Friday File: Time for Cows, not Horses

by Travis Johnson, Stock Gumshoe | November 13, 2020 5:13 pm

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Source URL: https://www.stockgumshoe.com/2020/11/friday-file-time-for-cows-not-horses/


32 responses to “Friday File: Time for Cows, not Horses”

  1. michaelh8158 says:

    GOOD Job, Travis…….thanks for the info, and as usual,,,,,,,,,,,good research and publishing

  2. sunnyca says:

    An investment update with a reference to James Herriot, thank you. I remember reading his books at school & watching All Creatures Great and Small on the telly when i was studying in England.

  3. oliveira says:

    Travis, there is definitely a Michael Lewis lying dormant in your brain. Bring him out and let us all profit from the result.

  4. viktor69 says:

    Great metaphor Travis! Being a cow looks not so bad anymore

  5. glbcpa1 says:

    I believe you best be regurgitating a Biden election, that will very soon give you a Pres Kam Harris. Only a Repub controlled Senate can slow a parallel tax increase greater than the 1993 Clinton tax increases. That said; if L/T Capitals gains have an appreciable tax increase under Biden, even if there is a sniffle, you would see big profit-taking selling is MO. One Would have to sell by Dec 2020 to get the current effective tax rates. With debt bursting through a $30 Trillion + plus debt ceiling, The Fed Res will never allow interest rates to appreciate if they can. But, FR can’t stop the eventuality of the debt implosion. The Gov’t can’t pay any increases in interest rates and that is primary reason. There is Trouble in Rivercity., and that will incur before the 2022 election.

  6. SoGiAm says:

    $APTO reasons to buy and catalysts: https://pbs.twimg.com/media/Emz0pisXUAErNhk?format=jpg&name=large
    and link to excellent chart: https://twitter.com/semodough/status/1327704989595279360?s=20
    Thank you Doug and Joe! #Best2ALL!

  7. Shaun says:

    I like the idea of Goosehead and feel like I do need to diversify my portfolio a bit from its tech heavy current state. Trouble is although its core business is insurance with the sky high valuation and forward P/E will it be treated like a tech stock if there is a crash or general rotation? The insider selling also seems high though I understand its quite common for new companies (though if your really confident in the company I would have thought that this would be a bit lower).
    I like the steadiness of Brown & Brown but if you haven’t got a lot of money to invest or protect it kind of seems like treading water particularly with a really small dividend.
    I was also looking into Brookfield Renewable Partners as the current political situation seems to have put a big emphasis on climate stocks and it pays a 3% dividend, mmm decisions decisions.

  8. deumberger says:

    Brought some shares of Pershing Square Holdings last August. (up 27%). I have been playing cow either since neither adding or substracting from my holdings. (I am a rancher by the way.)
    I look forward to your comments about different promotions.
    I am looking at one from Casey Research promoting the idea that the USA will soon convert to a digital dollar and completely eliminate paper money. Any comments.

  9. timcoahran says:

    Your ‘computer is choked with enough cookies to make Cookie Monster surrender,’ (!!)

  10. judg3dr3dd says:

    Some of your prognostications are dependent on Biden certified as Prez being a done deal. I saw Attorney Sidney Powell on ‘Sunday Morning Futures’ and she said that Neffinger, president, and on the board of directors of Smartmatic, and also on Biden’s presidential transition team, used software to flip millions of votes to Biden in multiple states. She claims to have sworn testimony and will present it in court. What happens if He-who-can-not-be-named lest some descend into the mouth of madness …. (Sorry, Been watching too much Lovecraft Country)– but, seriously, what happens if he flips this? Stranger things have happened. Picture the famous “Dewey Defeats Truman” photo. What happens to the stocks of the media outlets who called it for Joe? What chaos will grip the market, as Antifa burn their bras (or local AutoZones)?

  11. lottifab says:

    Hi Travis, I wonder in this cows time how you live with hedging..
    I mean, if this bull continues driven from vaccine/economy healing promises, you think some hedging is to be re-established at new top, and what would be some ideal timing of the year for that (I know the silliness of this question but just consider the first part of question eventually..).

  12. Travis Johnson, Stock Gumshoe says:

    Trade Note

    Boston Omaha’s (BOMN) new Special Purpose Acquisition Corp. (SPAC), called Yellowstone Acquisition (YSACU), went public a couple weeks ago, without much fanfare, as the world of SPACs continues to explode. They raised a little bit less than they had hoped, $125 million versus the $150+ million they originally anticipated, but it’s done now and they have the capital in trust… we just wait to see what they do with it.

    As I’ve said before, buying a SPAC at its redemption price is essentially a no-brainer, as is starting your own SPAC — the risk is all taken by people who pay a premium price (more than $10 and change, for most SPACs), and by those who bid the stock up after it announces a deal or hold on after the redemption date. Until the deal is done, buying a SPAC at near $10 is just a call option on the future decision made by that management team… so if you’re holding a bunch of cash, as I tend to be most of the time recently, then setting some of that cash into SPACs that are run by managers you like seems like a reasonable low-risk enterprise.

    And Yellowstone is one of those — yes, the best news for my portfolio is that Boston Omaha is managing it, so they get all those juicy promoter perks, they buy into ~20% of the shares for very low cost and have a large sponsor warrant position that cost them about $5 million, and they get to swing that big pile of cash around to get attention from possible sellers of interesting businesses. They don’t work all the time, but when they fail they fail small… and when they work they work big. At least for the sponsors (for the SPAC shareholders, of course, they can fail big, too, but that’s really only after the deal is made and if you’ve passed on your redemption opportunity).

    I think the news of Yellowstone completing this launch is probably a larger and more certain positive for Boston Omaha than it is for speculators in Yellowstone Acquisition, but given low interest rates I don’t see any meaningful risk in allocating some capital to a SPAC that’s run by managers I trust, and which is trading at below its redemption value — given the fact that we can buy YSACU now at $10.10 or so, which is below the $10.20 that’s in the trust fund and available for redemption eventually, we essentially get the call option on “what if they do something impressive” for free, and we also effectively get the warrants for free (one half of a five-year $11.50 strike warrant to buy YSAC is attached to each YSACU — YSACU will be split into YSAC common shares, with that redemption right, and YSACW warrants over the next few months). It’s an opportunity risk, in that I could put that cash into something else, but I don’t see a real risk of losing that money (that doesn’t mean no risk, fraud or a lawsuit that has to be settled from the trust fund are theoretical possibilities, and there are probably others… it’s just that I think the risk is minimal).

    So a bit of YSACU goes into my Real Money Portfolio today, a little bit less than a 1% position, and it will show up in the next update on Friday.

  13. judg3dr3dd says:

    This post is eerily prescient.

    I was literally just readiing about Billionaire Billy Ackman and “Moneyball” star Billy Beane dropping 400M on Pershing Square Tontine SPAC for the possible merger with Stripe.
    Was set to seacrh for any Gumshoe posts on that (and any other SPACS) and you put this up.
    Bravo.

  14. kruffin says:

    Has there been any indication of what Yellowstone is eyeing to bring public?

  15. yoursbydesign says:

    I can’t tell you how much I value your opinion/advice/feedback. Please don’t ever retire! I will be following you for as long as you keep writing…..thanks for all your hard work and for giving it to all of us at such a reasonable price!!!

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