Commonwealth Tries to Beat the Market

[kerowo]

I’m moving into a house with some randos soon which will free up more money to invest. Probably going to put most of it into SPYD or JEPQ but hope to have more funds available to take little flyers from time to time.

[boredsocial]

I want to state for the record one more time: I think a lot of the people here who own ETF’s should just buy BRK instead. It’s safer, it’s better run, and there is absolutely not a single piece of it that was overpaid for… and you aren’t being asked to overpay for any of it now.

In terms of diversification, like the S&P BRK is miles and miles past diminishing returns on diversification.

[Surf]

@boredsocial

It’s safer, it’s better run, and there is absolutely not a single piece of it that was overpaid for… and you aren’t being asked to overpay for any of it now.

Although as far as black swans aren’t they potentially on the hook for like infinite court damages if their utilities ever burn down part of Cali? I would be curious to understand that risk more.

[commonWealth]

@kerowo

I’m moving into a house with some randos soon which will free up more money to invest. Probably going to put most of it into SPYD or JEPQ but hope to have more funds available to take little flyers from time to time.

I think being primarily in index funds and dabbling a little is a very reasonable strategy.

[boredsocial]

They’re also one of the largest reinsurance companies on planet earth which means they’ll likely be exposed to every climate disaster on earth because they are an extremely sharp +EV player in the climate risk game. It’s important to note that as big as the damages in Cali could theoretically get multibillion dollar losses at BRK are actually not material to the overall market cap is 867B and unlike most companies with valuations that high it’s diversified across literally thousands of different businesses, most of which own hard assets that themselves are worth quite a bit of money.

BRK is probably the most valuable single company on earth. Not in terms of the official market cap but in terms of ‘if we started selling shit tomorrow what would we get if we liquidated everything’. The stock is just a very very strong investment product.

[Surf]

@boredsocial

is 867B and unlike most companies with valuations that high it’s diversified across literally thousands of different businesses, most of which own hard assets that themselves are worth quite a bit of money.

But can’t courts increase the damages to be punitive specific to the company (kind of like the size of the Trump NY damages). Thought spidercrab or maybe Buffet himself had raised this concern in last year or so

[commonWealth]

@commonWealth

Bought FSI this morning at $2.62, will provide more details later.

@commonWealth

Down to $1.53, bought it back to my normal allocation. Very bad quarter, one of their main customers lost a lot of business. It should recover cyclically with agriculture, and $1.53 is an attractive price relative to the upside here.

This is a reasonably good business at a cheap price, and there’s a freeroll upside on climate change for a product that significantly reduces water reservoir loss to evaporation. They’re currently making nothing on it, seems like a reasonable chance that takes off at some point and blows them up into a much bigger business.

Sold the extra shares I had purchased today at $2.85, so now I’ve still got the original shares and the reinvested dividends. I still like the business, and they’ve added a new potential upside catalyst by using some of the cash on their balance sheet to buy a vial filling line for GLP-1 compounding. They say it’ll take them 1-3 years to find a client and get that up and running (and I don’t think executing sales to new clients is their forte so they could blow it), but if they do pull it off, it could quadruple their revenue and increase their margins. Their regular business has stabilized from that bad stretch, and they seem to be executing well on an expansion into selling more food products.