Sabre Arc Capital - November 2023 Report

Fund Total: $853,339 :)

Sabre Arc Capital ended the month at a record $853,339, up $78,935 from October. I’m amazed that I am using the term “record,” given that our fund lost a whopping $250K last year. The fund received $347.90 in dividends and $178.79 in interest. We had $31,123 in cash and $16,000 in CDs.

What We Purchased

We purchased $15,000 in Walt Disney Stock and $8,000 in 3-month fixed couple CDs.

We continue to believe that Disney is undervalued and that free cash flow and profitability will continue to increase over the next few quarters. For us, free cash flow is the number one metric we are looking at in 2024.

Dividends & Interest

Another record set this month was one for the largest divided received, as we received $308.77. This record will likely be broken every 3 months when we receive another SBUX divided.

What We Own

I was recently asked if it troubles us that 50% of the portfolio is in 3 positions, and to be honest, it rarely crosses my mind. We don’t believe in sector or industry weighting, and our goal is never to be “diversified.” We simply find companies we love and allocate capital accordingly.

Berkshire Hathaway

First, this first rest in peace, Mr. Munger.

• Berkshire ended the quarter with $157 billing in cash and cash equivalents.

• Berkshire bought back $1.1 billion of its shares during the third quarter, after repurchasing about $1.4 billion in the second quarter.

• Operating earnings, which exclude some investment results, rose to $10.8 billion from $7.7 billion last year.

Disney

• Quarterly revenue of $21.2 billion was largely in line with consensus estimates.

• Disney+ and Disney+ Hotstar together boast 150.2 million subscribers

• ESPN delivered its best overall viewership in four years, and its highest viewership in the 18-to-49-year-old demographic prized by advertisers.

• Free Cash Flow of $3,428 Billion: The company expects to grow free cash flow significantly in fiscal 2024 versus fiscal 2023, approaching levels last seen pre-pandemic.

Home Depot

• Consumers are pulling back on high-dollar purchases and deferring major home-improvement projects.

• Same-store sales, which adjust for store openings and closings, fell 3.1% during the quarter.

• The company indicated caution about the coming months and narrowed its full-year outlook.

Walmart

• The big-box retailer struck a cautious tone with its outlook after it saw consumer spending weaken at the end of the period.

• U.S. comparable sales increased 4.9%, while e-commerce was up 24%, which it attributed to pickup and delivery.

• “In the U.S., we may be managing through a period of deflation in the months to come, and while that would put more unit pressure on us, we welcome it because it’s better for our customers.”