writser

If you are logged in: 45 days. If you are logged out: 90 days. I sometimes have the same problem: site logs me out for some reason and I see a different set of recent ideas suddenly. Are you sure that’s not what is happening?

How much time do you have? I’d tell them something about compounding and the effect of small costs on the end result, the EMH and its faults, how hard it is to beat the market, something about psychological challenges (i.e. Kahneman, common biases investors suffer from). Tell them that people in finance often have completely different incentives than their clients / shareholders etc. and why that is bad. Explain active vs passive investing. Tell them about Vanguard. If you have some time left you could try explaining the basic tenets of value investing: i.e. a stock is a partial business. Ask them what they’d look for when buying a burger joint (i.e. do they own the real estate, are they indebted, annual cash flow, taxes, forecasts, how is the personnel, model profitability, etc.) and make them understand that it works the same way with stocks. Finally you could recommend some books/websites for those who are interested. At least for the investing part.

If anything, one of the takeaways of this fiasco (and many other trainwrecks) is that people argued: "X invested a lot of money in this, surely they did their due diligence" or "Y is on the board, surely this is not a fraud". Well, guess what. Also, this thread nicely demonstrates the difference between optimists and pessimists. You know nothing about a company, it sounds super cool and has a $5b valuation, what's your first reaction?

Ex post everything would be fine of course. Ex ante: what are the chances of something fishy going on if your CEO is basically a cardboard copy of Steve Jobs that drinks "a pulverized concoction of cucumber, parsley, kale, spinach, romaine lettuce, and celery" several times a day to "save time"?

Some of these threads bumped lately really didn't age well. Props for bumping it yourself.

Agreed, great read, recommended.

Agreed. True, however I think it is a typical trait of some, especially older, Americans to view any country other than the USA as a shithole, to quote the president. I.e. they go to Norway or something, one of the safest and wealthiest countries in the world, and they worry about no-go zones, whether there will be running water, electricity and what to do if the streets are covered in horse manure because surely nobody owns a car there. Of course I'm exaggerating a bit but if you are born in a small, insignificant country it is much harder to develop such an attitude. For similar reasons I think a lot of Americans are (too?) home-biased when it comes to investing. If you are born in Belgium or Costa Rica you are pretty much forced to invest in foreign companies (or at the very least companies operating outside your country borders) right from the start. If you are born in America you don't have to. That's not a bad thing in itself but the risk is that you start dismissing foreign opportunities without even looking at them. Chinese company? Surely it's a fraud. Fiat? Why would I buy that when I heard on the news that Italy is riddled with no-go zones? Something in Poland? Surely the communists will nationalize it? But now I'm completely derailing this topic. I'll stop. Italy is beautiful. You'll love it. Don't worry.

Maybe you have watched too much Fox TV? Nothing to worry about. Visiting some tourist attractions in Italy is about as safe as visiting Pike Place Market, Central Park or Yosemite National Park. Probably safer since Italians don't own as much guns.

If you have a 30% allocation to retail REIT’s, would you call that a Graham type portfolio or a concentrated sector bet? I think it is an easy trap to fall into to convince yourself you are doing the first while actually doing the second. Not implying you do so :)

Big tech?

http://www.aecon.com/Media_Room/~1417-Aecon-Announces-Extension-of-the-Arrangement-Agreement-Outside-Date Stock collapsed the past few days. Aecon traded around $14 - $16 before a strategic review was announced and around $16 / $17 after that but before the CCCI proposal. Assuming the stock will drop to a price in that region the market is now pricing in a ~30% chance of deal failure (very basic math, ignoring time value etc.). Seems quite high, especially given that they seem to have all other regulatory ok's required. Just my 5 minute assessment though. Stock might be a decent gamble at current prices but still, hard to handicap.

And we're in year nine of a bull market. We've bullied away the sellers on this forum and replaced them with compounders.

Tony was a bad businessman. Typical overambitious CEO, reminds me of Enron or AIG. Now, Stringer Bell, that's my kind of criminal. Could've been a CEO for PM or MO. "I know; shit is weak, but, y’know, shit is weak all over. The thing is, no matter what we call heroin, it’s gonna get sold. Shit is strong, we gonna sell it; shit is weak, we gonna sell twice as much. You know why? ‘Cause a fiend, he gonna chase that shit no matter what. It’s crazy, you know. We do worse, and we get paid more."

In hindsight that was not a good idea and i sold the future for a slight loss. Timing was really miserable and i punched myself several times for that move. What i wanted to achieve was to increase my net long exposure without having such a high impact on my available margin. But it felt wrong all the time. Next time i will probably just sell some of my puts. But my real problem is that most of my netnets are not marginable. Has someone an idea to change that? Don't do macro, don't do derivatives & don't have a large short book :) .

I believe either the XIV or SVXY will go into auto-redemption mode after a 80%+ drop in a day? Does after-market movement count? Can you explain the mechanics a bit more? Simply said, these funds consist of a bunch of collateral with a short vix future / swap position. They are designed to track the inverse daily movement of the vix. Volatility goes up 5%, XIV goes down 5%, etc. So if vol goes up 100% XIV is bankrupt. To avoid going broke these fund will usually liquidate their future / swap positions before that (i.e. they basically have a stop-loss somewhere around +80%) to ensure they can pay all their obligations - details are in the prospectus. Looking at the price action something like that is happening or expected to happen. At that point the value of these products is basically a gamble: the leftover collateral depending on where the fund manager closed his positions. If the fund is large and future-based the fund manager might have to buy back so many futures that he/she can cause a squeeze in volatility futures - increasing losses for shareholders even more. These products are dangerous. I don’t know what the specific benchmark is: I haven’t read the prospectus nor do I really care but looks like the fund might liquidate and/or that people are trying to manipulate the benchmark in order to make money on the derivative vol products. (i.e. buy lots of volatility, increasing its price, blow up the etf’s by doing so, sell volatility at an even higher price to fund manager. Only recommended if you have balls of steel and lots of money) But maybe I’m completely wrong.

Lol, look at the inverse vol etf's after-hours (XIV, SVXY). Not sure what's going on exactly but it's a massacre. SXVY down 80% now. These funds might bust overnight.

Interactive Brokers offers that functionality: https://www.interactivebrokers.com/en/software/tws/usersguidebook/realtimeactivitymonitoring/set_price_alerts.htm#XREF_81641_Set_Price_Alerts

Well, the pro forma balance sheet was not that suprising imho, how did you expect it would look? Last Tuesday you could buy the entire company for what I thought was basically net cash, give or take a million. On top of that you got $11m in notes, NOL's, future CDSOA payments, a small equity interest in the buyer and the upside of the go-shop period for free. Also the company signaled it wanted to do a buyback / dividend. Surely that whole package is worth something? I bought the package for what I thought was a bargain price and flipped my position when shares were up ~10% (implying a ~$1.5m increase in package valuation). Probably a bit too aggressive but I'm not in love with this idea either (and in case of a dividend I have to pay withholding taxes). I just thought the market overreacted a bit last Tuesday. Still, I think the pro forma company is such a random (disgusting?) collection of assets that appeals to nobody that it is, if you have strong stomach, probably on the cheap side.

What I am trying to say is that in your initial post you forgot to take into account the fact that the buyer has to finance the transaction. If you value DPS at $95.65 / share but somebody buys it for $103.75 and an equity stake in a new company then the 'retained stake' in DPS net of debt / paid up cash is not worth $12.43, it is worth zero or less. So the $16 stub is actually the markets appraisal of your stake in Keurig + the value of future synergies. If you want to value the stub, do something like Rasputin did.

Thought experiment: I have an empty shell company, borrow ~$18b and offer to buy DPS from you for $103.75 per share and a 13% equity interest in the new combined company. How much is that offer worth?

My thoughts are that you should probably do a little bit more work valuing the stub. What does the pro-forma company look like?

Thanks a lot. Seems like Baupost is on a roll lately.

Small chunk of 0635:hkg. Few shares of STLY a couple of days ago (is that allowed in this thread?)

So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.

Small chunk of 6822:hkg.