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Charlie Munger Slams Bitcoin
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Charlie Munger Slams Bitcoin

Alpha Letter
Feb 17
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Investors,

What a crazy past few weeks it as been. To re-cap, 2021 was the best investing year of my career. I was up over 50% for the year as stocks continued to rebound from the COVID-19 fallout from 2020. The deal flow in the public markets went something like this:

  • You get excited because you find an undervalued stock.

  • After doing all of your due diligence the stock goes up 50% and you miss your chance because you were being a dork trying to build a multi-segment discounted cash flow model.

  • You get mad and give up.

  • One day later you find another stock that looks incredibly cheap.

  • The stock rockets up the next day and you miss out.

That is pretty much how my 2021 investing career went. If I was not quick enough on my due diligence, I missed a ton of good opportunities as the market re-rated undervalued stocks extremely quickly.

Thankfully, I can bust out a model in a day or so and get up to speed on how a company generates free cash flow, to get a general sense on what those cash flows should ultimately be worth.

Given my investing success in 2021, I thought 2022 would see a slowdown. So far, that has not been the case:

  • One of my top positions sold a segment and executed a $12 dollar per share special dividend. The stock continues to trade at basement level valuations. I have continued to add as I think the rest of the business is up for play and could be sold over the next couple of years.

  • Another top position announced strategic alternatives with plans to sell themselves by April. The stock has moved sharply up on the news but it still remains a core position as the valuation is just stupid cheap here.

  • Finally, my largest position has begun to move, up around 50% over the past couple weeks. I continue to hold this position as the upside could be even greater as fourth quarter results are released which I think will be a large cash generative quarter. This stock is in “The All In” portfolio which is up 77.55% in less than a year.

M&A is Accelerating. Don’t leave money on the table

Company acquisitions are on pace to hit record numbers. We are living through a generational change as cheap money fuels a stunning number of defensive and offensive acquisitions. 

We're watching top firms and banks succeed not just because they have a stellar business, but because they have the modern tech to amplify their reach. Having a CRM that auto-logs all client interactions, enriches your data with contact and funding info, and provides an ML-layer of relationship intelligence on top, is what keeps the top-performing firms winning as much as possible.

If you're in a client-driven business like M&A, we recommend you check out Affinity and see if you can use modern tech to simplify your life and amplify your deal making.

Actionable News

  • Spanish Broadcasting Radio Stations achieve top local total billings in New York and Miami. Read More.

  • Retail sales point to ‘overall strength’ of U.S. consumers, economist says. Read More.

  • Charlie Munger touts Apple and Alibaba, slams Bitcoin at Daily Journal annual meeting. Read More.

  • Natural gas ETFs & ETNs surge to the topside as the energy sector leads. Read More.

  • CF Industries slips after Q4 earnings; nitrogen 'tight for foreseeable future'. Read More.

  • Earthstone Energy Announces Midland Basin Asset Acquisition for ~$860 Million. Read More.

Global Macro

  • Stocks rebound as Russia says it will send some troops back to base. Read More.

  • European Central Bank lays groundwork for rate hike, say Wells Fargo economists. Read More.

  • Federal Reserve officials see faster runoff in balance sheet: FOMC minutes. Read More.

  • Texas sues Facebook owner Meta over face recognition. Read More.

  • Treasury ETFs fall to 52-week trading lows. Read More.

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Cheech
Feb 17

Are u still in on SBSAA?

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