craigatk

Thanks for posting, I will enjoy reminiscing about this trade as I read this.

They are going to replace AMEX as the Costco-branded credit card that is offered/pushed on members, but Costco will accept any other mastercard too. I don't view it as that big of a deal. Most of these store credit cards are already issued by the likes of Capital One/MBNA/Chase or other American financial firms who specialize in credit cards. Most Canadians will also carry some cards issued by Canadian banks which are branded with that bank.

I thought they ended that or was that only in Costco Canada? News on the radio this morning is that Costco Canada will stop accepting Amex period and that Canadian issued AMEX cards will not be accepted at US Costco locations. I'm really scratching my head on this one ... how bad was the falling out over negotiations that they canceled their exclusive Costco branded AMEX card and now are changing their preferred payment provider. Speculation is that this will open the door to an alternative credit card partner in Canada. One less reason for me to carry an AMEX card.

Chase Visa Amazon Card has 0% currency transaction fee in addition to some cash back. What you pay is the market spot price. Great for vacations! BeerBaron The only reason I got this card! Was the first in Canada with this feature that I had wanted for a while. Highly recommended to save on foreign currency transactions.

I thought they ended that or was that only in Costco Canada?

Worked for 5 years as headhunter in Tokyo and dealt only with front-office type roles with a lot of exposure to foreign hedge funds (from 2006-11 when we had a big cycle of Japan team build up and then eventually firing/closing). This is exactly how it worked in Japan. All our hedge fund clients wanted native Japanese bilingual types who thought differently than the 'average' Japanese, often educated in US/Europe or spent time with a father who was transfered overseas, etc. It was the holy grail that we constantly searched for... there are also a lot of non-Japanese who gained some tremendous Japanese language ability (near native) and they had some opportunity but generally still couldn't get as far with clients.. Clients would be regional PM/fund founders/global PMs in Hong Kong, Singapore, NY/Conn or London generally. They wanted analysts on the ground to support their positions and research. Not to say there isn't opportunity when you aren't fluent. I personally think when it's really cheap enough (liked oddball stocks approach) you don't really need to know more than what google translate can tell you, as long as you spread risk around in a basket and search for statistical cheapness.

Sorry may be a dumb question but no harm in asking... do you have to be a shareholder to attend shareholder meetings?

Do you have a dealreporter subscription?

You describe some very thoughtful rules around how to mechanize a net-net strategy. Back when I had a bloomberg and was based in Japan, I studied quite a bit more about Japanese stocks than today. In fact, I completely avoid Japan now based upon my experiences living and working there. Anyways, at the time I was selling services to hedge funds and kept particularly close eyes on the public short-lists and large holders lists, since many of our customers were in there. Always good to appear knowledgeable about their business... Over time I became convinced that Renaissance Technologies was running Graham NCAV net-net style portfolios on a global scale. Why? It's a proven strategy that has worked over a long period of time and (I believe) continues to work today. With some of the smartest quants on the street, why wouldn't they be running it??? They would show up holding some unusually small securities in sizes that couldn't have a direct meaningful contribution to their overall return based upon their AUM. Their approach uses multiple models overlayed with other models, thus one strategy might go long while another is short, creating a net position. However with some of the small Japanese names I saw them in, only explanation (to me) would be some kind of net-net strategy. So, I believe diversification across your strategy is the key. Graham was very mechanical in his approach also, buying only on discount to value, without considering hardly anything else about the company. It was very much a basket and numbers game to him. Buying at discount and selling at fair value. At the time, he had quite a market of net-nets to select from. I don't think you change his approach much to adapt to the current US equities market, but rather expand your universe of selection to include a global equities market and you might find that you can still source enough highly discounted from value equities to fill a large enough diversified basket. This is however not easy. How many small-cap net-nets in Japan do you think release English language annual reports? My guess is zero. Their financial statements are public, but it's in Japanese. This accessibility issue with global markets is probably where your biggest advantage would fall. So gaining access to the right data in a format that you could quantifiably and mechanically understand is your hardest problem to solve. If you are a programmer and have enough resources behind you, it's a solveable problem in my opinion. Just like Bloomberg and other data services, you could parse Japanese financial statements into your own model... It's just not an easy problem to solve. So if you are just a small (relative to the big guys) personal account holder with more limited means, it may be something you want to leave to Renaissance and DE Shaw. Hope this gives you something to think about.

I cut Rogers cable two months ago. My solution was netflix and a raspberry pi running raspmbc. For netflix, our Sony TV has it integrated and it works great. There is even a red netflix button on the remote control that my 3 year old has figured out. The raspberry pi works well to access a network drive and stream videos. It also can access the TV's remote control thru the HDMI passthru CEC controls, making it really easy to control. But the real big win for my wife was the Canada On Demand add-in -- http://forum.xbmc.org/showthread.php?pid=1303314 which gives FoodTV, HGTV (the big two) and most Canadian broadcaster's web streams direct access through the TV and TV's remote control. Kids happy = Netflix. Wife happy = Canada on Demand. So far I haven't heard any talk of bringing back the Cable bill = Me happy.

I don't believe he has ever published all of his past letters in public. He has some available, see http://www.scioncapital.com/index__letters.html and at bottom of main page: http://www.scioncapital.com/ where he links to Q1 2008 letter and Nov 2006 article on RMBS.

kiwing100 is right on the money! Phenomenal answer! If understand correctly that you are entry-level, then you need to get any job you can to get in the door. Sell Side Equity Research Associate is OK to start. You need experience period. However really read kiwing100's answer a couple of times to understand what you would be getting into.

I'm curious, when did Buffett mention vice stocks? Past AGMs? Don't recall this, though have heard him talk about how many letters from gamblers he gets (when talking about state lotteries). I think it's mainly Charlie, who has mentioned in several interviews that Berkshire would never invest in a casino because it's a dirty business. Buffett I think once said that he would never be in the tobacco business, but he doesn't mind owning a retailer (referencing Costco) that sells tobacco. I think they were once offered to buy a tobacco company, and even though they liked the economics, they chose against it for moral reasons. EDIT: As far as when they've said it, I'm not sure, but I'm trying to do a google search. Well Berkshire does own McLane Company which is probably the largest wholesale distribution company in groceries and that includes a massive business in tobacco. See some details: http://www.forbes.com/forbes/2000/0821/6605054a.html. Walmart sold McLane to Berkshire in 2003 for $1.45B. Seems a little counter-intuitive that distributing tobacco would be okay but not manufacturing it?

I saw this tender offer as well, can anybody explain the clause about 21 August? Does that mean we are not eligible to accept the tender offer? Do brokers even allow you to tender and does Heska have any way to find out who where shareholders at that date? I was involved in a number of deals like this a few years ago. There used to be quite a community at fat pitch financials that shared deal info and kept track of all the potential opportunities. As I recall there used to be quite a lot of "your mileage may vary" when it comes to the date keeping on these deals. If the purposes of the transaction is to go private, they need to get the shareholder's count below 300 and thus the "ownership record date" can often be overlooked by management because regardless they want to get rid of you as a shareholder. This transaction doesn't say it is a going-private deal, but seems to be mainly about removing the odd-lot shareholders and they have capped the number of tendered shares at exactly their estimated number of odd-lot shares. Management in this case, can get from the transfer agent a list of owners as of August 21 and if you are not on the list you may or may not be filled. They may or may not enforce that rule, depending on their own circumstances, available cash, or tender limits. As with all investing, you have to size up all these potential risks. If it was me, I'd pass on this one: 1.) the date is past already, 2.) the very small size of the number of shares which is explicitly capped, 3.) unclear motivation for management to do this deal ... indicate to me potential problems if you initiate after the record date. I remember reading some conversations where one individual had multiple accounts open with Fidelity and participated with all their accounts (I remember he had an excessive number of accounts - maybe 50?) in odd-lot deals. I also remember people finding deals like this one where the date was in the past and still trying their luck (and getting filled with their tender). Whether or not it was because management didn't care or whether their broker back-dated some paperwork, I couldn't say.

Profiting off somebody else's death is not a way to make friends. Look at how many ancient civilizations have shunned undertakers for one. It was a fascinating read. Thanks for sharing.

I really think it's interesting that Ackman is picking a fight here over GGP. In my opinion, he just wants to get out of his position and is willing to push his old partners at BAM around in order to get another buck or two. I was there before bankruptcy and followed Ackman into the position. First bought some shares (not enough) at $0.58. The price started to go higher on me while I was accumulating so I stopped. Regret it now but got most of my position and knew it had the risk of permanent loss of capital, so was pretty conservative. I believed that there was value despite the potential bankruptcy. The push to file for bankruptcy by Ackman as the activist was actually the main catalyst because it was the only way to reorganize the company's mismatched liabilities. There problem was in the terms of their debt and the capital structure was heavily skewed towards short-term. They had an inability to roll over the short-term debts into long-term or even other short-term while the credit markets were closed. The court cases generated mountains of paperwork. It was also very similar to a previous play that had gotten Ackman his start. I can't find any thing right now but basically while Ackman was an MBA student at Harvard, he invested in Alexander's (ALX) when they went through a debt restructuring scenario that would lead to bankruptcy. He calculated the equity value exceeding their debt obligations and went on to make a tremendous return on his investment, enough to pay outright for his MBA tuition. It was actually a very similar scenario.

Joined a family business. As a recruiter I was in Tokyo and covered Asia. It was great when times were awesome, but got tougher financially and mentally during the crisis and as Japan continued to wither away. Glad to have moved on as it wasn't a perfect fit for me but it was extremely interesting for a while.

You will probably do well with a more direct approach. Bring some ideas and an understanding of what you can bring to the table. Then just make as many approaches as you can, all the while trying to bring value to the table. It's not about getting a job but providing the other person with more value than you are taking away. For a hedge fund PM, this could be some good ideas that would fit their investment style, or just new angles/information on positions or ideas under consideration. I've met several hedge fund founders (later running billions of AUM) who got their first break through offering to work for free, just to prove themselves. They were hired because they offered more value than they were taking and got a chance to prove it.

As a former recruiter who worked for 5 years with hedge funds hiring junior analysts, it's not always about your specific idea or your proven ability to generate successful ideas. The guy interviewing you wants to see how you think and how you dig into something deep to come up with a new angle that hasn't been considered by anybody else. They want to see if your thought process is compatible with the fund's or their own style. They want to see how deep you are willing to dive down into a single idea, or will you just read the latest 10-Q and throw together a DCF model. If you are asked to provide some ideas in the interview or to do a sample report, it's not about your recommendation to buy or sell, but rather the quality of your analysis and how you went about your research.

This investment psychology isn't linked with the bursting of the Japanese bubble.. first off I'd say it was really a real estate bubble and equities only got caught up as a result that they stood ontop of all that real estate. However the investment pysch actually goes back much much farther. There is an amazingly complex cultural norm towards not taking risk that permeates that average person in Japan. I'd say that it has always been a part of the culture. I lived there a while and married somebody from the country and met many of these domestic people who were culturally adverse to anything "risky". Bonds at minimal yield are acceptable because they risk is more important than return. High yielding currency deposits were acceptable for a while (with a certain subset of the population) because they were packaged up by banks/securities firms and resold as currency bonds yielding certain percent returns. The FX risk of the underlying was conveniently mentioned in very small print and many people believed what they were told. Equities have always been risky and will always be risky to Japanese. Originally their stock market was modeled after their history trading rice futures. That element of futures trading has permeated their cultural reckoning so that equities is akin to gambling. It's OK with a little bit of money of course, but you wouldn't put your future at stake over it, now would you? Don't get me wrong, I have read lots about the short Japan trade. I don't have a really good sense of confidence around the country's future either. (One of the reasons we recently moved away). However, Japan has a way of surprising the world. I wouldn't be surprised if they can hold on for 10 more years at the status-quo regardless of what happens in Greece/Europe at the moment. I'd have a hard time holding my positions for 10 years... besides the fact that 10 years is a long time for anything at all to happen.