KPO

Dope and quality can be two different things. Your Ford choice is probably true, but as someone that has owned two Toyota FJ cruisers, which were made 100% in Japan, I’ve only been to the dealership one time in 15 years……and this was for a door seal issue. That’s quality. The early EVs have had a lot more quality issues than the popular media let’s on….and they rip through tires at a much higher volume due to their 25-35% greater weight relative to similar ICE vehicles. Buy GT I suppose, particularly if you want a hedge for significant oil gains recently! I did.

Not sure how the margins will look once warranty related repair/inevitable GM recall costs are baked in. And is anyone else worried about the legal liability of a 9,000 lb projectile that goes 0-60 in 3 seconds? I just think mass markets auto manufacturing is a tough business to generate outsized long-term free cash flow.

I agree, this seems like an interesting exercise. Sorry I missed your initial post. Better late than never, I guess. Anyway, I like most of your list. I’d add MKL, which I was able to add during 2020 after foolishly selling after it went up about 125% several years ago only to watch it go up further. I’d also add IFF, BA, KO, PEP, UNP & TPL (which I foolishly DIDN’T buy, but seriously considered in March of 2020 at under $450). Live and learn. Investing is the ultimate exercise in continuous improvement. I’d be interested in the thoughts of others on the board.

BA

If you’re interested in this sort of thing you might consider TEN which frequently sports a 25-28% rate of return on the cash buyout price. Of course ATVI is another at a 22% potential return, but it’s close is further out and seems to have more political pushback, which is possibly just noise. I’m in on both because I have zero exposure to these businesses otherwise and am fine to own both if the deals don’t materialize and they drop 10-15%. Good luck.

He seemed familiar with Bayer when discussing the Monsanto merger arb deal, so that’s one to put on the short list.

End of day starters in BA, MOS & AMZN. All of which I’ve never owned and all of which will likely go lower.

https://www.oxy.com/operations/essential-chemistry/

This post seems straight out of a sell side research report rather than demonstrating a unique understanding of CP and their strategy, risks, etc. I happen to be very familiar with the KCSouthern asset. How do you value KSU in light of not really having owners economics in Mexico? Do you adjust the terminal value for the concession potentially becoming non-exclusive in 2027 and eventually rolling off altogether? This is a different asset than UNP, BNSF, CSX…… or CP for that matter. I wish you (and Ackman) luck though as I do think CP has an interesting history and some good assets, but they overpaid for KSU in my view.

I suppose disagreement is what makes markets as I thought several on your list were borderline laughable for various reasons for a 10 year holding period. For example, why does Floor & Decor have a sustainable competitive advantage? Where I live most buy their products cheaper at NFM. And what is your edge relative to other investors on Alphabet & Microsoft? These are two of the most obvious investments in the world. Rather than these two, I’d go with @Spekulatius on the index reference if your going to go with these options since they’re around 10% of the S&P 500. CP I bought over 20 years ago before they split into several companies, but I scratch my head as to why it’s now a buy as I don’t recall anyone writing about it in early 2001 yet it’s up multi-fold. Maybe I value safety of principle and predictable returns too much. Best of luck though.

I’ve always approached these “if you could only love one” questions through the lens of identifying a company that can’t be displaced. It seems like every start-up is a tech company these days, so I don’t know if I’d fish in those waters. If you think in terms of a company that has little emerging competition, geographic diversity, product diversity, and customer diversity, the one I’d go with is IFF. Their products are also a small component of their customer’s end product cost structure, so they should be less impacted by inflation than most companies. It does have a modest dividend and it’s a bit pricey at the moment, but you could buy a starter position and add over time on dips. I honestly think the only way to screw up this company is through bad balance sheet management, which does happen from time to time. Much of what I said about IFF applies to WM & RSG, which I also like, but probably wouldn’t buy at the current quote.

GHC is an interesting one. Several of their holdings should benefit from the post Covid world (e.g. Kaplan, restaurant holdings, etc.), they have about 30% of their market cap in stocks like Berkshire & Alphabet, plus they have a sizable pension surplus invested in similar names. The Graham’s control the company, but their actions have generally been shareholder friendly (e.g. Cable One spin, repurchased ~9% of shares outstanding the last two years, etc.). Going forward I could see them selling the TV stations and hopefully finding creative ways to monetize the pension surplus.

Have they diluted their shareholders? What’s the 2022 projected FCF/share compared to 2019?

And didn’t DUFRY dilute their equity holder’s free cash flow per share by issuing shares and debt to stay afloat? What’s the expected 2022 FCF/share vs 2019? This seems similar to the cruise lines in that it’s obviously depressed by Covid, but potentially not particularly undervalued due to dilution.

T, INTC, GHC & small starter in SFTBY

At initial glance this looks like an income producing value play with aligned management in a decently boring business. Any catalysts? Do you mind sharing more? Thanks for the idea.

From today’s quote of around $12.25, on a risk adjusted total shareholder return basis (i.e. including dividends), LUMN seems interesting given the various spin events during the year that will help clean up the balance sheet.

Thanks for the idea. I’ll check it out when we’re in Arizona in a few weeks as I see they have locations there.

A sausage theme. Nice! I get these are reopening plays, but to what extent is that offset by input inflation? I’ll admit I haven’t done research on either besides watching the Nathan’s contest some years. The announcer may be worth picking up a small position, but I digress.

Same on TPHS

Yeah, they haircut my tendered shared by ~10% in my accounts with round lots, but I tendered for several friends/family with odd lots, which were tendered at 100%.

Check again. Mine just came through at Fidelity.

Many more simply complete open market purchases, which don’t require the holding or selling shareholders to have deep knowledge of tax law. I guess I'm still unclear of the benefit to the tender approach if, as you suggest, it is not driven by the liquidity of the securities subject to the tender.

It did seem like a convoluted way to complete a repurchase compared to the Berkshire path, but I’ll assume this was driven by Fairfax’s relatively low trading volume.

I spoke with the tender offer desk at Fidelity earlier today and they confirmed that a payment of ~$253/ share has to be paid by the transfer agent by 8PM ET tomorrow. They’re playing the float game.