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Brent Beshore @BrentBeshore
, 3 tweets, 1 min read Read on Twitter
"Small business optimism rose to the second highest level in the indexes history."

"37% of all owners reported job openings they could not fill."

"Historically, recessionary periods do not occur until several years subsequent to peaks in the NFIB index."
disciplinedinvesting.blogspot.com/2018/08/near-r…
This sentiment mirrors what we're seeing amongst lower-middle market sellers. Optimism is abundant, even despite near-term historical results that are disappointing, misaligning transaction expectations.
While expectations are high, reported multiples in our segment are stable. The elevated expectations (future/sale price) are meeting reality, causing a higher rate of deal failure. We've a ton more boomerangs from 1-2 years ago that still haven't sold, despite multiple tries.
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Familiarity often leads to dullness or deepening gratitude.

Seen it. Get it. Know 'em. Move along.

Or, marveling in newly discovered nuance that lights past experience, provokes anticipation, and elicits awe.

Consider Christmas.
Same tired story. Santa and a manger. Food, drink, family. Gifts, gifts, gifts.

Or, God’s rescue mission. Jesus, God himself, born into poverty and anonymity. An uneducated carpenter who taught briefly and was brutally killed. Then something happened that changed everything.
That something transformed Jesus's family and friends from distraught, scared skeptics into believers willing to lay down their lives, often in horrific fashion, professing his divinity.

I’ll let the Durants, widely regarded as the 20th century’s best historians, explain:
Read 18 tweets
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Read @ryan_caldbeck’s thread, then come back.

We’ve been exploring this topic @adventur_es for 3-4 years now. In addition to an information advantage and a large sample size, transaction costs and governance are crucial components in private transactions.
These two additional components, transaction costs and governance, comprise friction that is 1000X higher than public markets. Quant hedge funds can identify and purchase a stock in a blink at almost no cost and with no governance function, then sell it just as easily.
PE must hire talented (expensive) people to find, negotiate, diligence, document, govern, and eventually created a negotiated sale. This hardship is costly, but also provides opportunities for alpha.

In PE, here’s how a quant system might work at scale:
Read 16 tweets
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A fellow EBITDA-curious investor sent me this from Moody's dated June 2000.

Why care?

Like it or not, EBITDA is the standard profit proxy and default valuation metric in the private markets. Expectations are always quoted in EBITDA, or adjusted EBITDA.

ucema.edu.ar/u/jd/Inversion…
Financial innovations rarely stick to the intended lane, morphing into justifications for continually more aggressive behavior.

*Insert something about fools doing so in the end and history rhyming*
"LBO sponsors and bankers have promoted the use of EBITDA for its obvious image benefits."

Ding, ding, ding, we have a winner!
Read 10 tweets

Related threads

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West Ham’s 2017/18 financial results covered their second season at the new London Stadium, which the club described as “difficult”, despite finishing a “satisfactory” 13th in the Premier League, as managers Slaven Bilic and David Moyes both left. Some thoughts follow #WHUFC
#WHUFC profit before tax reduced by £25m from £43m to £18m, as revenue fell by £8m (4%) to £175m, though profit on player sales was up £2m to £30m. Despite the revenue decline, wages increased by £12m (12%) to £107m, but player amortisation dropped £4m (10%) to £41m.
All #WHUFC revenue streams decreased: match receipts were £4.1m (14%) lower at £24.5m, due to no Europa League; while commercial fell £3m (9%) to £32m, mainly due to one-offs in the previous year; and broadcasting was slightly lower at £119m, due to lower Premier League place.
Read 39 tweets
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@crocodilebrainz @Jaredleeblack Economic Growth
4.2 percent growth in the second quarter of 2018.
For the first time in more than a decade, growth is projected to exceed 3 percent over the calendar year.

Jobs
4 million new jobs have been created since the election, and more than 3.5 million since Trump took
@crocodilebrainz @Jaredleeblack office.
More Americans are employed now than ever before in our history.
Jobless claims at lowest level in nearly five decades.
The economy has achieved the longest positive job-growth streak on record.
Job openings are at an all-time high and outnumber job seekers for the first
@crocodilebrainz @Jaredleeblack time on record.
Unemployment claims at 50 year low
African-American, Hispanic, and Asian-American unemployment rates have all recently reached record lows.
African-American unemployment hit a record low of 5.9 percent in May 2018.
Hispanic unemployment at 4.5 percent.
Asian-
Read 26 tweets
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1) The Economic Train isn't slowing down at all! If anything, it is picking up speed and passengers each and every day as it crisscrosses our country.

2)

From the article linked above:

The NFIB Small Business Optimism Index eased slightly from a record-high reading to 107.9 in September, the third highest in the survey’s 45-year history.

In 2018, economic growth for small business has produced 45-year
3) record highs for job openings, hiring plans, actual job creation, compensation increases (actual and planned), profit growth, and inventory investment.

“The economy continues to deliver a spectacular performance for one so near its record length. Small business owners
Read 5 tweets
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1/
 .
Newsday --- August 14th, 2018 -- Tuesday

Nov 6th, 2018
Mid-Terms
83 Days

August 14th 2018 -Primaries
1-Wisconsin
#WISen Nicholson vs Vukmir
#WIGov Walker
2-Connecticut
#CT05 - Depoint, O'Neill, Santos
3-Vermont
4-Minnesota
#MNGov- Johnson, Pawlenty
2/
Nov 6th, 2018
Mid-Terms
82 Days

August 14th 2018 -Primaries
1-Wisconsin
#WISen Nicholson vs Vukmir
#WIGov Walker
2-Connecticut
#CT05 - Depoint, O'Neill, Santos
3-Vermont
4-Minnesota
#MNGov- Johnson, Pawlenty
#MNSen - Housley, NewBurger
#MNAG - Wardlow
2/
 Nov 6th, 2018
Mid-Terms
82 Days

August 14th 2018 -Primaries
1-Wisconsin
#WISen Nicholson vs Vukmir
#WIGov Walker
2-Connecticut
#CT05 - Depoint, O'Neill, Santos
3-Vermont
4-Minnesota
#MNGov- Johnson, Pawlenty
#MNSen - Housley, NewBurger
#MNAG - Wardlow
Read 65 tweets
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Economy Firing on All Cylinders

@drawandstrike @ThomasWictor @HNIJohnMiller @jihadaeon1 @rising_serpent @_ImperatorRex_ @Debradelai @LarrySchweikart

whitehouse.gov/articles/econo…
The rate of growth of the economy, also known as Gross Domestic Product or GDP, is one of the most important indicators of the health of our country’s economy. Today’s news did not disappoint; over the past year (4 quarters),
our average annual growth rate has been a healthy 2.8 percent.

Thus far in 2018, real GDP is on track for growth of 3.1 percent over the calendar year, which would be the first calendar year of growth over 3 percent since 2005.
Read 31 tweets
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1) Many Deplorables are concerned with the fact that our President spoke about raising the % of Ethanol from 10% to 15%. Please keep in mind that it would be a few years away! I think our President is throwing RINOs at the meeting a bone to get them to say go after China, EU
2) NAFTA etc. because you are doing this for my state. It buys our President and his KILLERS two years to renegotiate trade deals where Agriculture will flourish like it is nobodies business. At which point the bone is no longer needed!
3) Trust the plan!

Our President said two beautiful words to his Secretary of Energy, “Energy Dominance”. Secretary Perry took those words and is completely running with them!

Read 7 tweets

Trending hashtags

#Zionism #TUR #Jewish #SupremeCourt #chickenwings #protolanguages #Winter #Burma #Basque #ecological #wealthy #USA #regulations #pulitizer #lobbyists #financial #WISen #Russian #WeThePeople #MirrorsEdge #America #weather #VoterSuppression #legislation #Germans

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