🤑247capital #46 | $PCH II

Hi Everyone 👋,

Welcome to the #46 issue of 247capital — your weekly source of Investment Research. If you are new, you can join my email list here, or👇🏻

Please hit the heart button ❤️ if you like today’s letter and reply with any feedback.

Below you’ll find the overview of all bought shares since Issue 1 and the current state. Please keep in mind we’re here for the long run. 5-10 years horizon at least. 

$TAP - bought at $44.95 - Issue 1
Closed the week at $50.64 (up 12.65%)🔥
💰$0.68 dividends

$GEO - bought at $5.79 - Issue 7
Closed the week at $8.03 (up 38.68%)🔥

XTRA:DFV - bought at 12.96€ - Issue 8
Closed the week at 10.66€ (down 17.74%)❄️

READ - bought at 39.25SEK - Issue 12+24
Closed the week at 17.52SEK (down 55.36%)❄️

$HIMS - bought at $8.28 - Issue 12+25
Closed the week at $5.74 (down 30.67%)❄️

THG - bought at 373.50pc - Issue 32+36
Closed the week at 194.40 (down 47.95%)❄️

I´m currently on the road in south Germany, enjoying german beer and trying to forget the current market 😆 Cheers 🍻

PotlatchDeltic Corporation - $PCH II

Hello to all!!!

Today as promised, the 2nd part is regarding PCH. I hope all subscribers enjoy reading it.

3. An industry that has overcome crises will still be important 30 years from now.

PotlatchDeltic Corporation has customers primarily in the construction industry. Among other things, the sawmills produce boards and beams for building houses. In the 1st part, I have left you a link to the wood prices.

There you will have seen that the price of wood over a long period at a relatively low level for a long time. For example, the cost of wood was constantly below 500 US dollars in the period from 2005 - 2016.

Here's how to calculate it:

"The price of lumber is measured in U.S. dollars per 1000 board feet (unit of measure for lumber). One board foot is equivalent to 2,359.74 cm3. Lumber is traded on the Chicago Mercantile Exchange (CME) futures exchange in Chicago."

Furthermore, the definition of what lumber even is by definition is interesting:

"Timber is an agricultural commodity used to generate energy by burning and as a building material. Construction lumber is defined as large cut pieces of wood in the form of logs and squared lumber, while small pieces of wood are referred to as lumber. A further distinction is made between hardwoods and softwoods on the timber market. Hardwoods are obtained primarily from deciduous trees, while softwoods are obtained from conifers such as spruce, fir, and pine."

After the real estate bubble or subprime crisis in the U.S. in 2007-2008, the price of wood slipped to below 250 US dollars. Therefore, to the estimation, it is to be said that the wood price stands currently at over 1100 US dollars.

What do I personally conclude from these figures?

The company has survived major upheavals and has stayed even at meager raw material prices. Furthermore, I assume that as a result of the lower sales volume and at the same time lower revenue, all cost centers within the company have been put to the test.

Thus, efficiency was increased, and the company streamlined the structure. I would therefore answer part 1 of the 3rd question with "Yes."

The company has survived a severe crisis within the entire industry. Therefore, part 2 of the 3rd question is: Will the industry still be necessary for 30 years?

Societal change is currently at least as vital, but faster than in the Industrial Revolution days. The world of work, consumer behavior, communication, to pick up on only 3 areas, are no longer the same in large parts of the western world as they were 20 years ago.

Working in a home office, shopping without leaving the house (keyword: online commerce, i.e.), telephoning with live image transmission to all continents of the world, etc.

20 years ago, this would have been the classic content of a science fiction production. Therefore, PCH can justifiably be seen as the forerunner of the old economy. Even 30 years, the people will need lumber to build houses.

That means, no matter what the change looks like in the end, there will always be 4 walls in which we want to live or work. I'll even go one step further; wood is a sustainable building material that is climate neutral and will be a big winner in the green deal.

So for point 3, I see both sub-aspects as fulfilled.

4. A company that won't be an airline act in the newspapers tomorrow.

The past - and you don't have to look back very long - has shown that there are always air numbers on the stock exchanges of this world. Be it Wirecard in Germany, a DAX 30 company, or Enron in the USA.

A person at the age of 70 years, looking for an additional source of income through passive income, wants to sleep peacefully at night and enjoy a calmer life.

So what does PotlatchDeltic (PCH) have to show for reference here?

Founded in 1903, PCH can now look back on a company history of almost 120 years, 119 years to be exact. That's nice, but as we all know, the stock market is where the future is traded. So long company history in isolation would be too little for me.

PCH will probably end the past year, 2021, as a record year. Q4 numbers will be released on January 31, 2022. To present such a result after more than 100 years means to me that obviously, PCH made not only wrong decisions in the past.

Next week I will answer the remaining questions 5&6 for you. Until then, I wish you only the best!!!

Your Florian

The amount of money a person receives will always be in direct proportion to the demand for what he does, his ability to do what he does, and the difficulty of replacing him.
— Earl Nightingale

sartoshi@sartoshi_nft

6:07 AM · Jan 6, 2022

823 Reposts · 7.34K Likes

StockCats@StockCats

"market rotation" is when the market rotates out of the stocks you bought and back into the ones you sold

9:04 PM · Jan 4, 2022

277 Reposts · 2.77K Likes

Pomp 🌪@APompliano

If you’re a young investor in any asset and this is the first market drawdown that you’ve experienced, take the time to learn why the best investors in the world all think in years and decades, not days and weeks.

9:23 PM · Jan 6, 2022

546 Reposts · 4.42K Likes

Dr. Parik Patel, BA, CFA, ACCA Esq. 💸@ParikPatelCFA

Dating is like venture capital. Most will go to 0, some will be meh, but you only need 1 home run hit to make it worth it.

1:15 AM · Dec 28, 2021

567 Reposts · 7.01K Likes

Scott Galloway@profgalloway

Biggest surge in job quitting — manufacturing washingtonpost.com/opinions/2022/…

8:25 PM · Jan 10, 2022

23 Reposts · 68 Likes

Curated by the Big Investor Blog:

1. The most significant gains in the market have been made by simultaneous increase of earnings and rise in P.E.

2. Increased earnings are just arithmetic progression; both are almost geometric progression.

3. P.E. vs. simple earnings increase

   1. For a stock to grow 100 times on increased earnings.

   2. If a P.E. grew 4x, the company would only increase earnings 25x.

   3. The same is also a double-edged sword when P.E. falls; in fact, it is much worse as if the P.E. halves, the earnings have to double to keep the prices constant.

4. There is no such thing as a correct P.E. or a correct relative P.E. The story, assumptions, and risk-reward are the most important.

5. Suppose a stock has gone up 50x after you bought it, and with significant risk, if it can double, it will yield a 100x return. So you can run incredible amounts of risk for a reward of that size.

Thanks for reading, and until next Monday,

Sebastian from 247capital