What are you buying today?

[Cod Liver Oil]

Bought some SPHR at the close for Mother's Day.

https://www.jambase.com/article/phish-msg-sphere-las-vegas-report

They will probably make MSG and the Sphere binary stars. Bands like like Phish will

eat the Sphere up.

Edited May 12, 2023 by Cod Liver Oil

[thowed]

Nice on $FRPH.  Did I miss anything?  Couldn't understand what happened today.  I suppose the illiquidity means it doesn't take much.

[Gregmal]

26 minutes ago, thowed said:

Nice on $FRPH.  Did I miss anything?  Couldn't understand what happened today.  I suppose the illiquidity means it doesn't take much.

Nothing I saw. Sometimes the market is just generous. 

[Spekulatius]

Added just a few shares to $PAYC last week. Sort of expensive, but very well managed, imo.

 

I also added a bit of $PNC.

Edited May 15, 2023 by Spekulatius

[Cod Liver Oil]

Adding to Itafos (IFOS.V). This hits the high points:

https://raymondjames.bluematrix.com/links2/pdf/31bd19b9-0365-46d9-b587-2d3aba81836f

It has been derisked if you can stand some exposure to DAP pricing. You guys can and should

throw pies at me if this doesn't work out.

 

[bizaro86]

FRPH

[Red Lion]

Bought a little BN at $30.49 to top up my position to roughly equal weight with kkr/apo/bx/owl. 

[CorpRaider]

On 5/12/2023 at 12:30 PM, EBITDAg said:

WFC-L. ~6.6% yield that might as well be a perpetuity. Will hold for a long time or sell if rates plunge in future and these go back to ~$1300+ again.

I had a good time reading through the old Walk-all-ova-yah prospectus this weekend.  Thank you.

Edited May 15, 2023 by CorpRaider

[chompsterama]

54 minutes ago, RedLion said:

Bought a little BN at $30.49 to top up my position to roughly equal weight with kkr/apo/bx/owl. 

Great idea.  Buy the frauds!

[Luke]

12 hours ago, chompsterama said:

Great idea.  Buy the frauds!

Sorry, frauds? I mean you can be critical of their reporting and question leverage etc but call these businesses frauds? Where is the fraud here? 

[Luke]

Added to FFH and Exor. FFH now almost a 10% Position to me. Wanna see what the market does the next 3 years with the current set up...

[Malmqky]

Almost bought SPHR…couldn’t bring myself to do it so just bought more MSGS instead

[Cod Liver Oil]

@Malmqky yes, SPHR makes me throw up a little bit every time I press the buy button. Can anyone opine if there a correlation between throw up and returns?

Edited May 16, 2023 by Cod Liver Oil

[chompsterama]

8 hours ago, Luca said:

Sorry, frauds? I mean you can be critical of their reporting and question leverage etc but call these businesses frauds? Where is the fraud here? 

If their marks are fake, then their balance sheet is fake.  If those write-downs don't flow through the income statement then that's also fake. 

 

https://www.institutionalinvestor.com/article/b1h9csrci656v4/Why-Does-Private-Equity-Get-to-Play-Make-Believe-With-Prices  

[Red Lion]

8 hours ago, Luca said:

Sorry, frauds? I mean you can be critical of their reporting and question leverage etc but call these businesses frauds? Where is the fraud here? 

I can see 100% legitimate concerns with reporting as well. But this basket that I’ve mentioned trades at below the s&p multiple, has a core high roic asset management business model, undervalued on the basis of valuable asset light Fee related earnings. 
 

The basket is still raising aum at a rapid pace which is the key growth metric to watch. But a nice mix between PE/infrastructure/private credit/insurance solutions to not make a huge binary bet on interest rates. 
 

Also, BX and/or APO have a good shot at s&p inclusion. 
 

I’ve been considering increasing my allocation to the sector which is already my largest stock investment, but I think I will continue to proceed with the above basket as long as fundraising continues at attractive rates and continue to add to relatively undervalued names. 
 

APO has been outperforming in the markets but still undervalued compared to most peers. KKR still fundraising at healthy rates not withstanding obvious headwinds with the interest rate backdrop selling at cheap valuation. Cheaper than BN I suspect but most of the balance sheet in private investments.  

 

OWL growing like fire in a subsector (direct lending) that could benefit from banking dislocation, is asset light and trading at 5.5% current yield growing rapidly along with FRE which is following rapid fundraising and matching the margins of much larger competitors.

 

BN super cheap, but mostly on SOTP with a bunch of questionable assets some of which are publicly traded with low float and high valuations.
 

BAM/ARES great businesses with premium valuations to the rest of the sector. Ares premium seems more justified to me of the two.  
 

Having a basket does balance out the risks to some degree (going all in on CG for example) but also provides broad exposure to a high margin asset management subsector that is currently not represented whatsoever in the s&p. 
 

 

[Spekulatius]

37 minutes ago, chompsterama said:

If their marks are fake, then their balance sheet is fake.  If those write-downs don't flow through the income statement then that's also fake. 

 

https://www.institutionalinvestor.com/article/b1h9csrci656v4/Why-Does-Private-Equity-Get-to-Play-Make-Believe-With-Prices  

You forgot about the heads I win, tails they don't lose much thing. That's the essence of private equity investment management.

 

If things wrong, they are losing other peoples or their creditors money. Worst case, they are also lose their reputation, but I think most wont get there.

Edited May 16, 2023 by Spekulatius

[Luke]

Sold half of my Samsung Position at a 5% loss and shifted proceeds into fairfax and left with some cash to deploy.

[sleepydragon]

Bought Fairfax for the first time!

[Castanza]

Added to OXY

[Spekulatius]

I bought a starter in $CSL and $SU.

[Red Lion]

2 hours ago, Spekulatius said:

You forgot about the heads I win, tails they don't lose much thing. That's the essence of private equity investment management.

 

If things wrong, they are losing other peoples or their creditors money. Worst case, they are also lose their reputation, but I think most wont get there.

I think this is a much more concise summary of the situation. if fee paying AUM continues to grow, these businesses will increase in value. So if you're buying them at a reasonable multiple of FRE you will make good returns. They won't continue to grow their FPAUM with a loss of reputation. BAM, BX, KKR, APO, ARES, and OWL clearly still have a fine reputation with LP clients, they're all raising more and more money even as previously invested capital might struggle with valuation marks. The media reports BX's redemptions with BREIT ad nauseum yet BX is raising boatloads of capital in real estate and everything else. 

 

The realization/carried interest is really just icing on the cake here, and that's more impacted by whether marks are low or high in the short term. 

Edited May 16, 2023 by RedLion

[CorpRaider]

SLG-i; just putting back similar exposure from prior "tax loss harvesting."

Edited May 16, 2023 by CorpRaider

[Luke]

Reduced my Micron Position at 10% Gain to add to Fairfax

[Red Lion]

18 hours ago, CorpRaider said:

SLG-i; just putting back similar exposure from prior "tax loss harvesting."

Curious on your thoughts on this vs Vno preferred? I’ve been buying some vno preferred in my retirement account, and thinking of making it a larger position. With the yield plus narrowing of discount to par there seems like a pretty good case for mid teens returns with less downside risk than the common. 

[CorpRaider]

1 hour ago, RedLion said:

Curious on your thoughts on this vs Vno preferred? I’ve been buying some vno preferred in my retirement account, and thinking of making it a larger position. With the yield plus narrowing of discount to par there seems like a pretty good case for mid teens returns with less downside risk than the common. 

 

Flattered you would ask.  I will have to look at the VNO preferred.  Obviously, VNO presents a superior credit risk at this time.  I was going to buy VNO common to maintain my exposure, but Roth didn't help me get there on that last call (singing from the denial playbook and cutting himself off mid-rant and then calling out that he wasn't in the office lol). 

 

It sounds like I went through part of the same analysis as you did; plenty of upside if they're money good and less risk (of course then they're up 1% today versus 7% in the common).  I also transitioned my exposure to a tax advantaged account.  CEO and CFO were buying the SLG preferreds at around the price I got earlier in the year.

Edited May 17, 2023 by CorpRaider