BG2008

During my 1 year stint as a HVAC engineer, I used AutoCAD to lay out HVAC, fire sprinkler, and plumbing systems that got overlayed with Architectural drawings as well as electrical drawings. It is the bread and butter of most architectural/engineering firms. That was almost 15 years ago. Wow, feels so weird typing it out loud. I know there are some engineers on this board. 1) Do you use AutoDesk products? What field? 2) What products do you use specifically? 3) Is there a substitute? How are the substitute? 4) Do you use the subscription cloud service? 5) How important is BIM features and being able to collaborate? 6) What the heck is Rivit? (Not sure if I am spelling it correctly)? 7) Is machine learning designs a big deal now? In the future? 8) Are there add ons for AutoDesk that are nice features? Must haves? Would love to hear more from this group. Thanks.

Been working from my apartment. My wife and kids have gone to stay with my in-laws and my brother-in-law is working from home. Everyone in my family is in lockdown mode and staying in. The best thing that I can do is cook 2 good meals on the weekends. My wife told me that when I am around and cooking, it takes the edge off everyone as everyone has been cooped up inside. So I try to get everyone to sit down and eat. We stocked up on food a few weeks ago, think like 30 pounds of oxtail, frozen crab legs, frozen shrimps etc. It's amazing how affordable it is to eat restaurant quality food if you can buy it from a restaurant supply store and cook it yourself. My wife has been on point with ordering online. We have switched over to ordering via Instacart and getting grocery delivered.

Everytime I think oil is cheap, it finds a way to impress me on the downside.

Oh, I'm not saying that the banks shouldn't offer flexibility, particularly for landlords and SFH owners who have a decent chunk of equity in their properties -- defer the payments and term them out, and everything will be happy on the other side. That's in the bank's interest and it's in the property owners' interest. My question is what is the bank planning to tell shareholders? If you have a commercial client who doesn't make a payment without first discussing it, what is a bank supposed to do? You throw him on the arrears list! And then what is the bank supposed to do? You are supposed to increase the provision for that particular loan. And if you get a client who can't make a payment, but at least phones you up to ask for a deferment, what are you supposed to do? Well, the bank can definitely make the deferment and term them out, but then what is it supposed to do? If there are enough cases like that, the bank is supposed to increase its provision for that portfolio of debt because it knows full well that a client requesting a deferment is indicative of a higher risk of ultimately defaulting. So, are you comfortable if a bank extends an automatic 3 month deferment to all of its commercial clients and then uses that as a reason to not take a large provision increase next quarter? It's just a little white-lie to shareholders if it's ultimately in their interest right? SJ What banks tell their shareholders is a whole different topic. That's why I decided not to own any banks after the GFC. I worked at one during 08/09 and no one knows what the heck is in the "black box". It truly is a black box back then. I generally don't like owning stuff where you have to constantly decide "is it time for me to get out? because if there's a recession, I'll get slammed." This pretty much applies to all cyclicals, banks, auto, etc. I own some RE that are cyclical. But that's my area of expertise. Very much true. Some friends in the industry said they are not allowed to invest in banks. I asked why? They said it's the CIO's preference. Banks are a black box. I don't know why people even on here are always loving BAC and WFC. Especially now that rates are 0% again, margins are going to get compressed. To be fair, the TARP warrants were pretty interesting. I always thought that if you buy banks, you need to buy an 20% OTM put the whole time for moments like this.

Oh, I'm not saying that the banks shouldn't offer flexibility, particularly for landlords and SFH owners who have a decent chunk of equity in their properties -- defer the payments and term them out, and everything will be happy on the other side. That's in the bank's interest and it's in the property owners' interest. My question is what is the bank planning to tell shareholders? If you have a commercial client who doesn't make a payment without first discussing it, what is a bank supposed to do? You throw him on the arrears list! And then what is the bank supposed to do? You are supposed to increase the provision for that particular loan. And if you get a client who can't make a payment, but at least phones you up to ask for a deferment, what are you supposed to do? Well, the bank can definitely make the deferment and term them out, but then what is it supposed to do? If there are enough cases like that, the bank is supposed to increase its provision for that portfolio of debt because it knows full well that a client requesting a deferment is indicative of a higher risk of ultimately defaulting. So, are you comfortable if a bank extends an automatic 3 month deferment to all of its commercial clients and then uses that as a reason to not take a large provision increase next quarter? It's just a little white-lie to shareholders if it's ultimately in their interest right? SJ What banks tell their shareholders is a whole different topic. That's why I decided not to own any banks after the GFC. I worked at one during 08/09 and no one knows what the heck is in the "black box". It truly is a black box back then. I generally don't like owning stuff where you have to constantly decide "is it time for me to get out? because if there's a recession, I'll get slammed." This pretty much applies to all cyclicals, banks, auto, etc. I own some RE that are cyclical. But that's my area of expertise.

I am all about the govt not getting involved. I think that applies when you have idiot individuals who take too much risk. They hand their keys back. But a pandemic that forces restaurants and contractors to stop work. That's nobody's fault (okay, maybe the govt as they could've acted sooner). Tenants/Landlords/etc did not act recklessly and they don't deserve to be punished on a mass scale here. If you are worried about communist policies in housing, welcome to New York City. The rent control and stabilization laws here are so nuts. The haves and have nots are not divided on economic earnings. It's the people who got subsidized housing and subsided everything vs those who are free market. Someone on VIC mentioned that if you make $600/week in unemployment, who's going to flip burgers. That was a very valid question. Disincentives are very powerful. There were a few Republicans who wanted to limit unemployment benefits to people's previous earnings, not the auto $600/week. I thought those guys are hero trying to stop excess waste.

The goal here is to share real world anecdotes as I have picked up a few in this thread that would paint us a good picture of the overall economy 1) NYC renters are asking for a lot of rent deferrals. I have relatives where 1/2 of their tenants have asked for rent deferrals. 2) On Instagram, famous chefs like Thomas Keller, David Chang, Jean George, etc have banded together and been very vocal about the stay in place orders and what that is doing to the restaurant business. I am very afraid that we come out of this with no mom and pop restaurants. Although, I would not own a restaurant, I do appreciate what they do and where my family and I can go and find a good meal. 3) Most banks are offering deferrals. I have heard that First Republic has offered up to 6 months deferral if you submit a statement saying how Covid 19 has affected your income. TD Bank is terrible. Chase is fairly easy to do via an online interface. Would love to hear more. 4) Hotels and retail real estate are actually losing money. All the RE investors that I talk to have mentioned that they tend to underwrite to a 20% drop in NOI for retail and maybe 50% for hotels during a recession. But they don't underwrite to a negative NOI. This is different. How long it last is very distressing. 5) I personally believe that the Fed and the government will allow for a temporary 3-6 months deferral on rent and mortgage payments across the board in the US. If they don't , the consequences are dire. Politically, it is very difficult for 80% of the homes to be foreclosed on. It is probably the same for 80% of retail and hotels to be foreclosed on. It is not any of the owners' fault that they were put in this situation. 6) Grocery and warehouses are the only two areas where they are still hiring people. My wife is a champ and has been on top of this. She bought us face mask, sanitizers, formula, etc a couple months ago and people thought we were nuts. I have done 2-3 runs to restaurant depot and Costco early on to stock up on 10 pounds of shrimps and 30 pounds of oxtail etc. You gotta eat well even during times of quarantine. My wife told me that it is about the only thing keeping everyone from tearing into each other at this moment, nice dinners on Saturday and Sunday night. We have decided to not go grocery shopping and have people bring it to us. Placing orders through Instacart is really stressful. There aren't any windows open. Within the Chinese WeChat, there are now people specializing in running errands for you for $40-$100. Frankly, we will gladly pay that. 7) A few of my high school friends have mentioned that staying home means they have been munching on food and gaining weight 8) This one is obvious, we all started using Zoom If you have stories from industries that you work in, please share. I would love to hear them.

Man, I just want Kyle Dake, David Taylor, J'Den Cox, Kyle Snyder, and Yianni to win Olympic Gold medals in 2021. All other sports, I kind of don't care.

Guys, I get the cynicism on the extend and pretend. I think the AirBnb arbitragers will get bent over and treated properly. The house flippers will likely get their due as well. But if you have good hardworking tenants. The 3 months deferral is a great solution and an unofficial way to put money in the hands of renters and landlords. Frankly, is it anyone's fault that some virus forced hardworking cooks, waiters, and construction guys to have to sit at home and not work? I don't think so. The tenants didn't do anything wrong and neither did the landlord who chose their tenants the right way. I have no idea how the banks treat this. I'm sure the Fed is giving the A-OK for the bank to push back payments. What would you prefer? Let 90% of the homes go into foreclosure and feel righteous because you saved enough and have a nice nest egg? Most of the US live paycheck-to-paycheck. We are a disciplined bunch on CoB. But we are like the 1% (in terms of discipline, curiosity, and likely smarts). The rest of the country is not as lucky and/or well off. This is a good solution. But I do hope that the arbitrager with 15 Airbnb get punished. If you want to rent out a spare apartment or room that you own, it's fine. If you have 20 SFH on Airbnb that you lease from a landlord, you deserve to be taken to the woodsheds. House flippers? Let's them go broke. But normal everyday tenants and homeowners, give them this pass.

Yes, the SALT deduction changes definitely impacts RE values in high tax states - NY, NJ, CT and MA. NY probably the worst. LOL. That's likely a reason a friend lost a bid on a house against 5 cash offers two weeks ago. Not. My cousin is not backing away from 900k house in SF Bay Area suburbs. It will be her primary residence. She is not worry about a downturn and said she will buy more as investments if she see "deals." I feel Bay Area housing pain. Last year I was going from SFO to Bay Area and I'm like "there's so much empty space everywhere, why nobody's building". But, yeah, I know, reasons. I did not go to work in Silly Valley for RE price reasons close to 20 years ago. Yeah, I know looks stupid now. Coulda bought a house below 500K in Palo Alto haha. A friend has $2-3M house in Los Altos. I'm telling him just sell and retire to some nice place and sip margaritas. Nah. It's OK, everyone makes their choices. 8) Jurgis, Us bi-coastal elites have standards :) arts, restaurants, and class and a rat race to get your kids into Harvard and Yale

Kelcy Warren is known for screwing minority and you should read the preferred documents very closely. If he can get away with it, he will.

I think 80/20, 80% fortress balance sheet and 20% leveraged stuff that would be multi-baggers

I think one of the easiest places to look for value today is simply locate companies with lots of liquidity and cash on balance sheet and with very little operating leverage. This means restaurants, cruise ships, airlines etc are out. Laaco - Only $44mm of net debt, generates almost $30mm of cash from operations a year. Gross asset value of about $700mm for self storage and Downtown LA Athletic club and parking garage. Almost everyone pays electronically for their storage units. During times like this, it is comforting to know that they will keep spitting out cash and won't go under. So 8% Loan to Value. Excelsior Capital - Net net that sells mission critical coal mining electrical couplers. Used to prevent explosion in coal mines, high liability to switching suppliers. $47mm of current assets, $12mm of cash, vs total liabilities of $11.1mm. Implied liquidation value is $35.9mm vs $31mm of market cap. Earns about $5mm a year give or take $1mm either direction. Pays out $0.05 a year on a $1.11 stock Berkshire Hathaway - We all know about $100 bn of cash on the BS Equity Common Wealth - Sam Zell's Cash Box for Office REIT acquisition Google - $109bn of cash and mints money Apple - $200bn of cash and markettable securities FB - $54bn of cash and marketable securities Love to hear more from others

I just want to point out that Tom Barrack is a terrible investor who supposedly made 0% returns in his career. So I would calibrate what he says a bit.

Ferrari at 40x P/FCF and Kinsale Capital (Insurance company at 6x BV) Not my original idea, but it just looks pricey. Ferrari factory is also shut down for at least 2 weeks.

This changed as of this morning: https://mf.freddiemac.com/COVID-19/ https://www.fanniemae.com/portal/media/corporate-news/2020/renters-covid-19-multifamily-7002.html Basically, multifamily owners will be allowed to defer mortgage payments if they agree to pause evictions due to non-payment of rent. My day job is to own/operate multifamily investments, so I pay a lot of attention to this :-) Only about 50% of all multi-family mortgages are Fannie/Freddie insured. This a big help for the other half, but the way I see it, almost all tenants will choose to not pay rent, even if they can. It will just be too easy to say they were negatively affected by the virus: "I have to help my parents/sister" etc. I see the word spreading on social media that you can just skip rent for a while. there is no incentive for anyone to keep paying. You can't kick them out and it won't affect their credit rating. So you have multi-family managers that get minimal rents coming in, but still have to maintain the building, pay for utilities (if they are not individually billed to renters directly from the utility) If you can defer mortgage payments, you will still be cash squeezed because of costs, and if you can't defer, then you are at the mercy of the lender. I can see the pressure on landlords to limit evictions continuing for months, not weeks. Even once people are allowed to go look for work, many of them will not find one right away. What are you seeing in your business? This thread highlights for me why the UK took the right approach with fiscal stimulus. Cover 80% of the salary of those that are unable to work as long as they remain on the company's payroll. This enables the rest of the financial system to continue working in a relatively normal fashion (e.g. people can continue to pay rent and utilities, landlords can continue to make mortgage payments, and so on). I fear that with the US approach to fiscal stimulus, we have created incentives for tenants to not pay their rent, as noted very well in the preceding comment. If this actually happens on a large-scale, there will be significant knock-on effects through the rest of the economy. For example, if you aren't paying rent, and the landlord can't evict you, does that mean you are still entitled to have things repaired in your apartment when they break? I would think not - if the tenant is not paying, why should the landlord pay for the cost of the repair? Hahahaha, I guess depends on where you are. If you live in the state of New York, you bet that the landlord will be repairing broken stuff. There was a NYT article on a guy facing eviction from a development in the Bronx. They really portrayed him as a victim. The guy lived in a rent regulated apartment for 40-50 years and the developers wanted him out. The video really portrayed gentrification as bad and the developers greedy. Turns out the developer went broken and the guy got $1-2mm to vacate his space. So he paid below market rent his whole life and got paid $1-2mm to move out. Talk about winning the lottery!!

Btw, I am not saying that my relatives can't pay their mortgages if their tenants skip rent for a month. They have quite a bit of liquidity. Their simple and naive way of buying NYC residential rentals will make 95% of public market investors look like chumps with regards to their 10-20 year track records.

I have mentioned a few times that my family and I own 2-4 unit NYC residential rental buildings. In the last week, my relatives have been getting quite a few request from otherwise great tenants asking for rent deferral. Their reasoning is very sound as they cannot go to work on the construction sites and restaurants etc. Obviously, this impacts my relatives' ability to service their mortgage. I think most of them are set up where if 50% of their tenant pays, they can pay that mortgage. Governor Cuomo also signed an executive order forbidding foreclosures. But I heard that the wait is literally 3 hours to get someone on the phone and the banks have no clue on how to handle this as they are slammed with request from homeowners for mortgage deferral. I doubt the banks want to become equity owners in most homes and part of the stimulus bill is supposed to handle this. This is likely very obvious, but I hope this anecdote provides a bit of insight into the seriousness of the situation.

Does anyone have more detail on this news? The Governor also announced the Department of Financial Services has issued a new directive to New York State mortgage servicers to provide 90-day mortgage relief to mortgage borrowers impacted by the novel coronavirus. The directive includes: Waiving mortgage payments based on financial hardship; No negative reporting to credit bureaus; Grace period for loan modification; No late payment fees or online payment fees; and Postponing or suspending foreclosures. Do we call the banks directly? The Corona Virus has been a very different event than 2008/2009 GFC in that many hard working blue collar employees/renters kept working through it. If you took the time to lease your rentals to good people, you winded up with 99% occupancy during this time. I have been hearing from many of my relatives, who own 2-4 family residential buildings, that they are getting requests from tenants to postpone rent which affects their ability to pay their mortgage. Traditionally, these are some of the most reliable tenants and the workforce housing is the cheapest in the NYC area. If anyone has any details on the 90 day mortgage relief, it will be very helpful for us and all others have a mortgage in NY State. This time around, the white collar folks/office workers have had more time to adjust as there is typically contingency plans in place to work from home.

They also have more experience with these issue and a greater expectation to continue to be ground zero for outbreaks so that likely makes a difference. From my anecdotes, you just can't stop 16-28 year old Americans from trying to get laid.

The winners from the last few years are high quality compounder that grew EPS over time. FANGs are a different animal as the growth rate is in excess of 15-20%. What is the appropriate multiple for a high quality business like a Sherwin Williams, Ferrari, Heico, etc? It seems that these growth compounders do really well if they continue to grow their cash EPS and buy back shares. For the first time in a long time, investors have to take a hard look at the denominator and use math that involves declining EPS (even if temporary). So what is the appropriate multiple for a high quality company then? For those people looking for potential short candidates, Ferrari is still trading at 32x 2020 P/FCF. They just announced factory stoppage for 2 weeks. I thought that Boeing was a very good short candidate before the implosion as they were dealing with the Max issues and the virus was a game changer in terms of reducing flight demand.

All the trading and price discovery is done in the last 30 minutes of the day. What's it gonna be today?

I worked for Citigroup's mid market real estate investment bank in 2008 and saw Citi go from $50 to under $1 during my time there...I'm now one of the old guys

Guys, Does anyone have information/procedure if you have family member who are infected? Testing? Go to ER, PCP, not go? My brother has had a fever for an almost a week now. We are in NYC. Thank you. I see that NYC has a drive through testing in New Rochelle.

Priced in. Eric, Just wondering what level of concentration is the BAC position for you? I have followed your investments in the past and when you put more than 50% into a position (even if it is fully hedged), I noticed that I should be paying attention.