I went to $PTLO for dinner recently. It’s the first time that I haven’t been impressed. The food was still good, but the restaurant was kind of a mess. I hope this was an exception.
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I sold a whole lot of puts of a software company this morning. I want the shares put to me, but not yet. Been a long time since I felt sick putting on a trade. However, every trade that I’ve felt sick on has been a monster. I feel that way this morning.
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I changed my mind on $HE. If I don’t feel excited to buy more when a stock declines, I cut the position. I didn’t feel excited. 5% loss.
Added a position in $HE. The price clearly isn’t the right price for what you are getting. A 20% decline would put you at the wildfire lows. That’s too cheap given what has happened since then.
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I’ve been buying $INTU into weakness. It’s becoming a big position for me. We’ll see if I’m wrong, but I think there is real value. I normally don’t pay up for stocks, but I think the AI fears are overblown. However, anything can happen to the stock price in the meantime.
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Added a position in $HRB. The last time that I owned this one, I traded it almost perfectly. I’m hoping for a repeat. 🙂
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Added a position in $HE. The price clearly isn’t the right price for what you are getting. A 20% decline would put you at the wildfire lows. That’s too cheap given what has happened since then.
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Built a position in $INTU. I think it’s a fair price for what you get.
I also sold some options. My history with options is mixed. So, I’d rather not reveal the ticker while I’m experimenting.
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A few years ago, you could buy tobacco companies at 10% yields. A little bit before that, you could buy $C for half of book value. Six years ago, you could buy oil companies for basically nothing. These are just examples that I could think of in a few seconds. Value still works.
Value investing worked because information was scarce. Today, if a stock is cheap, there's a reason, and the reason is terrible:
Alix Pasquet (@alixpasquet), managing partner of hedge fund Prime Macaya Capital Management, explains:
"Value investing taught you to look at things bottom up. You look at the business, and that's it. And that wasn't because Graham or Warren were bad at understanding an industry. It's because back then, they didn't have access to the information we have now."
"One of the reasons value investing worked really well is you could buy something cheap that was very good, and no one knew it was good, because there wasn't enough information on it."
"But today there's so much information that if something is cheap, usually there's a really good reason why it's cheap, and that reason is terrible."
"You're not gonna have a really good athlete trade cheaply for a short period of time. People are gonna know."
"I look at certain long-only, quality-focused investors and say, I bet you 100 bucks to a hat pin that Visa or MasterCard are in that portfolio. And yes, it is. The cat's out of the bag."
"But guess what happened this year? Quality took a dive, a really big one. It's gonna take those guys a couple years, if not five, to dig themselves out of that. It's gonna be painful."
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Housing has been selling at record highs. If house prices start falling…
Quick thought on stocks:
I don't know what's happening over the next 1-4 quarters with interest rates or housing construction,
but there are a ton of construction/housing supply companies with great market positions that seem to be selling for a lot less than the discounted value of their future earnings.
I own a lot of $QXO, but take a look at $BLDR or $HD or anyplace else in the supply chain. Even $POOL (which I kind of expect to get bought out). Many others in this category.
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I’m surprised at how well the stock market is holding up considering what is happening with the price of oil. If someone could get this market to decline, I would appreciate it.
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Oil has gone up significantly since this tweet. I prevented some losses, but I was expecting a bigger decline. It’s probably time to start trading again. I see a few things that are interesting with options. My experience with those is mixed. We’ll see.
Maybe I’ll be a contra but I’ve moved to cash.
I know what trades make me money. I don’t see any of those trades now.
I’m not convinced that a TACO moment is coming. Even if there is a TACO, the world will have to start buying oil soon.
Refinery outages are a huge risk.
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I haven’t looked into it much because I wanted to take a break from the market but if the Chinese are buying it is worth paying attention to. If they start filling their SPR that’s a strong signal oil will soon go up. They’re astute buyers that don’t get the respect they deserve.
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Those who do not learn from history are doomed to repeat it.
Joseph P. Kennedy Senior and Bernard Baruch are names worth remembering at this stage of the cycle.
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Maybe I’ll be a contra but I’ve moved to cash.
I know what trades make me money. I don’t see any of those trades now.
I’m not convinced that a TACO moment is coming. Even if there is a TACO, the world will have to start buying oil soon.
Refinery outages are a huge risk.
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PureUtility retweeted
To everyone who said or liked posts on “SaaS is dead! AI is killing it” - no it’s not:
Meta will be paying Slack easily ~$20M/year for a chat product
Ask yourself: if they could build something with 2 devs + AI why not do it? They’d save SO MUCH.
Because they clearly cannot!!
This was Meta
They deprecated their in-house chat solution used a decade+ called Workchat less than a year ago. Decided to move to GChat.
Now they’re moving again, GChat messages not being migrated
Very strange there’s so little upfront planning, just YOLO then change course
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It’s kind of amazing that oil even moves on these headlines anymore. It’s clear that the administration thinks that they’ll cause a global financial catastrophe if they fully go in against Iran. We’re just seeing which country can wait it out for longer.
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I’ve been accurate on my oil calls. I didn’t think oil would moon because politicians have an incentive to keep it from mooning.
If we run into an oil refining crisis, however, there will be no cap on prices because a fire doesn’t have to worry about whether it gets elected.
Most oil traders on here aren’t thinking about the goals of the various parties involved. No one has drive oil to $200 on their checklist. If Iran faces certain defeat they may destroy oilfields as a way of salting the earth, but that’s not where we’re at now.
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