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What are you buying today?


LowIQinvestor

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Bought some more AYR. Here's hoping this bitch finally bottomed...

 

Looks like it paid off well for you. Nice call!

 

Hardly out of the woods yet, but hoping to get there soon.

 

If you don't mind, what is the plan for situations like these?  Is there a % or price in mind, or something else? 

 

I always wonder about these - would you say it's special/unique - situations.  Even with a or multiple pop(s), but what is suppose to be the exit?

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Bought some more AYR. Here's hoping this bitch finally bottomed...

 

Looks like it paid off well for you. Nice call!

 

Hardly out of the woods yet, but hoping to get there soon.

 

If you don't mind, what is the plan for situations like these?  Is there a % or price in mind, or something else? 

 

I always wonder about these - would you say it's special/unique - situations.  Even with a or multiple pop(s), but what is suppose to be the exit?

 

Its never really "this" or "that" exactly, if that makes sense. I'll try to explain further the thought process.

 

I really love looking for investments that some may call orphaned, or otherwise just check a lot of boxes in terms of things that put people off for no good reason. So with something like AYR, you have that in spades. Its been covered much more in detail on the AYR thread, but summarizing, you first had the marijuana bubble craze and this was all retail fueled. All institutional or sophisticated investors basically wrote it off then. The bubble popped, and all of the retails folks then took a bath as well. Somewhere in between AYR came along as a SPAC convert. Again, refer to the AYR thread if you wish, but it just made sense for me.

 

The adding into the investment of, which I did plenty of, was a little nuts given the volatility, but I was fortunately to kind of catch the falling knife in bulk closer to the $10 number rather than the mid teens where I took the first tracking position. It's now about a 4-5% position for me, which is a reasonable one. One the technical side, yea theres been a couple days where you've had several $ swings in the share price for no real reason. I typically have a rule of thumb that if anything I buy goes +15-20% or more the same day, just sell it, take the extraordinary gains, and re-evaluate tomorrow, basically in the same exact spot as you were prior, minus your fat one day gain.

 

I don't really have a set price target per say. I think a floor price target would be high teens or so. 7.5x $110M estimated 2020 EBITDA for a growth company like this isn't unreasonable. However on the other hand, I am also inclined to just let things play out and see if they can hit numbers and see where this goes. This is definitely a sector/special situation where you are capable of getting the retail rush back and going whacky; in which case, again AYR, is kind of positioned to be a premier marijuana play vs poo poo like Cronos and Tilray.

 

 

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Gregmal, seems like PTON is only modestly more difficult to short than WeWork.

 

How big of a TAM and durable of a business can there possibly be for $2-4,000 pieces of exercise equipment and $40 per month subscriptions in an industry with a long history of fad exercise programs (and diets)?

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Gregmal, seems like PTON is only modestly more difficult to short than WeWork.

 

How big of a TAM and durable of a business can there possibly be for $2-4,000 pieces of exercise equipment and $40 per month subscriptions in an industry with a long history of fad exercise programs (and diets)?

 

I dont disagree. FWIW I sold my puts on the run down and have this on the radar for a re entry either with puts or an outright short. The product is 100% a fad...its a Nordic Track with an iPad with Youtube for $40 a month... Ive been a member at some super duper high end and expensive gyms, and at times tried all the new buzz worthy fitness stuff. The truth is, for 90% of the population(the 90% of the top 10% that can actually afford this shit), this stuff is fun and captivating in the beginning and then you just get tired of it.

 

The bull case for NordicTrack, I mean Pelaton, is not that they'll sell a million machines, its the recurring revenue and subscriptions. To me, the on demand stuff is neat, and Im still trying to tally the meaningfulness of that. But at $40 a month or whatever? When people arguably won't pay $40 a month anymore for a full TV package... or they can get a full gym membership for $30 a month? Or even get fitness videos for free on Youtube and the like?

 

So yea, its kind of a no brainer, but it'll come down to timing so if you're going to put the trade on you either need to buy puts, or give yourself a very cut and clear catalyst but also a running start into it because once everyone else notices the catalyst the opportunity goes away. I typically like revisiting these a couple months ahead of the lockup expiration. Its important to remember, this isn't a SV tech company. Where all the employees are snobby dickbags and dont value money, ie, they'll hold their stock until they become billionaires because worst case they just move to the next venure and try again in a year...Its Beyond Meat or Tilray... normal people working at a company that just found themselves sitting on a restricted amount of life changing money, made in a short period of time, and they likely cant pass that up. The VC folks know this as well, which is typically why you see these get obliterated in the 2-3 month period sandwiching the lockup expiration, so typically 2 months out is an ideal time to start laying the ground work for your position.

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Will you pay for the puts by selling puts well below the current price, or do you like to buy a little more OTM to reduce option cost?

 

Knowing you have specific short term catalysts and willingness to have some conviction, I’m betting you’re staying pretty close to the money and buying naked most of the time.

 

Thanks for the color on PTON.

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Will you pay for the puts by selling puts well below the current price, or do you like to buy a little more OTM to reduce option cost?

 

Knowing you have specific short term catalysts and willingness to have some conviction, I’m betting you’re staying pretty close to the money and buying naked most of the time.

 

Thanks for the color on PTON.

 

It really depends. With some of the crazy high borrow cost names Ive found going 30% or so OTM and a year plus out does the trick. If you get a reasonable move down it takes care of itself. Otherwise you are still predominantly holding the time value. Whereas short dated and at the money you need to be so pinpoint with your timing its a little too much of a risk for me. Ive seen shit like BYND where you have something more or less at the money pricing in a 10% weekly move which is just insanely difficult to make money on.

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WFCF (food / meat certification business), which finally showed  some decent earnings and  better operating metrics. I was following the stock for quite some time and liked the business, but wasn’t comfortable with valuation and execution until after the recent earnings report, which showed some promise.

 

DD (bought back some shares again).

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