stonksup

@TheRealDavey2 He didn’t invest in these types of businesses until he was quite wealthy though. I agree he morphed into them over time but people forget how rich and well he did at the beginning.

The lesson that can be learned from Buffett and Munger's purchase of See's Candy isn't to buy cheap companies - it's to buy good companies. See's Candy had very high returns on invested capital - 60% pre-tax at the time of purchase. See's also had even higher returns in incremental invested capital. At the time of purchase in 1972, See's had pre-tax earnings of $5m on invested capital of $8m. By 2007, See's had pre-tax earnings of $82m on invested capital of $40m - a ROIC of 205%. In the period from 1972 to 2007, See's required only $40m in capital and had cumulative pre-tax earnings of $1.35b which flowed to its shareholder - Berkshire. See's was able to achieve these results due to its pricing power which was the result of a strong brand. As regards price paid, the lesson from See's, if anything, is that Buffet and Munger could have paid a much higher price and it still would have been a great investment!

@toy59496 Have a chat with the king of coal himself @LukeyTrags

Crowded Trade Not really sure I want to be here if suddenly an agreement is reached by TACO. Notwithstanding I'm a fan of coal. But we are looking at a yield at one and a half percent of the moment... Rather cash unless you are a trader...

@LukeyTrags @variance_swap 100% agree, really gambling with macro in this name. Happy to watch others win on this one.

It’s cheap with the most torque at high coal prices & can easily multibag hard in a bull cycle but it’s also a dog / shitco. The others will mint enough at $200 NEWC without needing to drop drastically down the Tier ladder (me personally). So just have to know what you’re playing & be comfortable with the risk.

$TER.AX... at US$200/t Newcastle prices, seems to be very cheap. Can someone check my math. I'm a coal noob.

@toy59496 Just absolute destruction right - I assume it’s falling out of the index? My assumptions are generally wrong

$MYX.AX : Who is Selling? Anyone? x.com/toy59496/statu…

@ShitValueFund This is a genuine question but after hating the country for so long why don’t you leave to somewhere that aligns with your beliefs?

Nanny state inside nanny country. All to lick the balls of their Epstein class leaders

@respeculator Will be same as $MIN.AX where I wish I followed.

@Comlbr24 Whisky in hand and feet up I believe they call it…

This is my pitch. Absolute dogshit.. just the way I like it. If 2022 repeats.. well you get the story.. (maybe with a few more shares on issue) $TER.AX

@respeculator Do $TER.AX 😂

Now do it at US$150/t (all that uplift ex royalty falls to bottom line).. #coal

@toy59496 Yeah it seems like a great course in some respects but then also being short on time I wonder whether it’s best actually just investing and learning how to do that by making mistakes etc.

No I read all the books and did the questions but didn't do the exams as I work for myself- fantastic education for anyone who is serious about having a broad framework. The exam would require me to practice writing a pension plan for an institute for example and that's not an efficient use of time It's not all correct- they still push efficient markets. It's probably time I bought the new sets actually...

Business Summit Sydney So I spent the last 2 days at the AFR Business Summit in Sydney. I go each year just to make sure I have my finger on the pulse given I tend to work in isolation like Warren Buffett hiding in his office but perhaps not with the same results. I noticed this year I wasn't invited to the dinner so my star must have fallen relative to last year. I mean don't they know who I am?!! In any event there were some pretty interesting talks some of which I will itemize for people's interest, although much of it has already been described in the AFR... I should upfront give a special shout out to the Chanticleer guys who are without doubt the best interviewers in the room... Keep it up... 1. Ryan Stokes - this is the first time I've seen him talk, and I was surprised to discover that the man is a total gun. He had a good working understanding of finance, economics governance, productivity, and most importantly what makes a business both valuable and successful - he was definitely the smartest man in the room. I asked a question about Bluescope (thinking of you Jeremy @puppyeh1 ) and he was clear that a best and final offer means a best and final offer, which is impressive because it means he is conscious of protecting capital and not buying something at any price which might occur with an empire building executive that has no equity (no agency problem here). He was asked why he seeks acquisitions in public markets rather than private markets and the answer was an exercise in good sense in that he prefers transparency into generally efficient markets but with the occasional price dislocation for him to take advantage. You can tell he's not a fan of illiquid markets with poor information and uncertain valuations. So he was the surprise guest.... 2. Andrew Forrest - yes, Australia's richest man attended, and gave us some insights into the unit economics of clean energy. He claimed that even without considering the ESG component that if he wanted to create a source of energy for his company that clean energy requires half the capex of conventional sources of energy, and once it is set up, especially solar, there are no further input costs other than maintenance. It was a fascinating argument on the face of it and yet I'm not sure the audience was convinced when we are all confronting high energy costs. 3. Barnaby Joyce - his perspective on energy was a little different saying our sovereign energy advantage is coal and gas which we have squandered with the result that energy is incredibly expensive. He said people talk about the AI revolution but it's fantasy given the absence of water and energy to support that in Australia. He implied the liberals were doomed to purgatory unless they come up with some sort of preference swap arrangement with One Nation and I have to say I was convinced. Afterwards at lunch I had a chat with him because it seemed people weren't lining up to have that conversation, so I suspect it was a bit of a tough crowd. 4. David Solomon - so the head of Goldman Sachs was there in person which is a remarkable coup for the AFR. He was also interesting and made the thoughtful observation that even if inflation does rise, which you can kind of tell he expects, that at least from the point of view of Goldman Sachs it won't matter if their return on investment is even higher, say 3% higher than the inflation rate, so the nominal rate of return is still good. That's quite true for us financial types but is probably not very reassuring for those mugs on a fixed wage. It also reminded me of the Weimar Republic where stocks went wonderfully right up to the point that they did not...maybe they are all blind. Don't they read financial history? 5. Michele Bullock - the RBA governor talked to us yesterday and delicately tiptoed around the rampant fiscal stimulus by the government and the RBA's futile attempt to reign in the risk of inflation with basically their single lever of interest rates. She provided a laughable graph of modelling of future inflation predicted by the RBA which had an implausible envelope given the current fiscal bleed and recent history. She would have been better to simply give the standard deviation from the last 6 years or just say "I don't know". But it is important to remember that she has limited control over demand, and much less control over supply which is with Chump Chalmers. It reminded me of 2020 when I told Philip Lowe inflation would be rampant, but no no, it was going to be less than 2% because forward guidance provides cognitive feedback on the spending patterns of society. Sure it does... 6. Howard Marks - The legendary Oracle tuned in for a zoom conference and discussed the impact of AI on finance. Everyone should read his memos, I certainly do. He also pointed out that credit spreads are incredibly narrow given the volatility of the world and that there is no doubt that credit is being offered with weak or absent covenants which is typical of a late stage credit cycle before it all goes to hell. You can tell that oaktree is not being so cavalier with their credit. This was a point made by other guests as well. 7. Malcolm Turnbull - I was always a fan of Malcolm Turnbull, he was one of the few people that wrote to me in person before he became PM, and as usual he had some interesting insights. The key words he used was "sovereign exceptionalism" which means the US can go do what it damn well pleases, with the notable exception of bullying China who had a stranglehold on rare earths, he said that little event last year would have been a bit of an epiphany. You can see he laments the passing of a rule-based order, and like many people doesn't quite realise that it is has passed... I think "sovereign exceptionalism" is going to stay within the lexicon. 8. Danielle Wood - head of the productivity commission was there... Who did a great deal of good in her reports right up to the point where she thought it was sensible to tax cash flows... Bran Black of the business council, who didn't invite me to the BCA dinner (!), pushed back on that one. I don't think individuals like Danielle Woods or Chump Chalmers have actually run a business. 9. Catherine Livingstone, Chair, Pacific National - I'm going to mention this lady particularly as like Ryan Stokes she was a bit of a gun. She pointed out the saying "improve productivity" is like telling someone to "get healthy" , it's an endpoint, not an action plan. She said behind all of that there needs to be the structural changes to actually allow that increased productivity to occur, which is something basically said by Ryan as well. Someone I would have liked to hear more from, hint hint, AFR... 10. Ross McKewan - BHP chairman basically had the courage to pull the genie out of the bottle and say what the hell is going on with the NDIS?!! Some particularly insightful perspectives on that were made by a few others as well. We all know it's ridiculous, we all know society has developed a childlike dependency since Covid, and we all know it has to stop...before all us rich bastards move to Singapore. 11. Chris Lehane, Chief Global Affairs Officer, OpenAI - I'm going to mention him particularly because he pointed out that 50% of adult Australians are using ChatGPT regularly but only 5% are advanced agentic users. That gave me pause to think given I have a subscription to all the AIs... Was I in the 5%? It's also reminded me of Howard Marks who had to rewrite his memo because it was already out of date with only 3 months in the AI revolution. The pace is incredibly fast. 12. A few others were there, Shemara Wikramanayake, Matt Comyn, and Vanessa Hudson - all of whom had sensible things to say, and it's pretty impressive they are regular attenders. Shemara and Matt always make time and it's a testimony to their calibre that they do so. I still haven't figured out Vanessa Hudson, I'm not sure her gears are quite as smooth as the other two... But I may be negatively disposed as I wrote to her last year to question why a member of my family who has basically paid to build the Chairman's Lounge with so many flights is not a member. 12. The AFR - the hidden gem here is that the AFR actually puts this together every year, it's quite amazing, except for that dinner list that I was somehow missing from... I think the AFR is actually a sovereign asset in facilitating these connections. @FinancialReview @amacfirst @MrJThomson

@toy59496 Did you do the CFA in the end?

I don't buy the Australian so I'm not sure. I originally got the AFR digital subscription about 10 years ago to see whether I could understand every article, which was a challenge at first, eg Christopher Joyce on bonds and yields and RBA policy levers, but it's now relatively straightforward. So I used it as an educational tool. I also realised I need to formalise my education which is why I read the CFA. A lot of finance is not difficult, but much of the jargon serves to inoculate understanding.

@toy59496 Would it be worth having both Aus and AFR do you think?

@toy59496 Fantastic summary mate - really love it. Might be time for an AFR sub.

@toy59496 Smh - this should be in Brisvegas

AFR Business Summit I will be there tomorrow if anyone is present, look for the poorly dressed vagrant in the corner. live.afr.com/businesssummit/

@toy59496 Other than articles and it’s drop today - I have never looked at it but considering it was nearly purchased for $5.40 in 24 it must get interesting soon.

@Comlbr24 It's a good question given recent events- let me run some numbers.

$HUM.AX : Takeover Panel decision Announcement this morning of various agreed undertakings by $HUM.AX given the TP intended to make a ruling of unacceptable circumstances. It boils down to improvement in governance including through appointment of independent director and committee to assess the Credit Corp buyout proposal. Issues such as the purchase of shares by Abercrombie when he had inside a knowledge of this acquisition offer have yet to be ruled on. I've watched the Takover Panel over a long period of time and been involved twice in their proceedings and they are increasingly assertive on the conduct of markets, to their credit. They are a real asset to the local market. However it occurs to me that the appointment of the independent director and committee by $HUM to consider the credit corp proposal is still going to be under the control of the incumbents.... So there remains a question of the level of independence... But it does improve the chances of Jeremy @puppyeh1 and Collins St Asset Management overturning the incumbents, which would have the support of any sane shareholder. However, given Abercrombie group retains a very large holding, people must vote in their own interests to remove Abercrombie as only those that vote are counted. The numbers were discussed by kingfisher capital recently. open.substack.com/pub/kingfishca…

@puppyeh1 100% agreed, almost an admission of their failures to the panel. Anyone paying attention cannot be in their camp.

@toy59496 @puppyeh1 Always a wise move though

@Comlbr24 I would like to say I was wise, thoughtful, and read widely on every company... But in reality I just followed @puppyeh1

$BSA.AX : to know and not to do is not to know x.com/toy59496/statu… I would have made $2m on this one (so far) if I had just followed my own advice... I had marginally under 5% of the company when it was 12 cents...

@puppyeh1 @Nobody_But_M3 @I_am_Lake_Macq Surely means Abercrombie 😂

@Nobody_But_M3 @I_am_Lake_Macq What are you talking about? No stock mentioned?

I reckon apple crumble is selling a few … Ping @puppyeh1