ASXlongshort

@puppyeh1 @TokyoDeepValue @nomurasyo Wait for Tanaka-san to finish review.

@TokyoDeepValue @nomurasyo This reads much more like a thesis not to own these stocks, rather than to own them. What is your actual plan to get stocks like this to trade closer to fair value?

Called the IR line for a Japanese net-net trading at 0.4x book with more cash than market cap. Rings twice. A woman answers. “Hai, de gozaimasu.” I butcher my way through asking for investor relations in Japanese. Long pause. I switch to English. Longer pause. “One moment please.” Hold music. It’s a MIDI version of a song I think I recognize from a Studio Ghibli film. Three minutes pass. Four. “Hello. This is Tanaka-san. General Affairs.” Not IR. General Affairs. The department that orders the office slippers. “Hi, I’m a shareholder. I had some questions about capital allocation.” A pause so long I check if the call dropped. “Yes.” That’s the whole response. Yes. “You’re holding ¥80 billion in cash. Your market cap is ¥55 billion. Have you considered a buyback?” “We are studying.” “For how long?” “Since 2009.” I laugh. He does not laugh. “What about the cross-shareholdings? You own stakes in seven other listed companies worth roughly ¥30 billion.” “These are important business relationships. Tanaka-san at Sumitomo and our president were at university together.” Different Tanaka-san. I don’t ask. “Are there plans to unwind them?” “We review annually.” “And the conclusion?” “To continue reviewing.” I hear a fax machine in the background. An actual fax machine. In 2026. “The activist fund that filed last quarter — are you engaging with their proposals?” “We received the letter. We are considering carefully.” “They sent it eight months ago.” “Yes. Carefully.” A long silence. I can hear someone in the background unwrapping what sounds like a rice cracker. “Tanaka-san, with respect, the company has traded below book for fourteen years.” “The market will understand eventually.” “When?” “When it is time.” He thanks me four times for my interest. I thank him three times. We bow at each other through the phone. I hang up. Stock is unchanged. Has been unchanged. The cash pile grew another ¥2 billion last quarter. Tanaka-san is reviewing.

Crude began its run from the Monday 2 March open. ~$67 to ~$115 (+71%) Now ~$96 (+43%) When oil ran in 2022, crude outperformed $WDS and $STO. Same story again. Since 2 March: $WDS +14.5% (peak +26.5%) $STO +15.5% (peak +21%) Markets live in the space between “this time is different” being a fallacy and every time actually being different. While I didn't play based on history, I expected stronger equity reactions this cycle given how sentiment toward oil & gas / ESG has shifted since 2022. Disappointing.

@Bogan_Geologist You've answered your own question haven't you? It's a ___

When you’re making money then losing money next quarter, and are about to change the plant configuration with an ore sorter, and could be buying back $MEK stock at 52wk lows in a positive Gold Price environment with any surplus cash, why would you do this, of all things?

Alright, something has pissed me off enough for me to crawl out of my hole and show my face here. $MEK - who have been struggling with the ramp up, even during an OP oxide dominated period, and are facing capex bills for both UG development and a plant upgrade, did this.

@respeculator @teagueinvest Spending the cash hurts the yield thesis was my point

@ASXlongshort @teagueinvest If it sells off I don’t think it’s because they are taking on very modest amounts of single digit interest rate debt… but do think it probably sells off for other reasons

When you're low key more excited for @respeculator deep dive than the actual ASX announcement! $YAL.ax #coal

It feels like about a decade ago "follow the smart money" became "follow the money"

@damianplayer The enhanced WR in the video has already been beaten by a legit athlete.

THIS IS WILD! Peter Thiel’s company the “Enhanced Games” got valued at $1.2B before a single event. the first one is next month. here’s what the headlines aren’t telling you (share this): every athlete is monitored. every compound is clinically approved. every dose is tracked. two independent medical commissions oversee the whole thing. and if your bloodwork doesn’t pass, you don’t compete. the same investors behind the biggest peptide and longevity companies put $1.2B behind this. these aren’t sports guys… they’re taking a public bet that performance medicine becomes a real market. whether you’re into it or not, pay attention.

@puppyeh1 They stick you on the old planes for that route, it sucks

Currently on a Virgin Australia Sydney -> Perth flight (5hrs) in business class. Hard to overstate how terrible this product is. Plane (Boeing 737-800) at least 13yrs old but feels 25. Seatbacks minimal recline. Tray tables broken. Only one option for meal in biz class, no opportunity to purchase more food. Inflight WiFi didn’t work half the flight. No TV/screen/entertainment provided. Nevertheless the flight is full 😳 not one I’ll be flying on again

@matt_levine TLDR: If you’re allocating to private credit at par right now instead of buying the public BDCs at a discount, you either are an idiot, or you treat fiduciary duty like toilet paper.

This newsletter should reflect current market dynamics, even when they do not fully align with our assessment of long-term intrinsic Money Stuff. bloomberg.com/opinion/newsle…

Market ignoring this mostly - it's come right at the end of the 48hr ultimatum. Iran said they'd return force. TACO buy rugged?

There isn't even a benchmark/hurdle for the 20%+GST performance fee. Absolute disgrace.

@respeculator My favourite part of this trade is that the Small Ords has come to consist of $GGP $WGX $RRL $VAU $WAF $EMR within in top holdings. If you have a belief that gold equities look tired + have some confessions to make short term. Where in the Small Ords is the place to be? $VEA

Took a little while to work but refiners are moving now - will be deemed infrastructure of national significance soon enough.. $VEA.AX $ALD.AX

Could not believe he still commanded any sort of pull/$$$. People paying him seriously deluded on his value.

@matt_levine wrote about Bill Ackman trying (again) to list a closed end fund and how modern-day investors aren't stupid enough to hand over money to closed-end funds without material additional incentives (like gratis ownership in the manager, ahem VGI). Meanwhile in AU, L1 and Solaris trying to tap said stupid enough investors for LICs. @FinancialReview @Johnkehoe23 @australian What does this say about L1 & Solaris? What does this say about any investor 'advised' into these bookbuilds?

@respeculator @plumfeeler hedging their lols with a contract note

I got laughed at for hours for pitching this POS last night.. WHERE ARE THE LAUGHS NOW @plumfeeler

@MarkDiStef No Spin is a good read/listen

Still doesn’t feel real he’s gone tbh.

@LongShortTrader Did you use the capital losses 🥹🥹.... wow 😂

Cham the Scam

@MarkDiStef The client base will get slotted in the IPO. r.i.p.

The IPO of Firmus stands to be the biggest in Australia this year. One of the the largest ever. Tomorrow’s column on the Brisbane bankers caught bragging they’ve already got shares. afr.com/rear-window/mo…

@respeculator Yeah that's it. At the time the people pushing it had zero answers for this and the last stock they promoted went into administration. And the other one they are in is on that path so it was an easy avoid based on that. Sounds like you're all over it.

It’s the JV partners mill, they can put whatever feed into their mill as they please and they are under no obligation to put JV ore through (there is some minimum production payments they need to pay ERM this half). But their 100% owned deposits are either small (<1mt) or low grade. They need a baseload feed to fill the 1mtpa mill. The ~1.4gpt stockpile they are processing runs out in ~18mths.. White Devil (JV tenement) is your only real option to be the baseload feed (4.7mt @ 4.1gpt). End game I think is buyout.

A lot of value in this one... not sexy but has a clear pathway to cash flow its entire EV (~A$180m) from CY28.. and the JV partner is sinking ~A$250m over the next two years to expand its mill and open up deposits (of which $ERM.AX has an economic interest in many)..