What's the deal with ORBT? Military contractor that's been dark for 4 years.

Why BRK.B?

Stable cash flows that won't change even in a market downturn, and price is going to hold basically because of its illiquidity + management doing buybacks when there is liquidity. In the meantime it is returning a dividend, so I will just leave it alone.

The holdings are mostly AAPL + a mirror of XLF + private holdings. My thesis is that over the next two or three months, we suffer a 20%+ market correction + economic slowdown + crash in corporate debt + interest rate hikes causing all of their holdings to implode >20%+. I know Uncle Warren has said that he will do buybacks if it falls below a certain book value, but it took a 2009 implosion for him to even consider it the last time around, so not worried about that.

A lot of equities have already started to undergo a correction from the interest rate hikes and economic slow down; now it's a matter of picking the ones that should undergo the same correction but haven't yet (MSFT, BRKB, W, SHOP, and so on).

Seems like a tired one to ask, but when do we start looking at moderately distressed oil plays again? Was my best move a few years back.

Then again I once said that about a coffee and now I go buy my super premium beans at $7.99 a pound from the roaster, lol. Unreal collapse.

Didn't Warren get rid of the 1.2x book value rule recently and also disclose he had bought back something like $1b worth of stock in the most recent quarter? Shorting shares to sell to Warren himself when its the company he knows best just seems like a very very tough set up.

IIRC, the last buyback was to close out a private estate sale, but yeah he did eliminate the book value rule.

However, if his underlying equities are plummeting then the smarter move (the one I expect Warren to do) would be to buy the plummeting equities instead, not buyback BRK.B stock.

IMO it is also a rather perverse feedback loop that's waiting to happen. XLF itself is BRK.B plus the other XLF equities that BRK.B has. So a selloff in XLF causes a selloff in BRK.B which causes a selloff in the XLF holdings ad nauseum.

I admit that I might be off my rocker here, but with the fall of AAPL and the looming liquidity crisis it just seems like it is worth a try.

He also has a mountain of cash, no debt, and huge cash flows. If that's really your thesis seems like you can pick a better stock to short. Why not something that's really lever'ed up

if you're wrong that leveraged stock will shoot up more because it's leveraged. A company having a bunch of debt accentuates the upside and the downside.

Covered W and SHOP for losses right at the top tick before it all went to **** because TSLA threatened to run. I suck.

Shorted WDAY.

And yes, it is rather tilting that BRKB is my best performing short.

It really never occurred to me that companies selling at 20x forward revenues or unprofitable automakers in the midst of SEC and DOJ investigations were the go to flight to safety stocks when the market crashes.

I posted a write up on Goodfood on VIC last week. Keep an eye out for it when it gets posted for non active account viewership

Not quite; when the market flushes down the toilet, the sh*t floats and remains the last to go down the drain because the long/short hedge funds have to vehemently cover their shorts to balance their long liquidity and it causes stocks like W, SHOP and TSLA to go up.

Value stocks always die first in a market crash, but the sh*t eventually catches up and plummets harder and faster than the value stocks. Hence the BRKB short outperforming all my other shorts except for AAPL and the dumpster fire that is MDXG.

Admittedly, that was a very interesting lesson to learn over the past few weeks.

Well highly leveraged companies and not leveraged companies can both be value stocks. My point was that all things being equal, a more highly leveraged company has more upside and downside than a less leveraged company.

I suspect this is going on right now, but I'd like to find some evidence of this from like 2008 or the tech bubble

I do all short term stuff but have decided to buy a couple of stocks using a value approach. The metrics I screened for were low price to tangible book, insider buying, and it had to be microcap or small cap.

Bought junior miner Alio gold (ALO) at .72. Listed book is 3.30 but spoke to an analyst covering the stock and he said they will have write down some low grade ore inventory and the company is kind of perpetual loser though not going bankrupt. CEO bought 20k shares in August and a director bought 100k share in July another 100k in August

Bought New Gold (NGD) at .81. Listed book 2.90. New management from Richmont Mines which was acquired. He has a good track record with mining companies. CEO, CFO and another Senior officer each bought 100k shares in the last month or two on the open market.

Both stocks long trading history. Both hovering right at all time lows. Both sold assets recently to prevent bankruptcy. Catalysts might be tax loss selling ending. And gold futures had the first net short position since 2001 from large speculators. Open interest also dropped hard last week which tends to be short term bullish for gold. A rising gold price might be a catalyst for these out of favor companies even though gold and the miners don't usually trade together. I see other value people looking at the miners. John Paulson is trying to pressure companies to unlock value in the sector. There are a lot of metrics showing the sector is historically very cheap. Looking at an 18 month hold period or if the balance sheets get much worse or if they trade up to 2/3 of book to right at book.

Enron during the dot-com bust:

Yup. Note the Nasdaq peak was March 24, 2000, after which it rapidly dropped. Enron stayed up and even ripped higher going into year end as the Nasdaq dumped.

I have no idea what's happening in this thread. Are we comparing Berkshire to Enron? There is a ton of corporate debt that is due in 2020-2022. Some of those companies are not going to make it. None of those companies are owned by Berkshire. Some of those companies owe money to companies that Berkshire has a stake in, but surely Ted Weschler and Todd Combs know this way better than I do. I don't see how shorting Berkshire is a winning proposition compared to shorting SPY or lots of other things.

I also disagree highly with the statement that value stocks die first in a bear market. Overpriced growth stocks are what get hammered first, especially in a rising rate environment where DCF analyses are impacted negatively. Value stocks were the great survivor in the tech bubble.

No, we're comparing Enron to similarly situated garbage like W, SHOP, and TSLA, which are all massively green and have been during this market purge.

Value holding BRKB is dropping like a stone, but somehow stocks that are trading at 20x forward revenues or unprofitable car companies trading at 3x revenues and subject to SEC/DOJ investigations are closing green during the last few purge sessions.

Enron was also green all throughout the tech bubble until the fundamentals finally won out.

I will agree 100% that W and TSLA are garbage. I don't follow SHOP closely enough to have an opinion. I think Berkshire will escape to the other side quite well....cash is an outperfomer this year

Eventually that will be the case, I agree.
But with the way things are going right now, I would not be surprised if W, TSLA, SHOP break all time highs while the stock market drops 20-30% because of hedge funds blowing up.

As to SHOP. I am their customer. I think their service is pretty good and cheap. They don't do anything unique though and it's easy to imagine other players taking their market share in foreseeable future. It seems they are already becoming more aggressive pushing people into expensive plans and I have an impression that their interface is becoming worse as the time goes which is usually a sign of running out of important ideas and focusing on pointless redesigns. Their pricing is about right (for me anyway) to continue paying them instead of hiring someone and go with independent store.

I don't see many potential happy events for them but a lot of potential negatives like competition offering something cheaper and just as good or a big player like Amazon coming after their market share. To me it seems 16B is just too much for a company of this kind. Then again Tesla is worth 4x that and they are yet to prove sustainable business model. I wouldn't be so happy shorting though. Economy is expanding, more people and companies want to sell stuff online and right now SHOP has a very good cheap service which already put a lot of people out of business as they managed to come up with service simple enough that even someone who doesn't know what html is can start a store for 25$.

SHOP has a solid product worth something. By design they are more efficient than building a store from scratch. They will make money and you need to hope there is too much growth priced in and it will catch up to the price before they make enough money to offset that. I would much prefer to short TESLA which seems to be one call away from a disaster on regular basis.

The biggest problems with SHOP are that it is trading at 17x revenues and forward PE of 220 in an economy that is starting to slow down.

As absurd as Tesla is, it is only trading at a "mere" 3x revenues.

Covered SHOP and W for 15% losses at the top tick because I suck.
Sold AAPL puts for a 13 bagger and rolled into new ones.
Covered WDAY for a 7% gain.
Sold BABA puts for double bagger.
Covered NKE calls for 90% gain.

Shorted SPY, USO, BA, NVDA, WATT, ALGN, VGR, and probably leaving this short profile alone until Feb. Still shorting the planet.

Long: ORBT
Short (either straight or by puts or sold calls): TSLA, NFLX, AAPL, ALGN, BRK.B, MSFT, WATT, NVDA, USO, SPY, BA, VGR, MDXG

BRK.B still my best short outside of MDXG and USO puts.

I'm thinking of buying the ticker USD with my stocks. Thoughts? Solid fundamentals, pays 2% dividend. Free strike puts as part of the deal. Sounds pretty great actually.

This thing? https://finance.yahoo.com/quote/usd?ltr=1

Don't semiconductor stocks crash in a global slowdown though? If MU reports bad earnings in their upcoming ER then all semiconductor stocks go down regardless of valuation (MU has a PE of 3 right now).