Castanza

Sold remaining AMD stake $47. Cost basis of $11. This run up has been insane.

Merry Christmas

Curious what your PT is on this. I think it's more than a 100% upside and potentially a lot more if the new management team is successful in fixing margins. The crazy upside number if they can fix the business and get some revenue growth over 5 years is much bigger. Revenue is around US$1.7bn now and if they can get to US$2bn in 5 years with EBITDA margins of 15% (the goal for 2022 at the recent investor day last month), then EBITDA is around US$300m vs US$170m now. Peers generally trade north of 8x EBITDA, so that leaves an EV of US$2.4bn. The current DSO are at 90 days which is elevated for one off item in particular but management thinks they can get it to 45 days over time. Some peers are that low on DSO but even getting down to 70 days will free up over US$80m in cash. I can easily see with annual free cash flow plus improving working capital that debt will be closer to US$400m from ~US$565m now in 5 years. Also management is keen on buying back stock and there should be enough cash to do that too. If I model them buying 11.1m shares at $10 vs the current price of ~$3, there are 60m shares left outstanding. So an equity value of US$2bn and 60m shares outstanding is over a 10 bagger from here. I usually don't throw numbers like that out there because it sounds ridiculous but that's why I think the risk/reward is good at these prices. I think most investors are waiting for the resolution of the PIK and I think because of the upside that I'm sure Bain can see, they probably want to hold onto the equity. The big risk is that they turn over their shares to the bond holders who then proceed to sell into the market. I just can't see why Bain or the note holders would do that when they could run a strategic process and get a higher price or just wait to see how successful management is with the turnaround. That being said, I am constantly surprised by market participants. Thanks for sharing

The topic is interesting. I could ramble in many directions but decided to take it from the following angle. There are specific risk factors for defensive medicine from the provider's point of view and health preservation/restoration has significant intimate value but my opinion (and this somewhat validated) is that, outside of basic competence, basic physical skills and exposure to idiosyncratic risk, the most significant factor is the quality of the human interaction. In the last two years, I moved to the other side of the mirror and accompanied my in-laws into the meanders of the health care system. This confirmed my view that ordering tests in a defensive way does not really protect from litigation. Avoiding eye contact with the 'client' and focusing on a computer screen as well as the complete absence of physical contact (I don't even mean the absence of any physical exam, which was frequent but the actual absence of any physical contact {ie basic human interaction skills}) in fact constitute significant risk factors for litigation and, unfortunately, the recent experience confirmed a previously held assumption that medical staff who had poor human skills tended to be the ones ordering unnecessary tests the most. Atul Gawande has talked about this, if you're interested. This is a huge question but basically the underlying work implies aligning the incentives. I could give you many examples but let's go back to the heart stent example. Warning: I'm comfortable with the assumptions mentioned but cardiology is not my forte and I could possibly be ridiculed. Given that everything looks like a nail if you hold a hammer, given the human tendency to follow the path of least resistance (and the path leading to higher earnings) and given the information asymmetry, it is easy to understand why heart stents would be recommended and performed. And defensive medicine is not even a major factor in this specific equation (stable patients). The amount of potential savings only in this segment is huge and this can be reproduced in other areas where the defensive aspect plays a larger role. Now you'll say that the poor incentives are deeply woven into the complex web of interactions build over decades. The simple answer is that people respond to incentives (both good and poor). To align incentives, you need data, good analysis and some kind of leadership. I think this is coming to fruition and perhaps (forced) realization with a crisis would help. As I've mentioned elsewhere on this Board at some point, as part of a self-regulatory effort, I was part of a committee establishing tariffs for various procedures. For a rarely performed act, after a revision, an error (a typing error) was introduced (resulting in a much higher tariff) and, the following year, billing for that specific procedure increased considerably (are you surprised?). The billing statistic came back to normal after the error was corrected (!) and, recently, I've been told that the price of the act had been reduced because it needed to reflect its real clinical 'value'. So, how to make money here? If I were 22 or something, I would drop out of university, move to the US and start a venture going along a third-party handling of claims formula and would not worry too much about the deeply needed tort litigation reform that your country needs at it is part of its charm. Because I've become lazy, I'll watch from the sidelines and try to pick the winners. The exercise may also help to spot losers in the overburdened supply chain. I think the only fear you'll have to fear is fear itself. Espouse reform! Thanks for sharing your thoughts.

An interesting aspect is that all attempts aiming for cost containment that have been tried have not been successful so far. A strategy would be to try more of the same with an expected different result, another strategy would be to reframe the foundations which is basically not possible. Still, using the heart stent example below, it appears that the system may be ready for some significant (and constructive) changes. If you play with the link provided by Spekulatius, you can find that the cost to insert heart stents (cost of procedure and estimated cost of stent) is a large multiple compared to other countries. Because of innovation, it is understandable that the cost may be superior but clearly not enough to be a multiple. Also, it is becoming increasingly clear (evidence-based, multiple references available upon request including a large international study just published last November) that stents mostly do not result in significant benefits in chronic and stable heart disease. Despite this, in all countries but especially in the US (by a large margin), stents continue to be inserted without any restraint. Finally, some groups, who are aligning incentives, are designing ingenious protocols to replace invasive procedures and expensive drugs. We are only at the forefront of this wave but it is coming. If I'm right, you may want to adjust sales and profitability for those involved in the stent market: Medtronic (MDT), Cardinal Health (CAH), Abbott (ABT), Boston Scientific (BSX), Becton Dickinson (BDX), Terumo and MicroPort Scientific on the OTC market. https://www.eurekalert.org/pub_releases/2019-08/kp-kpr082719.php Someone highlighted this in the very early part of this thread. But the legal aspects or threat of legal action in the US really has a large impact on overall medical costs. My wife who works in the medical field concurs that there is constant fear of malpractice lawsuits. This undoubtedly has to have an impact on procedure, device, and prescription costs. This type of legal action has had an impact on every industry (for better or for worse?). Curious if you have done any study in this area?

HMO Act of 1973 was one of the most detrimental policies to healthcare in the US. The tax code only allowed businesses to deduct healthcare premiums instead of allowing individuals to do so. This is the foundation that cemented this insurance relationship between employer and employee in the US. Before this policy pretty much everyone could pay for routine visits in cash. Healthcare was centered around reducing cost and insurance was viewed as a need to protect against catastrophic incidents. There is essentially no incentive to reduce healthcare costs with the current handcuffs on the healthcare system. This tethering of healthcare to employers is probably harmful in other ways as well as companies are forced to deal with this expense and individuals are choosing jobs based on the healthcare.

Input latency is a big issue that has not been solved yet. Anything over 60ms basically renders any competitive game useless. Not saying they wont figure it out, but you're going to have a hard time getting people to switch from physical local hardware allowing them to play games in 4k to a cloud based system when you're hearing things like "Stadia works better on a smaller screen." edit: This is especially important to streamers. In competitive gaming you have to have basically zero latency to be "good." Well being good affects your social status. Ninja would not be Ninja if he was playing it on Stadia (not actually available on Stadia).

Are you sure that you've captured all the damages the world would suffer if temperatures rose, say 3 degrees Celsius? Or are even in the ballpark? If you're questioning the percentage given by UN scientists for damage costs then why not question them on their thesis to begin with?

6 months of pain/stagnation and then “positive trade talks” to rally the market going into the election. What else is he going to campaign on at this point?

I guess this classifies more as a temporary side gig but for the sake of content I'll add it :P I wouldn't really call this a long-term business or something that I will continue to do, but I sort of "lucked" into a situation this past year. A lady who I am acquaintances with owns about 19 town home rentals in my immediate area (kudos to her). She was looking to upgrade the kitchen counter tops in all of them over the next year or two. Well my dad was a carpenter and happened to specialize in custom kitchens. I used to work with him on weekends back in High School so I know enough to be dangerous. Anyways I made a hand shake deal with this lady that I would build the countertops for her over the course of the next year and beyond at her convenience. I have been building about one a month for the past 3 months. It doesn't take much time 4-6ish hours each build + install. Because they are town homes they are all pretty standard, same granite, same dimensions. Typically you charge labor by the square foot and not actual build time. Conveniently I use my dads former shop (I give him a kickback for maintenance costs) and was able to use his contractors account to get access to materials. All in all it's been a pretty sweet deal. Shes happy with the slightly lower than market cost and I'm happy with the extra cash ($1300/m. A nice addition to the future kids college funds) for minimal effort. Plus there is some added enjoyment I get out of this over mashing a keyboard all day. Contracting is a murky business and this is about as convenient as it can get.

Started position in WMB

If we make it all the way through #9 I would be skeptical we would see #10. There would be massive political intervention. That being said, it’s the Holidays man! Cheer up! :D

Thanks for this. Picked up a set of heavyweight merino baselayers for a good price. Ditto that, also Eddie Bauer has their fleece lined guide pants on sale 50% off. I swear by these when I do backcountry overnight hunting trips.

Aren't most of the S&P 500 going to be around? I bet that 50% of them will still be in the index. On average, there is a 4.4% change to the index each year according to this article https://www.businessinsider.com/sp-500-index-constituent-turnover-2015-6 Yes but that cuts your universe down 50%. And over 20 years it cuts it down almost 100%. You can simplify the question and ask, "what companies will be around in 20 years" and not even worry about growth - the rest simply won't exist. Relatively interesting visual view of S&P 500 over time. https://blog.qad.com/2019/10/sp-500-companies-over-time/

AMD - I think they will continue to expand their enterprise pipeline and take market share from Intel.

Starts at 6:00

Sold 15% of my $AMD position to free up some cash.

Starter position in TPL and STOR

Curious, does this also comes with mineral rights? I'll be traveling down there for work most likely in June and also will be visiting a sister in-law. Any recommendations of "non-touristy" things to do in Santiago?

Looks like it paid off well for you. Nice call!

CACC Earnings missed. Share price down 8% today and 2020 earnings projections are estimated to be down 30-60%.

Subprime auto loan "sector" is somewhat interesting. Possibly a play on Santander Consumer USA? Apparently they are only verifying like 8% of income for their auto loans. You have to think the auto sector would take a massive hit in a slowdown. Used car market is already quite saturated. Add in thousands of delinquencies and banks are stuck with newish vehicles (now used) at artificially high prices. I'm not an auto bug as some on here so maybe someone else who has followed this can shed more light on the topic.

It’s similar in Germany, corporate taxes aren’t much higher there than in the US. Also, health care isn’t free either, it’s paid for in taxes, which is a capped tax of 15.5%, 8.2% paid by the insured and 7.3% is paid by the employer. It’s not free by any means. Then what’s the benefit? Because rough math for someone earning 65k a year would be 5,330 (-960, -1k, -3k) and you’re basically at my insurance except I’d have $370 less. Make more pay more. I know my coworker makes somewhere between 100-120k usd so that would put him close to 10k costs in healthcare using the numbers you provided. It’s similar in Germany, corporate taxes aren’t much higher there than in the US. Also, health care isn’t free either, it’s paid for in taxes, which is a capped tax of 15.5%, 8.2% paid by the insured and 7.3% is paid by the employer. It’s not free by any means.

Those figures for health care costs in Czech republic sound way off base. Have you had a chance to verify that somehow. Keep in mind anecdotal evidence from taxpayers is not always true. For example, I cant count how many people I have met that dont understand fundamental personal finance stuff like marginal tax rates. Certainly! I generally take everything with a grain of salt. But I know about 20ish people who live here currently and only 1 of them seems to have an issue with the insurance. $80/m 1k deductible 3k max oop and $20 copay (none for preventative). For healthy people this is no expensive by any means. And I definitely don’t have the best insurance around.

Thanks for that simple yet insightful perspective.