Sweet

Wouldn’t surprise me one bit if Bitcoin was created by a government to ensnare criminals paedos etc.

That’s not a fact, that’s a prediction. I’d take the opposite side of that bet.

Why does Berkshire have 50% in AAPL at a PE of 30 on flat revenue growth for 2 years. Sorta crazy to me. Great company but unless revenue growth reappears where do the stock gains come from in the next 10 years?

I’d argue in some respects you see that already. Public stock holdings are 50% Apple, a company with no revenue growth and a PE of 30. Great company sure.

I don’t understand how these companies aren’t very profitable businesses and why they continue to carry so much debt. Hard to invest when I can’t square that off.

Just use the 911 as your daily drive lol. Problem solved!

Yep, it’s why I don’t have a position in any of them yet, and may never. Avis gives a breakdown of its cost on average per car and you can work out roughly how much it is to replace its fleet. It pegs the costs at a long term average of $300 per car per month. Cars in Avis are replaced every two years. So the average cost of a car for two years is 300 x 24 = 7,200, before they are sold on. I think both these companies probably expanded very aggressively with debt, the payment of which drags.

These companies are going to be very interest rate susceptible given the debt they hold. I was looking at the Avis long term options, the pricing is terrible so I moved on. I then looked at the Hertz warrants which are just crazy instruments. They allow you to exercise them at $13.80 and they are good until 2051 - yes a 28 year call on the company. They benefit indirectly from Hertz buying back stock, Hertz have reduced their float by 35% since June 2021. The warrant is also structured such that if Hertz pays a dividend the exercise price of the warrant will drop too. Sure, if Hertz goes BK again you are probably toast.

Thanks for writing that up. Some of reminded me of this Charlie Munger quote: ”The first $100,000 is a bitch, but you gotta do it. I don’t care what you have to do – if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit." Not sure when he said that, probably 20-30 years ago. Did you have a number after which you eased off the gas a bit?

This begs the question Greg. How do you make your money? And how did you escape that?

Whatever you think of the debacle, I think we can all probably agree that Ackman’s Twitter feed in the last day has become very cringey. I just can’t take these Gladiator references

Interesting video, thanks, big issue here. Understand why the banks would kick it down the road, they are hoping for normalisation.

We bought for location, which I don’t regret, but the cost of our area is probably 50%-75% higher than comparable houses in other areas. So the house is a bit smaller than I’d like and so is the site, but it’s probably the right trade off overall - even if I get grumpy during Spring when I cant plant all the crops I want in the garden.

lol, I did smile at spending $350k a year and not thinking you’re rich comment Dinar. I wouldn’t even know how to spend $350k a year, most of it would just be invested again I reckon.

Get that. We gave four in ours at 1,700 sq feet. Think it depends to a large extent how many you’ve got in your house.

I think that’s a big house too, but I think it’s a big house anywhere. The best thing about American houses, at least the older ones, is they tend to sit on a good bit of land. My own house, I feel as if I’d like it about 50-100% bigger. Not to show off but just to have more room.

He’s definitely right but at what point does a basic house become a large one?

Not sure. Amazon probably - over 50% of their revenue comes from the USA. The run way remains large but execution could be challenging. A home building, maybe NVR, people are going to need houses. Biotech, I’d play it safe with an ETF. A bank or two, not JPM, although everyone knows it’s the best right now I’d probably go for the recently beaten up Bank of America. I’d also bet on an emerging market, probably India, again through some ETF.

Agree the two companies would benefit from their own thread. The use of debt is a bit disconcerting. Avis did survive the pandemic when travel ground to a halt. No mean feat.

I don't think these are terrible companies. In the case of Hertz they went bankrupt from quite an extraordinary event. And they are buying back shares quite aggressively too. Oh and welcome focused1

Which is a clearly a good thing but you wouldn't know if from the Bloomberg article.

Yes, that’s was surprising to me too, particularly given the free cash flow situation. Management have said they will continue because they believe share price does not reflect the value of the business. I’m interested too, but the trouble is I don’t understand the accounting even though think the business model is fairly straight forward. The buy cars from suppliers, probably at a discount, they keep the cars for two years in nearly every case and they sell it on. Their calculation is per car as far as I understand, depreciation is on average $300 a month per car then they have debt financing which is calculated at $167 per car. Utilisation of rental cars is 67-71% depending on the location. Don’t seem to be overstaffed, was wondering where all the staff where when I recently rented. Should be a decent low margin business in there.

Totally agree on rental vs Uber. There is some overlap but they are different markets too. I was surprised to find that Avis have reduced their share count by 50% since Jan 2019. They have been very aggressive at buying back stock. The website of Avis is investor friendly easy to find recent filings and calls and press releases. Not really looked at Hertz yet, wasn’t aware there were warrants.

Strange that Oxford Nanopore was also lower on news so far as I can tell but Illumina was largely unchanged or higher even.

Uber and Lyft definitely denting the area to some degree, but speaking from my own experience, I much prefer to rent a car and go where I want when I want. I don’t find waiting for an Uber convenient and if I am using the car multiple times a day not worth the cost either. One thing though, it is a headache sorted the insurance etc, if you aren’t prepared they’ll take a good chuck of money from you. I recently rented from Avis, small SUV for over two weeks. All in I paid about $600 which I didn’t think was too bad. Will check out uhaul - cheers.