Hey Vince, thanks for the year-end summary! I've been pecking at the mine face of my reading backlog.
Three questions:
1. I'm curious to better understand your investing style; for example, how did you trade the GTLS bounce and secondary? I recall from our previous discussion that you bought a full position (I think near the bottom)? Did you sell the bounce, stop out on the secondary, or buy more on the dip?
2. I'm wondering if you've had success shorting recent SPACs? It seems like they all implode following the initial squeeze, but as you note, while it looks like free money, borrows are very hard to find.
3. ISPO looks intriguing. I haven't done any work besides reading your article and drooling over their inventory (which sadly I'm unlikely to be able to afford; I'd offer to carry your bags, but I think they do all that stuff for you). Their guide down is a little unnerving given that the macro environment is likely to get much much worse before it gets better, and besides, a solitary guide down is as rare as hen's teeth. But I think they do have a real business, they've displayed a lot of creativity in expanding their product offerings, there's huge potential for further expansion (e.g. internationally), and there's potential for a powerful network effect among their target demographic. Further thoughts?
Best wishes to you and your family for the New Year!
hey Mike, so sorry for the delay in replying - and a belated Happy New Year.
1. I bought a full position, am a bagholder, sticking with it. Had it been a trade, I'd probably have trimmed on the initial bounce (was +13% or so pretty quick if I recall quickly) and likely exited on the secondary, but I was happy owning at the price I paid so I'm not going anywhere yet. Still possible I'm missing something (beyond the secondary, which I admittedly did not anticipate), but that was the risk before as well.
2. I've given up on the short trade simply because I looked repeatedly and there was just never any real way to play it. No borrow, no puts. I've looked at even trying to short warrants on occasion, even though they don't incorporate these nutty rallies they do get a bit of a bounce sometimes. Borrow there though usually doesn't exist, either.
whoever is pushing these things — and I don't know what the bleep the SEC is doing all day to not see this at this point, it's been a year now — understands that there's really no way to push back. I've actually considered trying to play along, but the day I do that the trend will come to a screeching halt.
3. It's a 'feel' answer, but ISPO just doesn't quite feel right to me. I'm intrigued, I think it might work, it's really interesting, but the path to success for the business model just seems really, really thin. And on top of that there's the "man, if you're cutting guidance now, when are you going to outperform?" question.
ISPO also goes to something I've been thinking about de-SPACs. We know there's just a lot of really questionable businesses that went public via that route. We've talked about them here.
But I think there are also a decent number of businesses that really didn't need to be public, and maybe can't bear the added costs and different incentives of *being* public.
Inspirato probably should be a nice private business with a few million in VC investment that tries to get to profitability, stay in profitability through all environments, protect its balance sheet, and grow opportunistically. But that's at loggerheads with a couple million in incremental annual costs and the demand for growth from the market.
I'm not sure this sense is 100% right - haven't really gone through our de-SPAC sheet to see how many similar stories there are. But Lottery.com was that way — should have been just a silly private business that could have made $500K or $1M a year and been worth $10-$15M. HOFV, Boxed, Talkspace, Owlet, maybe BeachBody...all at least not served being public. I do wonder if someone is going to figure that out and see if they can salvage some of that value.
anyway, very long answers, but you hit a couple things I've been thinking through of late
Thanks for the response, I appreciate the pushback on ISPO, and as always, especially enjoy the window into your thought process. Happy New Year to you and your family!
Hey Vince, thanks for the year-end summary! I've been pecking at the mine face of my reading backlog.
Three questions:
1. I'm curious to better understand your investing style; for example, how did you trade the GTLS bounce and secondary? I recall from our previous discussion that you bought a full position (I think near the bottom)? Did you sell the bounce, stop out on the secondary, or buy more on the dip?
2. I'm wondering if you've had success shorting recent SPACs? It seems like they all implode following the initial squeeze, but as you note, while it looks like free money, borrows are very hard to find.
3. ISPO looks intriguing. I haven't done any work besides reading your article and drooling over their inventory (which sadly I'm unlikely to be able to afford; I'd offer to carry your bags, but I think they do all that stuff for you). Their guide down is a little unnerving given that the macro environment is likely to get much much worse before it gets better, and besides, a solitary guide down is as rare as hen's teeth. But I think they do have a real business, they've displayed a lot of creativity in expanding their product offerings, there's huge potential for further expansion (e.g. internationally), and there's potential for a powerful network effect among their target demographic. Further thoughts?
Best wishes to you and your family for the New Year!
hey Mike, so sorry for the delay in replying - and a belated Happy New Year.
1. I bought a full position, am a bagholder, sticking with it. Had it been a trade, I'd probably have trimmed on the initial bounce (was +13% or so pretty quick if I recall quickly) and likely exited on the secondary, but I was happy owning at the price I paid so I'm not going anywhere yet. Still possible I'm missing something (beyond the secondary, which I admittedly did not anticipate), but that was the risk before as well.
2. I've given up on the short trade simply because I looked repeatedly and there was just never any real way to play it. No borrow, no puts. I've looked at even trying to short warrants on occasion, even though they don't incorporate these nutty rallies they do get a bit of a bounce sometimes. Borrow there though usually doesn't exist, either.
whoever is pushing these things — and I don't know what the bleep the SEC is doing all day to not see this at this point, it's been a year now — understands that there's really no way to push back. I've actually considered trying to play along, but the day I do that the trend will come to a screeching halt.
3. It's a 'feel' answer, but ISPO just doesn't quite feel right to me. I'm intrigued, I think it might work, it's really interesting, but the path to success for the business model just seems really, really thin. And on top of that there's the "man, if you're cutting guidance now, when are you going to outperform?" question.
ISPO also goes to something I've been thinking about de-SPACs. We know there's just a lot of really questionable businesses that went public via that route. We've talked about them here.
But I think there are also a decent number of businesses that really didn't need to be public, and maybe can't bear the added costs and different incentives of *being* public.
Inspirato probably should be a nice private business with a few million in VC investment that tries to get to profitability, stay in profitability through all environments, protect its balance sheet, and grow opportunistically. But that's at loggerheads with a couple million in incremental annual costs and the demand for growth from the market.
I'm not sure this sense is 100% right - haven't really gone through our de-SPAC sheet to see how many similar stories there are. But Lottery.com was that way — should have been just a silly private business that could have made $500K or $1M a year and been worth $10-$15M. HOFV, Boxed, Talkspace, Owlet, maybe BeachBody...all at least not served being public. I do wonder if someone is going to figure that out and see if they can salvage some of that value.
anyway, very long answers, but you hit a couple things I've been thinking through of late
Thanks for the response, I appreciate the pushback on ISPO, and as always, especially enjoy the window into your thought process. Happy New Year to you and your family!