Hielko

Congrats, and have to say that I'm somewhat surprised that there isn't more interest in a fund with your track record, fee structure and risk.

It should actually reduce your risk. If positions are not liquidated when you are using a lot of margin you could end up with zero equity a lot faster if prices continue dropping. There is only a $10/month minimum fee. If you pay for the US real time data you don't pay the minimum fee, and the US data is free once you reach $30 in commissions that month. When you can buy stocks for less than $1/trade it might not be easy to hit that number though. What is imo also a huge advantage of IB are the cheap rates on currency conversion. You pay $2.50 fixed per conversion while at other brokers you often pay something like 1% of the transaction value. Just one 10K transaction in foreign currency and IB is already unbeatable wrt fees. But also when you want to use margin, short stocks or lend shares IB >>> everything else. Only wished they had access to more foreign markets.

I'm reading it now, but I'm wondering if the methodology that has been used to test the effect is correct. He's using a lot of data sources, so easy to introduce some form of look ahead bias if it's not carefully constructed and there is no discussion on how for example this potential problem is tackled.

How meaningful is the statistic? Makes sense that you see a lot of retail companies in this list that use a large number of low paid employees.

(disappointing that @WarrenBuffett isn't following me yet... :P)

Great read, especially the part about Texas Pacific Land Trust and MLPs. Thanks for posting.

I don't think this event will generate a big buying opportunity. See for example Steve Jobs @ Apple. Might be a smallish drop if it's unexpected early (say tomorrow).

If I like this book you probably also like "The Elegant Universe".

Fun thread: https://bitcointalk.org/index.php?topic=137.0 Guy bought a pizza for 10,000 BTC couple of years back.

Yeah, up 100% on that... also amazing how much trading volume there is in STP. $160M market cap and trading volume like it is MSFT. Too bad that borrowing costs are still pretty high.

If option compensation is high and you think the stock is undervalued you should make some adjustments to what's expensed since that calculation assumes that the current stock price is a fair value. Giving someone an option on a $100 dollar stock that has an IV of $100 is not the same as giving someone an option on a $100 dollar stock with an IV of $200 (assuming everything else is the same). The accounting expense would be equal in both scenario's.

I'm (still) short STP... let's hope Buffett has't lost his mind :P

I think holding companies as long as they are fairly valued is probably best, because owning a fairly valued company beats holding cash. I would only sell if you don't have cash and there is a better opportunity. This is assuming that the specific company is not a huge part of your portfolio. If you bought something very cheap and it's up a lot and now also a huge position in your portfolio you probably should reduce your position.

I prefer buybacks. I'm investing in companies that I think are undervalued, so I perceive buying back shares as a better use of capital than returning it to shareholders. I would NEVER own a stock where I would think buying back shares would be a mistake. It's probably different from a management perspective if they also own a large part of the company. They don't have the same flexibility with buying and selling, so when they think buying back shares isn't a good investment they should prefer to pay a dividend.

It's going to be a lot easier to make money in a low PE market than a high PE market, no matter what you buy. And for some investments it might be quite important. Think for example about the valuation of an asset manager: how profitable will they be in the future if the market goes sideways for a decade? Or what about BRK. They are invested in expensive stocks, and how much opportunities can they find to redeploy capital if valuations are at this level?

I mined a bunch of coins two years ago and basically managed to get a new high-end graphics card for free. Guess I shouldn't have sold my coins at ~$10 back then...

I think this is checked using the companies stock transfer agent

This is 3 year data, hardly statistically valid. In fact given the tumult, I would expect something like this during this period. That said, to me MF is a beginning, it gives companies to analyze. Whenever I hear this response I wonder how long is needed for something to be statistically significant? I've heard people claim 120 years of market data isn't enough to show stocks outperform bonds at a statistically significant level. At the minimum, you need to go a whole market cycle. Also, I would guess, that the Chinese fraud problem really screwed up results. No experienced investor should have bought into that crap, though. Again, I look at MF as a starting point. If you scrub for the Chinese frauds, and the results were good, one could still argue that that was cherry picking. You would expect value stocks not to do as well on a big leg up in the market. I think that's certainly a form of cherry picking. Magic formula is supposed to be great because it's buying ugly and cheap companies that humans wouldn't buy because "no experienced investor should have bought into that crap". If it would have bought a few real Chinese companies that went op 1000% no-one would have complained about the bad picks, in that case it would all be part of the strategy.

I agree that bondholders and equity holders should be wiped out, but that's not going to solve the problem. You still have a bank that is unable to pay back depositors, and the insurance given to sub 100K accounts isn't very valuable if it's from a practically bankrupt government. You can't create money from thin air: it's at this point in time a lose/lose situation. Tax money need to be spend to save depositors, or depositors are going to lose money. And since the depositors are also the people paying the taxes you have a problem. I think it's fair that depositors are getting a hair cut because it's their money that's going to be saved with the 10B ECB loan, and also non depositors on Cyprus are going to pay for that. Does that make things really better for depositors (or other people in Cyprus)? I'm pretty sure that is going to result in a way bigger loss for depositors that the 10% talked about previously, and it's probably going to create a lot of unnecessary economic damage as well. Banks and the government going bankrupt is going to be ugly since it's going to disrupt a lot of economic activities.

I'm confused, why would you want to be in "near cash assets" when (hyper)inflation hits? Historically cash has been a pretty good inflation hedge. Interest rates go up when inflation goes up.

In the same category: http://en.wikipedia.org/wiki/Flexagon A hexahexaflexagon is cool and easy to make (plenty of tutorials online), but more complicated stuff also exists. Fascinating stuff

I don't think there is a clean and easy solution. The CIK is a unique key for entries in the SEC database, but I think you also get a CIK number if you for example file as an individual a 5% position. And the SEC doesn't care about ticker symbols. That something between companies and exchanges. So you either need to build your own database or find someone who has done the work. Probably not available for free...

From a quick google search: http://www.jot.fm/issues/issue_2008_09/column2/index.html This is how you can go from ticker to cik.

Cyprus itself is small, but what's the psychological impact going to be on rich savers and corporations in the PIGS? If they decide to start moving money to saver countries shit will hit the fan, and it doesn't matter if politicians would never have considered a similar measure in those countries.

(Almost) No-one is going to exercise early unless you have a deep in the money call and a there is a dividend coming up. Otherwise you have to wait till maturity. See above. Of course the other party is going to wait. Why give up on the time value of an option? NO. It's called an option for a reason. And if you sell a call you sell the option to someone else.