thepupil

this is the combo i use as my base and then I layer in a promotion every now and then if it's worth it. they claim to have gotten rid of it but it seems like you can still get away with buying amazon (or other store) gift cards at the grocery's to get 6% off whatever you want if you don't spend the full $6K on groceries.

whoops, read this wrong on my phone. nice job orange, value trap and constructive. as a group, these results are actually pretty spectacular and would be the envy of the hedge fund community. 68% of participants made absolute returns on shorting in a year the S&P was up nicely and the russell was more or less flat. In the real world borrow costs and portfolio management likely would have led to different results (I know it did for me at least!!!). But still, good job

Oh and a personal takeaway from this is the two worst performing shorts in my basket were those I had on in largest size in real life (TSLA and UVE). Conviction weighting shorts is a tough thing to do. Most of the good short sellers I know are more or less equal weighted and diversified.

On my phone so not sure if spreadsheet is up to date but it looks like valuetrap (Glenn) wins and longinvestor loses. Well chosen names! ;D

read greenblatts book, you will at least know they exist then. Not even Greenblatt's book, just look at a number of names, you'll eventually hit one. Conduril comes off the top of my head as a name I knew was worth 4x as much, it's up 3x so far. It hit 4x at one point although I didn't sell. Since the purchase the company has improved and it might end up being worth 5-6x my initial purchase price. Problem was it was extremely illiquid (only traded twice in 2010) and there was no certainty that IV would ever be realized. I've owned a few others that I knew were worth multiples, but often these things languish for years. The problem for me isn't finding absurd valuations, it's knowing when IV will be reached. You can run a screen right now for stocks trading for 25% of book value...ok, just did this, 2,956 stocks worldwide qualify. I'm sure a few in that pile are truly worth book value, 4x the current price. Just need to go through the hard work sifting through that pile. I've read the book; I know they exist; yadayada the last time you told me to read something and implied I was ignorant, it was AAMC's financials; I had read them. I apologize for the rudeness but I find your posts to be a bit know-it-all and condescending to others at times. Maybe it's just me though. I'm just saying, I've never been able to assemble a portfolio of 3X's with a high hit rate and at what I deemed low risk when evaluating the situation. I knew my 20.00 SWY calls (which were a 20 bagger but I stupidly sold too early for a 3X) were worth 0 or many X's, but I knew the downside was 100% so I put 2% in them. I've never found something that I could comfortably put 20% in that was a 3X. I have put 10% in BFCF over the past few weeks, but that's not exactly without risk or hair. I could see it being a 3X, but I could also see the timeshare business coming under regulatory scrutiny or suffering in a downturn. I just don't think this game is as easy as "I only buy 3-4X's and concentrate in those" implies. If it was easy for me, my name would be themaster and not thepupil.

I have personally never identified a stock I thought was worth 3X its current price. Part of it is my tendency to gravitate to SOTP stories, real estate, banks, holdco's and stubs, Berkshire/Leucadia type of companies, and other things where I think you can create 20-40% discounts. I've bought options and made multiple x's a couple times on a large move in stock price (-100% and 100+%) but I simply must not be looking at the right stocks to create a portfolio of "easy doubles". I concentrate not because I want to make 100% / year or something ungodly, but simply because If I find a a decently diversified company with a good balance sheet and some catalysts, I'm completely comfy putting 10-20% in it or if it's berkshire circa 2011-mid 2014, 30-40%. Not to get too personal, but I'm 26, gainfully employed and my IRA's are very low six figures and I'm saving about $20K+/ year, worst comes to worst if i have a big blow up on a stock (which i've never had on a core unhedged long but I'm sure it will happen one day) I lose one year's savings. as long as I'm unlevered, a net saver, have an emergency stash of dough, concentration is not scary. If I could find 100 companies that fit what I like, I'd do that, but I can't. Anyone who can buy 50 stocks, do well, and not have his/her return start to hug the relevant benchmark over time is impressive. I do, however, think puttin it all in 1 or 2 is nucking futs, even if you hedge with OTM puts. A permanent 50+% idiosyncratic drawdown (in other words not accompanied by the market going down which would give you many different ways of making it back) is hard to stomach and even harder to make back. that wouldn't work for me.* *although to contradict this, my IRA's have been built with a few very good initial bets and were 1 stock at a time when they were smaller

yes, but not in nearly the same size because a lot was considered to be shorting against Berkshire, which went from a 40% position to a 5% position on valuation (in retrospect this one trade idea, long Berkshire short russell, would have been enough lol). in general i'm trying to be a little more professional about sizing, portfolio management, take a few less lotto ticket bets, and contain my desire to sit on lit rockets (the short selling equivalent of catching falling knives).

Roth IRA: +17.9% (100% invested, long only, 3-5 stocks at a time) IRA : +20.3% (100% invested, long only, 3-5 stocks at a time) Taxable : +0.12% (50-80% net exposure long/short, substantial options & lottery tickets component) Reasons for disappointing year in taxable: short UVE (-430 bps), short XBI (-540 bps); these two shorts took me to the woodshed. Also had significant options/lotto ticket burn of 400 or so bps. Longs did fine. At least all the stuff on which I lost money was in my taxable account.

hold it at the U.S. treasury. http://www.treasurydirect.gov/

I don't own it but I think CTO probably makes the most sense in terms of the land bank stocks. There was an uber bullish VIC article on it that I thought was a bit aggressive but the company is seeing real development on its properties and the newish management has done a great job so far (David winters was right to be activist there. Lots of seeking aloha articles out there too for those interested.

http://m.youtube.com/watch?v=8kZg_ALxEz0 Anyone else think of this?

removed my angry post. it wasn't productive.

there was a similar thread entitled "bond ETFs" recently. I will say what I did there. There are few free lunches in investing and there is definitely no free lunch in cash and fixed income; you have to take on reduced liquidity, or credit risk, or duration or something to make more money. Period. The only almost risk free advantage to be had is taking advantage of being small. Being small (relative to institutions) allows us to take advantage of institutions that want deposits and will pay > bond market rates with little duration and FDIC insurance. Being small also allows us to build material (depending on your wealth) positions in inflation-linked savings bonds over time. If you want to make more on your cash (and its purpose is truly cash, not making money), invest $10K/year in i-bonds. You can't redeem them for 1 year and you pay a small penalty for redeem in years 1-5 or you can hold them for 30 yrs. They pay you inflation in the form of tax deferred accretion. If you build this over time, once you are at (day of purchase+1 yr) for a given lot, this becomes effectively inflation linked cash. Search around for CD's, my favorite is the GE Capital 5 yr CD at 2.25% with a 270 day's interest (1.7%) early redemption penalty. This is basically a bond fund with an embedded payer swaption where you can make a little less than AGG but take only FDIC credit risk and your duration is capped. No retail investor should own a dime of bond funds before they max out this. The stable value thing offered to 401'ks/403'bs is also a good option, just check the liquidity / fees/ redemption penalties. Considering a portfolio of Fannie/Freddie ARM's (suggested earlier) cash is a bit of a stretch in my opinion. You are taking on mortgage spread risk, curve risk, prepayments being slower or faster than expected risk. You are effectively writing an option whenever you own a portfolio of conforming mortgages, even if floating rate. there are floors and caps, teaser periods, defaults (prepayments), normal prepayments, technicals (high concentration of ownership in fed and levered mREITs), and all kinds of stuff. I don't know a ton about floating rate RMBS but having traded a little floating rate product an a lot of fixed rate mortgages, I can tell you there are 1000's of bank & insurance treasurers and analysts and traders and what have you probing this market for bargains and taking away any good risk adjusted returns. It is a game of basis points. Not to mention the example fund yields 60 basis points after fees, you can get that with a CD or with a high yield savings account at American Express and not have to buy / sell a security and worry about the sell side's prepayment models. There are other worse options like short duration credit funds (basically take on HY risk to make 3% and sell puts on upcoming refinancings) but that's a dangerous game. There are plenty of mutual funds that offer this.

No. That is not cash-like. To make 1.4% more than a high yield savings account you are taking on duration near 6. If rates unexpectedly blew out by 200 bps you'd lose 10% (roughly, since your duration would fall because of convexity, you wouldn't lose 12%). Bond indices are weighted by size of issuer so they are full of treasuries. You wouldn't buy the 10 yr at 2% to make a little more than a savings account, would you? Average effective maturity 7.8 years Average duration 5.7 years

honestly the thing that i can think of that most suits what you want is a high yield savings account (Amex or GE or whatever) that you can hope to get 75-100 bps out of and be better off than 0%. Or building out laddered CD's and i-savings bonds over team. No free lunch in bonds = no 3% safe yields with no duration or credit risk and immediate penalty free liquidity.

3% is very difficult, if not impossible, without sacrificing something (accessibility/penalty free liquidity, or taking on some risk). If you think the stock market is efficient, try the bond market. It is very difficult to earn above market returns on large amounts of capital w/o taking more risk. Even the Vanguard Intermediate Term Investment Grade Fund yields a meager 2.7% and that's with a duration of 5 and average maturity of 6 years. So you have to take a moderate amount of duration (more than I would be comfy with my "quasi cash" pile, which this is) and some tail credit risk.

I see you are in the US. What are your goals for investing in bonds? I would encourage you to consider the following alternatives: 1. Inflation linked Savings bonds (i-bonds): $10K/year, locked up for 1 year, redemption penalty in years 1-5, pays you inflation rate tax deffered 2. GE capital 5 yr CD's (or CD's of another FDIC insured entity) 2.25%. Early redemption penalty of 1.7%. No bonds will beat these on a risk adjusted (very limited duration and 0 credit risk, unless FDIC collapses in which case you'll have worse problems) basis. The yields on spread product are still quite low in an absolute sense and you aren't really getting paid much to go further out on the curve and take on duration. If you are investing in bonds to make a higher return than that offered by these, I would recommend not investing in bonds, or looking at BDC's and mREIT's where you'll take loads of credit/duration risk, but at least get paid a hefty yield for the high risks., but then you'd probably be better off in equity land.

maybe it's just me and that I've only been really investing since mid 2011 and am pretty US focused and not a spectacular investor, but I have never been able to put together a portfolio of things I consider to be safe and at a 50% discount to fair value (ie a portfolio of 2X's) I think I own a portfolio of growing 60-80 cent dollars (even some 100 cent dollars in there) and a few high risk multibagger payoffs with 100% downside, but If I could build a relatively diversified (say at least 6-10 names) portfolio of 50 cent dollars, I wouldn't be working for a living. Maybe I'm just mediocre or set my expectations too low. Can someone walk me thru a portfolio of 10 names (just 2 bullet points) that they own and all of which are low-risk 2x's over the next 3-5 years?

http://www.etf.com/WYDE only way i know of for retail to short credit is the WYDE etf, doesn't seem to have taken off though. you can't trade OTC CDS as a retail investor because that would require you to set up with an investment bank go through KYC process and go through all kinds of counterparty agreements. the bank's trading desk has zero incentive to do it with you unless you are going to be a source of significant business. Since I'm assuming you're not running a $500MM credit book from home, you will not be a source of significant business. you can always attempt to short bonds...not sure if you can short sovereigns but you're far more likely to be able to do that than pay on CDS.

Caretrust REIT, googled "healthcare" "reit" "spin-off" CareTrust REIT, Inc. Announces Completion of Spin-Off From The Ensign Group, I http://investor.caretrustreit.com/releasedetail.cfm?ReleaseID=852011 http://investor.caretrustreit.com/releasedetail.cfm?ReleaseID=876716 he special dividend of approximately $132.0 million, or approximately $5.88 per share, will be paid on December 10, 2014, to stockholders of record on October 31, 2014 in a combination of cash and shares of CareTrust common stock. The amount of cash distributed will be approximately $33.0 million, with the remainder distributed in shares.

Maybe look at midstream? Was at an event where an energy insider spoke, discussed industry dynamics. Said most midstream players have take or pay contracts for up to 20 years out. Seemed like buying into one of these guys sold down with oil might be good. some of these companies are really great, high quality assets. problem is they aren't cheap and because they are high multiple, not super high growth assets, they have lots of duration/rate risk in my view. Check out MMP: 3.5% yield and up 20% YTD despite all the noise. I love the company, but it's tough to love here; the selloff just made it get slightly less expensive. To me, buying the best of breed midstream guys is kind of like buying the trophy REIT's at sub 4% (or even sub 3%!!!) yields. Great assets, but the steamy valuations have to make you a little queasy in that a lot of growth/capital markets being compliant is already baked in.

This is a question that should be directed to your friend, who I am presuming is an LP in the fund. Some managers are wierd about this stuff whereas others see it as free marketing; you will only know by asking the manager yourself or through your friend.. If you post it and it sours the relationship between the manager and your friend you would feel badly.

if it is a small company with finite borrow, I would caution you against sharing. You never know who you may impress and there's no reason in potentially crowding out yourself or increasing your costs to short. If it's big and borrowable, share away. it's a free market formed by the dollar weighted average opinions of participants. price discovery requires more than just bulls. also if it's an equity issuer, it's good to get out the bear thesis in a public forum. any declines in the stock price or just the negative attention will potentially fend off unwary equity offering participants. you don't want people buying into that expensive stock and hurting your position (or hurting themselves). don't underestimate the ability to be your own catalyst or at least get your thoughts seen by big important people. I've seen hedge funds and long onlies shaken by the humblest of seeking alpha articles / message board threads.

The majority of their clients don't pay taxes. GMO is a global investment management firm committed to providing sophisticated clients with superior asset management solutions and services. We offer a broad range of investment products, including equity and fixed income strategies across global developed and emerging markets, as well as absolute return strategies. Our client base includes endowments, pension funds, public funds, foundations and cultural institutions.

we agree that shorting puts and buywritecall is the same thing. i'm just comparing the return profiles of an index owner (no options) and a putwriter/buywriter. You asked why they prefer the downside of the hideously expensive index versus that of the high quality co's. I offer the explanation that 1) liquidity in the single stock options market is not large enough to sell puts on a massive scale in daily liquidity commingled funds 2) the payoff profile of selling downside protection systematically is different than owning index and even if the index is overvalued, selling vol at the right price may make sense I'm not advocating for doing what GMO is doing and in fact think it's a sign of the times that they are venturing into short vol positive carry yieldpig pennys in front of steamroller strategies like merger arb (which is selling an event put) and index put selling. But I understand why they are. And I think you do to.