RE:RE:RE:RE:RE:RE:RE:RE:RE:News Okay, since you wrote me this nice love letter ill reply. IMO,
Watchmeplz,
You sound like a youngster with very little experience or knowledge about the world, let alone equities markets. Thanks I wish. Not because you're wrong, but because you continue to try and speak with authority about things that you may not have a complete grasp of. Maybe, but i doubt it. It doesn't seem like a bad thing in this case, because anybody dissuaded by your arguements probably shouldn't be in an equity this risky in the first place.
It's just my perspective, because I'm hyper-conservative with what I consider worth speaking about, but there sure is a heck of a lot of, "probably," in your posts. Picking stocks is an act of arrogance, and you certainly have plenty to go around. Probably was only used in my latest post and only referring to the covenenants because I havent seen the term sheet, but like anyone knows signing a loan with convenants what the bank would restrict you on, debt heirchery is definitely one, and the ability to refinance over top of them would be another, hence "probably". What you say has a grain of truth, as a possibility, but you speak on it as if it's a certainty. Some humility would serve you good in the future.
The idea that BMO would agree to a credit facility so flippantly as you describe is a complete joke. They borrow on physical asset, such as a property or an ENTIRE facility, book value of the facility. Maybe personal guarantee too for a car loan etc, if the ceo tied his personal-self into it, but as we all know that is highly unlikely he would ever do that. In my experience, repossession usually means that a company is recovering their capital AT BEST. There is so much overhead to the process that it's just silly to think that any professional would sit down and consider that as a deciding factor for the loan. They dont anticipate your gonna go broke, but they don't care, they know there covered in any situation.
"200m is literally worth .10c on the dollar IF that." There's so many facets to a lot of the things you say without giving them much thought. It's clear that you're just coming up with random numbers to suit your beliefs, but you're actually not too far off base when you say that the assets aren't worth their full valuation, to BMO. Research this and youll find, its maybe not .10c but close.. https://bid.ableauctions.ca/HORTICULTURE-GROW-OPERATION-AUCTION_as42509
Not because, "BMO doesn't realize yet," which actually made me laugh out loud when I read that. Like I said, no shortage of arrogance on your part, to actually think you know better than them how to run their business. No, but in reality thats whats going down. In reality, it's because BMO is simply incapable of extracting the full value of these assets, or in the case of a deafult, would even like to. They're not even going to attempt to get full value from these assets, they're going to return as much capital as they can, as quickly as realistically possible. Likely still well above 10%. Fair enough, wont be far off.
First, however, if things were really in such a poor state as you state, Supreme would preemptively sell assets in the market to repay their loan or implement cost-savings / restructuring as you mentioned. They should be and aren't.. make a hope and a dream Canada eventually will change laws, open stores and they can produce below black market, good question why they aren't downsizing and instead hiring people. The only way to extract optimum value from these assets is while they are fully operational and healthy. There is a lot of greed in the market, but to think that leaders are genuinely going to drive a business into the dirt just to line their own pockets, neive comment, you think this doesn't happen daily? with little concern for their professional reputation or future, is absurd. Some people don't think even seconds ahead, live in the moment, or blindsided by greed, not in necessarily in supremes situation but this happens daily my friend.
It happens, but it's not the baseline we should be talking about. It's more likely that they would get genuinely blindsided by unexpected headwinds and the appropriate discussion point would be to focus on what those headwinds might be. Instead, you just talk about how everything is terrible and everybody else is stupid for not realizing this.
Another concern about your strategy, as was already mentioned in this thread, is that you seem a bit short-sighted in your approach and overly focus on trivial realities. No sir, these are long standing issues, most of them are impossible or nearly impossible to change, some with supreme only but numerous items are for LP's wide. While it's true that the stock price is a representation of investor sentiment, just because it's gone in a certain direction, does not mean it will continue to. During the tech bubble, Amazon was valued over $100 at one point. In the following year, it tumbled down below $6 per share. That's a loss of ~95%, but Supreme and the Cannabis sector still havn't quite made it that far. Was Cannabis a bubble? Has it popped? Not even close to being the same. The computer market didnt have a "black" competitor that had a valid legal license operating at the same time they did. This is completely different and not comparable to that market. Just like people saying this is related to prohibition. It definitely is not. This market existed fully before the LP's existed and have their own class of licensing currently to hide under. Read this itll help you understand... well maybe.. https://en.wikipedia.org/wiki/Legal_history_of_cannabis_in_Canada
I personally have the natural contrarian instinct that if the majority is doing something, I consider that a sign to do the opposite. With your approach of validating your opinions through stock-price performance, you should be returning at least 10% ROI per annum in the current market, are you? Yes, my public portfolio has been right around 20% profit for years. Thanks for checking. I know that I'm reducing it down more than I should, but in my experience it's this exact herd mentality -- feeling validated by others doing the same thing -- that leads to the biggest losses. On the flip side, it also leads to the greatest opportunities. People are currently criticizing Warren Buffet for his cash hoard, but we'll see.
Of the same note, I don't know how you justify a single 11M quarter as suddenly being the run-rate for the company -- there has to be a limit to short-sightedness and arrogance. While the dip versus last quarter is a concern, a savvy investor will just wait for the next quarter, rather than throwing the baby out with the bathwater. Yep, I agree wait until the next quarter and judge for youself. Nothing in the market is changing, John conroys lawsuit is years away which stalls the market and timelines for supremes roll out of tasks is taking them into 2021 before you ever even see any of that stuff come online and hit the books. By the time it hits the books this thing will be in the pennies. Supreme has already said multiple times that revenue in fiscal 2020 will be back-half weighted. Bat for a grand slam i guess and pray for a hail mary, awesome way to invest.
I was actually a bit suprised, when looking at the Aphria fiscal 2019 numbers, as it's a good benchmark to compare Supreme to. They started in Q1 with revenue of ~$10 mil, followed by $17m, $55m and $96m. That's a similar performance as to what Supreme is anticipating. This data is useful because it isn't unheard of to see the numbers shake out like Supreme expects, but it's far from a guarantee. After however many quarters of strong growth, a hiccup like this is a buying opportunity at best and a wait-and-see moment at worst.
I hope your other investments serve you well (a 10% return is nothing to scoff at),
-Dubby
Read more at https://stockhouse.com/companies/bullboard?symbol=t.fire&postid=30406952#tXeG5JMXKYQSkwQj.99 DubbyTGF wrote: Watchmeplz,
You sound like a youngster with very little experience or knowledge about the world, let alone equities markets. Not because you're wrong, but because you continue to try and speak with authority about things that you may not have a complete grasp of. It doesn't seem like a bad thing in this case, because anybody dissuaded by your arguements probably shouldn't be in an equity this risky in the first place.
It's just my perspective, because I'm hyper-conservative with what I consider worth speaking about, but there sure is a heck of a lot of, "probably," in your posts. Picking stocks is an act of arrogance, and you certainly have plenty to go around. What you say has a grain of truth, as a possibility, but you speak on it as if it's a certainty. Some humility would serve you good in the future.
The idea that BMO would agree to a credit facility so flippantly as you describe is a complete joke. In my experience, repossession usually means that a company is recovering their capital AT BEST. There is so much overhead to the process that it's just silly to think that any professional would sit down and consider that as a deciding factor for the loan.
"200m is literally worth .10c on the dollar IF that." There's so many facets to a lot of the things you say without giving them much thought. It's clear that you're just coming up with random numbers to suit your beliefs, but you're actually not too far off base when you say that the assets aren't worth their full valuation, to BMO.
Not because, "BMO doesn't realize yet," which actually made me laugh out loud when I read that. Like I said, no shortage of arrogance on your part, to actually think you know better than them how to run their business. In reality, it's because BMO is simply incapable of extracting the full value of these assets, or in the case of a deafult, would even like to. They're not even going to attempt to get full value from these assets, they're going to return as much capital as they can, as quickly as realistically possible. Likely still well above 10%.
First, however, if things were really in such a poor state as you state, Supreme would preemptively sell assets in the market to repay their loan or implement cost-savings / restructuring as you mentioned. The only way to extract optimum value from these assets is while they are fully operational and healthy. There is a lot of greed in the market, but to think that leaders are genuinely going to drive a business into the dirt just to line their own pockets, with little concern for their professional reputation or future, is absurd.
It happens, but it's not the baseline we should be talking about. It's more likely that they would get genuinely blindsided by unexpected headwinds and the appropriate discussion point would be to focus on what those headwinds might be. Instead, you just talk about how everything is terrible and everybody else is stupid for not realizing this.
Another concern about your strategy, as was already mentioned in this thread, is that you seem a bit short-sighted in your approach and overly focus on trivial realities. While it's true that the stock price is a representation of investor sentiment, just because it's gone in a certain direction, does not mean it will continue to. During the tech bubble, Amazon was valued over $100 at one point. In the following year, it tumbled down below $6 per share. That's a loss of ~95%, but Supreme and the Cannabis sector still havn't quite made it that far. Was Cannabis a bubble? Has it popped?
I personally have the natural contrarian instinct that if the majority is doing something, I consider that a sign to do the opposite. With your approach of validating your opinions through stock-price performance, you should be returning at least 10% ROI per annum in the current market, are you? I know that I'm reducing it down more than I should, but in my experience it's this exact herd mentality -- feeling validated by others doing the same thing -- that leads to the biggest losses. On the flip side, it also leads to the greatest opportunities. People are currently criticizing Warren Buffet for his cash hoard, but we'll see.
Of the same note, I don't know how you justify a single 11M quarter as suddenly being the run-rate for the company -- there has to be a limit to short-sightedness and arrogance. While the dip versus last quarter is a concern, a savvy investor will just wait for the next quarter, rather than throwing the baby out with the bathwater. Supreme has already said multiple times that revenue in fiscal 2020 will be back-half weighted.
I was actually a bit suprised, when looking at the Aphria fiscal 2019 numbers, as it's a good benchmark to compare Supreme to. They started in Q1 with revenue of ~$10 mil, followed by $17m, $55m and $96m. That's a similar performance as to what Supreme is anticipating. This data is useful because it isn't unheard of to see the numbers shake out like Supreme expects, but it's far from a guarantee. After however many quarters of strong growth, a hiccup like this is a buying opportunity at best and a wait-and-see moment at worst.
I hope your other investments serve you well (a 10% return is nothing to scoff at),
-Dubby