Postcards: How to Trade a Seven Hour Flight Delay

I've done a lot of dumb things to try to move up in tiers as a Delta Skymiles member. Today's debacle is the worst... plus why the markets are squeezing and a must-read value book.                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more [Postcards: How to Trade a Seven Hour Flight Delay]( I've done a lot of dumb things to try to move up in tiers as a Delta Skymiles member. Today's debacle is the worst... plus why the markets are squeezing and a must-read value book. [Garrett {NAME}]( Nov 4   [READ IN APP](   Dear Fellow Expat: We started this adventure today on the second plane of our trip to Baltimore from the Florida Republic. The first plane was sitting about 100 yards away at the original gate of the 11 a.m. flight. A part of the wing fell off that plane when it landed this morning. So… they called maintenance… And we waited an hour, and then they finally canceled the flight. They said the plane could fly without that specific flap… so that should make one feel safe. Apparently, they would just have to lose some sort of “point” for doing so… After that announcement, I walked off the plane and got on the next one… So, I missed my connection in Atlanta – and had to take a flight that would put me in sometime before 10 p.m. Remember – I could have just taken a direct Southwest Flight to Baltimore, but the chase for a higher Delta tier status for 2024 hung in the balance for this flight. This is my last Delta flight of the year. It’s a lot of sacrifice for vanity… and what I’ve been told will be the greatest cookout I’ve ever attended. The Delta director David Taylor, who bought more than $637,000 in company shares in the last three weeks, should put in a word for me with customer service. The director did quite well in the process, with the stock popping 4% today with industrials turning higher. I considered a spread trade on Delta at the $30 level yesterday but instead turned to American Express (AXP), which also had a sizeable insider purchase 10 days ago) [Upgrade to paid]( Equity Strength Turns Positive Yesterday, our Russell 2000 signal turned positive in the early hours, bringing the S&P 500 along for a ride this morning. Capital flows were very strong on the back of three factors… - First, the Fed’s lack of rate conviction has funds betting they’re done with rate hikes for the year. While it doesn’t mean that rates are heading lower anytime soon, it does kick off a new series of talking points and headlines… from How High… to How Long (will rates remain here). We’ve had Stanley Druckenmiller and Bill Ackman both stating this week that they taking aim at the “Higher for Longer” crowd. - Second, the markets liked the news that the Treasury Department coupon payments for the quarter will be lower than projected. According to Reuters, the Treasury is set to borrow $776 billion for the quarter, which is $76 billion less than expected in July. That’s money that isn’t coming out of the equity market. Of course, [Michael Howell noted today]( that the news is short-term bullish… and will eventually drag on equities as deficit projections explode. - Third, the obvious. We explained last week in the Republic Risk letter that we had the combination of oversold on the Relative Strength Index (RSI) and the Money Flow Index (MFI) on the SPDR S&P 500 ETF (SPY) while insider buying was the strongest level we’ve seen in 2023 compared to selling. Things were ripe for a squeeze, especially with so many funds net short across the equity market. Given the weakening economic data, I’m not sure how long this move will run, but I know that the music is back on, and it’s time to start dancing. It’s time to look for some ideas. Looking for Ideas Arriving in Atlanta (for the first leg of my flight), I had to run at full speed through the airport to try to make my second flight. Of course, I was at the end of one terminal… and the second flight was at the end of another terminal. So… I got comfortable in Atlanta. I’m doing some research on Warren Buffett for a new editorial project. Naturally, it’s always important to revisit Buffett’s shareholder letters and the book “The Snowball.” But I started my work with an old friend: “[The Acquirer’s Multiple” by Tobias Carlisle](. It’d be a few years since I read this very short book on value investing, one that I enjoyed so much that I lobbied it to be “Finance Book of the Year” at Modern Trader a few years ago. Carlisle revisits the adage by Buffett that investors should want to buy “Wonderful companies at a fair price.” But Carlisle – with great speed and precision – shows that historically “fair companies at wonderful prices.” His Acquirer’s Multiple makes it very easy for Do-It-Yourself investors to tap into a very simple strategy: Determining value by dividing a company’s Enterprise Value by its Operating Earnings. As you’ll learn, Carlisle’s data shows that “fair companies at wonderful values” outperform the market (and many other value strategies) thanks to one important phenomenon: Mean reversion. In addition to great, simple insight, Carlisle also offers a tremendous series of anecdotes about how Buffett’s investment strategies changed over the years and discusses the influences of Charlie Munger and Ben Graham. I highly recommend the book… it’ll take you two hours to read. We’ll talk about ideas next week using Carlisle’s formula. Stay positive, Garrett {NAME} Secretary of Defense You're currently a free subscriber to [Florida Republic Capital](. For the full experience, [upgrade your subscription.]( [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2023 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()