What are you buying today?

[Castanza]

30 minutes ago, Gmthebeau said:

Sentiment from this board.  Whatever man, I don't need to justify why I bought it to anyone.

Then why even post to begin with? 

[Gmthebeau]

5 minutes ago, Castanza said:

Then why even post to begin with? 

listen dude you just want to argue.  I posted why I bought it you dont like the idea.  I could give a shit what you think.  

[LC]

10 hours ago, nwoodman said:

A sucker for their music business. 

That's kind of the only thing that attracts me to Sony as well.

 

I assume you think UMG is too expensive on a relative basis? UMG you get a pureplay and slightly better market positioning. I do like some of Sony's other businesses (gaming), but it's a huge conglomerate and my knowledge is cursory - I don't know what could be creeping under the surface.

[Spekulatius]

3 hours ago, Castanza said:

 

LOL sentiment from who? Every hedge fund and talking head is pumping China right now. If anything the sentiment is positive as Chinese equities are at 52 week lows.

 

Regardless of sentiment your initial comment has little to do with sentiment...

 

I think it’s a pretty contrarian viewpoint to invest in China, just looking at the charts. If you want to see positive sentiment look at everything related to tech and AI - that’s a whole other level than buying something on dips and low metrics.

[jefke]

On 2/9/2024 at 2:16 PM, Paarslaars said:

Starter in XFAB

Interesting name. Do you have a quick pitch on the stock?

[Castanza]

53 minutes ago, Spekulatius said:

I think it’s a pretty contrarian viewpoint to invest in China, just looking at the charts. If you want to see positive sentiment look at everything related to tech and AI - that’s a whole other level than buying something on dips and low metrics.

 

I wouldn't say it's contrarian, but more of about risk management regarding trust. At least that's what the talking heads are saying. Primarily I was just curious what changed @Gmthebeau mind. Two weeks ago he way saying investing in any country that is at odds with the US is playing with fire; or that it's impossible for American investors to properly analyze Chinese equities....or that BABA specifically would go up only once the CCP takes all your money.

 

I'm just curious how someone can hold such a strong view and then when asked about a position the response is...."the sentiment changed on this forum." <--- that doesn't address any of the risks or opinions they shared (confidently) previously..

 

Frankly I don't believe them to be an honest person so I'll just disregard any of their posts moving forward. 

[Gmthebeau]

7 minutes ago, Castanza said:

 

I wouldn't say it's contrarian, but more of about risk management regarding trust. At least that's what the talking heads are saying. Primarily I was just curious what changed @Gmthebeau mind. Two weeks ago he way saying investing in any country that is at odds with the US is playing with fire; or that it's impossible for American investors to properly analyze Chinese equities....or that BABA specifically would go up only once the CCP takes all your money.

 

I'm just curious how someone can hold such a strong view and then when asked about a position the response is...."the sentiment changed on this forum." <--- that doesn't address any of the risks or opinions they shared (confidently) previously..

 

Frankly I don't believe them to be an honest person so I'll just disregard any of their posts moving forward. 

 

The great news is I don't have to explain to you why I changed my opinion.  I told you I did.  I told you it was sentiment.  You didn't like the answer.  I don't care.  You should mute me.  

[Paarslaars]

2 hours ago, jefke said:

Interesting name. Do you have a quick pitch on the stock?

Stock is down quite a bit on inventory corrections and the announcement of large upcoming CAPEX expenditure.

XFAB is at the end of a transition from low margin commodity production to more high value/high margin products (automobil, medical, industrial...). This will also reduce the cyclibility of their revenues.

 

In any case, worth more than a P/E of 6.5 to me as this is still a growing market.

[Spekulatius]

41 minutes ago, Paarslaars said:

Stock is down quite a bit on inventory corrections and the announcement of large upcoming CAPEX expenditure.

XFAB is at the end of a transition from low margin commodity production to more high value/high margin products (automobil, medical, industrial...). This will also reduce the cyclibility of their revenues.

 

In any case, worth more than a P/E of 6.5 to me as this is still a growing market.

Some of their fabs run ~1um feature size process. Bleeding edge is 3nm or 0.003um feature size. 1 um is basically “steampunk” tech for semiconductors. It does mean it can’t be a good business, but I found it remarkable.

Edited February 15 by Spekulatius

[lnofeisone]

5 hours ago, Spekulatius said:

Some of their fabs run ~1um feature size process. Bleeding edge is 3nm or 0.003um feature size. 1 um is basically “steampunk” tech for semiconductors. It does mean it can’t be a good business, but I found it remarkable.

There is some fun history here - and this is my electrical engineer side. 

X Fab looks to produce analog devices. Those generally tend to run larger than digital chips. The sizing they give you corresponds to the actual sizing. 3nm stuff is marketing fluff, and those chips are much bigger than 3nm. So it's not apples to apples, but yes, the analog world is much larger. 

 

In the analog world, 1um is not terribly far behind "cutting edge." Take a look at at ADI's roadmap and zoom in on the sizing. 

https://www.analog.com/media/en/news-marketing-collateral/solutions-bulletins-brochures/adis-resilient-hybrid-manufacturing-network.pdf

 

The bit on history: When semiconductors were first produced the sizing was describing the size of the transistor gate length. Over time because of the chip architecture innovation, "nm" took on a marketing tilt. The 3nm doesn't mean a 3nm transistor gate length. All it means is that 3nm process makes smaller stuff than a 7nm process of the same company. The latter point is important because it means that 7nm process of one company can be bigger or smaller than 7nm process of another company. 

[Paarslaars]

7 hours ago, Spekulatius said:

Some of their fabs run ~1um feature size process. Bleeding edge is 3nm or 0.003um feature size. 1 um is basically “steampunk” tech for semiconductors. It does mean it can’t be a good business, but I found it remarkable.

 

You are correct. Other than what @inofeisone mentioned, this is common for those industries. Automobile, medical, etc... their priority is reliability & robustness, not performance. No point in putting 3nm node electronics in a car if it breaks down the first time you hit a speed bump.

[Gmthebeau]

SNOW.  Would have preferred to buy it around $200 but missed that, will add it if drops back to 200ish.

[Gmthebeau]

EL

[Spekulatius]

13 hours ago, Paarslaars said:

 

You are correct. Other than what @inofeisone mentioned, this is common for those industries. Automobile, medical, etc... their priority is reliability & robustness, not performance. No point in putting 3nm node electronics in a car if it breaks down the first time you hit a speed bump.

It’s not just that, some analog devices can’t be miniaturized, because they don’t work binary. Sometimes you need to generate a certain current or power output and a too small device structure won’t be able to do with without overheating. Same with a sensor - if you want to capture some photons , you may need the receptive area to be of a certain size etc. 

Edited February 16 by Spekulatius

[aws]

OZ. I need to do some more work on it to see if there is any fundamental reason for the selloff this year but I wanted to pickup some. It's an Opportunity Zone fund and has been beaten down to less than half NAV. I suspect it could just be capitulation in a thinly traded stock. It looks like they had to take out a high interest mezzanine loan this month on their new retail/luxury apartment building they are supposed to finish this year. Possibly they expected to be able to issue more stock at NAV as they had an outstanding offer for $1 billion at $100/sh, but only sold a little over $300 million worth. Either they are crimped on cash and running into issues on their development, or there is fear they are and they will need to dilute at even lower prices.

 

It's been a favorite trading vehicle of mine in the past because it is has the unique trait of being the only publicly traded stock in the market that allows you to take a dollar for dollar tax deduction when you buy it. And the deduction is retroactive to last year so long as you have a gain in the past 6 months to offset.

[zippy1]

3 hours ago, Spekulatius said:

It’s not just that, some analog devices can’t be miniaturized, because they don’t work binary. Sometimes you need to generate a certain current or power output and a too small device structure won’t be able to do with without overheating. Same with a sensor - if you want to capture some photons , you may need the receptive area to be of a certain size etc. 

I am kind of wondering, though. 
Designing and building analog chips with old equipment that has been depreciated years ago, can be a great business. 
I remembered that Linear Technology and Maxim used to have gross margin in 60%-70%. 
However, XFAB is a foundry and not a IDM like ADI or an analog design house, though. XFAB's gross margin is between 5.5% to ~24%. I looked at their website which lists their fabs.  As far as I can tell, most were built years ago. In other words, not much depreciation from the equipment.  
It may be a good idea to check how many new entrants into this kind of fabrication capacities there are. 
If they are going to buy brand new equipment for the new fab, the depreciation of the equipment will be different than running fabs with 25-30 years old equipment. 
If one checks the gross margins of UMC and Vanguard Semi(5347.tw), one suspects that capacities are being added after the industry had very good margins in 2021 and 2022.  The previous low margin occurred in 2018-2019.
Capacities with new equipment will have quite different economics than adding capacities with equipment that has been depreciated, though.
Just my 2 cents.  

Edited February 16 by zippy1

[nwoodman]

On 2/16/2024 at 3:53 AM, LC said:

That's kind of the only thing that attracts me to Sony as well.

 

I assume you think UMG is too expensive on a relative basis? UMG you get a pureplay and slightly better market positioning. I do like some of Sony's other businesses (gaming), but it's a huge conglomerate and my knowledge is cursory - I don't know what could be creeping under the surface.

Thanks, I need to do a side-by-side comparison with UMG.  Sony's not cheap, but I consider it well-run.   It's only a 2% position for me, but set-and-forget.  I think they are executing well despite all the handwringing that goes on in the gaming division, a lot of which is misreporting.  

 

Take Helldivers 2, for instance; that's a PC/PS5 release that's currently going absolutely ballistic and hopefully alleviating some of the cynicism about live service games.  While not my bag, if people are going to game, I think it is better to do it with your mates and have a laugh. Helldivers 2 looks like a hoot 

 

Edited February 18 by nwoodman

[lnofeisone]

On 2/16/2024 at 2:45 PM, aws said:

OZ. I need to do some more work on it to see if there is any fundamental reason for the selloff this year but I wanted to pickup some. It's an Opportunity Zone fund and has been beaten down to less than half NAV. I suspect it could just be capitulation in a thinly traded stock. It looks like they had to take out a high interest mezzanine loan this month on their new retail/luxury apartment building they are supposed to finish this year. Possibly they expected to be able to issue more stock at NAV as they had an outstanding offer for $1 billion at $100/sh, but only sold a little over $300 million worth. Either they are crimped on cash and running into issues on their development, or there is fear they are and they will need to dilute at even lower prices.

 

It's been a favorite trading vehicle of mine in the past because it is has the unique trait of being the only publicly traded stock in the market that allows you to take a dollar for dollar tax deduction when you buy it. And the deduction is retroactive to last year so long as you have a gain in the past 6 months to offset.

Can you share more please, especially around the tax structure (I always love clunky tax structures)? 

[cash_incinerator]

20 hours ago, lnofeisone said:

Can you share more please, especially around the tax structure (I always love clunky tax structures)? 

 

I have a few oz investments, I never understood how a publicly traded one could really work, and I'd steer clear. And oz program just causes a deferral of a capital gain until tax year 2026, not a deduction thats good forever. So yes you could buy oz with say a dollar in capital gains and defer that dollar of cap gains tax until 2026, saving you 20 cents this year.  But if you ever sold oz before 2026, that entire transaction should be reversed, and since you are the seller, i think the irs would take a dim view and might impose penalties and interest.  Not sure on that last piece but I'd be careful.

[lnofeisone]

Starters in INTC and COF. 

[lnofeisone]

3 hours ago, cash_incinerator said:

 

I have a few oz investments, I never understood how a publicly traded one could really work, and I'd steer clear. And oz program just causes a deferral of a capital gain until tax year 2026, not a deduction thats good forever. So yes you could buy oz with say a dollar in capital gains and defer that dollar of cap gains tax until 2026, saving you 20 cents this year.  But if you ever sold oz before 2026, that entire transaction should be reversed, and since you are the seller, i think the irs would take a dim view and might impose penalties and interest.  Not sure on that last piece but I'd be careful.

This is what I was curious about too. OZ hinges around investment and holding for deferral purposes. So how would that work if one buys OZ and then sells OZ. Is that the same as selling holdings in OZ triggering tax events? What if OZ itself sells something, does that mean a tax event triggered? 

[Ross812]

Adding to DFIN on a little earnings weakness. 

[Saluki]

small add to NTDOY

[winjitsu]

MACK filled at 14.65

SMCI 700/600 Jan '25 Bear Spread. First time "trading" like this in a while. I wouldn't be surprised if "they" tried to gamma squeeze this again on Friday.

Edited February 20 by winjitsu

[KPO]

TDOC