Castanza Posted December 23, 2022 Share Posted December 23, 2022 14 minutes ago, Spekulatius said: I have added to TSN as well, as well as a few others (averaging down). Just saw the proxy and I am voting against any board member with zero stock. Don't care what else they do. I do this pretty much for all proxys. I also started a position in CRWD. Haha I like it. Haven’t read over the proxy yet but will probably follow suit with that thought process. Link to comment Share on other sites More sharing options...
Xerxes Posted December 25, 2022 Share Posted December 25, 2022 https://financialpost.com/telecom/media/michael-bloomberg-looking-to-buy-dow-jones-washington-post Looking to beef up Link to comment Share on other sites More sharing options...
Dave86ch Posted December 25, 2022 Share Posted December 25, 2022 Few Gwei Ethereum and staked at 4% APY Link to comment Share on other sites More sharing options...
Luke Posted December 27, 2022 Share Posted December 27, 2022 Opened a position on LVMH Link to comment Share on other sites More sharing options...
lnofeisone Posted December 27, 2022 Share Posted December 27, 2022 AMZN, GOOGL, BX, BAC, and trying to fill ORG but it may take a second. Link to comment Share on other sites More sharing options...
Agrippa07 Posted December 28, 2022 Share Posted December 28, 2022 Added to IAC, opened small positions in Twillio and Airbnb Link to comment Share on other sites More sharing options...
ValueArb Posted December 28, 2022 Share Posted December 28, 2022 I'm trying to build a position in something I found that is trading at roughly 50% of intrinsic value, with a pending liquidity catalyst in probably 6 months. The problem is its only trading about $150k a day, so I can't really talk about it lest someone blow me out of my bids. Of course its unlikely anyone here has any interest in a tiny shitcap, but better safe than sorry. Link to comment Share on other sites More sharing options...
Dinar Posted December 28, 2022 Share Posted December 28, 2022 1 minute ago, ValueArb said: I'm trying to build a position in something I found that is trading at roughly 50% of intrinsic value, with a pending liquidity catalyst in probably 6 months. The problem is its only trading about $150k a day, so I can't really talk about it lest someone blow me out of my bids. Of course its unlikely anyone here has any interest in a tiny shitcap, but better safe than sorry. How big are you trying to get? If this is as attractive as you think, why not pay up 2-3% and get it? Unless you are trying to buy $5MM of it. Link to comment Share on other sites More sharing options...
Whensthepaintdry? Posted December 28, 2022 Share Posted December 28, 2022 Bought some WWW. Probably going to be tough road ahead for this one. Link to comment Share on other sites More sharing options...
DooDiligence Posted December 28, 2022 Share Posted December 28, 2022 A little more GOOGL and DIS. Link to comment Share on other sites More sharing options...
ValueArb Posted December 28, 2022 Share Posted December 28, 2022 15 hours ago, Dinar said: How big are you trying to get? If this is as attractive as you think, why not pay up 2-3% and get it? Unless you are trying to buy $5MM of it. LOL, I only accumulated $17k in a little less than a week and now it's spiked 20%. There is a chance that it's actually well below 50% IV even at the higher price but I have to think more about the value of it's less certain assets more before paying up. It was so much work buying $700 at a time I'm not sure if it was worth it. Maybe I should have just fed the ask to see how much it would have taken at the lower prices. My habit is never to pay above bid, and just walk away if it isn't hit, but that may have burned me. Link to comment Share on other sites More sharing options...
Dinar Posted December 28, 2022 Share Posted December 28, 2022 48 minutes ago, ValueArb said: LOL, I only accumulated $17k in a little less than a week and now it's spiked 20%. There is a chance that it's actually well below 50% IV even at the higher price but I have to think more about the value of it's less certain assets more before paying up. It was so much work buying $700 at a time I'm not sure if it was worth it. Maybe I should have just fed the ask to see how much it would have taken at the lower prices. My habit is never to pay above bid, and just walk away if it isn't hit, but that may have burned me. Read Philip Fischer - common stocks and uncommon profits, if you have not already. If I like something, I will pay ask so not to kick myself later. Link to comment Share on other sites More sharing options...
ValueArb Posted December 28, 2022 Share Posted December 28, 2022 37 minutes ago, Dinar said: Read Philip Fischer - common stocks and uncommon profits, if you have not already. If I like something, I will pay ask so not to kick myself later. I buy way more shitty stocks than Phil Fischer did. Paying ask often is risky since I need a huge margin of safety. If Phil overpaid for his growth stocks, in a couple years it would hardly matter given how much they appreciated. Link to comment Share on other sites More sharing options...
UK Posted December 29, 2022 Share Posted December 29, 2022 AMZN, JOE. Link to comment Share on other sites More sharing options...
Red Lion Posted December 29, 2022 Share Posted December 29, 2022 Bought a little bit of BX with the small amount of cash I had in retirement account. This is essentially a full position for me at about 5% of my liquid portfolio, but I added 20 basis points, I think it's a real bargain here. Link to comment Share on other sites More sharing options...
crs223 Posted December 30, 2022 Share Posted December 30, 2022 21 hours ago, RedLion said: Bought a little bit of BX with the small amount of cash I had in retirement account. This is essentially a full position for me at about 5% of my liquid portfolio, but I added 20 basis points, I think it's a real bargain here. Why is the market offering such a bargain? Why isn’t BRK buying? What’s the risk? Link to comment Share on other sites More sharing options...
n.r98 Posted December 30, 2022 Share Posted December 30, 2022 (edited) 16 minutes ago, crs223 said: Why is the market offering such a bargain? Why isn’t BRK buying? What’s the risk? interested to hear the bull case and risks as well. Is the rise in interest rates not a headwind for PE? Edited December 30, 2022 by n.r98 Link to comment Share on other sites More sharing options...
hasilp89 Posted December 30, 2022 Share Posted December 30, 2022 1 hour ago, n.r98 said: interested to hear the bull case and risks as well. Is the rise in interest rates not a headwind for PE? my layman view (no position but interested) is that the rise in rates is a headwind for everyone - the PE masters of the universe will be best positioned of everyone to snap up assets / take advantage of distressed situations. they've lived with 5% rates for much of their lives. they'll know what to do. Link to comment Share on other sites More sharing options...
Red Lion Posted December 30, 2022 Share Posted December 30, 2022 1 hour ago, crs223 said: Why is the market offering such a bargain? Why isn’t BRK buying? What’s the risk? I'll keep it short, there's a lot more analysis on this and similar companies in the Brookfield thread and there's also a Blackstone thread lurking out there somewhere. Obviously this is all my point of view and maybe I'm totally wrong, wouldn't be the first time, that's why I set 5% position sizes. BX is the leading alternative asset manager. It was founded in 1985 with $800,000 according to Schwarzman's autobiography and has been one of the great success stories of the last 40 years. The business model is that Blackstone is the general partner to myriad limited partnerships. The GP typically gets paid management fees and carried interest on the different funds. The management fees are incredibly sticky, predictably, and as long as BX continues to start new strategies and grow its existing strategies, the management fees will continue to grow at a healthy pace even if there's a downturn in the markets. BX is well diversified, so it's not just PE, it also has the biggest real estate business in the world which is mostly focused on industrial and multifamily. It also has huge credit and infrastructure businesses. BX has just under $1 trillion in fee paying AUM which is about 2X the size of its biggest competitor. Will 5 or 6% interest rates be a drag on BX compared to ZIRP? Sure, I admit that. Will 5 or 6% interest rates kill fundraising in its tracks? I think not. BX is adding new strategies, and has had enormous success with fundraising in real estate from retail investors. This fundraising (BREIT-retail) has slowed, but only after an amazing run. This same strategy can be rolled out with other products. BX is asset lite and earns an insane ROE, doesn't need its own capital to grow. It has a net cash balance sheet. BX pays out 85% of its Distributable Earnings as a variable dividend. DE = FRE + carried interest + disposition gains. Carried interest and disposition gains will likely be down for the short-intermediate term while rates rise, but as long as BX continues to raise AUM, it has more and more carry eligible capital which is setting us up for record carried interest on the other side of this cycle. More importantly, BX can be purchased today for less than the value of its FRE, and you get carry and disposition gains for free. BX did $4.29 per share of FRE in the last twelve months and is trading around $75. So this means BX trades at 17.5X its Fee Related Earnings. FRE will almost certainly continue to grow at high single digits or faster with an 85% payout ratio. Then you get the carried interest and disposition gains which will likely be substantial on the other side of this business cycle. https://www.blackstone.com/wp-content/uploads/sites/2/2022/10/Blackstone3Q22EarningsPressRelease.pdf Link to comment Share on other sites More sharing options...
Dinar Posted December 30, 2022 Share Posted December 30, 2022 Blackstone and its ilk will be materially less profitable on a going forward basis. Here is why: a) Less demand for their services. At zero interest rates, people have to flock to equities, real estate & private equity. At 7% on mortgage paper, they can just lend. b) A lot lower returns, and hence lower management and incentive fees. When you buy assets putting 20-50% down and using 50-80% debt financing at 3-4%, you make a lot of money. When you have to put 50% down and use 5-9% debt financing, returns on levered equity are much lower, so you have to charge less. c) Recent controversy (unjustified) in my opinion over gating at BREIT is not helping. Link to comment Share on other sites More sharing options...
no_free_lunch Posted December 30, 2022 Share Posted December 30, 2022 (edited) I am starting to look at real estate, probably an apartment style condo to keep it simple. Rents are up 15% or so and prices are down ~10%. It is suddenly appealing from an investment perspective. Edited December 30, 2022 by no_free_lunch Link to comment Share on other sites More sharing options...
LearningMachine Posted December 30, 2022 Share Posted December 30, 2022 (edited) 1 hour ago, RedLion said: I'll keep it short, there's a lot more analysis on this and similar companies in the Brookfield thread and there's also a Blackstone thread lurking out there somewhere. Obviously this is all my point of view and maybe I'm totally wrong, wouldn't be the first time, that's why I set 5% position sizes. BX is the leading alternative asset manager. It was founded in 1985 with $800,000 according to Schwarzman's autobiography and has been one of the great success stories of the last 40 years. The business model is that Blackstone is the general partner to myriad limited partnerships. The GP typically gets paid management fees and carried interest on the different funds. The management fees are incredibly sticky, predictably, and as long as BX continues to start new strategies and grow its existing strategies, the management fees will continue to grow at a healthy pace even if there's a downturn in the markets. BX is well diversified, so it's not just PE, it also has the biggest real estate business in the world which is mostly focused on industrial and multifamily. It also has huge credit and infrastructure businesses. BX has just under $1 trillion in fee paying AUM which is about 2X the size of its biggest competitor. Will 5 or 6% interest rates be a drag on BX compared to ZIRP? Sure, I admit that. Will 5 or 6% interest rates kill fundraising in its tracks? I think not. BX is adding new strategies, and has had enormous success with fundraising in real estate from retail investors. This fundraising (BREIT-retail) has slowed, but only after an amazing run. This same strategy can be rolled out with other products. BX is asset lite and earns an insane ROE, doesn't need its own capital to grow. It has a net cash balance sheet. BX pays out 85% of its Distributable Earnings as a variable dividend. DE = FRE + carried interest + disposition gains. Carried interest and disposition gains will likely be down for the short-intermediate term while rates rise, but as long as BX continues to raise AUM, it has more and more carry eligible capital which is setting us up for record carried interest on the other side of this cycle. More importantly, BX can be purchased today for less than the value of its FRE, and you get carry and disposition gains for free. BX did $4.29 per share of FRE in the last twelve months and is trading around $75. So this means BX trades at 17.5X its Fee Related Earnings. FRE will almost certainly continue to grow at high single digits or faster with an 85% payout ratio. Then you get the carried interest and disposition gains which will likely be substantial on the other side of this business cycle. https://www.blackstone.com/wp-content/uploads/sites/2/2022/10/Blackstone3Q22EarningsPressRelease.pdf What's the risk of lawsuits against GP by LPs who got sucked into buying assets where GP chose to take on short-term loans/mortgages at lower interest rate to show positive cashflow/income to LPs, and now can't refinance at higher rates, leading to loss of capital for LPs? I'd say non-zero. Any chance the first few public lawsuits can trigger a wave of lawsuits? Edited December 30, 2022 by LearningMachine Link to comment Share on other sites More sharing options...
Gregmal Posted December 30, 2022 Share Posted December 30, 2022 (edited) 6 minutes ago, LearningMachine said: What's the risk of lawsuits against GP by LPs who got sucked into buying assets where GP chose to take on short-term loans/mortgages at lower interest rate to show positive cashflow/income to LPs, and now can't refinance at higher rates, leading to loss of capital for LPs? I'd say non-zero. Any chance the first few public lawsuits can trigger a wave of lawsuits? I take it you’ve never done a private securities deal before? You’re probably better off bc of it, but regardless, the paperwork alone is reason to run. And that’s at boutique firms. At the powerhouse firms? Odds of 0% chance are greater than the odds being a 1% chance. LPs get sucked into stuff all the time. Largely because they’re suckers. Which is why they sign all those docs almost regardless of term. Edited December 30, 2022 by Gregmal Link to comment Share on other sites More sharing options...
Red Lion Posted December 30, 2022 Share Posted December 30, 2022 Agreed with Gregmal. Also, these GPs have been through many cycles with good and bad investments along the way, and there hasn't been any crippling litigation or anything. I'm actually in the business of suing large corporate defendants for my day job and belong to organizations of trial attorneys that do the same, and I am pretty sure the GP's are not on anyone's radar in terms of big pending litigation. There's always a non-zero chance of litigation, but the GP/LP structure has a LOT of jurisprudence behind it, and I think it's probably going to take a case of outright fraud to make a good case. There's always the breach of fiduciary duty type causes of action, but like Gregmal says they've usually setup pretty ironclad contracts governed in pretty ironclad jurisdictions. Some of the biggest exposure to litigation is with the biggest and most blue chip of all like JNJ, MMM, PG, etc. But even if one of BX's LP's subsidiaries manufactured forever chemicals and faces huge liability, BX is likely legally insulated. So I would argue that in some ways BX has a more resilient business model less prone to serious litigation than a lot of multinational corporations. Link to comment Share on other sites More sharing options...
Gregmal Posted December 30, 2022 Share Posted December 30, 2022 Adds to Nintendo, Disney, GS, GOOG to close out the year. Link to comment Share on other sites More sharing options...
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