The changes in equities have been developing for a long time. And the world.

Las Vegas used to be a place where they made money by drawing people in through cheap buffets and low cost entertainment. Now gambling is available almost everywhere so Las Vegas has adopted a model for $75 buffets and $200 shows. 

 

The average stock used to be held 7 years. A person had to be connected or wait for the evening paper to check how your stocks were doing. Now it is possible to track by the second and easily flip something several times a day.

 

I recall when the CEO of Enbridge complained that he was making $500k a year and equivalent CEOs were close to the 7 figure mark. Now Al Monaco is getting $20M a year. The tenure of a CEO averages around 3 years. Hard to get them to think long term.

 

In the past, O&G was sort of a hillbilly business with mom and pops raising money to drill and hoping cash flow is enough to find the gusher that gets them bought out. 

 

One person on this board was adept at knowing how to ask the right questions of management and seeing which junior mining co was likely to hit. He has left that strategy behind because there is much more volatility and unpredictability. Steady performing sectors for him.

 

I used to put a lot of weight on the tangible book value of companies. Hudson Bay is a good example. Their assets made them worth 4 x the stock price. Management sucked and the equity was getting eroded slowly but the erosion was not too much to make me panic and I held as the shitty management dropped the share price when investors looked at the losses. I did not contemplate private equity doing a takeover at a 30% (or whatever) premium of the depressed shareprice. They got to realize the tangible value, not me.

 

When I look at the tangible value of so many big companies it is often close to zero. Too many of them outsource all the tangible stuff and the value is in the brand. I see Nike has a Shareprice of $120 and a tangible book value of $9. I do not know if Nike is a safe bet or risky. 

 

We talk about the impact of COVID, but really all COVID did was speed up the changes that were coming. At universities there was a trend to do more online courses, which is a set up for not even needing many professors. Just show the same Youtube videos from the last course. COVID provided the catalyst. In 1998, ERP systems were not selling like the Oracles had hoped but Y2K drove companies to adopt automated systems. 

It is not like there is going to be a return to the things that used to work. I thought Poseidon was a good deal because of the issues in the industry with water handling and here was a company that addressed that problem. I did not foresee the notion that the books were being cooked and a Ponzi scheme was paying the high yield.

 

In conclusion, I am running out of speculative holdings simply through attrition. Half of the stocks in my portfolio have listed SPs of under 1 cent. I am tired of listening to a good story that should work out. I used to be able to recognize value, but I lack the tools to spot them now. We used to bemoan on this board that there were no tools to help signal when to sell. Now I think there are few that still work on when to buy. 

 

Best of luck to all.