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@dollarsandsense
Dollars and Sense
$15.2M follower assets
Investor focused on finding the best companies at the cheapest prices. Investing for the next 40 years and just trying to beat SPY
56 following1,086 followers
My Portfolio: 11/05/22
A few days late but here is a quick overview of October. Performance was -1.7% VS the S&P500s of +2.6%, mostly on weakness from $CVS and $PYPL but overall a decent month.

1.) Added to $INTC, bolstering the position, and glad I did as earnings came in mixed but looking up.

2.) $CRSR jumped to my #3 holding after a +20% pop on Friday after incredible earnings.

3.) $INTC once again has made it to number 1 in my portfolio followed by $CVS. $PYPL sunk on incredible earnings dropping to number 8 from number 5 last month, still confused about that one. Other than that $BOC has made it to number 4 after a strong month, $SLV also went cruising upwards just not as fast.

4.) $DJCO remained flat this month and fell out of the top 12 to be replaced by $STLA which rose on good earnings.

5.) This month will probably see additions to $PYPL, $SLV, and $BRKB.
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You already know I’m the biggest CVS fan on this app. Glad it’s still a top position for you. No comment on the other names lol
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$PINS, Quality Amidst Rot?
Pinterest is kind of a weird company. Despite its steep drop in price, the actual fundamentals of the company improve after every earnings.

Revenue is up ~8% Y/Y overall and a slight decline in Europe is made up for by the 36% leap in the Rest of the World's revenue.

MAUs are a slight drawback remaining flat Y/Y. But this is made up for somewhat by the huge growth in ARPU.

The costs associated with this growth have been somewhat high, however.

I think the massive revenue beat sort of covered up the fact that Pinterest's R&D and S&M exploded by nearly 30%. I imagine this is a result of Bill Ready taking over as CEO in June. As a former Google employee, he has seemingly brought the company's readiness to spend money on seemingly nothing.

Regardless, with the massive revenue beat ($0.11 EPS VS $0.05 Expected/$684.6m Revenue vs. $666.7m expected), Pinterest once again has seemingly proven its business quality. They just have to keep a close eye on those costs and make sure they don't get too out of hand.
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I am actually quite surprised $PINS has not been acquired by a larger co yet because the metrics could be attractive to integrate into a larger social platform perhaps. What do you think? Or do you think they would be best on their own?
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$INTC, Rising From The Grave?
Intel $INTC is up to bat again for Q3 earnings, and I have mixed feelings about it.

On the one hand, they beat their own estimates. In their Q2 earnings, they guided for $15-16b in revenue and EPS of $0.35 and came up in Q3 with $15.2b and EPS of $0.35 and EPS of $0.59. Off to a decent start despite still being down a massive 15% Y/Y for revenue.

The big problem is guidance. They guided lower... Again. Slashing revenue estimates and lowering ADJ Free Cash Flow by another billion is scary.

And man that Q4 Outlook EPS is down over 80% Y/Y. That seems like a really big deal. Revenue also diving further. Maybe this is just a big fake-out that sets up Intel to crush Q4 earnings but I am beginning to doubt it.

Looking at the breakdown of business segments is also not a great look. Everything is down except the smallest business segments.

I was somewhat surprised to see this given the stock is up 6% after hours and it seems it is on the news of Intel planning up to $10b in cost reductions over the next 3 years.

To be honest this comes off as Gelsinger desperately trying to salvage anything about this quarter. While it will certainly help I think Intel should have entered cost-cutting mode BEFORE they decided to start spending money like a drunken sailor trying to reclaim market share.

This also means Intel is the newest tech company to announce layoffs but somewhat ominously in this earnings report they neglected to give concrete numbers. This tells me it is probably going to be big maybe even 10-12% of their workforce in an attempt to cut costs. Most of these will be sales jobs so the effect on operations is unclear. We will have to wait till November 1st to hear more.

But I think by far the most concerning line was this:

Turns out when you start spending tons of money your reliable stable dividend tends to get in the way. Guess Intel is dipping into its cash pile and issuing debt to pay its investors. At least $META doesn't have this problem.

I am of the opinion that Intel should cut the dividend in half in order to sustainably continue to pay investors and not pile on debt. If they manage to pull this transformation off while holding onto the dividend I will be beyond impressed. If they don't I imagine we get an AT&T situation where Intel will spin off more parts of its business in an attempt to raise cash.

I think the best way to describe these earnings is with this line from a CNBC article:

Very Mixed. Some Good, Some Bad.
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How would you expect the stock price to react if they cut their dividend (by half or more)?
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A Beautiful Chart
Every investor presentation should have a slide like this.

Long Term Vision
Long Term Growth
Easy To Understand
Perfect
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Love this view. As the graph builder at my company I approve of this one 🤩
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$BOSS, An interesting way to play the downturn
$BOSS is the Founder-Run Companies ETF. It invests in companies, weighted by market cap, that are run by their founders and I think it's worth looking into.

With the recent collapse in valuations of the high-flying tech stocks and the market in general I would think it best to bet on company founders as they often work harder to preserve their businesses.

Some of the holdings are actually pretty solid ideas too. Naturally many of the holdings are in Tech and Finance though.

The fund has been around for a little while and has a fairly low expense ratio of 0.45%.

Again if you believe in the idea that founder-run companies tend to outperform this ETF might be worth looking into.
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@mavix10/23/2022
Founder-led and high insider ownership are often good indicators for good businesses imo 👌🏻
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Simple Trade Idea $BND
While being a long term investor I think it could still be worth it to look at shorter term ideas. One of those is a bond trade. $BND is one of the largest bond indexes around and has gotten crushed this year.

Down over 17% YTD bonds have not done well. I attribute much of this performance to the FED raising rates. In general as bond yields go up prices come down. Given that this Fund has over 60% exposure to government grade bonds I had an idea.

With the FED planning to cut rates starting in 2024 I would think you could collect the over 2% dividend yield on $BND and wait for rate cuts. When they happen I would expect the price of most government bonds to rebound.

Granted the idea doesn't work if we enter a prolonged period of low rates and the FED doesn't raise rates in the future.

Again a fairly simple trade idea but one I think might be effective.
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Kelly ETFs, An AUM Problem
In searching for ETFs for my most recent thread on Twitter I came across $RESI which doesn't even show up on Commonstock which is already a bad sign.

At first, I thought the ETF was quite compelling. A Residential focused real estate ETF that seemed relatively promising. Its top holdings we're all seemingly decent operators in the residential and apartment real estate space.

And the expense ratio while quite high at 0.68% was also somewhat alright for an actively managed ETF.

But then I came across the problem.

$253k in total AUM. Also...

Virtually no daily volume. So a highly illiquid ETF that has almost no AUM. These two seem like quite a bad combination and I would expect this ETF to close up shop quite quickly if they can't find investors.

But interestingly this ETF is from a relatively new issuer Kelly ETFs. They currently have 3 of these products $RESI, $XDNA, and $HOTL. Residential Real Estate, Gene Editing Companies, and Hotel Companies.

The combined AUM across all their funds is a little over 6 million dollars. And I have found myself rooting for their success in the space to see what the future holds but at the same time not wanting to take the illiquidity risk of any of their funds.
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Any reason for preferring a real estate etf rather than a REIT co?
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$NXDT, My Real Estate Replacement
Since my poor $STOR Capital got taken away from me I have set out to find the best real estate company I can find to replace them. I looked through many from $O to $STAG, From $VICI to $NTST. But I finally believe I have landed on the company I will be replacing STORE with...

$NXDT The NexPoint Diversified Real Estate Trust.

I have a full write-up I am working on but I will give some of my reasoning here. To begin I believe it's a special situation opportunity that will turn into a steady long-term growth business.

As in the name, it is a very well-diversified real estate company owning everything from residential to commercial and pretty much everything in between.

The reason it's a special situation opportunity is that it used to be a Closed-End Fund that owned several private real estate businesses. It was in the process of transforming from a Closed-End Fund into a REIT and that process was just completed a few months ago. The newly formed REIT will be a monthly dividend payer that will hopefully turn into a dividend king one day.

One of the biggest things that attracted me to this company was its extreme discount on NAV. The total value of all of the companies the Closed-End Fund NXDT owned was closing in on $1 billion dollars. Currently, the market cap of the REIT $NXDT is only $434 million.

So assuming the NAV is correct the new $NXDT has a base asset value of nearly $1 billion dollars.

Since becoming a REIT the company's debt profile has also changed with Nexpoint now possessing over $1 billion in debts. Most of this is long-term debt on buildings, however.

As I said I am working on a full writeup and also waiting for $NXDT to file it's first 10k so I can get a more comprehensive overview of the company and debt profile.

I do plan to start accumulating shares in the coming week given the tremendous fall in share price which I believe is related to the overall Real Estate market weakness and not $NXDT specific.
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Very interesting. I’d love to chat with you about this name. The only name I liked from the ones you mentioned was NTST as you probably remember me posting about it. But this name has my attention. Would love to chat with you
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