Red Lion

I have put my thoughts here on the BN and the APO and BX threads I think. I’m not against BN or BAM, but in my opinion APO/KKR are better then BN and if you want an asset lite alternative then I think owl/ares/bx are better than bam. While bam has a great energy transition / green energy business that I think is best in class, the competitors are getting up to speed in this regard. BN is anchored down by some lousy real estate positions while the sotp is help up with high valuations on the subsidiaries. Anyway I think BN is one of the lowest quality alt investments along with CG. That doesn’t mean you shouldn’t own it, obviously it’s done well over the long term and can work through its real estate hangover to do well going forward, but I think APO/KKR are going to outperform.

I think you should own both. And I should too. I sold KKR to raise capital for a series of 4 real estate deals I closed on since late July. All of these sales were in taxable accounts and it made more sense for me to sell KKR than APO given tax considerations. I think they’re the perfect compliment, they’re two sides of the same coin but APO will outperform with higher rates and KKR with lower. They both are great alt asset managers at a (more than) fair price. So now might very well be a great time to load up. I would buy KKR on margin, but I’ve been regularly dipping into margin to fund some do the real estate renovations since it’s lower cost capital and more tax favorable to me. I expect to be reinstating my KKR position hopefully on par with APO once I start pulling cash out of these real estate investments.

My 401k is less significant and I hold more dividend paying and short term positions here. I also have massively underperformed my taxable investments, probably trying to be too clever and trading value traps more than I should. This isn’t fully representative since I’ve trimmed losses and reallocated money here into better positions. Hoping to hold steady with these, and think they should do well. Nintendo - 28% Apollo - 25% PM - 23% CPT - 8% CLPR - 7% BTI - 5% Basket of speculative stocks where I got soaked, but hold on because I can’t use tax losses in my 401k - 5%

Most of my net worth is in a closely held corporation and real estate. But here’s my main taxable stock portfolio. This has been a water the flowers and pull the weeds type portfolio after selling the under performers to invest in real estate. APO - 23% JOE - 15% FFH - 14% BX - 10% FG - 9% GOOGL - 8% Dec 25 $75 GOOGL calls - 7.5% AMP - 6.5% Aug 24 $50 JOE calls - 3% A few small positions accounting for not much.

This prediction seems spot on to me on every level.

39% in my ib account where most of my assets are. -1% in my 401k which is fairly insignificant percent of my assets. I believe this wild performance disparity has to do with watering the flowers and pulling weeds in my IB account while investing a lot of capital in real estate. The lackluster underperformance in the 401k involved catching several falling knives (looking at you BTI snd CLPR) selling winners too soon. Starting in late July I made a series of real estate investments which are still being stabilized. I can’t really say how these have done over such a short time frame, but I do think I am comfortably in the black overall. The largest of these real estate investments I am very optimistic about since my plan value (to go bf) should drive 40-50% return unlevered, and hopefully get my entire investment back on a cash out refi sometime late 2024.

Sold some just otm calls on BX and GOOGL for the earliest January expiration.

Merry Christmas!

Goes to show you didn’t need big tech to stomp the markets in 2023.

You said it more eloquently than I ever could. Exactly.

I’m not an expert and I’m not trying to troll you because I think you probably have spent a lot more time researching this issue and I’m probably not seeing things from your side as well as I should, BUT how are they working on these problems? It seems every socialist solution to income equality has just brought down the successful members of society, done nothing for the poor, and been the best thing ever for unproductive government workers. I’m not a historian, so maybe I’m missing some great examples. Also, a side point, a lot of these countries that have bigger social safety nets than the USA also have a more fair distribution of wealth. For example different countries use value added taxes and/or national resource revenues to help fund healthcare and other social safety nets. VAT is a “regressive” tax, but also provides a buyin by everyone using the services. In the USA we still spend a ton on healthcare, and the rich shoulder almost the entire burden. Yet we are also forced to compete for insurance policies in the “free market” against other high income earners for our own private policies. I think the USA needs a more regressive tax system. I think even the poor should be paying some money in taxes, especially for things like VAT. I for one would feel less pissed off about the insane amount of tax dollars I personally pay towards every old, disabled, poor, and middle class person’s healthcare, if i actually got healthcare out of the deal as well. The USA’s entire system is built around leaching off of the most successful members of society while encouraging waste. Anyway, it still seems in my humble non-professional opinion that the USA’s system of “working on the problem” of income inequality has created perverse incentives and made things worse, but at least we still get due process and a strong rule of law, and there is the ability to create a great business out of nothing WITHOUT the implicit approval of the CCP, so I’ll take it over the CCP (or do we just mean Xi?)

Even though it’s had a monster year, I still think APO is well positioned to keep performing well in 2024 (certainly not as well as 2023). It still trades at a very reasonable valuation, and will still continue to grow its earnings over 15% annually. Also, as always, I think KKR is a nice complement to an APO position, also reasonably valued despite the recent run towards all time highs. If we get more of a sudden drop in rates, I suspect kkr would outperform APO at least for the short term. I think BN would be a good play on falling rates too, but my personal preference is KKR. Well located single family homes, for all the same reasons stated a million times, there’s a housing shortage, and cost of replacement is going through the roof. Plenty of new apartments being built, but not nearly enough inventory of SFH. The “lock in” effect will persist unless rates drop dramatically, but even with mortgages in the 6s there’s going to be significant deferred demand as millennial and gen z buyers begin to qualify for mortgages on low end sfh. It’s probably easier to buy the reits, but the options to leverage these positions aren’t as attractive to me compared to controlling the real asset myself. JOE - I’m all aboard the Joe train, but have nothing to add to more clever posters about this topic. I have a large position with half as August 24 options that I predict end up getting exercised next August. FFH - I think the major outperformance is taking a breather finally, but it’s still valued attractively compared to peers, and I’m planning to hold on. I have almost all of my wealth outside a closely held business in the above (except KKR since I’m heavily invested in the residential re space and in the middle of value add projects on 4/5 investments, ie I’m short on cash and all in). I think if all my capital wasn’t tied up, I’d probably have some more good ideas, but these are my current conviction ideas.

I do this on a regular basis, but have really stepped it up this year as I put a lot of money to work in the markets around this time last year, but started pulling money out to make a series of real estate acquisitions. I’ve been selling my losers, and my lesser winners with an emphasis on letting my winners ride. Overall I’ve found this to improve returns, an improve tax efficiency of the portfolio as well. Most of the returns come from holding the handling of superior stocks, so watering the flowed and pulling the weeds tends to provide more opportunity to own these stocks.

I’m not praising the 1% I’m saying they are paying the vast majority of the taxes in the USA, yet populist rhetoric acts as if they are a robber baron class. In fact there’s a huge “investment” going into healthcare/education/etc just a very low ROIC. I have a hard time wrapping my head around this china as a utopia idea.

So if this commentary of inflation closer to 3% and lower rates comes true, it seems highly beneficial for risk assets no?

About to close in my 5th piece of residential real estate in the last 12 months. Looking forward to holding steady at this point and waiting for an opportunity to refinance as rates come down. These purchases are only about 30% LTV overall so they’ve been tying up a lot of capital causing me to really concentrate my stock investment portfolio in the meantime.

In the USA the top 5-10% are the only ones that pay significant taxes to the federal government (income taxes). The income tax burden is quite reasonable on most income earners. I just looked it up it takes a family $216,000 of income to be in the top 10% in the USA. Federal income tax for a family of 4 with that income is only about $30,000 with a marginal bracket of only 24%, and could be much lower with itemized deductions or retirement contributions. This is to illustrate the point that even an American family in the 90th percentile isn’t a very heavy federal income taxpayer, either in absolute terms or in terms of the tax bracket itself. So whenever anyone talks about raising taxes on the top 30%, I wonder if you really think someone in the 75th percentile actually pays their “fair share”? Or is this just another reason the 1% should pay for essentially everything, and still just sit and take the scorn and derision of the masses?

I had a similar experience with a company called Electronic Gamecard. It wasn't a pump and dump, it was a net-net where the CEO actually ran off with the cash IIRC and essentially got away with it. Now that I think of it, I want to find out what ever happened.

Sold calls on fg with a $50 strike. I bought this at spinoff around $18, still in short term gains but we finally have call options to expire past my 12 month mark.

You’re beyond killing it.

All of my best investments have been in my own business. In 2019 I went “all in” and then some on a business venture that ended up returning about 100x pretax. The best overall was another advertising campaign that has returned 150x pretax and still isn’t done yet. Unfortunately this wasn’t a huge weighting, but still ended up providing a fantastic return without much out of pocket capital.

I tend to agree.

I love that area. I live in the chico area, so a couple hours away but I’ll check it out this summer when we need to escape the heat.

I was drinking the Napa valley one to the left. It was good, but not worth $90. I actually bought a 1 liter bottle on sale for $85, so probably not a bad deal, but… The Frank family Cabernet from Calistoga is better, in my opinion, for just over $40.

Drinking some Caymus 2021 Cabernet. Not amazing for the price. I’ve been drinking Frank family Cabernet at half the price, and I think it’s better. Not a wine connoisseur, so maybe I have bad taste.