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  1. I think one reason buybacks might be better is because as businesses get too big, they can get diseconomies of scale. Like, if you're trying to deploy $N of insurance capital, you might be able to be pickier about who you insure than if you have to deploy $10N worth of insurance capital. Similarly, if you have a Berkshire-sized portfolio to deploy, it sharply limits the number of potential investments relative to a portfolio a hundredth that size. Essentially, if you get too big, you can no longer deploy your capital in great investment, but have to settle for good investments. If you buy back shares, you can keep yourself in the sweet spot where the economies of scale benefit you, but the diseconomies of scale don't yet have a major impact.
  2. The main reason you're wrong about this is because businesses can have huge amounts of leverage to the price of the commodity so that a 50% increase in a commodity can lead to a 500% increase in the value of the business. e.g. if you take a different timeframe of Resolute, it's gone from the low $2 range to $16 as lumber moved from $300 to $700.
  3. Well, kind of everyone defines it that way, economists, accountants, pretty well everyone. If you google "income" you'll find the term is pretty standard.
  4. Income does not imply in any way a working relationship. It just implies money coming in. e.g. gambling profits, capital gains, insurance payouts, and gifts are all income.
  5. Hmm, I think this violates Hanlon's razor (never attribute to malice that which is adequately explained by stupidity).
  6. Yeah, this theory makes sense to me. At this point in North America, people are either: vaccinated, so they don't really need to worry much about major problems so can revert to normal behavior non-vaccinated, but are unvaccinated because they have little fear of COVID, so can continue to behave normally There will be deaths among the non-vaccinated, but most will be akin to someone dying as a result of not wearing a seatbelt--unfortunate, but a natural consequence of a decision that that person was entitled to make.
  7. It was a chart created by someone on reddit, but it looked reasonable based on my in-my-head estimates. I imagine they got the data here.
  8. I'm no expert on pandemics, but if the description of ADE is correct, then I struggle to see how it's consistent with this data from Ontario. Of people 12 and older, Ontario has 73% fully vaccinated and 82% with at least one vaccine dose, and Delta is the most common variant.
  9. Thanks, everyone, for your kind comments. It's worth noting that for me, it's not yet worth a victory lap because it's still speculative and could still turn into a mediocre trade. I took out about a 100% profit when I rolled the options the first time, but nothing the second time. If the stock reverses, there's a chance that the entire position ends up worthless and I'd be left with the 100% gain. (And that might look like a nice win, but I think it's not worth buying out-of-the-money options if your goal is only a 100% gain. It's way too hard to win over 50% of the time with long OOTM options.)
  10. TL;DR: A mental model I picked up 30 years ago allowed me to recognize an opportunity based on other peoples' analysis, and I used options to reduce risk. Luck also helped. Back in 1992, when I was trying to learn investing, I read a book about why gold stocks are the best investments. Even then, I figured out that what they were saying wasn't that smart, that generally commodity stocks suck. But the one thing that stuck in my head was the idea of operational leverage in commodity companies. Basically, it's the idea that if you're looking at a commodity business, when the cycle turns up, if the costs of production don't increase, basically 100% of the revenue falls to the bottom line. And in that scenario, you actually don't want to own the lowest-cost business. You want to own the highest cost business, the one that was staring at bankruptcy, because at the bottom, that business will be priced on its tiny or non-existent earnings. So, while the low-cost producer might see its profits double or triple in the upswing, the high-cost producer could see its profits go up 20 times. So the high-cost producer's shares should do much better. I've been sitting on that model for close to 30 years, never having used it (generally buying stocks on the basis of value, growth, or quality). But then in reading message boards, I heard about UAN, and read a bunch of people's analysis about the business. I tried to kill the idea because it seemed so ridiculously undervalued after the operational leverage kicked it, but I couldn't kill it. The options seemed like the way to go because generally I don't want to own commodity businesses long term, and if the thesis was correct, it ought to move fairly quickly. Plus, that operational leverage cuts both ways--if fertilizer plummets (like lumber) UAN should get killed. So, I saw long options as a way of reducing risk on my speculation (with the downside being options are bad with companies that make large, unpredictable distributions.) That said, it's worth noting that almost everything has gone right, which obviously is not normal. UAN's fertilizer is mainly used for corn. Brazil's corn crop has been demolished, USA has had droughts, China also had a bad harvest and has been buying corn (and hoarding its own fertilizer), so corn is high. That increases demand for fertilizer. And there have been various production problems, and yesterday a fertilizer producer just asked for fertilizer anti-dumping measures to be instituted against Russia. As a result, while fertilizer always peaks in the spring and resets to low prices in the summer, this year summer pricing has been higher than spring. So there's been a fair amount of luck (though it's insensitive to phrase it that way. My "luck" likely means some food-insecure people somewhere in the world will be suffering.)
  11. Yeah, I didn't mean within broad society. I meant within the community to whom he is personally attached. Like, "I'm happy to help out my friends."
  12. In an attempt to prove that pigs get slaughtered, I rolled most of the UAN Aug $50 calls into November $60/$65 calls. However, I increased the number of calls by a third, and did it by legging several times so that there was no additional cash outlay (though some additional short-term risk). This is about a 1,650% return since my first UAN options post here, but I think it's still a decent speculation. If fertilizer prices hold at current levels, which seems possible, then the MLP could distribute $25+ of cash flow in a year. Under that scenario, it's hard to see the units remaining in the $60 range.
  13. One can gain social standing by acting magnanimous, and it's possible that, once one reaches a certain level of wealth, the value of the social standing gained can exceed a relatively tiny economic loss. (I have no idea if this applies to Prem because I don't know the guy, but it's possible. It's also possible that he just screwed up.)
  14. I created an auto-trader using the IB API, but it was with C#. It worked as promised.
  15. I think it's primarily the combination of zoning, bureaucracy, ideology, and immigration. Essentially, a huge percentage of the major cities are zoned to single-family homes. And, it's hard to change that. If you want to build anything else, you have to change the zoning. That means fighting in front of city council with residents who are worried about the neighborhood character changing. And to even get that day in court, would typically take a couple years, and it might not be successful. And if you are successful, it would typically require paying the city hundreds of thousands or millions for neighborhood amenities. Essentially, the city believes that if, as a result of rezoning, the value of the property increases, then the city deserves to take the money created, rather than the owners of the property. So, there's substantial risk and unusually high expenses associated with any development that increases density. More broadly speaking, municipal politicians are fairly ideologically-driven, typically not believing in market-based solutions. Though they're very concerned about affordable housing, if they could get affordable housing, but in doing so, some property developers would become wealthy, they wouldn't view that as an acceptable solution. One councilor in Vancouver, Jean Swanson, sees affordability as a crisis and cares a lot about the underprivileged, but for two and a half years has voted against almost every proposal for adding more supply (because the poorest wouldn't be able to afford that supply. She doesn't see it as a good thing that middle class will move into the new supply, freeing up less-expensive space for the poor, but rather a bad thing because average rental prices will increase.) Finally, on top of these supply restrictions, Canada has relatively high immigration. But much of the country is a frozen wasteland, so about two-thirds of immigrants end up in Vancouver and Toronto, and 80% in Vancouver/Toronto/Montreal. So, you have constantly increasing demand and artificially restricted supply, leading to high prices.
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