My deepest condolences to Mr. Stahl’s family and colleagues. As a long time follower, I’m tremendously thankful for Murray’s willingness to share his genius.
Passing the Eric Torch
https://x.com/ericschmidt/status/2001415374013702271?s=46&t=oboeinihvjNn__bpHMCoXQ
I’m still retired but this was too notable to resist! Early days and limited details but the structure of the partnership (equity participation, margin preservation) are appealing.
Proxy Statement + Meeting (Comments Open)
Preferred Shares Podcast
A link or two can’t hurt! Still on the beach though!
This is an interview of long time investor Chadd Garcia.
Comment Thread
Whilst on hiatus I’ll put up a new one of these posts every so often. Feel free to post here to keep the comms going.
Ch ch ch changes!
Still very long TPL!
But due to some professional developments on my side, it’s time to hang up my spurs for a while.
The blog will stay up and I’ll retain control of the URL. The stock is so well known now that the original purpose seems quaint.
I’m thankful for all of the friends I’ve made over the years. More ups than downs! Hopefully you all made (and continue to make) lots of money.
Don’t hesitate to reach out via the contact page. Be well!
The S&P500 Era – A Haiku
Passive flows loom large
Demand can outstrip supply
Less is more always
The buyback lever is as long and important as it’s ever been. Land is scarce. The stock should be too.
TPL in the WSJ
“Just having the proper staff to keep up with the pace that the industry was moving at created a ton of revenue,” he said.
Texas Pacific also started a water company to supply oil producers.
That created a new revenue stream and enabled drilling in dry areas. More drilling meant Texas Pacific could lease additional property for access roads, pipelines and power lines. It opened rock pits and sold producers caliche, a natural cement used to build the roads.
“It opened up a lot of acreage that I don’t think would have otherwise been developed,” Glover said.
The article as linked to this fun WSJ story from 1998. https://www.wsj.com/articles/SB88653506413772000?mod=article_inline
Big Leagues
When this blog started in 2018 TPL was an index ineligible trust.
We owe a ton of gratitude to Eric, Murray, and many other engaged investors who willed (blood, sweat, tears, and legal fees) TPL into its current form of modern governance.
The next chapter after that was business scaling, revenue diversification, investor awareness building, and discipline in capital allocation. For as cantankerous as I get about the threat of equity sales, it is undeniable that management is now executing at a high level.
From the individual investor perspective, it’s been a hell of a ride.
Still in awe!
+$1500
Is the S&P500 around the corner waiting to scoop us up?
If so, I’d suggest the use of the remaining authorization to split the shares. Make liquidity a bit better and the bite size a bit smaller for current and future investors.
On another note, what we are seeing with MSTR is that they are being rewarded (probably excessively so) for selling marginal shares and putting an asset on their balance sheet (100% marginal Bitcoin) that is better than than their current assets (watered down Bitcoin). This strategy is great for the shareholders. But not so great for the new shareholders who get a diluted version of Bitcoin.
My view on TPL is that the marginal asset available for purchase is almost always WORSE (value per $$) than the existing assets. Who would be selling good inflation protection assets with this macro backdrop? TPL issuing shares would be the opposite of MSTR doing it. The market would not reward the trade.
I’m beating a dead horse here but I’m getting worried that the crew is getting antsy to hit a bid on shares.
Don’t do it! Stay on the course and stay on the rocket ship. Split and buyback. Rinse repeat. It’s a low cost, proven strategy. Margin expansion and equity footprint contraction will get you to the c-suite hall of fame. And if you really want to make a splash, get on podcasts and talk about this capital strategy. Maximize equity per share, not total assets.
Listen to Larry
Excellent interview and profile of long time TPL investor Larry Goldstein.
https://themikrokap.substack.com/p/off-the-beaten-path-investing
Special Meetings Codified + Votes Tallies
https://www.sec.gov/ix?doc=/Archives/edgar/data/1811074/000110465924116887/tm2428122d1_8k.htm
Special meetings now possible. Not a layup to call one, as expected. See new bylaws linked towards the bottom of the 8-K linked above.
Other than “special meetings”, last Friday was a tough day to be an investor friendly proposal.
Meeting Day / $1400 Day
Engaged shareholders fueling up for the meeting!
Please use this post for meeting notes and reactions.
3Q24 Earnings
Robust volume growth all around. Margins continues to slide however as expenses creep up. Acquisitions (and the lawyers they require) are expensive. Expenses were up ~50% from same quarter last year.
Will the ROE/ROI/IRR (whatever) of the new purchases beat the hurdle rate of TPL’s historical stock performance? Not a chance in hell. The rally this week alone tells you that.
Split, buyback, split, buyback, split, buyback. Make the company liquid enough for index requirements and return capital efficiently. Not hard.
Will we get a regular report card on the performance of the new buys? Will that performance be contrasted with the opportunity cost of forgoing capital returns? Let’s keep asking for one.
Enjoy the meeting tomorrow! Keep us posted. I’ll set up a thread for meeting reactions in case in person attendees would like to share notes and reactions.
Bulls Everywhere
….and they love datacenters.
The Texas Pacific Land Trust Investor 