let a natural discovery process guide you into new ideas routinely

I went through drafts to delete what must be removed and publish what I can. I thought this one alright.

This doesn’t have to be something that happens with intention. You can let it happen to you. with smaller companies I’m trying to smash combinations of intangibles and fundamentals together to form substantially larger product outcomes that put management in positions to pay out very large sums of money.

Product discovery in the last year described more generally has meant looking at the following things

• Ratable contracts of maintenance revenue on software products

• Installation of specialized hardware for specialized software products

• License and product revenue from pharma (namely Moberg & Cipher)

• Ads

• Acquisitions of other companies and resulting proforma operating changes (See highland tank at terravest, Sygnity)

• surveillance budgets/cost saving tools with remote live monitoring (Geo Group, Zedcor)

When encountering Geo Group, it was obviously getting the ick of capital markets, but never once did it look like the debt was unmanageable and the shares pulled forward a ton of that return in under 12 months. Management is just going to churn through debt until IG rating improves. But our world is dumb and slow, even within real institutions so change to ratings are slow.

As the EV is worked lower, the equity naturally climbs higher. And the assets that GEO has cannot be built much of anywhere in the US without spending billions dollars. So, you have this combination of NAV compounding out of control that’s never credited due to liquidity, while a depressed EV looms above the stock on a rapidly deleveraging balance sheet. And contained within the private prison portfolio you are rinsing money from tracking immigrants on ISAP and paying down the debt even from these proceeds. Eventually capital returns will ensue, and this can squeeze NAV/share figures into the stratosphere.

Dark and hollowed but it was not something I looked for last year, it just happened. Today my average for geo is around $8.50 and I don’t see a reason to trade it inside a taxable broker. There’s probably going to be some form of capital return planned/started in 6 mont

Another thing floating back into the mix is ClearPoint.