The United States of Bed Bath & Beyond

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A grown man made a wager. He lost.

He made another wager. He lost again. 

End of story.

The Sopranos (season 2, episode 10)

In season 2 of The Sopranos, Davey Scatino – owner of Ramsey Sports and Outdoors and degenerate gambler – loses $10,000 in a poker game run by one of Tony Soprano’s associates. Davey, an old high school friend of Tony’s, begs him to let him play in the higher stakes poker game, the Executive Poker Game, so he can win his money back. Tony advises against it, but eventually agrees, staking Davey with $50,000 for the game. Davey loses, of course, and now Tony Soprano owns him.

You told me not to get into the game, why’d you let me do it?

“Well, I knew you had this business here, Davey. It’s my nature.

At which point Tony and his associates proceed to ‘bust-out’ Davey’s sporting goods store.

They buy high-priced items on store credit to resell for cash, max out the store’s credit lines with suppliers, and generally loot the store. Ultimately Davey declares bankruptcy, is divorced by his wife, and moves to Nevada. The last we see of Ramsey Sports and Outdoors is a liquidator putting up a store closing sign.

Oh wait, that’s not Ramsey Sports and Outdoors.

But of course it is.

The story of Bed Bath & Beyond is the story of grown men, weak men, making wagers that they lose over and over again.

The story of Bed Bath & Beyond is the story of grown men, rapacious men, whose nature is to bust-out the weak men as cruelly and certainly as possible, over and over again.

The story of Bed Bath & Beyond is our story, the story of the United States here in the fin de siecle of The Long Now, where our entire country has been busted out and stripped for parts by grown men, rapacious men, different from Tony Soprano only in that they plunder legally within a system of courts and laws and regulatory agencies.

The story of Bed Bath & Beyond is a story of loss and sadness.

The story of Bed Bath & Beyond is the story of what happens when Story ends, when the reality of the bust-out — crappy stores and crappy management and overwhelming debt — finally swamps the narratives of Stock Buybacks!TM and Turnaround!TM and Short Squeeze!TM.

And maybe a story of hope.

Hope how?

Hope that the reality of the American bust-out — crappy institutions and crappy leaders and overwhelming debt — will begin to swamp the narratives of Yay, Stock Market! and Yay, College! and Boo, MAGA! and Boo, Wokeism!.

Hope that the assignment of losses here at the end of an age will force us to call things by their proper names, to identify weakness as weakness and rapaciousness as rapaciousness and narrative as narrative. Hope that we will have the courage to reject them all. Hope that we will choose to be more clear-eyed and more full-hearted as we move forward with resolve to Make/Protect/Teach in the world beyond bust-out.

So here is the story of the weak and the rapacious and the narrative-driven. Here is the story of Bed Bath & Beyond. Not for shame or schadenfreude, but for hope.

There are at least three distinct phases of the Bed Bath & Beyond bust-out.

Bust Out 1 was orchestrated by the original founders and management of the company. This is where most of the money was sucked out of the company, and by the time the original founders and management were deposed in May 2019, the company was already dead.

Bust Out 2 was orchestrated by the management team that replaced the Bust Out 1 team, together with an external investor, Ryan Cohen.

Bust Out 3 is so outrageous – a self-proclaimed functionally bankrupt company selling self-proclaimed worthless equity to meme investors, degenerate gamblers all – that I just call it the lulz period.

Both Bust Out 2 and the lulz period were quite speedy looting operations, so I’ve zoomed in on the past 12 months to show the stock price moves more clearly. In particular, the exit spike for Ryan Cohen’s Bust Out 2 sale was so fast that his exit price of $22+ per share doesn’t even register on the long-term chart above!

In general, I think this is a common factor in all bust-out processes, whether of a company or a country, that the individual bust-out episodes become shorter, sharper and more ridiculous as there’s less and less juice to squeeze out of the orange.

Now let’s look at each of the bust-out periods in more detail.

Bust Out 1 (2014 – 2019)

We should start with the numbers before we tell the story.

Bed Bath & Beyond financials (source: 10Ks, 10Qs, Bloomberg)

Like many retailers, Bed Bath & Beyond reports its annual financials on a February fiscal year, so that their results capture the full Christmas shopping season as the culmination of the business year. This can be a little confusing, because when the chart says, for example, FY 2022, that’s actually only two months of 2022 and is mostly made up of 2021 results. Adding to the confusion, BBBY has delayed its FY 2023 annual filing, so I have to use 9 months of quarterly filings for the FY 2023 line, none of which occurred in 2023. So when I say things like “Bed Bath & Beyond died in 2019”, I’m referring to the FY 2020 results.

Otherwise I think everything is pretty self-explanatory. CFO is cash from operations, essentially the profitability of your core, real-world business. FCF is free cash flow, the amount of money left over from CFO after you’ve satisfied the cash burden of non-operational obligations like taxes or interest payments or capex to maintain your stores. I like to focus on cash flows when I do this sort of analysis, because so much of modern accounting is designed to obfuscate or shade this most basic investment question: where does the cash come from and where does it go?

Those are the numbers. Now here’s the story for Bust Out 1.

Bust Out 1 was orchestrated by CEO Steve Temares and company founders Leonard Feinstein and Warren Eisenberg after the disastrous 2013 Christmas shopping season. Total fiscal year operational metrics were fine! In fact, FY 2014 is the absolute peak for BBBY in cash from operations and free cash flow. But Christmas 2013 revealed the internal rot (tired stores, blah inventory, heavy discounting) and external competition (Amazon in particular, but others, too) for all to see, and the stock price took a big hit, going from $80 per share at the end of 2013 to just under $60 by the middle of 2014.

In response, Temares and the board announced a Strategic Plan! TM to reinvigorate the company, complete with a $1.5 billion bond offering, the first debt in company history. What was at the core of this grand plan, you ask? Well of course there were words like “building a leading e-commerce presence” and “targeted acquisitions” and “commitment to excellence”, but the main plank of the 2014 strategic plan and the only thing management actually executed on was simply this: Stock Buybacks! TM.

In 2014, as cash operating margins declined 200 bps and cash from operations declined 15% and free cash flow declined 20% from the year before, Bed Bath & Beyond borrowed $1.5 billion and bought back $2.2 billion in stock.

Over the next five years, until CEO Temares was fired and founders Feinstein and Weisenberg were kicked off the board in May 2019, Bed Bath & Beyond bought back an additional $2.2 billion in stock even as cash operating margins went from 12% to 5% (I mean … good lord) and free cash flow declined by 70% from the FY 2014 high water mark.

Over the 6-year period of Bust Out 1, the board and management of Bed Bath & Beyond spent $4.4 billion buying back their own stock on total free cash flow of $3.6 billion. As their stores deteriorated and their margins collapsed, this company spent ALL of their free cash flow and then $800 million MORE buying back stock.

Now that’s a bust-out!

How did this personally benefit Temares, Feinstein and Weisenberg? Well, I compiled the 100+ SEC filings from these gentlemen to find out.

Steve Temares is a real estate lawyer who was hired by the company as their general counsel in 1992 and worked his way up the ranks. He’s not a founder. He’s not an entrepreneur. He’s a real estate lawyer who went from general counsel to executive VP to COO to CEO in 2004. I do not think it was an accident that Bed Bath & Beyond also instituted their stock buyback plan when Temares was named CEO.

As CEO, Temares was granted a total of 5.2 million shares of stock over his tenure, either as options that he immediately sold on exercise or as stock grants at no cost. He never bought a single share of Bed Bath & Beyond on the open market, but was reloaded by the board of directors every few years.

As CEO, Temares sold 4.3 million shares of stock for $148.4 million. This is net of all option exercise costs. This is in addition to his cash salary, bonuses and benefits, which averaged more than $4 million per year during the Bust Out 1 period. This is solely in connection with his personal holdings and is separate from the dozens of transactions associated with the family trust he established to exercise and sell additional BBBY options. After being fired as CEO, Temares sold an additional 900,000 shares for an estimated $18 million. This is in addition to his cash severance package of $36 million. In sum, Steve Temares received well in excess of $200 million in cash from Bed Bath & Beyond shareholders, the majority of this during or after Bust Out 1.

As for co-founders Leonard Feinstein and Warren Eisenberg, after the stock buyback program was introduced they each sold more than 10 million shares for an estimated $300 million. Each. This is in addition to the CEO-level salaries, bonuses and benefits they received as Co-Chairmen of the Board (my fave benefit was $230,000 in car service allowances per year; I mean, how is that possible?). This is in addition to the millions spent to make all-cash acquisitions of retail operations started by their sons, most famously $86 million in cash to acquire buybuy Baby from Leonard Feinstein’s son, including the retirement of $19 million in debt owed to the Feinstein family.

Honestly I don’t get as worked up over founders taking huge amounts of money out of a company as I do over managers, and if Bed Bath & Beyond had remained a private company that the founders decided to suck dry and leave to their kids … more power to ’em. But that wasn’t what Feinstein and Eisenberg did. They took the company public, dominated the board with Steve Temares, and used stock buybacks to prop up the stock price and sell tens of millions of shares into the open market. Feinstein and Eisenberg were old school merchants! You’ll never convince me that they didn’t understand exactly what was happening with the accelerated operational decline of the company from 2014 forward and exactly what were the consequences of spending 122% of free cash flow on stock buybacks.

It’s no wonder that Temares, Feinstein and Eisenberg were all kicked out of the company in 2019, but by then the fatal damage was already done.

Bust Out 2 (2021 – 2022)

It’s hard to describe how rare it is for activist investors to win a proxy fight against an entrenched CEO and Co-Chairmen of the Board who founded the company! But that’s exactly what three activist investment firms — Legion Partners, Macellum Capital and Ancora — did in 2019 when they acquired 5% of the company stock and successfully marshaled support from the other big institutional holders. The 168-page deck where they make their case is a thing of beauty, and I’ve made it available for download here. Seriously, if you are at all interested in this stuff, it’s excellent work.

With much fanfare the activists brought in a new strategy and a new CEO (Mark Tritton) from Target that November, right before the all-important Christmas season which … oops … did not go particularly well. I’ll repeat the financials chart with the post-proxy fight years highlighted to illustrate the point.

Bed Bath & Beyond financials (source: 10Ks, 10Qs, Bloomberg)

Again, recall that when we’re talking about the 2019 Christmas season, that’s entirely within the FY 2020 results. Not only did the company take on $2 billion in new long-term debt as part of the management and board overhaul, but cash from operations and free cash flow continued their steady decline and the fiscal year ended poorly. And then came Covid.

Look, I have no idea if Mark Tritton and the new team would have been able to turn around Bed Bath & Beyond under the best of circumstances. Honestly, I doubt it. But once Covid hit in March 2020 (so the start of FY 2021)? Not a chance. And you can see how the operational metrics plunge.

By September 30, 2020, all three of the activist funds that led the proxy fight to replace CEO Steve Temares and the entrenched board just 15 months earlier had sold their entire stakes. They’re out! In 15 months! Macellum never had much stock in the deal to begin with, so I don’t know how they fared. Ancora had a peak stake of 1.6 million shares, and it looks like they made a little profit. Legion Partners had by far the biggest stake, with peak holdings of 5.7 million shares, and it looks to me like they probably cleared a profit of $5-10 per share? Clearly these insiders used their insider status to see that there was no turnaround possible and exited before that became obvious to the world. But I don’t consider this a bust-out because I don’t see a concerted effort to prop up the stock or use a bullshit narrative like Stock Buybacks! TM to cover their exit. Was it an insider, privileged information sale that should have given any investor a clear signal to run away? Sure! But a bust-out? No, I don’t think so.

In fact, the stock went to new post-proxy fight highs in early 2021 on the heels of a better than expected Christmas season and a general lift from a Covid re-opening trade. On that basis, the activist investors got out too early. But on an operational basis … everything continued to get worse for the company and a new bust-out formula was hatched. How do I know? Because the company starts buying back stock again to prop up the stock price.

In FY 2022, with collapsing same store sales and a $336 million free cash flow deficit, Bed Bath & Beyond bought back $590 million in stock and depleted its cash and cash equivalents from $1.4 billion at the start of the fiscal year to less than $500 million at the end.

CEO Mark Tritton sold $5 million worth of stock grants into this renewed stock buyback program.

COO John Hartmann sold $3.5 million worth of stock grants into this renewed stock buyback program.

This is now the end game.

Enter Ryan Cohen, the 36 year-old activist investor who spearheaded the meme stock revival of Gamestop and has been its Chairman since 2021. No one can sniff out a bust-out like Ryan Cohen.

At the tail end of FY 2022 (so February 2022), Cohen started buying stock and call options in Bed Bath & Beyond, creating a >5% position by February 24 (7.8 million shares and 16,700 options contracts acquired for a total cost of $121 million). He notified the board on March 6, 2022 and the letter was released publicly on March 7. The stock spiked from $15 or so (Cohen’s average purchase price for his shares) to $22 and change, about a 50% jump. On March 24, Cohen signed a cooperation agreement with the board, where he agreed not to take his stake above 19.9% (as if he had any intention of doing this anyway), and in exchange the 11-person board was to be expanded to 14, with Cohen appointing the 3 new board members.

At which point all the meme investors who were expecting some masterstroke by Cohen … selling buybuy Baby for $5 billion? taking the company private at $40? squeezing those darn short sellers and crushing the demon-in-human-form we know as Ken Griffin? … were left a tad disappointed. Is that all there is? At which point the BBBY stock price resumed its inexorable path down, down, down.

By May, Cohen’s position was underwater. And then CEO Mark Tritton was fired. By July, Cohen’s position was WAY underwater. This shall not stand!

Going into August, 2022, 103% of the Bed Bath & Beyond float (shares available for public trading) had been sold short. Now, this is not crazy. It is not prima facie evidence, as the Reddit meme stock apes would tell you, of naked shorts (stock shorted without a borrowed share to support it) or of the demon-in-human-form we know as Ken Griffin perverting markets from Citadel’s offices in Mordor Chicago. Why not? Because of the enormous daily trading volume in Bed Bath & Beyond! When far more than 100% of the float changes hands every day, it’s really not so hard for the shorted float percentage to also be more than 100%. But still … this is a very high short interest for any stock, no matter the daily volume, and the drums of Short Squeeze! TM started pounding VERY, VERY LOUDLY throughout meme stock world.

To be clear, I have zero evidence or knowledge that Ryan Cohen encouraged this Short Squeeze! TM drum-pounding. I know that he had 121 million reasons to encourage it. I know that his 121 million reasons had a loss of about $80 million coming into August. I know that there is no human on the planet with more skill or experience in encouraging a Short Squeeze! TM drum-pounding than Ryan Cohen.

For whatever reasons, there was a massive short squeeze in BBBY in the first two weeks of August. Massive! In late July, this stock was trading at less than $5. On August 16, the stock hit an intra-day high of more than $29! That’s like a 600% advance in three weeks. Insane.

And at that moment, at a top-tick price of $29.22, Ryan Cohen began to sell. He sold it all. He sold 7.8 million shares of stock on August 16, plus 16,700 call option contracts with strike prices in the 50s and 60s, for total proceeds of $189 million.

In three weeks, by virtue of a meme stock short squeeze that appeared out of nowhere on the Reddit meme stock boards, Ryan Cohen went from an $80 million loss on his Bed Bath & Beyond position to a $68 million profit. Within a month, the stock was back under $10. Within two months, the stock was back under $5.

Now that’s a bust-out!

LULZ (February – March 2023)

The lulz period in 2023 is a variation on the meme stock Bust Out 2 of Ryan Cohen. In a nutshell, new company management worked with an external “investor” (you’ll get the reason for the quotation marks in a minute) to sell hundreds of millions of new shares of stock a few months after the Ryan Cohen debacle. I feel gross just talking about it, so if you want more detail, please check out the yeoman’s work that Bloomberg’s Matt Levine has done on this.

Coming into 2023, Bed Bath & Beyond was functionally bankrupt, with negative cash flow from operations, negative growth prospects, and long-term debt of approximately $2.5 billion. No one, least of all BBBY management (Sue Gove, interim CEO since June 2022, signed on as ‘permanent’ – lol – CEO in October 2022), had any illusions about what the future held for the company. This was now a work-out. The equity was worthless, and the only question was how the corpse of the company would get chopped up among the bondholders for some partial recovery. That’s typically something that gets worked out in bankruptcy court, and it’s a brutal, depressing, knife-fighting process. But then someone had an idea.

“Hey, these meme investors are degenerate gamblers. They’re easily confused and manipulated, and frankly they’re not terribly smart. It seems like we as BBBY management would be abdicating our fiduciary responsibility — not to mention our chances of getting a good job after this company winds down — if we did not take every opportunity to sell them worthless stock in our functionally bankrupt company for cash that we could could hand over to the bondholders. I think the bondholders would really appreciate that and did I already mention the part about getting a good job after we’re done here? Oh, I did? Well, bears repeating, right?”

Now I suspect that this idea did not actually originate with Sue Gove and her team, or at least the practical implementation of this (“umm, how can we sell stock in a company that we know is functionally bankrupt without … you know … going to jail and all that?”) did not originate with Sue Gove and her team. I suspect this idea came from a bondholder-associated hedge fund, law firm or investment bank — organizations filled with very smart individuals who do nothing else all day but dream up rapacious yet (arguably) legal ideas that will separate grown men, weak men, from their money. Ideas like this:

“Hey, meme investors, we are a probably-bankrupt company that wants to sell $1 billion worth of stock. You should definitely do your own due diligence on Reddit for what happens if we declare bankruptcy, but there’s a chance that $1 billion is enough for us to have a Turnaround! TM. Also, take a look at what happened to the stock of Hertz after it actually declared bankruptcy. To the moon!”

“Now we know what you’re thinking. You’re thinking that you already got burned with that whole Ryan Cohen thing, and we totally don’t blame you. But now the stock is so much cheaper! You can buy so many more shares now than you ever could six months ago. Plus, this time you’ll be buying your stock with The Smart Money! TM. Yes, we are announcing a deal where this hedge fund institutional investor called Hudson Bay Capital Management has already bought the first $225 million of our stock offering, and they’re committed to buying another $800 million. They’re gonna buy the whole offering! Honestly, it’s lucky for you that we’re still a publicly traded stock because otherwise you wouldn’t be able to tag along on this sweet, sweet deal. Yes, we are required to provide a public filing of our agreement with Hudson Bay, but the language is really complicated and hard to read, almost intentionally so. Lawyers, amirite? What’s that? Did someone say Short Squeeze! TM? LFG!!!!”

In truth, Hudson Bay was a cut-out, an intermediary who bought the equivalent of hundreds of millions of shares in new stock from Bed Bath & Beyond only to turn around and sell all of it into the open market to meme investors. Selling these hundreds of millions of new shares would obviously drive down the price of the stock, but Hudson Bay was given enough of a discount and enough warrant coverage and other goodies such that — so long as trading volume remained robust within the meme investor crowd — they were basically guaranteed a healthy profit on their trade here. And if the stock price got really low (70 cents per share or thereabouts), then the deal was off and they had no more obligation to participate.

Over the active course of this cut-out arrangement, from February 6 to March 30, Bed Bath & Beyond received approximately $360 million from Hudson Bay for preferred shares and warrants, which Hudson Bay translated into at least 300 million shares of common stock which it sold into the open market. The average price of BBBY stock over that span (leaving aside the pop on February 6 to $5.80) was approximately $1.50, which would work out to about $90 million in profits and a 25% return for Hudson Bay … not bad for a two-month bust-out!

After the termination of the Hudson Bay cut-out arrangement on March 30 and prior to its formal bankruptcy filing on April 24, Bed Bath & Beyond continued to sell hundreds of millions of new shares directly into the market through a series of at-the-market offerings. I figure they were able to raise at least another $100 million in cash from these sales, making a grand total of about half a billion dollars over a three month span from this final (?) squeeze of the meme investor orange.

Half a billion dollars.

Nothing illegal about it. All wagers by grown men, free to gamble away their money in whatever way they see fit. Grown women, too, I guess, although not for the first time I am struck by the fact that the weak, degenerate gamblers in these stories are 99.99% male. (Hold that thought, please, for the last section of this note!)

These grown men, these meme investors, aren’t particularly upset about losing half a billion dollars. They’re not fazed by it. As I write this note, the common stock of a no-longer-functionally-bankrupt-but-now-formally-bankrupt Bed Bath & Beyond trades at $0.17 per share. The average daily volume over the past 65 days is 123 million shares. If Bed Bath & Beyond could issue new equity from within formal bankruptcy I’m sure they would continue to find buyers. They would continue to find grown men to perpetuate the bust-out on and on, even through bankruptcy.

Which gets me to this.

The United States of Bed Bath & Beyond

At a large enough scale, the bust-out goes on forever.

Sure, it becomes more and more of a lulz bust-out over time, relying more and more on cut-outs and cartoons, more and more on ‘arguably’ legal ways to separate grown men from their money (and their votes). But it goes on and on all the same.

In the American context, my personal view is that Bill Clinton and George W. Bush presided over Bust Out 1, Barack Obama orchestrated Bust Out 2, and Donald Trump kicked off the lulz period, which we are now squarely in. I mean, how can you understand Trump and Biden as anything other than lulz?

In the American context, my personal view is that all of the signature economic policies of the past 30 years — ALL of them, from NAFTA to the Bush Tax Cuts to TLGP/TARP to QE1/2/3/infinity to Obamacare to the Tax Cuts and Jobs Act to PPP to the American Rescue Plan to the Inflation Reduction Act – have been bust-out policies.

And it’s not going to stop.

It’s not going to stop because we are increasingly a nation of weak men, degenerate gambling men, men who in their desperation for wealth or recognition will bet more than they can afford to lose over and over and over again. And I’m not talking about a loss of money, although yes that, too. I’m talking about a loss of autonomy of mind, where the weak man willingly gives away his very identity to a political party or economic creed if they will just allow him to be part of the action. Because in the end that’s all the weak man, the degenerate gambling man, has left. The action.

It’s not going to stop because we are increasingly a nation of rapacious men, clever-edging men, men who discover early on that they’re damned good at playing the game of take-the-sap’s-money and never realize until it’s too late that the table stakes for this particular game are … well, being damned themselves. And I’m not talking about being damned in the religious sense, although yes that, too. I’m talking about a loss of humanity, where the rapacious man willingly gives away his very identity to a corporation or business partnership if they will just allow him to continue winning the game. Because in the end that’s all the rapacious man, the clever-edging man, has left. The winning.

There are lots of Old Stories about times like this, when our nation itself seems like it’s sick, when our society and all within it seem to be infected by avarice and wrath and pride and lust and envy and sloth and gluttony just as surely as any virus. My favorite of these Old Stories likens it to a box of evils opened and loosed on the world.

But you know what remains and is preserved when the box is opened, right?


I started this note by writing that the story of Bed Bath & Beyond was maybe, just maybe, a story of hope, and that’s how I’m going to finish it.

I am hopeful that the reality of the Bed Bath & Beyond bust-out — crappy stores and crappy management and overwhelming debt ending in failure — will encourage weak men and rapacious men alike to see beyond the narratives of market game-playing and control.

I am hopeful that the reality of the American bust-out — crappy institutions and crappy leaders and overwhelming debt ending in failure — will similarly encourage weak men and rapacious men alike to see beyond the narratives of political game-playing and control.

I am hopeful, not in the common but false usage of the word as ‘optimistic’ or ‘thinking it likely’, but in the true sense of the word as being ‘full of hope’. I am full of hope that weak men will choose to reclaim their autonomy of mind and that rapacious men will choose to reclaim their humanity.

I’m not optimistic. But I am very, very hopeful!

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  1. Ouch painful to read as I’m quite invested in this one.

    I hope you are wrong and I’m not that weak or gambling. :grimacing:

  2. Hope that the assignment of losses here at the end of an age will force us to call things by their proper names… I am hopeful, not in the common but false usage of the word as ‘optimistic’ or ‘thinking it likely’, but in the true sense of the word as being ‘full of hope’.

    Turns out definitions actually matter

  3. Curious what you hope Ben is wrong about here?

  4. Well I think his perspective on Ryan Cohen seems slanted. He hasn’t created the typical stock buy back programs in the companies he runs. I know Ben has a huge problem with that.

    He has also been pretty successful in turning around GME regardless of the “meme” investing movement. Back to basics and for the most part not overleveraging or wasting money on stupid projects.

    More than that, I think he’s been more organic trying to build a community through the NFT culture and his presence on twitter is aligned with a lot of what Ben says: his brave stance against covid response and partisanship.

    So in a lot of ways I think Ben has things in common with Ryan.

    As to his characterisation of the people invested in the company, yes there are people who want to make a quick buck or grift for squeeze^TM but there are also genuine people who shop at the stores and see it as something worth protecting over the consolidated experiences of amazon or wallmart. Just from personal experience of interacting with them.

    As someone who doesn’t care to have a kid and doesn’t live in US, their love of the store kinda touches me. To read Ben characterise that sentiment with a broad brush of 99% grifty men and gamblers does itch a little.

    As to his perspective on Tritton he was fairly soft and I think he didnt touch upon him accelerating the stock buy back program:

    I can’t access it due to paywall.

    But why is this not considered a bust out? Plus I think he was excessively paid relative to the market cap and comparative roles in retail…

    But I hope he’s wrong because I’m hoping for restructuring which doesn’t wipe out the shareholders who bought for various reasons. I think Ben mischaracterises that as gambling when some people believed in the company or other figures. It was actually an act of good faith and pretty good intentions for some people, which being rewarded with being wiped out seems unfair and the problem with society today; everyone’s trying to grift.

    So yes, I hope he’s wrong about the management and Ryan Cohen and hopefully the community I joined wasn’t false.

    But either way, learning curve. I’m happy to be a brain to be picked in this scenario because I’ve been pretty involved from the beginning til now.

  5. Just a marvelous note. I would love to see a bigger discussion about each of the bust-out phases from Clinton to Biden, and see if we can’t manage to detect (with the gift of hindsight) how obvious they were while they happened.

  6. Thank you Ben for your clean explanation in a world filled with spittle-flecked hysterics. The forces you describe can do anything but stop.

  7. Avatar for bhunt bhunt says:

    Tritton was absolutely part of Bust Out 2. He was 2A and Cohen was 2B. It’s the proxy activists who brought Tritton in that I don’t consider to be part of a bust-out. They were long gone before the buyback program was reaccelerated by Tritton and the board.

  8. Cohen is a con man. He’s also a good founder who created something useful and was rewarded for it. Those two things can live side by side. He may well do great things with GME. I hope he does. But he knew that his minions on Reddit were exit liquidity and he treated them as such. Is he a villain or a hero? Yes.

  9. Thanks for the clarification.

    Also when Ryan sold his stake, I believe he sold to a private entity. I’m not sure it’s simply that he dumped the shares on the open market.

    But this whole thing was a lot more convoluted than I expected and requires someone probably financially trained to deal with the complexities. You could think of my process like boiling a frog more than gambling. I’m still trying to understand where it will go and I’m not entirely convinced it’s to 0.

    If it does, you can find me making a post of having survived a cult later on. :sweat_smile:

  10. Well it remains to be seen in my eyes currently…

    He’s listed as one of the interested parties in the restructure.

  11. “when our society and all within it seem to be infected by avarice and wrath and pride and lust and envy and sloth and gluttony just as surely as any virus.”

    I have been rolling this around in my head a lot in the past few weeks , this idea of the 7 deadly sins and how our society calls them by other names , celebrates them , puts people in positions of power who seems the most infected by them. In the end Ben --I think your prescription for surviving the Long Now is spot on.

    It starts with the man in the mirror

    I am a member of a program and my betterment , recovery , whatever word you choose to use - rely’s on me reducing the darkness that these very character flaws, shortcomings , or sins (again whatever word) cast outward from my person and into the world. Replacing Fear with Faith or hope. Replacing pride with humility etc etc.

  12. Avatar for bhunt bhunt says:

    No, Cohen dumped everything on the open market. I went through the Form 4 he filed and compiled the individual trades here.

  13. Avatar for bhunt bhunt says:

    This is the way. Thank you for sharing this, Lawrence.

  14. Not really related to Ben’s note, but I’m curious: is this really a thing?

    I’ve been a gamer since the 80s and have a Steam library with a couple hundred titles. I remember buying PC games from GME’s predecessor company Babbage’s throughout the 90s. I shopped at EB Games and post-acquisition GameStops until I no longer had to, largely because the experience sucked so very, very much 100% of the time. Once the consoles had enough local storage options and good online stores, I could never justify dealing with the terrible CS experience of entering a GameStop store. It’s weird to me to think about Walmart and Amazon as the competitors, because anyone I know who doesn’t shop at GameStop does it because they just buy soft copies of the games on the ubiquitous console shops or on Steam, GOG or whatever their preferred PC platform might be.

    But I really am asking the question earnestly! I’m just one dude. Are there really people who really and truly like the GameStop in-store experience and are long the stock as a result?

  15. Sorry this was more in relation to BBBY and baby. Lots of people have told me about buying stuff for their families kids or decorating their homes. The judge in the BK court also quipped that his wife loves to shop there and holds coupons.

    Apparently nostalgia is a thing.

    As to gamestop, people say this. I wasn’t personally sold on the idea but I was speculating that he had greater plans with NFTs and crypto that never materialised. I saw gaming as a vehicle to onboard people into the metaverse. I saw NFTs and crypto being integrated into that future. In hindsight it looks unrealistic now, but you’d have to ignore the billions poured in by Zuckerberg and the buzz around it. Now, it looks far off and we have more pressing concerns than bourgeois upper class fancies.

    But for me personally, never felt connected to either company. But I am and was pretty certain that there is nefarious actors on the other side of the deal who have been utilising market mechanics to suppress price (BBBY off exchange volume was crazy during the decline). I also think that Ryan Cohen has greater plans.

    So the hope of progress and the fight against the great evil? Is there another more intoxicating prospect for a disaffected and idealistic young man? The ideas are alluring and depending on how this play goes I’ll re-evaluate and reflect on the position I took.

  16. Thanks for this, there was a form or other I saw that said he sold to a private entity. I’ll have to find it and I’d like to see if I’m misunderstanding something.

  17. Ok Ben:

    I used chatgpt to derive an answer:

    When filing a Form 4 with the Securities and Exchange Commission (SEC), the disclosure requirements pertain to transactions involving the securities of a publicly traded company by individuals considered insiders or affiliates of the company. The purpose of the Form 4 is to report changes in beneficial ownership of securities, such as the acquisition or disposition of shares by directors, officers, and significant shareholders.

    The Form 4 requires disclosure of various details about the transaction, including the date of the transaction, the number of shares bought or sold, the price per share, and the nature of the transaction (e.g., open-market purchase or sale, gift, option exercise, etc.). However, the specific details regarding the identity of the buyer or seller are not disclosed on the Form 4 itself.

    The SEC generally treats the identity of private buyers or sellers as confidential information unless it becomes necessary to disclose such information to enforce securities laws or regulations. Therefore, the disclosure of selling to a private buyer would typically not be included in the publicly available information on the Form 4.

    The specific detail about there being a private buyer was from pitchbook. So that’s just a rumour. But based on the form 4 and the chatgpt answer above, you cannot ascertain it was on the open market.

  18. Avatar for bhunt bhunt says:

    These were open-market transactions.

  19. Thanks!

    That clears one mystery.

  20. Kaiser - I am deeply curious as to what point you are trying to make. What difference does it make if he sold it as a public sale or not? Does it in any way substantially change the nature of his acts?

    Cause to me, the details of whether it was open market or private don’t change the nature of what he did, of what the market has become or where the US is headed.

  21. I think firstly it establishes a lot more context to the idiots (me) who were strung along by Cohen who dumped his shares and believed in memes… In that I still think there is a functional plan here. I’m not gambling and I think I’m not being mislead currently. I’m just intrepretating filings and other resources to make an investment (though it has become a lot more complex as of late and during the process).

    I also think Ben could have fundamentally misunderstood the types of people involved if he thinks it was a bunch of gamblers and grifter types. It removes a lot of the context of the situation. There is a lot of people who did a lot of research and they could have been wrong, but Ben kind of puts them on the cross as the anti christ.

    Instead the people I’ve seen are full of hope and love. It’s pretty strange to see a disconnect from my favourite writer (epsilon theory is my only paid subscription service) and the broader world I see.

    As to the transaction code not mattering, or where the US market is going, you are probably right. But it does show that there are probably details being missed if you use a broad brush. I don’t think BBBY is probably the best example of the sickness of bros trying to double down on bad bets. Better to find a ticker that is actually allowed on wsb first.

  22. . . . .
    . . . .

  23. Yes, but do you have visibility into the plan and the ability to evaluate it? Because if you don’t, Kaiser my brother, all you are doing is investing on the idea that there is some smart guy out there with a plan - and tbh, that sounds more like a gamble than an investment.

    I love your heart for thinking about these things, but keeping clear eyes - Hope and Love do not make for an investment strategy nor can you protect BBY from its operating environment by investing in its worthless equity.

    This is why the market as an abstraction, as a grift, as a game is so dangerous because eventually you can’t tell the difference between raccoons and genuine clear eyed, full hearted people.

  24. When you invest in anything that you don’t directly control, isn’t that what you are doing? Also if I never did invest, I’d never know if I had the ability or the visibility into the plan to evaluate it. But yes, if I had to do this again, I’d never have gone as deep into it because visibility was opaque.

    Well I was looking in part for an investment strategy when I first started this journey, but in the end I moreso got a community. This is partly an influence of Epsilon Theory as much as other ideas I’ve introduced to. So maybe that’s part of a paradigm shift, community will become the new driver? That is the reality I want to see and invest into.

    If I solely wanted money I guess oil would be a great pick.

    It remains to be seen in my eyes, I’ll let you know when I’ve given up.

  25. Avatar for robh robh says:

    Kaiser— ultimate shareholder recoveries in a restructuring will be zero. The stock may trade above zero for a while and may even spike up (a la Hertz), but the end point is unquestionably zero. As of their last 10Q, liabilities exceeded assets by over a billion dollars. They have announced they are closing ALL of their stores and rejecting all of their leases in the bankruptcy court which will add hundreds of millions (if not billions) in new liabilities from lease rejection claims. All of the store fixtures and capitalized improvements on their balance sheet will likely be written down to zero. Its bonds which mature in 2024 are trading at 5 cents on the dollar. Anyone that is still holding on to stock is merely hoping for a greater fool to come along.

  26. Avatar for robh robh says:

    Great note Ben. Well done.

  27. Thank you for sharing your perspective.

    I was thinking of writing a rebuttal, but there isn’t much point because I’m fairly inexperienced and the point isn’t to seem smarter than you about these matters. Just that I genuinely invested in the company for a turn around and I know many who did.

    Even if I love Ben’s note for it’s information, I had to speak out against the characterisation. I generally wouldn’t want to talk shop here because it’s not the purpose of this sub to me personally (I know there is another tier when you could I guess).

    But I appreciate your analysis and perspective and wouldn’t mind you expanding lease rejection claims. I’m not familiar with that as I thought that the BK judge can order those liabilities off the books?

  28. Avatar for robh robh says:

    Companies in Ch 11 can choose to confirm or reject each of their real estate leases. If the lease is rejected, the company no longer has to pay rent, but the owner of the real estate gets a general unsecured claim in the bankruptcy for the present value of the lost rent (adjusted if the lease was significantly above or below market, with some duty by the landlord to mitigate losses by re-letting the space). GUCs fall below bonds (both senior and unsecured) but above equity in the bankruptcy recovery waterfall.

  29. Thanks for the clarification! I appreciate it.

  30. Not at all. Control does not equal visibility.

    For example, I have a sizable position currently in a Nat Gas transporting stock. I don’t control the company in any way, shape or form however I have a reasonable amount of visibility into:

    1. The supply/demand of natural gas globally
    2. Their long-term operating/marketing strategy
    3. The specific financial and operational strategies for the next few quarters
    4. The recent financial and operational performance over the past few quarters
    5. The level of investment and direction of that investment by insiders
    6. The teams that are in charge of this company and their track record.
    7. The opportunity to meet and talk with representatives of the company about what is going on
    • a whole lot more.

    So, my control is low and my visibility is high. With BBY once you get past the first bust out, control is low and visibility is low.

    When I read the note that Ben wrote, I understand “gambling” to mean “an activity where the risk/reward of the underlying investment is not visible and you can’t calibrate realistic odd of winning vs losing”. Sort of like making a bet on Red in the Roulette.

    And, Kaiser, lest you think I am morally opposed to gambling. I am not. There ain’t nothing wrong with gambling as long as you understand you are gambling.

    Good luck with your investments going forward. :wink:

  31. While I appreciate your perspectives, really feel like you are still fundamentally gambling.


    Because all those things you say you observe relies on data being reliable or trust worthy. You are gambling on the veracity of their claims. Even if you ignore straight up fraudulant behaviour, its very possible to gamify everything you said that doesn’t rely on gambling.

    Surprising for someone who understands this pretty well (I remember your views on inflation) to not realise this gamble on trustworthiness hits every single number on your list. Not saying that the gamble has the same stakes, but the fundamental act of investment is a gamble- the act of investing capital in for a unverifiable future return.

    As to BBBY, I admit, control was low and visibility definitely was VERY low. But I don’t think what I did or some other’s did was gambling^TM. It may seem like that because risk was high, but it was actually intrepretation in a gamble^tm aka investing.

    Does that mean it was a wise thing to intrepret negative information as positive? Maybe not. But it was definitely idealistic and full of hope. Which is why Ben’s characterisation rankles me so much, because in reality some people made a bet on community. Being mislead doesn’t always constitute weakness, it can be filled with true optimism that was taken advantaged off.

    To make fun of that by calling it “lulz” period is crass… Though that doesn’t mean I don’t appreciate the humour in it, because overall Ben’s message is also full of hope. But what makes the irony truly funny to me because Ben is on a philosophical war against the gyre filled with the same fatalistic optimism I see the BBBY gamblers^tm being in. Foolhardy optimism in the face of true adversity because of hope in others.

    I could be wrong to be hopeful though and I’m comfortable enough to admit that.

  32. I think I know the company of which you speak. two sizable insider purchases this week - if I am correct.

  33. Hope

    In my reading of Adam Smith, an enlightenment philosopher in the 18th century, I find this warning, “Do not let the merchants run the government.”

    Thank you Ben for discussing Big H Hope within our widening gyre of, IMO, dysfunctional economics and politics running our government.

    Here are my highlights of your post:

    “In the American context, my personal view is that all of the signature economic policies of the past 30 years — ALL of them, from NAFTA to the Bush Tax Cuts to TLGP/TARP to QE1/2/3/infinity to Obamacare to the Tax Cuts and Jobs Act to PPP to the American Rescue Plan to the Inflation Reduction Act – have been bust-out policies.

    And it’s not going to stop.”

    “And I’m not talking about a loss of money, although yes that, too. I’m talking about a loss of autonomy of mind , where the weak man willingly gives away his very identity to a political party or economic creed if they will just allow him to be part of the action….”

    “My favorite of these Old Stories likens it to a box of evils opened and loosed on the world.

    But you know what remains and is preserved when the box is opened, right?


    “I started this note by writing that the story of Bed Bath & Beyond was maybe, just maybe, a story of hope, and that’s how I’m going to finish it.”

    “I am hopeful, not in the common but false usage of the word as ‘optimistic’ or ‘thinking it likely’, but in the true sense of the word as being ‘full of hope’. I am full of hope that weak men will choose to reclaim their autonomy of mind and that rapacious men will choose to reclaim their humanity.

    I’m not optimistic. But I am very, very hopeful!”

    Lots going on in Epsilon Theory. Some of it is related to finance.


  34. A private sale would not have been done in 9 different traunches. It would read as one single transaction. Additionally if a private transaction there would be a corresponding form 4 on opposite side of transaction.

  35. Great note as always. As I read it I had this strange deja vu feeling in my head. It had to do with your discussion of people repeating same pattern, doing same thing, and it still being allowed. Finally figured out and should have been top of my head. It is from maybe the finest narrative control show ever… It’s Snot Boogie! from Wire Season 1 Ep 1 opening scene

    McNulty: Let me understand. Every Friday night, you and your boys are shootin crap, right? And every Friday night, your pal Snot Boogie… he’d wait till there’s cash on the ground and he’d grab it and run away? You let him do that?
    Kid: We’d catch him and beat his ass but ain’t nobody ever go past that.
    McNulty: I’ve gotta ask you: if every time Snot Boogie would grab the money and run away… why’d you even let him in the game?
    Kid: What?
    McNulty: Well, if every time, Snot Boogie stole the money, why’d you let him play?
    Kid: Got to. It’s America, man.

  36. Maybe it was intentionally done that way.

  37. Avatar for bhunt bhunt says:

    Oh man, I had completely forgotten the Snot Boogie scene! Indisputable classic.

  38. No issue with any of the BBBY factual, historic points and deeply appreciate the effort to carefully articulate and document them. But the more important (and valid) point—that BBBY just reflects bigger, longer term changes—isn’t adequately addressed here. Why did public discussions of BBBY ignore all of this readily available information and fail to stop the destructive activity?
    Discussions of the specific BBBY players (Temares, Feinstein, et al) are relevant to your narrow historical story but distract from the bigger issues. The MSM focuses on individuals like these (Holmes, SBK, Madoff in order to build a false “bad apples” narratives and to distract from their media’s refusal to investigate any of the more widespread corporate issues (how cash flows are used). The parallel to Presidential shifts (Clinton-Bush through Trump-Biden) also distracts from real issues since none of these politicians drove any of the larger changes, nor were they elected by people who wanted these changes to occur.
    The elephant in this room is the complete corruption of capital markets. The traditional idea that capital markets serve society by shifting resources to more productive uses is laughably obsolete. Capital markets have been radically restructured to allow narrow groups of powerful people to extract massive wealth in ways that make the rest of the economy much worse off. Capital markets now exist to facilitate bust-outs.
    The bigger issue is that the groups that gain from this extractive form of capitalism have totally captured all of the political and other institutional systems that in past generations would have stopped or mitigated broader economic/societal damages. The legislative and judicial systems have been totally captured by extractive interests and work tirelessly to crush discussion of the problems that have fueled widespread “populist” anger. The dominant financial interests are now aligned with the (arguably even more extractive) Military Industrial interests. One can no longer aspire to Professional/Managerial Class wealth or status unless one sells out to extractive interests, and all PMC institutions (e.g. universities) are either directly support these interests or focus on things that are useless to people harmed by extraction and distract attention from the real issues. The media now displays Pravda-level allegiance to the manufactured narratives these interests put forward and completely blocks any discussion of how much capital markets have changed or how they have massively reduced overall economic welfare. Just as there is no discussion of the hugely increased value the MIC has captured, or how little benefits they have produced for society.
    Gollly, nice to circle back to the question of hope for the future, but since you haven’t directly addressed the linkage between BBBY-type corruption to the larger capital market and political shifts, your points don’t actually give much reason for hope. This information was always available, but you haven’t explained why it had no impact on public discussion in the past.
    BBBY didn’t destroy billions because a handful of “weak and rapacious men” couldn’t see the possible consequence of masking “crappy management and overwhelming debt” by misleading “narratives of game-playing and control”. BBBY happened because capital markets and political systems have been restructured to valorize the extractive, destructive behavior that would inevitably destroy that corporate entity. They massively rewarded the extractive, destructive executives (and their many enablers) and worked tireless to block any wider discussion as to why these “weak and rapacious men” were allowed to pursue “crappy management and overwhelming debt” for years.

  39. Avatar for KCP KCP says:

    This such an outstanding illustration of the machinations in today’s City of Man. The resources and legal machinations to create a super head fake so the losers stick their losses on the more hopeful or less astute. Brilliant!

    I am hopeful as well, as things (a catch all for aspects of society) seem to cycle through time.

    I am hopeful that a new era of more productive and collectively beneficial efforts and results will come into this Country after a meltdown/reset (probably financial), whatever you want to call it.

    A healthy forest always reemerges from the ashes of its predecessor. I don’t look forward to the experience of living through a “fire” but it is probably what is necessary to reset our society, culture (expectations and responsibilities) and our government.

    Here’s to hope for the City of Man (USA).

  40. No, not always. Depends on your time horizon.
    If that which is required to support the next forest is not present, in your example an adequate soil stratum, a scrubby unhealthy forest will be the result for a long time.
    I agree that we could use a good burn, but an uncontrollable and chaotic inferno could take longer than we’d like to become healthy again. Some things need to survive mostly intact.

  41. Cuba, Russia , Iran come to mind.

  42. LOL. Okay. I give up.

    When the student is ready, the teacher appears.

    You will in time be ready, the lessons will be clearer.

  43. We are all Snot Boogies now.

  44. The scum always rises

  45. One of my favorite movies of all time!

    For those who haven’t watched it, Ed’s posted clip does not reveal the most important theme, the context of which cannot be easily guessed at from that clip.

    Being There

  46. Avatar for KCP KCP says:

    i am cracking up - i have not seen this movie but it’s on the list. Fortunately, i have some long flights over the next fewweeks!

  47. Nicely appropriate to the post…these rich guys sitting around their roaring fireplaces discussing the inevitability of spring and the idea that good times will always come again lol. Haven’t seen the movie but do they start plotting their bust out next?

    Tried to quickly look for better historical data on wintertime excess deaths, or whatever the correct term would be, but didn’t see anything easy. For spring to come you have to still be alive at the end of winter!


  48. Mine as well! I think I’ve re-watched it as many times as any other classic (apart from Finding Nemo and The Incredibles with my daughter).

  49. Absolutely well worth your time. = ) I won’t drop any spoilers, but I swear @bhunt or @rguinn dropped a note some time ago where Being There was prominently featured. It’s hugely germane to most everything ET stands for.

    For me it points up a thought I’ve held for a while: metaphors are dangerous when they permit or compel us to a.) talk obliquely about a real situation, and b.) leave the discussion assuming (or pretending) we understand the real situation because we understand the metaphor.

    Dudes and sports. Quite a few times I’ve found myself slack-jawed because someone listened to a complex explanation and responded “Oh, so it’s like (baseball, football, cornhole… take your pick).” Because dudes understand sports.

    When I hear “we’re rearranging the deck chairs on the Titanic” or some other oblique reference I try to remember to scratch my thick skull and try to grok out what the situation is really about - what are chairs? Why is Titanic?

    Thanks at any rate for the responses / dopamine hit this morning!

  50. Avatar for aw21m aw21m says:

    Freaking brilliant note Ben. This reminded me why I bought a sub to your site. You’re a hell of a writer and researcher

    Kaiser, don’t marry your bags bro. You sound like a crypto bag holder who’s down 95% and convinced the market is wrong and not them. The founder isn’t a scammer and grifter, but a visionary is disguise.

    Got to learn to take your losses in a situation like this. Wait for the next pump and gtfo, if not today. You’re getting emotional about some shitty American chain store that is waaaaaay past its prime, and ran by rug-artists. Good recipe for losing all.

  51. I think this is the living metaverse in all its beauty and gore. Metaphors can clearly have the incumbent dangers you mention but in their case the danger is at least clear and present once pointed out. The living metaverse for me is the recognition that all language carries these dangers not just metaphors.

    Having said that I think your point is well made and I think I’m often a guilty party to an assumption that my pet metaphors are more broadly familiar & understood than they are.

  52. I hear you.
    What you say is true.

    Being aware of this seemingly systemic corruption of which you speak has been a huge emotional burden for me. On the surface, the injustice of it all is the source of my rage. However, when I am honest with myself, I realize the thing most responsible for enraging me is the feeling of powerlessness I experience as a result of my own smallness in relation to the problem. Rapacious men gonna be rapacious. And there is nothing I can do about it… by “it” I mean other people’s choices. This passage in Mr. Hunt’s “An AI in the City of God” hit me like a sucker punch to the gut.

    What do I mean by the Spirit of Man? Maybe the simplest way to describe my faith is that I believe there is an arc and arrow to human history, an arc and arrow that goes fitfully up and to the right, propelled by the core small-l liberal virtue of a timeless autonomy of the individual human mind and the core small-c conservative virtue of a social human connectedness anchored in time.

    To be honest, most of the time I feel like such a sucker for believing in the Spirit of Man.

    I feel like Winston in Orwell’s 1984, persisting in a belief that the City of Man can’t possibly be as evil and permanent as it seems, even as I am tortured into submission and forced to admit that there is zero evidence – zero! – of any substantive movement in my lifetime towards a more just and free society reflecting the ascendancy of the Spirit of Man.

    Yeah, I often feel like a sucker too.

    I have no power over others actions, but I do have power over my own. Which is why I actively choose to frame my stubborn “hope” as courage rather than “being a sucker”. I very much resonated with the closing lines of the note under discussion on this thread.

    I am hopeful, not in the common but false usage of the word as ‘optimistic’ or ‘thinking it likely’, but in the true sense of the word as being ‘full of hope’. I am full of hope that weak men will choose to reclaim their autonomy of mind and that rapacious men will choose to reclaim their humanity.

    I’m not optimistic. But I am very, very hopeful!

    If enough of us choose the courage to hope, we might actually change something for the better. Either way, it is what I choose, regardless of what anyone else does.

  53. Your question IMO gives me permission to do the following:
    You, of all people, just gotta watch it (then report briefly back to us).

    It’s been well over ten years since I’ve last watched it, and just ordered the dvd for use in our mini teardrop camper so’s the campground neighbors can wonder what we’re howling about.

    Being There

  54. Thanks for the advice man, I appreciate it.

    Personally I’m not getting emotional, though it may seem that way because I’m over exposing myself on the stock in a place where sentiment is pretty bad. But I don’t mind playing the fool as long as I learn more. In this case, already got valuable information from Rob and Ben.

    Actually it’s kind of an organic opportunity to discuss information about a very specific play that I’m personally invested in.

    Plus 95% down, don’t see the reason to NOT be married to it. Til death do us part and all that. Still full of hope that the restructure doesn’t wipe out equity. But let’s see. :crossed_fingers:

    But the only part that could be considered a bit emotional is maybe the broad characterisation of the people invested in the stock. For me I got thick skin and I had different motives for being invested, but there was a few people who actually cared for the brand or store. I know it could be funny to be that invested in a “shitty American retailer past it’s prime”, but yea, seriously, some people just love towels. :person_shrugging:

  55. Remember, even if you’re already down 95% you can still lose 100% of what you have left. Every investor learns that lesson, though hopefully only once.

  56. That’s a fair point.

    Then I guess it’s better to say I still believe in what I’m doing.

    If I’m wrong I’ll look in the mirror after.

  57. Just read Ray Dalio’s AMA on “What Should Be Done About the Debt Ceiling Argument

    “I think that what’s most likely to happen is that the two sides won’t allow a default (or if they do, it won’t be for long) and they won’t deal with the big issues in a substantive way. Rather they will tweak things in ways that won’t matter much and that will look better than they really are (e.g., they will say that they will cut the deficit in future years, which they won’t when the time comes). I wouldn’t do that.”

    The “roaring fireplace” conversations of the Biltmore crew - and by that I mean the insanely wealthy hands inside our political puppets - for me come down to this mystery:

    • Do they really have a Plan A to deal with this in the future? Because they have to realize it will not end well for many of them either.

    • Or do they have an as-yet-undefined Plan B: some global currency / hyperinflation hedge / Snowpiercer train? Realize I’m grasping for theories here; I think we’ll be as surprised by Plan B developments as most were by the ascension of AI.

    Would liked to have visited with you in Nash, but waited too long to ask for the kitchen pass. = ) I have good, long standing meat space friends there.

  58. Avatar for robh robh says:

    I think Plan B is the Accelerationist (what Ben likes to call the Thiel Industrial Complex) Plan A —-

  59. Ed , I don’t think the politicians have a plan B.

    Some of them realize what the end result of all this money creation is , but I think they just figure/hope that everything falls apart after they are out of power. If not , they will just blame the “other side” or the “last guy”. If they play for the right team --the media will give them a pass.

    My guess is there will be a Blame Capitalism narrative that will be sold to the public, and they will get what they wanted all along - Total control over everything.

    On second thought maybe they don’t need a plan B --Maybe this IS plan A.

  60. Avatar for aw21m aw21m says:

    Why would they need a plan B? They are all over 70, some are pushing 90. Just hold it together for a few more years, cash out big, retire (do these swamp creatures retire??)

    There’s no incentive to fix long term problems and do long term reforms when you just simply aren’t going to be around for any length of time that could be considered “long term”. And here we are…

  61. “All aboard the Snowpiercer! Well, except all y’all.”

    Don’t these people have children? Good hell.

    And I still have to say (or am laboring under the delusion) that it’s not the politicians, it’s the brokers who have their hands up inside the politicians. I mean the muppets are playing for the sofa cushion money compared to their handlers.

  62. Avatar for Trey Trey says:

    I just happened to come across this blog post yesterday, not long after reading Ben’s post. I wish I could say I walked away hopeful because some companies are still operating in their shareholder’s best interest. Unfortunately, my thoughts went to after Buffett and Munger pass and the likelihood I’ll see a bust-out from “managers.”

  63. Avatar for KCP KCP says:

    One of the best leaders i ever worked for and there were many said something that stuck with me about leaders in the positions to make and influence big decisions. He said, “Don’t every give them full credit that they are smart or that they know what they are doing. They aren’t. Plus that way they won’t fully let you down.”

    I think the insanely wealthy’s plan A, B & C is to keep one’s head constantly on a swivel, diversify and “we’ll figure it out”.

  64. Rob, I’ve read this Guardian article a couple of times now, and I gotta say that it matches up with both some of the rich with which I am dimly familiar (north Scottsdale), and those closer to me of much lesser means.

    Example: Tractor Supply opened a new location in an adjacent town, and usually sells chicks (“I say, I say, chickens, son…”). Since this happened on the heels of the egg crisis there was a line wrapped around the building before they opened. Local noobs seeking to hedge their protein supply were going to get in the egg business.

    A pretty significant segment of the population is on edge, imo.

  65. Avatar for KCP KCP says:

    Great article.

    Buffett had a roundtable/interview with at one of our annual “Leadership Summits”. You know the ones where leaders spend 2 months putting together a pitch with a consultant then all the pitches are standardized for color, font, spacing, graphics, et al at a small cost under $10MM.

    I’m not exaggerating.

    Anyways these “Summits” are meetings where leaders network, one-up each other, do their best to kiss the right ass and the ones seemingly on an uptrend, drink copious amounts of wine and golf. These meetings are where the real breakthrough ideas come from to create shareholder wealth (and bonuses/promotions).

    Buffet sits down and gets his questions…i’ll paraphrase…this was the beauty

    Q: What type of operating rhythm do you have to calculate bonuses at all levels in your organization?

    A: I’m not really sure, the managers in the business tell me what their going to do and their justification. That’s really it.

    Q: So you have no meetings, no formality to it? I mean, you have so many diverse businesses?

    A: Well, we don’t spend a lot of time creating formal presentations for things. I have managers who run the business, they know what our goals are so i leave it to them. And look, we have conversations, we don’t do a lot of powerpoints and presentation decks. If my i can’t sit and have a conversation with my management about a business or issue, face to face or over the phone and understand the issue, then i bought the wrong business.

    This was circa 2006. I couldn’t believe my ears, it was like an epiphany.

    Simplicity and trust have value. Clearly Buffett and co have exemplified those behaviors for the betterment of many.

  66. Avatar for Laura Laura says:

    Students of cognitive science are taught that all language is metaphorical. That’s how it works fundamentally. So we can’t help it even if we wanted to. Such is the problem of language.

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