Time to buy JOE

...are you off your meds again Bob?

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back in 2006 I suggested to folks to short JOE, if they couldn't sell there home in South Walton, as a proxy for doing the same. I think the pendulum has swung ridiculously far to the negative side, and that the Short Joe trade is cooked, done. I think it's time to buy JOE, and lock the shares away for 50 years.

good luck to all.

Most of JOE's holdings are worthless swampland (think of Rivercamps that is a total bust), not prime beachfront like Watersound or Watercolor. Not worth $5 bucks a share.[/QUOTE

homeboy, sounds like you've done a deep dive analysis on this on a per share/per acre basis. could you please share any details of that analysis... your thoughts on JOE's balance sheet, and on some comparable price per acre sales of acreages bth near the beach, near swamp or pine forest??

Shelly,

Please keep the portfolio updates coming over the coming months, as the bet unfolds.

You're off to a great start, taking the S&P against JOE. ON a sidenote, I'm not sure who is betting against INTC, but that's fun to watch it go up too, as it should.

Welcome back, Matey! How was the cruise?

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reminded me why Florida is valuable though.... on the way to the beach, everyone in Roatan we saw walking, carried a Mashedi (sic)... since South Walton is now priced like 3rd world Caribbean, there may be some value here afterall.

Most of JOE's holdings are worthless swampland (think of Rivercamps that is a total bust), not prime beachfront like Watersound or Watercolor. Not worth $5 bucks a share.[/QUOTE

homeboy, sounds like you've done a deep dive analysis on this on a per share/per acre basis. could you please share any details of that analysis... your thoughts on JOE's balance sheet, and on some comparable price per acre sales of acreages bth near the beach, near swamp or pine forest??

Sure.

balance sheet looks reasonably healthy, BUT a good chunk of the cash was generated from tax refunds over the past couple of years. Outside these refunds, they are BLEEDING cash. At current burn rate, they will be out of cash in a couple of years with little capacity to borrow due to negative ebitda.

Pull out your excel spreadsheets and do a DCF analysis like I did. Assume they sell all 577,000 acres at 20k acres per year for the next 29 years (only sold about 1k this year). Assume a 10k per acre sales price (way too high, given that the bulk sales have been going in the range of 2-4k recently), 50% ebitda margin (again way too high historically), 39% tax rate, and a 10% discount rate. With these aggressive assumptions, the business isn't even worth $10 per share.

Was that enough detail, or do you need more?

back in 2006 I suggested to folks to short JOE, if they couldn't sell there home in South Walton, as a proxy for doing the same. I think the pendulum has swung ridiculously far to the negative side, and that the Short Joe trade is cooked, done. I think it's time to buy JOE, and lock the shares away for 50 years.

good luck to all.

in 50 years, I bet CROX is out of business due to changing trend or lead found in the shoes.

in 50 years, I bet CROX is out of business due to changing trend or lead found in the shoes.

Fantasy Portfolio Results (as of market close Nov 26):

STOCK/VALUE/GAIN-LOSS

INTC/$2,035.28/+1.76%

SPY/$1,943.40/-2.83%

JOE/$1,710.46/-14.48%

($2,000 put in each stock effective on market close Nov 4th)

WARNING: Kids, don't try this at home!!!

That is absolutely the WORST piece of investment advice EVER. 50 Years? Do you understand JOES business model. They don't sell widgets or services. They have a limited inventory of land. In 50 years, JOE will be out of business. If successful, all land will be sold and remaining cash will be paid out to shareholders (with a terrible return after considering ongoing operating costs, corporate income taxes and personal taxes on the dividend to shareholders upon dissolution) or they will have gone bankrupt long before due to inability to cover operating costs.

At least CROX, INTEL, etc make products and do not have a finite supply of inventory from which to produce revenues and profits.

50 years-you lost that bet the minute you made it.

Sure.

balance sheet looks reasonably healthy, BUT a good chunk of the cash was generated from tax refunds over the past couple of years. Outside these refunds, they are BLEEDING cash. At current burn rate, they will be out of cash in a couple of years with little capacity to borrow due to negative ebitda.

Pull out your excel spreadsheets and do a DCF analysis like I did. Assume they sell all 577,000 acres at 20k acres per year for the next 29 years (only sold about 1k this year). Assume a 10k per acre sales price (way too high, given that the bulk sales have been going in the range of 2-4k recently), 50% ebitda margin (again way too high historically), 39% tax rate, and a 10% discount rate. With these aggressive assumptions, the business isn't even worth $10 per share.

Was that enough detail, or do you need more?

Dude, you don't use DCF's on unpredictable, cyclical businesses. second, a 10% discount rate is laughable. Third, Einhorn had a price target of $20 when the stock was much higher, and recently updated that to low teens, so he could cover his short more profitability. Fourth, Einhorn's next 13-F report will show he coverd a bunch, if not all of his bet over the last 4 weeks. Will your 13-F show something different? Did you get short recently?

Wow, JOE is up 8% in one week.
INTC up 1.6% in same week.

Am I reading that right? Surely it must be a flaw.

Nice quote, but you said it was a game and you wanted to regularly monitor it, didn't you? JOE beat INTC for the week by more than 3 times, right?

SJ..."you are starting to sound like people who looked at their home value every day. I thought it was supposed to be about time in the market, not timing the market."

:roll:

It's really not "up"...it's just less negative--not unusual for a stock that's getting jerked around by 2 huge hedge funds.

(And INTC did pay out their quarterly dividend on Wednesday too...)

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That's only true if you bought higher than the current price.