patient with it than stocks without one. I think stepping back looking at the metrics helps sometimes too, but sometimes the story is not in the numbers. With FFH, I remember scratching my head when it was selling for 80% of book value (giving the assets or management a negative value) and I saw Prem doing a tender offer and buying shares hand over fist with his own money and I was darn near sure Mr Market was wrong so I just sat tight. With JOE the price went no where, but they were buying back a lot of stock and to me if you buy back 10% of the shares and the price doesn't move, I still feel like I'm up 10%. STNG is another one like that. They already bought back 10% of the market cap this year and might buy back another 10%. If the stock doesn't move, I still feel like I'm up 20% on it. OXY is another one, it's price is the same as it was a year ago buy the enterprise value is $10bln less, so I feel like I'm buying a better company. (Stock price going down, but the company is getting better, so hold. If something happens and it gets worse permanently, sell).

This reminds me of the optionality that Taleb always talks about. If you buy a lottery ticket (or go to a party where you don't know anyone), the downside is small and certain but the upside is huge and unlikely. If you skydive (or go in one of these), the upside is that you finish the day and you're still alive and not paralyzed, and your out a lot of money. The downside is small, but why put yourself in that position other than for bragging rights?

I have a midsize position in FF India. FFH is still my 4th largest position but I sold the shares in my retirement account and redeployed them to FF India. I still like them both, but FFH is a compounder trading at book value and FF India is a compounder trading below book, so I like the odds here. I need to program to myself to look for more compounders like this and not get sucked into commodity shitcos that are cheap and I have to watch like a hawk for signs of trouble. Problem is that once you've made money a few times at those, it's hard to pass up when you see it again. A Canadian insurer managing a company that invests in India, and is traded in Toronto (and thinly with another ticker in the US), but reports earnings in USD, and has an unusual compensation structure and conglomerate discount, with assets that don't seem to have a lot in common (Airport, chemicals, food, banking) seems like a textbook mispricing scenario. And it's a way to participate in that economy without overpaying for the nifty fifty.

Trimmed a little NETI in my retirement account and bought some OXY and PXD. I should have trimmed NETI two days ago on the merger news, but when I worked out the conversion ratio for Cadeler shares, I got $14.70 and NETI was trading at $13.50 and I literally said to myself "No, they still owe me another dollar." So now they owe me $2, LOL.

The airport is the center of gravity for the value of this stock, and airports are a toll road that lets you participate in the growth in the economy or tourism of a region. I was looking at CAAP recently and although it looks cheap, when I stepped back it had some issues. I think part of the CAAO discount is that Argentina is a mess, and Brazil isn't exactly a success story either, so people are concerned about it even though a cheap currency makes Argentina more attractive to tourists and 85% of CAAP's revenue from the Buenos Aires airport is in dollars. So if you think about the growth of latam vs asia, with CAAP you are getting a discounted dollar that may grow slowly, vs FFXDF where you are getting a discounted dollar that is growing rapidly. If BIAL was a separate stock I think the discount to fair value would go away quickly. Part of me likes that it is wrapped up with other things because the value is hidden in plain sight and I can still add to it from time to time when it dips a bit and I don't have other ideas. The airport is a long term compounder, so there is no hurry. And if the price stays this price or lower for long enough, maybe we'll get another tender offer and buy back shares again and I get a bigger % ownership without opening my wallet.

Added some OXY and STNG on the dip.

Well Putin has said in past interviews that his greatest regret about the fall of the Soviet Union was the millions of ethnic Russians that were now living on the other side of national borders. So when he took Crimea with no consequences, it's not an easy leap to think that he wanted all of the donbass region and probably as much of Ukraine with the russian speaking population that he could get. There are some dog whistles in his speeches. He brings up fascists to invoke the patriotism that the Russians associate with WWII. He refers to the Crimea/Donbass are as Novorossia (new Russia) which is what Catherine the Great called that area when she conquered it. It would be like a Texan invoking the Alamo. For a foreigner, they might not get it, but a Russian speaker would hear that and think that it's part of Russia's historical territory during it's golden age. To me, it seems likely that Belarus is close to Russia and he didn't like Ukraine tilting westward so he made his move while he still could. He probably underestimated the unpreparedness of the Russian military. Apparently a lot of the money for upkeep of those tanks was siphoned. It's ironic that he didn't foresee that possibility since that's how allegedly made a great deal of his fortune when he was in St Petersburg. A quick win would be a warning to Belarus, Latvia, Lithuania, Serbia and other neighbors to not stray too far off the reservation. A lot of oligarchs have died under mysterious circumstances since the beginning of the war and if he pulls back now, someone may try a power move against him, so he's all in on this one, unfortunately. I don't know if there is any truth to the rumors that he is ill, but if so, is he just trying to cement his power so his wealth passes to his family and cronies or if not, what else?

I read a lot of things that I find interesting and it may not pay off immediately, but eventually you may see something and the pattern recognition kicks in and it helps you. Years ago I read something about Packard automobiles. They were the Cadillac/Mercedes of the day. After WWII they came out with a lower end car and sales went up for a couple of years, then the company tanked. It diluted their premium brand and the boost in lower margin cheap cars came at the expense of their higher margin cars. The Japanese car companies did it right when they came out with separately branded cars like Infinity and Lexus because they knew that people won't pay $50k for a luxury brand if you can get the same brand for $25k. So I was long Harley Davidson and when they announced a lower end model to appeal to millennials, I immediately sold. Why buy a $40k Harley when you can buy one for $18k? That was pattern recognition. People thought the news was positive, but I'd seen it tried before and I thought there is a wrong way (Packard) and a right way (Toyota, Honda --> Infinity Lexus) and they were doing it wrong. Some of it, as others said, is just knowing more about a specific area where others have general knowledge. The good news is that you can acquire that. When bird flu was decimating chicken flocks and chicken stocks, I started reading up on it and the industry. I think Poultry Weekly or something was something that I read a lot of to get knowledgable about how long it would take to replace a flock (less than a year) and about how bird flu spreads and what they can do to prevent it. When I was looking into an offshore wind turbine company I signed up for Offshore Wind Daily and it shows up in my inbox every day. The good news about doing a "deep dive" like this is that even if it takes you a while, the long term compounders won't be something where the opportunity goes away in a few weeks. It would take me a loooooong time to know enough to have an edge or variant perception in a pharmaceutical company, but a lot of businesses are not that complicated. PLOW (which I don't own) makes 65% of the snow plows for trucks in the US. Steel comes in one end of the factory and snow plows go out the other end. So the two things that move the needle are steel prices and snow fall the prior year. Just keep reading things that interest you, without thinking specifically about investing, and if you find a company that looks cheap, you can start digging deeper into that area. If it takes to long and the opportunity passes, you don't get the money but you got to keep the knowledge and it may come in handy next time. There are some things like refineries and potash that I don't want to hold for a long time but I've traded in and out the names when things got really cheap (2020) because I did the work on them before. And one other thought on variant perception. Think about companies like BABA or NFLX that got decimated recently. One came back quickly and the other hasn't yet. A lot of people sold them but each time there was a buyer on the other end. So what's the counter argument for you selling (or buying). You can't be sure that you're right unless you know why they are wrong, and if you don't know what the person trading against you thinks, then how do you know they are wrong?

I like the idea of Zoom also. If it happens, count me in.

Added a little more Scorpio Tankers. I topped up my existing position about 10% more, hoping to follow @Parsad's method overweighting something slightly and then selling to get back to my original allocation when it goes back up.

It's all mental/emotional. In previous eras, being poor meant that you didn't know if you were going to eat that day. Now it means that you have an older iPhone. Beyond your basic survival needs, all money is just a story that we tell ourselves. The poor, middle class, and rich, all eat the same kind of food, drive on the same roads, get treated with the same medicine and wear similar clothes. In the 1500s, a peasant had one or two set of clothes, and you could tell a lord from a peasant by the way they were dressed. Today, there is some psychological difference in an expensive suit vs a cheap suit, but if I showed you a picture of a rich kid starting his internship at Goldman or a poor kid wearing his interview suit, I don't think you could tell who was rich and who isn't. So to some extent whether you are rich just means whether you can afford your desires, which are related to the story you tell yourself about them and about money. If you like expensive cars and champagne at the club, and you can afford it, then you are rich and if you want them but you can't, then you aren't rich. But if you don't have those desires, you are rich if you can afford the ones you want with no problem. I have one house, one car, one lady and one dog. I like to travel and read books. I am rich because I can afford it. If wanted 3 houses and 3 cars and 3 ladies and 3 dogs, and a ferrari, then I am not rich. I'll stay with the way I am. I like being rich

added a few more shares of Scorpio Tankers.

Added some Scorpio Tankers.

Whenever I see stuff like this, I always wonder why the journalist isn't asking for audited account statements to back up the claims. And if he could turn $7,500 into $8mm, using some repeatable method, not just YOLO calls, then why is he selling 30 day bootcamps for $79? He claims to have accomplished this feat at 23. The internet says he's in his 40s. At that rate of compounding, why isn't a billionaire following his own course instead of trying to sign up people with no investing experience. If he's that good at making money, why does he need to sell Facebook ads to Uber drivers looking for a new side hustle?

Bought a little more Scorpio Tankers.

I think that's why Peter Lynch advised to find a company so good that an idiot could run it because eventually one will. The Busch family had a lot of drunks and several dead bodies (but no prosecutions) before the business was sold to InBev. https://www.nbcnews.com/id/wbna40806859