UnclearConvictions

@HiddenGemsInves $SCR.NE was pretty good on the oil and gas business

What are the best investor letters you have read?

@pradeeepk @EQH

I find anything to do with AI trades crazy Want to move book to 0% AI exposure Bought a bunch of $OTIS today Any nonAI longs interesting here?

@DrewCohenMoney My guess is that outflows will accelerate

I think the real interesting question is, will it work? Who thinks fund flows will be positive for Fundsmith next quarter?

Terry Smith’s letter makes me wonder about a few things… first, he’s not playing the same game as most people on fintwit are i.e. relative vs absolute, hence to protect his fund business he needs to perform on shorter timeframes. Second, whatever anybody thinks about him selling off his soul, changing his mentality must be one of the hardest things he’s done in his lifetime. IMO it won’t prevent outflows. Finally and most importantly, for people investing on an absolute basis and arbitraging time, this might be one of the biggest bottom signal for quality: Terry Smith is not the only one doing this, he’s just one of the few talking publicly about it - good on him.

@JBierne Looks pretty good here if you’re willing to be patient, which seems a lot to ask in this market

$COF so unloved 😂

@BourbonCap Most crowded “bottleneck trade” in the market, aside memory and semis

Terry Smith why buying $GEV 1) Gas turbines and electrical equipment 2) Once its turbines are installed, customer are locked into high margin, inflation protected service contracts for decades 3) GEV generates approximately 25% of the world's electricity and 50% in the US 4) Future growth: Data centers, upgrading power, EVs.. 5) They're bulding the first small modular reactor in North America They also produce transformers

@negligible_cap My guess is that there was a lot of rebalancing by institutions. First of the month and mid year often coincide with the benchmarks either changing a little and rebalancing (weights of individual names).

Momentum got nuked today. GS’s high beta momentum index closed down almost 10% today - the worst day in the past year and a top five worst days in the past five years. Welcome to Q3

@ACapitalLP merger with $CRBG will double the market cap, bring scale and efficiencies, very cheap and could re-rate toward larger peers as it becomes a large name in the S&P500 after it's inclusion. I wrote it up here: qualitycapital.substack.com/p/pending-merg…

@ACapitalLP $eqh

@310Value Devon completely sold its class A shares which is almost double the amount that the ETF needed...Now I wonder who got in. I always though that Devon liquidating was a big risk, but the stock got a lot of support.

@QualityCap0 Looks like 7.65M came from Devon and Five Point.

Another weird bounce for $WBI in the last minute…

@macrosat @310Value Completely agree, ROIC on capacity expansion is very good. Best case scenario is that they don’t return cash and still have the opportunity to increase capacity at those IRRs in 4-5 years.

Nice. I tend to agree with the EBITDA estimates in 2030. Once the growth capex is done with at $WBI, i think your yield on cost will be unbelievably attractive. Of course they can buy back shares, add some tuck-ins or return cash. . either way i feel like the downside is protected a bit during this capex phase and better priced.

Is there a reason why $LB wouldn't grow, at least, as fast as $WBI on the produced water business only?

@long_equity By abusing pricing power and weakening their competitive position plus buyback with no regard to valuation

How did FICO turn 9% revenue growth into 25% free cash flow per share growth? The answer: margin expansion and buybacks. This image shows how FICO has expanded the margin and directed their excess cash flows towards repurchases that have significantly reduced their share count.

That is what I'm trying to figure out - $LB vs $WBI. I can see $WBI with 1bn$ worth of EBTIDA in 2030 with leverage cut at least in half and ample room for buyback in later years (once growth CAPEX is done with). With no expansion of multiple, $WBI looks very attractive, specially since the sell-side numbers looks too low. IMO $LB seems less mispriced by the market today, unless you give credit for all the optionality for data center, etc. I own $WBI in size right now, but I'm close to either adding to it or just buying $LB.

@310Value @QualityCap0 I own both- I like WBI at these prices as once they are done with their Capex spend, you basically get all that cash to the bottom line (with some maintenance capex). LB higher position for me now but adding to WBI.

I'm a little more conservative on the $WBI side at 500k bpd p.a. for the next few years, but even with that the opportunity is quite attractive. Seems like $LB is getting between 60-70% of $WBI volume currently, so you're saying $LB will likely get 100% of speedway 1 & 2 and cotton draw? or that the 60-70% will go up in time?

Probably faster. It probably picks up most of the major growth at $wbi, as most of the $wbi growth should flow to $lb. $wbi probably growing 1mbpd per year over next five. All that goes to $lb. $lb gets same growth on a smaller initial base. Not too mention royalty rates going up as finite pore spaced is used up.

@310Value I was thinking that it got shorted, but it doesn't look like it. Still it's like 16% shorted which is high. Trying to figure out why those people have a position like this when it's likely that these funds won't be sellers anytime soon.

@QualityCap0 Wonder who sold.

$AMLP bought 21% of class A. This is kind of insane. We have 76M shares of class B that don't trade and more than 80% of class A that are in the hands of long term investors (Devon ~38%, ALPS ~21%, Horizon kinetics ~16% and FivePoints ~7%). And I think that GIC pte is a sovereign wealth fund that owns another 7%. Fidelity another 8%. Not sure what to think...

@QualityCap0 Press release says added as of end of day today. Holdings list tomorrow will be interesting.

@Divergent7651 With the free version?

Found another good investing use case for Claude. Nothing too crazy. But you can ask Claude to compile investor letters from your favourite investors and funds and organise them into print ready volumes with a chronological contents page and specific topic index for each volume. I did this for Horizon Kinetics. Claude found all the quarterly letters going back to 1995.

@310Value I guess, still not seeing it in the holdings of the one you has mentioned

@QualityCap0 Huge volume too. ETF buying? Today is the day it’s supposed to enter the etfs.