jasonchin

Some rare stories on Lou from a Twitter account:

Two high FCF plays (*not the best industries): MGI - turnaround play with a pivot to digital. 100M FCF with a 800M mkt cap. ARC - boring printing business with an improved capital str. 40-50M FCF with 150M mkt cap

If you need an additional reference point, Tren Griffin included the 2003 AGM reference in his book (Charlie Munger - the Complete Investor). The reference was made to "Owner's Earnings" which takes into account the capex required to maintain the business's ROE.

Ahold Delhaize - there is a hidden e-com marketplace in this. An element of parallel with Amazon-Whole Foods (however, at a much smaller scale).

If you haven't seen, a short doc on Charlies shared recently:

Saw this article being shared on Twitter: https://image-src.bcg.com/Images/BCG-Is-There-a-Future-for-Service-Stations-July-2019_tcm9-223783.pdf Some good insights on the possible scenarios and solutions. End of day, companies must be open to adapt and innovate. Certainly good opportunities down the road. I can see some parallels between ATD and KR whereby innovation is required to stay relevant.

Ingles Markets: A regional supermarket chain. Bulk of B/S consists of PPE (asset play). GP Margin expansion (narrow moat). Normalize P/E ~8-9. Using cash to payoff notes @5%. Family-owned. No earnings call (only Wells and Gabelli in prior calls) Tiptree: 0.5 P/B. Wonderful asset in Fortegra (consistent underwriting margin). cash bal>Market cap. Hard assets earning yield of 4-5%. Sign. insider ownership. Biggest con: questionable capital allocation (not aggressive in buybacks)

CTRM: Net-net stock

Bought ADT as a long-term hold on Friday.

Interesting. Two thoughts came to my mind: 1. What % of the new businesses were started by employees that were furloughed? 2. How much did the stimulus check impact the %? This can be a social experiement and possibly creating a business case for future recessions. Just thinking out loud! Thanks for sharing, longhaul.

Given the trend in vehicle and RV sales, there should be a continous demand for oil from the largest consumer group. The risk/return profile at currently level is definitely attrative to me.

Adding ALTG. Consolidating the equipment rental/sales small shops with a potential secular tailwind post-election/recovery. Signficant management ownership/2nd generation ownership.

This is an interesting topic to me. Envy comes from comparing yourself to others which is a survival instinct. If you compare yourself to the best version of yourself, it's a growth instinct. So, envy is simply a matter of perspective. My personal view is that our society is designed such that we are "trained" to compare ourselves to others. When you attend primary and secondary schools, teachers and parents focus on grades as a measure of success. Grades are a relative comparison of you and your fellow classmates. For those who are top of the class, you get credits from everyone. For those who are bottom, you want to just be like those top students. As a result, we are step-up to develop an "envy" mentality. For those who are fortunate, you will come across a mentor/parent who will value your uniqueness and start planting the seed that life should be about the growth mentality (competing with yourself). This is probably one of the hardest weaknesses to overcome as it is ingrained in every one of us and it's a matter of "unlearning" it over time. Unfortunately, not everyone would reach that stage earlier in life.

HDS. Quality business at a fair price. Expecting a spin-off towards the end of 2020 and early 2021 which should result in multiple expansion. It is in a fairly fragmented industry that provides the opportunity for consolidation. HDS has invested in technology with SAP and its online platform which places it in a good position moving out of COVID. One to keep for the long term.

I think there is an element of overconfidence bias here. If you view the two together, it's simply the chicken or the egg causality dilemma. Simply a side note and can stem from the same psychological root cause.

Their investments are mainly in index fund (equity component), so they are not the usual Berkshire or Markel. The CEO has the right mindset in building for the long run. She was also in a few of the company's commercial directly which is one of the unique selling point about PGR. According to the CEO, their digital platform will be a game charger in the longer term. Lastly, quite impressed with the level of detail disclosed in their reports and highly recommend receiving a hard copy if you are a shareholder.

As a side note: I feel high-density cities with skyscrapers will have an additional challenge which is transporting people in elevators.

My personal interpretation: he meant that earnings will be depressed relative to new capex because it takes time to ramp up the new capex (esp. in those industries). It's like building an extension to your property. You can still enjoy the fruits of your existing property, but you will have to fork out capital for your extension which may take some time to be up and running. However, your existing property is cash generative.

I do feel part of this is due to Bill Gates. Bill's CNBC interview was also on a more pessimistic/cautious side of it.

Wonder whether the 10% rule applies to the convertibles? If yes, he may anticipate the convertibles and actually planning in advance. Pure speculation.

SAVE - Spirit airline. The low cost model works in a stable economy as you get a portion of the population who wants to get from A to B at min cost. However, the current debt level makes SAVE a risky business.

Some positive news! https://www.ctvnews.ca/mobile/health/thailand-sees-apparent-success-treating-coronavirus-with-drug-cocktail-1.4794001?fbclid=IwAR2UZXwps5fcGaWAsSVSlw1mKjsFXyu_BBBYm-Gr_jHt_y_jjVF32p4Y9wY