Featured Image Source: Cecil Jerome – Some Bum
I woke up this morning with a raging ache in my head. My night was long — full of travel and a delayed flight with crying babies, turbulence from hell, an overheated plane and an old bitch who kept repeating herself. I almost called off my morning schedule to sleep in, but in reality my mental stability (or as others would likely call instability) doesn’t allow me to break my day-in day-out schedule. I do the same routine every day — I’m a complete psycho, I can’t help it.
I start my day by doing 200 push-ups, 500 crunches and a light weight workout. My body is rock hard, I look good. Oftentimes I catch myself flexing in the mirror — which is quite an impressive scene if you ask me. While I am doing this I typically have pornography playing in the background — not that soft-core pussy shit either, I’m more of a snuff film guy — the more blood and screaming the better. After my workout routine I shower, apply multiple facial cleansers and put some brand name clothes on I bought from Burberry, Ralph Lauren or Nordstrom. While I am eating breakfast (I had oatmeal, raspberries, dragon fruit, blueberries and a half of avocado) I drink my coffee (black), while reading the Wall Street Journal.
After breakfast I check my Bloomberg terminal. I’m a value guy at heart. Despite my expensive suites, luxury penthouse and my high maintenance girlfriend I keep around for the sex, I like myself a cheap business — I know what works — and value investing works. I have never been able to understand why people stray from the value investing path. Buying a business below what it is intrinsically worth makes a whole lot of sense to me. If I can buy a grocery store for $25 million — with $15 million in the cash register, $10 million in inventory, $5 million in receivables and another $10 million in PP&E — I’ll take it. Why would I want to purchase a company with zero assets and all future value based off something other people anticipate — which hasn’t happened? It’s asinine! But I guess not everyone is as smart as me — or as rich…fools.
Here’s a good example of a company I like. It’s called AmBase Corporation — ticker symbol ABCP. The company owns an equity interest in a luxury high-rise in New York City (currently in construction). At full build-out it will be 82-stories, 1,438-feet tall residential tower. The asset is located on Billionaire’s row next to the Steinway Building and JDS is building the tower — without a labor union (fuck yes!). Once built out it will be the world’s tallest ultra-skinny hotel/condominium tower in the entire city (almost skinnier than Mary-Kate Olsen at her prime stage anorexia). It’s an impressive asset, but it’s not without its woes.
I could go on and on in regards to the thesis, but here’s the skinny. AmBase entered into a JV — initial investment of $57 million — and an interest in the building of 60% or so. The other members put up $37 million. Then the partners obtained a financing agreement — non-recourse — from AIG and Apollo commercial Real Estate Finance for a total of $725 million. If everything goes right 65 units and sold at $22 million a pop over the next five years. Then the creditors will get paid back their $725 million, AmBase will get a preferred return on the first $67 million, the next $31 million will be split on a 20% IRR return with their CEO (around $2 million), the next $150 million will be split with AmBase and their sponsor, eventually, the CEO of AmBase will get another preferred return, there will be a pro rata split of 6.80% with Capital LLC and yadadadadada — it’s confusing for the most part. In short, AmBase will get $328 million, Capital LLC will get $20 million, AmBase’s CEO will get $30 million the Sponsor’s will get $346 million and the creditors will get paid back their full $725 million. Discounting AmBase’s cash flow over a six year period at a 15% rate we get a sum of $169 million for the development. Throwing a tax rate of 35% on a cost basis of $64 million we get an after tax return of $132 million. At the current value $40 million there is a 240% or so upside.
The proposition is not a sure thing and it’s filled with risks. First, the New York luxury market is overbuilt. The partners may never sell anything and the creditors may end up taking over the asset. If this happens AmBase is worthless. The stock will go to zero. Secondly, there is a litigation or two between the Sponsors and AmBase. AmBase is suing the Sponsors for diluting their equity ownership in the asset for not providing more capital on an additional capital call — also claiming they overspent their budget on bullshit stuff. The Sponsors are suing them back for withholding consent to refinance the project. If AmBase wins this litigation they could get $105 million. If the Sponsor when they could get $63 million. It’s a big risk to say the least. Finally, there are some governance concerns regarding AmBase that make me iffy.
But anyways, there is the lowdown on AmBase. It’s a high risk high reward investment. I would consider it a value investment, but with a much lower margin of safety than I would typically like to deal with. But fuck it, I’ll keep a toehold 1% position on this sucker.
Later tonight I will take Jessica (my girlfriend) out to the Rivepark restaurant in Manhattan. I’ll get the buttermilk fried chicken with black pepper honey and rosemary and some spicy seafood broil with steamed mussels, clams, shrimp and vodka with soda-water. Jessica will get the baby lettuces with marinated vegetables and champagne vinaigrette with watermelon wedges with lime and espelette (she watches what she eats and keeps her figure slim). Jessica will likely not get a drink but occasionally slip off to the bathroom to rail a few lines of coke and pop a xanax or lithium. Later we will go back to my penthouse. I’ll have another vodka and soda-water, Jessica will slip into some lingerie (god her tits look amazing in the black piece she has) do some more coke, and then we will fuck.
She’s a good fuck for the most part. I know what I want and she lets me take it. My cock fits nicely in her and she doesn’t mind when it gets rough. If she did mind she knows better not to bring it up and just act like she loves taking it. Belittling her in a sexual manner makes me feel like a king. After we are done fucking I will call and Uber for her and tell her I need to head to the office — she won’t put up a fuss given that she will have the access to an abundant amount of cocaine for the night.
I don’t plan on heading to the office. There is a bum who hangs near 54th Avenue and 2nd Street who has been getting on my nerves. I plan on bringing him some vodka later and having a philosophical conservation. We will talk about God, death, Satan, drugs and women.
After about 45 minutes I’ll get sick of his bitching and whining. When that happens I plan on taking out my switchblade and stabbing him in the gut a few times. He will still be alive. It’s an amazing feeling hearing your victim moan from pain. I’ll watch him struggle, whimper and say “why Mr.” for a few minutes. Then I will twist his arm behind his back and break his shoulder. While his arm is still behind his back I’ll bite off is fingers one by one — the taste of sweet warm blood will run down my chin like BBQ sauce. His screams will grow incomprehensible. I’ll need to silence that by cutting out his tongue.
The tongue is a powerful muscle in the human anatomy. It has the stamina of an Olympic runner, the precision of a Venom Tactical Taipan Sniper Rifle and the tenacity of a Harvard student in his prime. I plan on grabbing his tongue by the dorsum and cutting if off at the terminal sulcus. He will bleed like a son-of-a-bitch. While he is bleeding I’ll grab him by the throat, tilt his chin up and close his mouth. Soon he will taste his own blood flowing down the back of his throat and gradually start to drown. At this time I’ll slowly push my thumbs into his eye sockets — popping his eyes out. Then I’ll let go of his throat, he will tilt his head forward and cough like a maniac spitting and puking blood up everywhere — remember, his eye sockets will be hanging out of his head at this time. Finally, I will kick the living shit of him and stab him a few more times.
After I get back to my penthouse I will masturbate to the film “Young Hot Blondes: Bruised and Beaten” get in a leg workout, smoke a cigarette and possibly have one more vodka and soda-water before I hit the hay. As I lay in bed and reminiscence the day I will remember what Ice Cube said, “it was a good day”.