Is The Bottom Almost Here?

[changegonnacome]

Haven't had time to dig around in these latest reads properly......but dont need to on one point.......those that exclude Food and Energy have no idea about real life..........and that F&E makes up about 70-80% wallet share of those less well off than they are....housing the rest.....and that is not a small amount of people out of the total population.......inflation pressure is the difference between running out of money on the 27th of month and running out of money on the 20th of the month. 

 

Only a tenured professor at an Ivy league business school would say something so dumb with a straight face as in - 

price inflation data excluding food to stay alive and energy to stay warm/cool  apart from that for everything else is awesome.

 

Quick read so far - as predicted the trip from 9% down to 5% is kind of a mathematical certainty......this journey 9 to 5 is indeed the COVID inflation/supply chain/Ukraine stuff going away..........its the trip from 5% to 2% that will be the bitch.....that 3% is god damn monetary inflation.......and its pain in the A to get rid off.

[Dinar]

1 hour ago, changegonnacome said:

Haven't had time to dig around in these latest reads properly......but dont need to on one point.......those that exclude Food and Energy have no idea about real life..........and that F&E makes up about 70-80% wallet share of those less well off than they are....housing the rest.....and that is not a small amount of people out of the total population.......inflation pressure is the difference between running out of money on the 27th of month and running out of money on the 20th of the month. 

 

Only a tenured professor at an Ivy league business school would say something so dumb with a straight face as in - 

price inflation data excluding food to stay alive and energy to stay warm/cool  apart from that for everything else is awesome.

 

Quick read so far - as predicted the trip from 9% down to 5% is kind of a mathematical certainty......this journey 9 to 5 is indeed the COVID inflation/supply chain/Ukraine stuff going away..........its the trip from 5% to 2% that will be the bitch.....that 3% is god damn monetary inflation.......and its pain in the A to get rid off.

I am sorry, but food + energy = 70-80% of spending?  I am sorry that does not sound credible.    How do you arrive at those figures?

 

Assuming a family of four and $1000 a month grocery bill (I know plenty of people who spend that much on groceries for a family of four), that is $12K per annum.  Even if you drive 80 miles per day 20 days per month, that's using 30 miles per gallon, that's 54 gallons or another $150 per month at Costco.  So, their budget is $1150 / 0.7 = $1643 per month or $20K per annum.

 What income do these people have?  Assuming 40 hours per week at $20 per hour, that $40K per year income assuming one person working and essentially zero taxes (only Social Security + Medicare) already gives you a $36K per year budget before government transfers, if any.  Assuming 2 people work, which is normal by the way the budget would be closer to $60K per year.  

[Gregmal]

10 minutes ago, Dinar said:

I am sorry, but food + energy = 70-80% of spending?  I am sorry that does not sound credible.    How do you arrive at those figures?

 

Assuming a family of four and $1000 a month grocery bill (I know plenty of people who spend that much on groceries for a family of four), that is $12K per annum.  Even if you drive 80 miles per day 20 days per month, that's using 30 miles per gallon, that's 54 gallons or another $150 per month at Costco.  So, their budget is $1150 / 0.7 = $1643 per month or $20K per annum.

 What income do these people have?  Assuming 40 hours per week at $20 per hour, that $40K per year income assuming one person working and essentially zero taxes (only Social Security + Medicare) already gives you a $36K per year budget before government transfers, if any.  Assuming 2 people work, which is normal by the way the budget would be closer to $60K per year.  

This is where we go back to "because we need to save the expiring puts most vulnerable"!

 

If we look at why the inflation hoax story is so potent, its because its snared like 85% of people. In it, we have...

 

-the interest seeking cheapskates....this year we've trained them that after being starved for a decade, now all they have to do is scream inflation for better rates

-the Biden and Democrats suck and are causing inflation Republicans, they were right last year and can't pivot this year because emotionally theyre blinded 

-the most resilient cult ever, the 2014 money printing bubble crowd....they just won't let go

-the boat of folks who said "transitory" in 2021 and now feel stupid and have to say its here forever, again being the tail chasing bellwether. Most of these people could still probably also get fooled by another covid variant story.

-finance folks shorting the market

-academics who only see textbooks and theory is reality

 

 

Its been great to watch. But its over. Next up is recession fear mongering. 

[LC]

On the 70-80% figure: I mean, mortgages I believe are going to be under 42% LTV? And I doubt the other 30% is food costs…

Edited December 15, 2022 by LC

[changegonnacome]

Yep I was on the high side - doing post on the run.....it was dumb. Right to be called out. My bad.

 

My point still stands though which is F&E is not an unimportant part of wallet share........food also has an outsized impact on inflation psychology........driving more aggressive future wage demands etc.   

[Spooky]

1 hour ago, Gregmal said:

Its been great to watch. But its over. Next up is recession fear mongering. 

 

This has been going on for a while now and is getting pretty boring. Can we move on to the next narrative please?

[dealraker]

On 10/24/2022 at 2:23 PM, dealraker said:

 

I'm enjoying the comments.  Change is predicting with "absolute absolutes"...a long-long list of them... and Greg is stating "maybe, and maybe not".  It's a market!

 

Enjoying the posts is what I am saying.

...as I wrote a while back.

Next obsession is...

 

...what Greg said.

Edited December 15, 2022 by dealraker
Spellin'

[Viking]

Making money (what we all really care about) for the past 10 years was really all about following the Fed. That was even more true as we began 2022. At the beginning of 2022, the Fed told everyone it was raising interest rates… and what did we get? Worst results in bonds since American independence in 1776 and a bear market in stocks. Ouch! But we all were given fair warning.
 

So what did we learn from the Fed today? They are going to raise the Fed Funds rate to +5% and keep it there for a long time. What did financial markets do? They yawned.  Really?
 

So as we close off 2022 we have a really interesting set up for investors. Now i could go off on a tangent and talk about conspiracy theories and UFO sightings and secret meetings… but hey… what is an investor supposed to do with that? 
 

Lets get back to reality… So as we close off 2022 we have a really interesting set up for investors. Someone is wrong: the Fed or financial markets. 
 

If the Fed increases the Fed Funds rate to over 5% and keeps it there for most of 2023 then stock averages are going to get torched (hello S&P500 at 3,300). Bonds? I’m not sure where yields go across the curve… short term yields rise and perhaps long term stay kind of where they are?

 

Or maybe the bond market is right… inflation comes down aggressively and by mid-2023 the US is in a mild recession (bringing inflation down even faster - perhaps close to 2%)… and the Fed actually cuts rates in 2H 2023. Bonds rock and stocks do ok (setting the table for stocks to rock later in 2023 and  2024). 
 

I am wondering in 2023 if we do not get a slowing economy/perhaps even a mild recession with the job market remaining relatively resilient. 
 

So what is an investor to do? Short answer: i’m not sure. We still have a few weeks to figure it out… early January is when we usually post our top ideas/themes for 2023  

Edited December 15, 2022 by Viking

[UK]

30 minutes ago, Viking said:

Making money (what we all really care about) for the past 10 years was really all about following the Fed. That was even more true as we began 2022. At the beginning of 2022, the Fed told everyone it was raising interest rates… and what did we get? Worst results in bonds since American independence in 1776 and a bear market in stocks. Ouch! But we all were given fair warning.
 

So what did we learn from the Fed today? They are going to raise the Fed Funds rate to +5% and keep it there for a long time. What did financial markets do? They yawned.  Really?
 

So as we close off 2022 we have a really interesting set up for investors. Now i could go off on a tangent and talk about conspiracy theories and UFO sightings and secret meetings… but hey… what is an investor supposed to do with that? 
 

Lets get back to reality… So as we close off 2022 we have a really interesting set up for investors. Someone is wrong: the Fed or financial markets. 
 

If the Fed increases the Fed Funds rate to over 5% and keeps it there for most of 2023 then stock averages are going to get torched (hello S&P500 at 3,300). Bonds? I’m not sure where yields go across the curve… short term yields rise and perhaps long term stay kind of where they are?

 

Or maybe the bond market is right… inflation comes down aggressively and by mid-2023 the US is in a mild recession (bringing inflation down even faster - perhaps close to 2%)… and the Fed actually cuts rates in 2H 2023. Bonds rock and stocks do ok (setting the table for stocks to rock later in 2023 and  2024). 
 

I am wondering in 2023 if we do not get a slowing economy/perhaps even a mild recession with the job market remaining relatively resilient. 
 

So what is an investor to do? Short answer: i’m not sure. We still have a few weeks to figure it out… and we post our top ideas for 2023  

 

I am not sure what to expect either, so my answer to this now is not to have strong opinion and to have approximately equal split between more value/short duration and more growth/long duration assets.

 

Also re what fed has said, situation is of course somewhat different (inflation currently), but I remember very well (because I waited for more better prices and somewhat missed that opportunity), how stocks went down almost 20 per cent in the end of 2018, after fed telegraphed policy normalization and then they just changed their minds abruptly and all opportunities quickly were gone. I am no way expecting them to do the same now or in near term, but they surely can and will change their mind how much to increase and how long to hold rates higher if situation with inflation/economy/etc will be different in 6 month.

 

But today already you can find some really good opportunities in the market I believe, especially between individual stocks. But is it a time to be very aggressive, I think it is not.

 

Edited December 15, 2022 by UK

[mattee2264]

Investment banks are only just starting to properly slash 2023 EPS estimates. Morgan Stanley saying $195 per share. JPM saying $205 per share. Goldman Sachs $225 per share. This is all pretty consistent with the bear market being far from over with earnings providing the next leg down. 

 

I think paying too much attention to the Fed is making markets even more short sighted than usual. People forget that markets usually bottom long after the Fed starts easing. And that doesn't seem to be on the menu for a while now even if the Fed is starting to slow the pace of easing. 

 

The 2022 bear market was an inflation/policy shock which is subsiding. The 2023-2024 bear market will be led far more by earnings and policymakers hands are tied to a far greater extent than previous recessions this century. 

[dealraker]

A neighborhool lady posted video of a fox, called it a coyote (which we have tons of), and proceeded to awfulize that her sometimes outdoor pets had been eaten.  We'd been on that neighborhood FB page suggesting she indoor the little creatures, but she had not seen a coyote and had to live it to believe it.  There's not a single outdoor pet here now in a neighborhood where we once had probably 50.  

 

In any event she eventually penned on the Watership Downs neighborhood FB page, "Charlie, I don't need your lecture."  We laughed; yes she was correct, I had given her a speech!  So I'll lecture this a.m. maybe...given I tend to do that.

 

Prices...oh yea it is simply this, we don't like to see the quotes go down.  So along the way back in the early 2000's I bought the trading houses, CME, NDAQ, and ICE.  I generally, when in quite the "oh my...this is one heck of a good business" mode, put a whopping "should-have-done-more-in-hindsight" $30,000 or so into something like this.  And then ole dealraker just goes plum hibernate mode.

 

And I have well into 7 figures of these businesses and basically never hear anyone ever mention them.  But they are there, still independent, and my limited brainpower says, "How do you ever find a better business than this?"   Others of course will disagree.

 

And I didn't sell a couple of years ago- the taxable account thingy- when it looked as if the stocks may have gotten as we say "ahead of themselves" and whatnot.  But the question I ask is simply this?  Did those stocks get overpriced?  Now overpriced to me is truly long term, I tend to be the type to make fun of the cyrpto go-go gang's of today and the "Tesla's run by a mad genius and he'll dominate the world soon" types.  My view is, as was posted by someone else on the crypto forum in a positive mode, that crypto is priced by "myth" and by the current "narrative"...both the cyrpto poster considered good and permanant, yes my view is of certainty myth/narrative to change violently at some point.  But I'm old, and my great nieces were obsessed with dodgecoin and prancing about (the price had gone blisteringly up)...now only to be saddled with a house in the Triangle of NC, one they paid a lot for and the value is below that---and it has endless problems that need a-fixin...and nearly complete cryto losses.  Thus my biased lecture to them---  I had, back in the downturn of Covid suggested they buy some stocks instead of dodgecoin.  Based on the request of my sister/bro-in-law and their parents (I have no biological children and am quite close to them)- I sent them a 20 year summary of my investments.  They yawned and said, "You're cute and old and so-so-so old fashioned and out of it."

 

But I'm off topic as ususal, not too serious (as usual), but forums are placed to vent and opine.  My view is that any time you can grab hold of a good business and "Rip" (that's Van Winkle) you are best served by doing just that.

 

Prices will vary.  What's ole dealrakers view?  It is precisly the same as 13 years ago or so when that asshole Warren Buffett stole my Burlington Northern stock.  I had bought several hundred thousands of that puppy, even got my investment club to buy it.  They were off-the-charts delighted when Berkshire, a stock the club also owned, bought Burlington.  They licked their chops, brought out the wine, and celebrated.

 

My view?  Well some of the guys in the club I eyeballed regularly for my life's direction (I grew up without parents and looked all around for models to go by)---- felt the same way as I did, that we got the shaft when the whiz kid came a knocking and literally stole our prize possession.  Yep, I knew the guys who thought the same as me because I was the spring chicken in the club still after years and years being the youngest.  And I listened and watched...even probed these guys endlessly because I wanted investment results like them!  I suspected they were well-off, most have died now and let's just say the proof was in their donations.  Buy and hold good businesses?

 

Prices vary often and intensely, but good businesses...maybe well-above average businesses exist and tend to stay that way for some time.  Most think Microsoft, Meta, Google, Apple, Tesla, Amazon and such.  But there are tons of others with relatively small market caps- market caps that won't bump up against historical limits that suggest bigger market cap may be the first time in history such exists, that cloud/tech/media may have to take a time break?

 

Growth and stock prices won't be linear but to me the prices of both ICE and CME today aren't absurd, and there are tons more.  The Buffett types come around and steal them when they can, if it is appropriate to the system and such.

 

They weren't cheap either in the early 2000's when I bought them.  Value investing ain't just 10 pe's and such.  I'd messed around with England/London's Jardine Lloyd Thompson through the years, yet another toll booth (ole dealraker loves toll booth businesses, those brokers, trading houses, railroads that Train quoted Buffett on near 50 years ago) things over there in my ancestry land.  Jardine too got stolen from me, literally stolen, by Marsh.

 

So now I look at the London Stock Exchange often, Microsoft somehow's got involved.  A long period of not such good results?  My best guess is that will change.  

 

Lots of variants in the value investing world.  Making money is what we care about and it takes being willing to exist for long periods under other people's pricing, not yours or mine.  Life is great if you can stand it.

 

Ranting, rambling or maybe lecturing?.  Good morning world.

 

 

 

 

Edited December 15, 2022 by dealraker

[UK]

1 hour ago, mattee2264 said:

Investment banks are only just starting to properly slash 2023 EPS estimates. Morgan Stanley saying $195 per share. JPM saying $205 per share. Goldman Sachs $225 per share. This is all pretty consistent with the bear market being far from over with earnings providing the next leg down. 

 

I think paying too much attention to the Fed is making markets even more short sighted than usual. People forget that markets usually bottom long after the Fed starts easing. And that doesn't seem to be on the menu for a while now even if the Fed is starting to slow the pace of easing. 

 

The 2022 bear market was an inflation/policy shock which is subsiding. The 2023-2024 bear market will be led far more by earnings and policymakers hands are tied to a far greater extent than previous recessions this century. 

 

What would be your view in terms of probabilities, that market will test previous lows or reach substantial new lows, say 3000 or below, in the next 6-12 month?

[UK]

40 minutes ago, dealraker said:

A neighborhool lady posted video of a fox, called it a coyote (which we have tons of), and proceeded to awfulize that her sometimes outdoor pets had been eaten.  We'd been on that neighborhood FB page suggesting she indoor the little creatures, but she had not seen a coyote and had to live it to believe it.  There's not a single outdoor pet here now in a neighborhood where we once had probably 50.  

 

In any event she eventually penned on the Watership Downs neighborhood FB page, "Charlie, I don't need your lecture."  We laughed; yes she was correct, I had given her a speech!  So I'll lecture this a.m. maybe...given I tend to do that.

 

Prices...oh yea it is simply this, we don't like to see the quotes go down.  So along the way back in the early 2000's I bought the trading houses, CME, NDAQ, and ICE.  I generally, when in quite the "oh my...this is one heck of a good business" mode, put a whopping "should-have-done-more-in-hindsight" $30,000 or so into something like this.  And then ole dealraker just goes plum hibernate mode.

 

And I have well into 7 figures of these businesses and basically never hear anyone ever mention them.  But they are there, still independent, and my limited brainpower says, "How do you ever find a better business than this?"   Others of course will disagree.

 

And I didn't sell a couple of years ago- the taxable account thingy- when it looked as if the stocks may have gotten as we say "ahead of themselves" and whatnot.  But the question I ask is simply this?  Did those stocks get overpriced?  Now overpriced to me is truly long term, I tend to be the type to make fun of the cyrpto go-go gang's of today and the "Tesla's run by a mad genius and he'll dominate the world soon" types.  My view is, as was posted by someone else on the crypto forum in a positive mode, that crypto is priced by "myth" and by the current "narrative"...both the cyrpto poster considered good and permanant, yes my view is of certainty myth/narrative to change violently at some point.  But I'm old, and my great nieces were obsessed with dodgecoin and prancing about (the price had gone blisteringly up)...now only to be saddled with a house in the Triangle of NC, one they paid a lot for and the value is below that---and it has endless problems that need a-fixin...and nearly complete cryto losses.  Thus my biased lecture to them---  I had, back in the downturn of Covid suggested they buy some stocks instead of dodgecoin.  Based on the request of my sister/bro-in-law and their parents (I have no biological children and am quite close to them)- I sent them a 20 year summary of my investments.  They yawned and said, "You're cute and old and so-so-so old fashioned and out of it."

 

But I'm off topic as ususal, not too serious (as usual), but forums are placed to vent and opine.  My view is that any time you can grab hold of a good business and "Rip" (that's Van Winkle) you are best served by doing just that.

 

Prices will vary.  What's ole dealrakers view?  It is precisly the same as 13 years ago or so when that asshole Warren Buffett stole my Burlington Northern stock.  I had bought several hundred thousands of that puppy, even got my investment club to buy it.  They were off-the-charts delighted when Berkshire, a stock the club also owned, bought Burlington.  They licked their chops, brought out the wine, and celebrated.

 

My view?  Well some of the guys in the club I eyeballed regularly for my life's direction (I grew up without parents and looked all around for models to go by)---- felt the same way as I did, that we got the shaft when the whiz kid came a knocking and literally stole our prize possession.  Yep, I knew the guys who thought the same as me because I was the spring chicken in the club still after years and years being the youngest.  And I listened and watched...even probed these guys endlessly because I wanted investment results like them!  I suspected they were well-off, most have died now and let's just say the proof was in their donations.  Buy and hold good businesses?

 

Prices vary often and intensely, but good businesses...maybe well-above average businesses exist and tend to stay that way for some time.  Most think Microsoft, Meta, Google, Apple, Tesla, Amazon and such.  But there are tons of others with relatively small market caps- market caps that won't bump up against historical limits that suggest bigger market cap may be the first time in history such exists, that cloud/tech/media may have to take a time break?

 

Growth and stock prices won't be linear but to me the prices of both ICE and CME today aren't absurd, and there are tons more.  The Buffett types come around and steal them when they can, if it is appropriate to the system and such.

 

They weren't cheap either in the early 2000's when I bought them.  Value investing ain't just 10 pe's and such.  I'd messed around with England/London's Jardine Lloyd Thompson through the years, yet another toll booth (ole dealraker loves toll booth businesses, those brokers, trading houses, railroads that Train quoted Buffett on near 50 years ago) things over there in my ancestry land.  Jardine too got stolen from me, literally stolen, by Marsh.

 

So now I look at the London Stock Exchange often, Microsoft somehow's got involved.  A long period of not such good results?  My best guess is that will change.  

 

Lots of variants in the value investing world.  Making money is what we care about and it takes being willing to exist for long periods under other people's pricing, not yours or mine.  Life is great if you can stand it.

 

Ranting, rambling or maybe lecturing?.  Good morning world.

 

 

 

 

 

Thanks for sharing your perspective! I do not think it is off the topic at all.

[gfp]

Great post as usual Charlie - thanks!  Will the youngsters listen and copy?  Probably not!

[Dinar]

@dealraker, Charlie, thank you for the post.  Would you be able to share what you think are good business to own? (forget about current valuations, as you know they fluctuate) I am just trying to add to my database of businesses to follow and buy if the occasion presents itself.   Thank you.

[Spooky]

1 hour ago, dealraker said:

Prices vary often and intensely, but good businesses...maybe well-above average businesses exist and tend to stay that way for some time.  Most think Microsoft, Meta, Google, Apple, Tesla, Amazon and such.  But there are tons of others with relatively small market caps- market caps that won't bump up against historical limits that suggest bigger market cap may be the first time in history such exists, that cloud/tech/media may have to take a time break?

 

Thanks for the post Dealraker - I'm also just trying to find and hold great businesses and as Charlie would say sit on my ass. Do you have any candidates for smaller businesses that are wonderful businesses? I've also been thinking that buying the big techs, given their size, doesn't give you as big of a runway in the future... need to find some smaller companies with lots of room to grow.

[Masterofnone]

I started investing in 1998. After a few false starts I stumbled upon Berkshire and Buffett. Like many here, the logic of the process clicked. I went to the "new" message boards of the time and got perspectives- one of which was from old Dealraker himself. Basically spouting the same line- find a good business with a damn good chance of being around in 30 years and hold on. I got more and more comfortable with Berkshire and just kept buying whenever it got cheap. I loved that Berkshire afforded protection for me in down markets. (and the past 10 years haven't had much down time... and BRK has still done fine.) Since 1998 it has comprised over 75% of my portfolio and I sleep well. I'm from modest means and will eventually get to give a bunch of money away. 

 

So, not to speak for Dealraker, but the first criterion of a "wonderful business" is one that has a great chance of existing in 30 years. Those long tails never get included in discounted cash flow valuation. I'd venture that "future future" earnings is the secret sauce behind most of WEB's acquisitions. Avoid "political risk" and most things dependent on consumer preference. Just look for companies like the ones Warren and Charlie bought. Worst that can happen is what Dealraker experienced- they might buy you out on the cheap sometime.

 

A few ideas? BRK CSL HD GWW, DHR, CLWY FAST

[Gregmal]

15 minutes ago, Masterofnone said:

I started investing in 1998. After a few false starts I stumbled upon Berkshire and Buffett. Like many here, the logic of the process clicked. I went to the "new" message boards of the time and got perspectives- one of which was from old Dealraker himself. Basically spouting the same line- find a good business with a damn good chance of being around in 30 years and hold on. I got more and more comfortable with Berkshire and just kept buying whenever it got cheap. I loved that Berkshire afforded protection for me in down markets. (and the past 10 years haven't had much down time... and BRK has still done fine.) Since 1998 it has comprised over 75% of my portfolio and I sleep well. I'm from modest means and will eventually get to give a bunch of money away. 

 

So, not to speak for Dealraker, but the first criterion of a "wonderful business" is one that has a great chance of existing in 30 years. Those long tails never get included in discounted cash flow valuation. I'd venture that "future future" earnings is the secret sauce behind most of WEB's acquisitions. Avoid "political risk" and most things dependent on consumer preference. Just look for companies like the ones Warren and Charlie bought. Worst that can happen is what Dealraker experienced- they might buy you out on the cheap sometime.

 

A few ideas? BRK CSL HD GWW, DHR, CLWY FAST

Yea @dealrakerhas been such a refreshing voice to hear….the wisdom seems to have more substance and duration than the screaming about (insert crisis) and what’s this or that guy/thing/fund saying/doing/eating for lunch nonsense. Not only is it practical but it can be verified. Versus all the noise makers who lack transparency, always claim to have bought just before the move went green and sold just before it went red despite never mentioning it, and oh yea, always doing 20% a year…leave that shit for the seminars and newsletter crowd. It’s great having investor perspective that varies. Key word is, investor. 

[Cod Liver Oil]

@dealrakerLindsell Train has owned LSE for over 25 years; they agree with you and MSFT that is the LSE is great toll road and worthy of a position in the forever portfolio. I was asking a couple executives in the music business yesterday  if UMG had an entrenched toll-taking position and they both reluctantly said yes. They both pay their tithe to UMG quarterly and don't see that changing anytime soon. Buffett bought a few very cheap looking Japanese trading houses based on the same logic. I see Alphabet as the toll taker on the internet. TPL is the toll taker in the Permian. DIS and Nintendo are the toll booths on childhood.  JOE is a toll on the demographic shift to Florida from high tax northern states.  Toll taking is a great heuristic.

 

Edited December 16, 2022 by Cod Liver Oil

[Jaygo]

Here, here to Dealraker. I am all ears and love your posts, especially when talking about years past.

 

Having not had many older family members to talk to and losing my closest source of wisdom, my dad. I would say the "ramblings" of an old man are just about the most valuable things a young man could listen to. Thank you Dealraker for sharing your experiences.

 

 

 

 

 

 

[UK]

 

[Viking]

17 hours ago, dealraker said:

A neighborhool lady posted video of a fox, called it a coyote (which we have tons of), and proceeded to awfulize that her sometimes outdoor pets had been eaten.  We'd been on that neighborhood FB page suggesting she indoor the little creatures, but she had not seen a coyote and had to live it to believe it.  There's not a single outdoor pet here now in a neighborhood where we once had probably 50.  

 

In any event she eventually penned on the Watership Downs neighborhood FB page, "Charlie, I don't need your lecture."  We laughed; yes she was correct, I had given her a speech!  So I'll lecture this a.m. maybe...given I tend to do that.

 

Prices...oh yea it is simply this, we don't like to see the quotes go down.  So along the way back in the early 2000's I bought the trading houses, CME, NDAQ, and ICE.  I generally, when in quite the "oh my...this is one heck of a good business" mode, put a whopping "should-have-done-more-in-hindsight" $30,000 or so into something like this.  And then ole dealraker just goes plum hibernate mode.

 

And I have well into 7 figures of these businesses and basically never hear anyone ever mention them.  But they are there, still independent, and my limited brainpower says, "How do you ever find a better business than this?"   Others of course will disagree.

 

And I didn't sell a couple of years ago- the taxable account thingy- when it looked as if the stocks may have gotten as we say "ahead of themselves" and whatnot.  But the question I ask is simply this?  Did those stocks get overpriced?  Now overpriced to me is truly long term, I tend to be the type to make fun of the cyrpto go-go gang's of today and the "Tesla's run by a mad genius and he'll dominate the world soon" types.  My view is, as was posted by someone else on the crypto forum in a positive mode, that crypto is priced by "myth" and by the current "narrative"...both the cyrpto poster considered good and permanant, yes my view is of certainty myth/narrative to change violently at some point.  But I'm old, and my great nieces were obsessed with dodgecoin and prancing about (the price had gone blisteringly up)...now only to be saddled with a house in the Triangle of NC, one they paid a lot for and the value is below that---and it has endless problems that need a-fixin...and nearly complete cryto losses.  Thus my biased lecture to them---  I had, back in the downturn of Covid suggested they buy some stocks instead of dodgecoin.  Based on the request of my sister/bro-in-law and their parents (I have no biological children and am quite close to them)- I sent them a 20 year summary of my investments.  They yawned and said, "You're cute and old and so-so-so old fashioned and out of it."

 

But I'm off topic as ususal, not too serious (as usual), but forums are placed to vent and opine.  My view is that any time you can grab hold of a good business and "Rip" (that's Van Winkle) you are best served by doing just that.

 

Prices will vary.  What's ole dealrakers view?  It is precisly the same as 13 years ago or so when that asshole Warren Buffett stole my Burlington Northern stock.  I had bought several hundred thousands of that puppy, even got my investment club to buy it.  They were off-the-charts delighted when Berkshire, a stock the club also owned, bought Burlington.  They licked their chops, brought out the wine, and celebrated.

 

My view?  Well some of the guys in the club I eyeballed regularly for my life's direction (I grew up without parents and looked all around for models to go by)---- felt the same way as I did, that we got the shaft when the whiz kid came a knocking and literally stole our prize possession.  Yep, I knew the guys who thought the same as me because I was the spring chicken in the club still after years and years being the youngest.  And I listened and watched...even probed these guys endlessly because I wanted investment results like them!  I suspected they were well-off, most have died now and let's just say the proof was in their donations.  Buy and hold good businesses?

 

Prices vary often and intensely, but good businesses...maybe well-above average businesses exist and tend to stay that way for some time.  Most think Microsoft, Meta, Google, Apple, Tesla, Amazon and such.  But there are tons of others with relatively small market caps- market caps that won't bump up against historical limits that suggest bigger market cap may be the first time in history such exists, that cloud/tech/media may have to take a time break?

 

Growth and stock prices won't be linear but to me the prices of both ICE and CME today aren't absurd, and there are tons more.  The Buffett types come around and steal them when they can, if it is appropriate to the system and such.

 

They weren't cheap either in the early 2000's when I bought them.  Value investing ain't just 10 pe's and such.  I'd messed around with England/London's Jardine Lloyd Thompson through the years, yet another toll booth (ole dealraker loves toll booth businesses, those brokers, trading houses, railroads that Train quoted Buffett on near 50 years ago) things over there in my ancestry land.  Jardine too got stolen from me, literally stolen, by Marsh.

 

So now I look at the London Stock Exchange often, Microsoft somehow's got involved.  A long period of not such good results?  My best guess is that will change.  

 

Lots of variants in the value investing world.  Making money is what we care about and it takes being willing to exist for long periods under other people's pricing, not yours or mine.  Life is great if you can stand it.

 

Ranting, rambling or maybe lecturing?.  Good morning world.

Please keep the posts coming… lots to think about.  

[formthirteen]

20 hours ago, dealraker said:

A neighborhool lady posted video of a fox, called it a coyote (which we have tons of), and proceeded to awfulize that her sometimes outdoor pets had been eaten.  We'd been on that neighborhood FB page suggesting she indoor the little creatures, but she had not seen a coyote and had to live it to believe it.  There's not a single outdoor pet here now in a neighborhood where we once had probably 50.  

 

In any event she eventually penned on the Watership Downs neighborhood FB page, "Charlie, I don't need your lecture."  We laughed; yes she was correct, I had given her a speech!  So I'll lecture this a.m. maybe...given I tend to do that.

 

Prices...oh yea it is simply this, we don't like to see the quotes go down.  So along the way back in the early 2000's I bought the trading houses, CME, NDAQ, and ICE.  I generally, when in quite the "oh my...this is one heck of a good business" mode, put a whopping "should-have-done-more-in-hindsight" $30,000 or so into something like this.  And then ole dealraker just goes plum hibernate mode.

 

And I have well into 7 figures of these businesses and basically never hear anyone ever mention them.  But they are there, still independent, and my limited brainpower says, "How do you ever find a better business than this?"   Others of course will disagree.

 

And I didn't sell a couple of years ago- the taxable account thingy- when it looked as if the stocks may have gotten as we say "ahead of themselves" and whatnot.  But the question I ask is simply this?  Did those stocks get overpriced?  Now overpriced to me is truly long term, I tend to be the type to make fun of the cyrpto go-go gang's of today and the "Tesla's run by a mad genius and he'll dominate the world soon" types.  My view is, as was posted by someone else on the crypto forum in a positive mode, that crypto is priced by "myth" and by the current "narrative"...both the cyrpto poster considered good and permanant, yes my view is of certainty myth/narrative to change violently at some point.  But I'm old, and my great nieces were obsessed with dodgecoin and prancing about (the price had gone blisteringly up)...now only to be saddled with a house in the Triangle of NC, one they paid a lot for and the value is below that---and it has endless problems that need a-fixin...and nearly complete cryto losses.  Thus my biased lecture to them---  I had, back in the downturn of Covid suggested they buy some stocks instead of dodgecoin.  Based on the request of my sister/bro-in-law and their parents (I have no biological children and am quite close to them)- I sent them a 20 year summary of my investments.  They yawned and said, "You're cute and old and so-so-so old fashioned and out of it."

 

But I'm off topic as ususal, not too serious (as usual), but forums are placed to vent and opine.  My view is that any time you can grab hold of a good business and "Rip" (that's Van Winkle) you are best served by doing just that.

 

Prices will vary.  What's ole dealrakers view?  It is precisly the same as 13 years ago or so when that asshole Warren Buffett stole my Burlington Northern stock.  I had bought several hundred thousands of that puppy, even got my investment club to buy it.  They were off-the-charts delighted when Berkshire, a stock the club also owned, bought Burlington.  They licked their chops, brought out the wine, and celebrated.

 

My view?  Well some of the guys in the club I eyeballed regularly for my life's direction (I grew up without parents and looked all around for models to go by)---- felt the same way as I did, that we got the shaft when the whiz kid came a knocking and literally stole our prize possession.  Yep, I knew the guys who thought the same as me because I was the spring chicken in the club still after years and years being the youngest.  And I listened and watched...even probed these guys endlessly because I wanted investment results like them!  I suspected they were well-off, most have died now and let's just say the proof was in their donations.  Buy and hold good businesses?

 

Prices vary often and intensely, but good businesses...maybe well-above average businesses exist and tend to stay that way for some time.  Most think Microsoft, Meta, Google, Apple, Tesla, Amazon and such.  But there are tons of others with relatively small market caps- market caps that won't bump up against historical limits that suggest bigger market cap may be the first time in history such exists, that cloud/tech/media may have to take a time break?

 

Growth and stock prices won't be linear but to me the prices of both ICE and CME today aren't absurd, and there are tons more.  The Buffett types come around and steal them when they can, if it is appropriate to the system and such.

 

They weren't cheap either in the early 2000's when I bought them.  Value investing ain't just 10 pe's and such.  I'd messed around with England/London's Jardine Lloyd Thompson through the years, yet another toll booth (ole dealraker loves toll booth businesses, those brokers, trading houses, railroads that Train quoted Buffett on near 50 years ago) things over there in my ancestry land.  Jardine too got stolen from me, literally stolen, by Marsh.

 

So now I look at the London Stock Exchange often, Microsoft somehow's got involved.  A long period of not such good results?  My best guess is that will change.  

 

Lots of variants in the value investing world.  Making money is what we care about and it takes being willing to exist for long periods under other people's pricing, not yours or mine.  Life is great if you can stand it.

 

Ranting, rambling or maybe lecturing?.  Good morning world.

 

 

 

 

 

Post of the year. I'm biased as an owner of ICE, ENX, CBOE, LSEG, and OTCM. I should probably buy more of them and hibernate.

[Cod Liver Oil]

@dealraker your investment club sounds fascinating. Would you consider posting a video or audio of one of your meetings?  We could all learn a thing or two about civil and intelligent dialogue and disagreement. If you filmed it from the rear, everyone would preserve their anonymity.

Edited December 16, 2022 by Cod Liver Oil

[dealraker]

1 hour ago, Cod Liver Oil said:

@dealraker your investment club sounds fascinating. Would you consider posting a video or audio of one of your meetings?  We could all learn a thing or two about civil and intelligent dialogue and disagreement. If you filmed it from the rear, everyone would preserve their anonymity.

Cod Liver - so the club that began in 1954 of course has no founding or original members and the older guys that I often refer to here are all gone.  We have a large candy maker company member, large NC grading company member, a architect whose family builds dry kilns all over the country, and the list goes on.  These guys are younger than me (68 for me) as is now half the club and they are of another world as to investments.  The older guys?  My brother-in-law 75; his brother 80; and so many others not only can't hear but are like "one sentence" is enough as to actual investments.  So it isn't necessarily a bad thing but this lawyer guy who is 76 sort-of took over the club in the last few years (took over because the members come for social reasons far more than investment) and he has us rotating in and out of low PE value stocks.  I mean here the Bristol Myers type things (we bought recently in the $60's...but you get the message).  Dividends rule and whatnot.  The game is lame as to stimulation, the meetings very short and not informative.  The old days are gone and I'm attending about half.  

 

The good thing is that our family owns (I'm a one of 11 member) two side by side 1000 acre tracts of land about 14 miles out of town with mid-size cabins and ponds and we picnic there a couple times a year.  We rent a van to pick up members (think age) and even those gatherings end for most (some of us hang around for hours) quickly so the older guys can get home in the daylight.  

 

Getting older?  So you wonder why I'm here and I post?  Staying involved, doing things, bashing around in all ways of life keeps you pulsatingly alive.  And I want to be a part of things for as long as I can.

 

Have a great day.  A list of what I think, and others will differ, good businesses is coming.  Life is great...if you can stand it.  

 

By the way, we had a mining company come offer us "we'll give you one million each (total $11 mil) to let us have 3 acres to dig and mine your land (the big tracts)".  They wouldn't even tell us 'what' they were going to mine but we think this and that...and told them "No."  Haven't heard from them since the markets broke.  FY entertainment one of the themes of this land is that members find ever more productions of "Big Foot" and these are placed both on the porches of the cabins or on the hiking trails - we have miles of trails which has become our throughout the year projects to build and upkeep.  Silly but fun boy stuff is as deep as it gets.

21 hours ago, Spooky said:

 

Thanks for the post Dealraker - I'm also just trying to find and hold great businesses and as Charlie would say sit on my ass. Do you have any candidates for smaller businesses that are wonderful businesses? I've also been thinking that buying the big techs, given their size, doesn't give you as big of a runway in the future... need to find some smaller companies with lots of room to grow.

 

Edited December 16, 2022 by dealraker