And I appreciate you valueing Titan Cement both ways. I think a lot of the "the stub is SO cheap" pitches are sensational or disingenuous when they won't / can't sell the ex-stub part anyway.
Cement tourist here: feels like most of them had a big boost in earnings in the last couple of years. Do you think there's anything unsustainable about that?
I agree! So what if a company looks cheap ex some trophy asset? If they'll never do anything about it, shareholders will never benefit. Fortunately, Titan Cement has shown a willingness to monetize its holdings when their value is not being appreciated by the market.
Cement is and will always be a cyclical business, so I would not be surprised if recent results were a short-term peak. But my fundamental thesis is that just as the US underinvested in housing in the 15 years following the Financial Crisis, we did the same with respect to cement production. It will take a long time to correct that, and I expect cement companies to benefit from strong pricing power and good utilization rates for years to come, with some ups and downs along the way.
That's what I get for typing this out while watching the indexes hit new lows! Since I shorted everyone, I also think Conrad Industries is worth a look. Boat and barge builder coming out of a cyclical bottom, with a strong balance sheet and a growing backlog.
I've spent some time looking at FOUR over the last few weeks and my lingering concerns are two-fold.
60% of their revenue comes from products originated in China, 14% from the US.
It's only their corporate HQ in the UK, their 2 distribution are in the US - Wisconsin.
I like the business but have struggled get past 1. The concern that a wider business down-turn will hit them very hard; it seems logical to me that one of the first things to go in a budget crunch will be random nick-nacks they hand out at events or within the office. A portion of their products are uniforms and stuff like that which will likely be somewhat insulated; and 2. a hefty tariff on China will hit them hard. Especially when their brand schtick is quite literally: "On time or it’s free. Cheapest or we’ll refund double. We’ll refund you if you’re not happy”.
Regardless. It seems to be a great business in good times. The question i guess is whether it is also a great business in poor times, or whether it's cheap enough to compensate for that --- I suspect the answer to the first is no, and am unsure about the answer to the latter - (would love any other opinions).
Hi Dave, on CBL. Appreciate your point on the valuation disconnect. But could investors be assuming the income from even unencumbered properties could be affected by a potential downturns if retailers close their outlets? Thx and appreciate your feedback.
Is the bank you mentioned GTPS in Champaign Illinois? I stumbled across that one about four months ago and it’s close to a 10% position for me. In my email discussions with the CFO I asked how their deposit costs could possibly be so low and he just responded with a bunch of boiler plate. They’re also quite the stealth share repurchaser as well.
To seed, build, and nurture timeless, intangible human capitals — such as resilience, trust, truth, evolution, fulfilment, quality, peace, patience, discipline, relationships and conviction — in order to elevate human judgment, deepen relationships, and restore sacred trusteeship and stewardship of long-term firm value across generations.
A refreshing take on our business world and capitalism.
A reflection on why today’s capital architectures—PE, VC, Hedge funds, SPAC, Alt funds, Rollups—mostly fail to build and nuture what time can trust.
“Built to Be Left.”
A quiet anatomy of extraction, abandonment, and the collapse of stewardship.
"Principal-Agent Risk is not a flaw in the system.
Thanks for the quick pitches!
And I appreciate you valueing Titan Cement both ways. I think a lot of the "the stub is SO cheap" pitches are sensational or disingenuous when they won't / can't sell the ex-stub part anyway.
Cement tourist here: feels like most of them had a big boost in earnings in the last couple of years. Do you think there's anything unsustainable about that?
I agree! So what if a company looks cheap ex some trophy asset? If they'll never do anything about it, shareholders will never benefit. Fortunately, Titan Cement has shown a willingness to monetize its holdings when their value is not being appreciated by the market.
Cement is and will always be a cyclical business, so I would not be surprised if recent results were a short-term peak. But my fundamental thesis is that just as the US underinvested in housing in the 15 years following the Financial Crisis, we did the same with respect to cement production. It will take a long time to correct that, and I expect cement companies to benefit from strong pricing power and good utilization rates for years to come, with some ups and downs along the way.
Hi Dave - enjoyed the note as usual but only counted four pitches, not five. Anything else?
Since I shouldn't be all take and no give, take a look at Pulse Seismic.
Best, Steve
That's what I get for typing this out while watching the indexes hit new lows! Since I shorted everyone, I also think Conrad Industries is worth a look. Boat and barge builder coming out of a cyclical bottom, with a strong balance sheet and a growing backlog.
Hi Dave - it looks like you have an imposter. Look at the comment that just came in from "Dave's water newsletter" below.
Steve
Thanks for these, Dave!!
I've spent some time looking at FOUR over the last few weeks and my lingering concerns are two-fold.
60% of their revenue comes from products originated in China, 14% from the US.
It's only their corporate HQ in the UK, their 2 distribution are in the US - Wisconsin.
I like the business but have struggled get past 1. The concern that a wider business down-turn will hit them very hard; it seems logical to me that one of the first things to go in a budget crunch will be random nick-nacks they hand out at events or within the office. A portion of their products are uniforms and stuff like that which will likely be somewhat insulated; and 2. a hefty tariff on China will hit them hard. Especially when their brand schtick is quite literally: "On time or it’s free. Cheapest or we’ll refund double. We’ll refund you if you’re not happy”.
Regardless. It seems to be a great business in good times. The question i guess is whether it is also a great business in poor times, or whether it's cheap enough to compensate for that --- I suspect the answer to the first is no, and am unsure about the answer to the latter - (would love any other opinions).
Hi Dave, on CBL. Appreciate your point on the valuation disconnect. But could investors be assuming the income from even unencumbered properties could be affected by a potential downturns if retailers close their outlets? Thx and appreciate your feedback.
Is the bank you mentioned GTPS in Champaign Illinois? I stumbled across that one about four months ago and it’s close to a 10% position for me. In my email discussions with the CFO I asked how their deposit costs could possibly be so low and he just responded with a bunch of boiler plate. They’re also quite the stealth share repurchaser as well.
Hello Dave,
I hope this communique finds you in a moment of stillness. Have huge respect for your work.
We’ve just opened the first door of something we’ve been quietly crafting for years—
A work not meant for markets, but for reflection and memory.
Not designed to perform, but to endure.
It’s called The Silent Treasury.
A place where judgment is kept like firewood: dry, sacred, and meant for long winters.
Where trust, patience, and self-stewardship are treated as capital—more rare, perhaps, than liquidity itself.
This first piece speaks to a quiet truth we’ve long sat with:
Why many modern PE, VC, Hedge, Alt funds, SPAC, and rollups fracture before they truly root.
And what it means to build something meant to be left, not merely exited.
It’s not short. Or viral. But it’s built to last.
And if it speaks to something you’ve always known but rarely seen expressed,
then perhaps this work belongs in your world.
The publication link is enclosed, should you wish to open it.
https://helloin.substack.com/p/built-to-be-left?r=5i8pez
Warmly,
The Silent Treasury
A vault where wisdom echoes in stillness, and eternity breathes.
Hello there,
Huge Respect for your work!
New here. No huge reader base Yet.
But the work has waited long to be spoken.
Its truths have roots older than this platform.
My Sub-stack Purpose
To seed, build, and nurture timeless, intangible human capitals — such as resilience, trust, truth, evolution, fulfilment, quality, peace, patience, discipline, relationships and conviction — in order to elevate human judgment, deepen relationships, and restore sacred trusteeship and stewardship of long-term firm value across generations.
A refreshing take on our business world and capitalism.
A reflection on why today’s capital architectures—PE, VC, Hedge funds, SPAC, Alt funds, Rollups—mostly fail to build and nuture what time can trust.
“Built to Be Left.”
A quiet anatomy of extraction, abandonment, and the collapse of stewardship.
"Principal-Agent Risk is not a flaw in the system.
It is the system’s operating principle”
Experience first. Return if it speaks to you.
- The Silent Treasury
https://tinyurl.com/48m97w5e
Does FOUR import from China?
Perhaps they will have to ship the products from China to the UK, then UK onto the US. Could be boom time for UK warehouses :)