writser

Maybe taxes are part of it. Yeah, I only pay a flat wealth tax, no capital gains, long-term, short-term, etc. So taxes are basically never a consideration. For some short-term trades might be unfavorable, doesn't matter for me. But mostly think investing style is a question of what suits you / personality. I have a trading / math background, I like investments and trades that I can quantify. That's both a strength and a weakness. It means that sometimes I find a quirky situation where I can make money, but it also means I have a hard time judging business strategies or envisioning what a growing business looks like in ten years. For example, I never bought Google even though I think I was ahead of the curve in understanding how good their products are because the business was always too hard to quantify for me. It is my dream that I find a great growth stock once and have the conviction to buy and hold it - so far I haven't managed to do that. I'll try not to further discuss Martingale / Labouchere because it is tiresome. If you still think these strategies work you are the casino equivalent of a flat-earther. The facts are on the table, science has proven you are wrong but you are too stubborn, lazy or ignorant to understand it. Good luck with investing if that is your attitude ..

I can't help making asshole comments every now and then. Don't take it personal. If you are lucky you can make some money in the short run. However, you cannot EXPECT to make sustainable profits with Martingale or any other strategy in a game that is neutral or minus EV. That has nothing to do with being conservative or patient, with table limits, with whatever, it's just math. Whatever your betting strategy, if you flip a fair coin X times your expected value is zero. You can change your bet size strategy in such a way that you, for example, win 1 dollar 999 times out of a thousand. That's basically Martingale and if you practice it it might seem like a solid strategy. But it isn't, if you are ahead after a few months in the casino you are just lucky you haven't encountered the tail event yet, which is that you lose 999 dollar every once in a while (on average once every thousand hands, so it evens out exactly in the long run). Table limits or your personal net worth do not change that equation at all. I just linked to the math, which you don't have to understand but I think you should, as an investor, at least understand the concept. In some ways the casino is a simplified version of the stock market. You can make bets without annoying distractions like security analysis or other wordly events. It's a good place to learn the fundamentals about position sizing, variance, risk taking, expected value, etc and it's easier to spot and fix weaknesses and mistakes in a (theoretical) casino that it is in the stock market. Why? Because in the casino the nerds among us have actually proven that certain things are stupid. That's pretty valuable feedback. In the stock market you don't have that: you can always bail out by blaming the FED, unforesee macro events, the market being irrational, management not executing well, etc. Very hard to know if you make mistakes and very easy to fool yourself, which all of us do some of the time. Which is why I think it is useful to point out flawed reasoning in the casino: it looks like the stock market but you can figure out for sure whether you are wrong or not. It's math, it's not up for discussion. Unfortunately, it often still is ..

I'm surprised and disappointed to see this quackery on this board. If the EV of an event is neutral and events are uncorrelated, when you bet a million your expected value is a million. Doesn't matter if you bet 1x 1m, 10x 100k or 100.000x 10 dollar. You can only change the distribution of possible outcomes, not the expected value of all possible outcomes. With Martingale you change the distribution in such a way that there's a probable profit but a tail risk of gigantic losses. With reverse Martingale it's the other way around. But both have the same expected outcome in the long run. If you made money using one of these strategies: congratulations, you were lucky! The same holds for the house limit: it can change the distribution of possible outcomes but not the expected value. It is simply ridiculous to think that a roulette wheel with a house limit of $100 is unexploitable but a roulette wheel with a house limit of $100.000 can be easily exploited. This is such a fundamental and basic tenet of statistics that I personally am tempted to say you should not be managing money if you don't understand (or even worse: don't believe) this concept. At the very least you should follow some math courses :) . https://en.wikipedia.org/wiki/Optional_stopping_theorem

Exactly. Bunch of nonsense. Maybe he won but nor martingale nor reverse martingale work. If a single round of a game has a negative expected value and results are not correlated nothing you can do with bet sizes or house limits or whatever else you can think of will change that the end result still has a negative expected value. If only making money was that easy ..

I think the above is a typical example of the sentiment I was talking about. I don't think it will influence current definitive Chinese going-private deals at all. Why would a ruthless Chinese businessman offer to buy back his own company when it's a fraud?! That makes no sense. The basic game plan of these situations the past few years has been A) sell shares in US at a high valuation. B) mistreat investors for a few years. C) if your company is actually worth something buy it back from disgruntled shareholders at a bargain price and relist in Hong Kong or Shanghai. Yes: if you buy at stage A or B you have to be very careful. But if you buy in stage C (from a disillusioned US investor) when there's a definitive Chinese going-private proposal on the table from the majority owner your incentives are basically aligned with the Chinese buyer. The past few years only one definitive Chinese going-private deal was NOT completed successfully: SVA. And that was a case with a lot of red flags that was easily avoidable.

At this point nothing. Well, I've been in and out of SKYS if you want to count that one. It's a bit more complicated though. But in general, at this point in time the market is so generous that even these somewhat sketchy Chinese deals are trading at levels where I don't think the risk-reward is attractive. YIN: 1.5% spread. FORK: ~3% spread despite the bid only being preliminary. DL: 2% spread for a preliminary bid. Even SKYS was at some point trading at a ~1% spread despite being a very risky deal - it imploded 50% when some bad news came out. Hard for me to get excited with such spreads. In general I like to size these things small (1%-3%) and own as many different ones as I can find (ok, in practice that usually means 1 - 5 deals or something like that, I wouldn't be comfortable with >20% of my portfolio in such a very specific subset of deals). It's a pet peeve of mine but I think US investors are basically discriminating against Chinese deals for unfair reasons. What investors basically forget is that IF there is finally a lowball offer on the table it is usually a REALLY GOOD DEAL for the Chinese counterparty and they have no more reason at all to screw you over, nor do they even want to. That you are in a trade war with China, that Chinese people (according to some) can't be trusted, that minority shareholders have been neglected for decades and that US investors have been traumatized by Chinese reverse mergers a few years ago is mostly irrelevant at that point. But these seem to be sore issues for a lot of US investors. So I think it's a fertile hunting ground if you are not prejudiced. Another subgroup of deals I like are small OTC US bank mergers. I also usually own a couple of them. Often, the fact that these deals are OTC-traded and illiquid means that, with some patience, you can buy at a very decent implied IRR. This year I have dabbled around in WEIN, BFFI, NWBB, DLMV and EMPK, amongst others.

Also the new deal price is ~75% lower .. but fwiw the deal is now definitive, I expect it to be completed in a few months and I own some shares.

I've now sold essentially all of my Rosetta Stone. A press release saying that they're exploring alternatives has increased the enterprise value of the business by 60%. I think that says alot about both the value of the Lexia and perceptions about of current management. Well done on what seems like a good, original idea working out nicely.

Sounds interesting. Ordered the book.

Very interesting idea. Obviously the whole company is somewhat of a shit show, it was even featured as a case study in 'Due Diligence in China: Beyond the Checklists (link). Nevertheless, it's not a fraud and the dubious founder has been arrested. The company still owns a minority stake in the business bought by KKR, worth ~800m RMB given what KKR paid for the rest. The endgame seems to be a relisting, FWIW. Then there's a lot of excess cash, and a significant, growing operating business (international lighting) with a book value of ~2000m RMB or whatever and not too much debt. Yet the market cap is only about ~500m RMB. In any sane capital market this would be trading 4x to 5x higher. I couldn't resist buying a few shares.

Shares have been on a great run, up another ~60% since the last post. Using the take-over of a cashbox in Bermuda, insiders effectively invested ~13.5m gbp in the company a few weeks ago at market prices (then ~0.38 gbp). They are using this money to take over a competitor in Belize, Scotiabank, for about book value or ~$30m. Shares are still looking cheap, but I'm not as enthusiastic as Skanjete. I have a hard time seeing this trade above book. The insider transaction also seems a bit dubious, taking advantage of the depressed share price on LSE. The takeover makes me think a going-private transaction is not imminent either. Minority holders are basically at the mercy of lord Ashcroft. I had a small position which I sold after the run-up this week. Probably way too soon! Still kicking myself for not having looked at this in 2019 or earlier. Might get back in at some point. Cool thread.

Very good post. Agree 100%. I would add that there's a 'quid pro quo' element to sharing ideas: when you put in the time and effort to share something that (you think) really adds value you hope to get something back in return. So when the quality of discussion declines here, the incentive to to put in the time and effort to share something declines as well. In that case it might be preferable to share your research with a select group of friends, on Twitter, on a private website or in a newsletter or behind a paywall. That also makes it harder for others to monetize content you share freely, which I think is another risk of a public forum. It is also my personal opinion that the board would be better if it had stricter moderation. Even if that means some good posters leave this forum because they disagree with the policy. That's up to Parsad though. Finally, to end with a positive note: given the incredible divisiveness in the US and the raging bull market the past few years it could have been worse. Just focus on the Investment board and ignore a few controversial stocks (and perhaps forum members). There are still some good discussions to be found. Name a better public forum!

I've been accumulating some PDLI too. Starts to look attractive at current prices.

On page 34 of the preliminary proxy they say: And as Bill mentioned, The ~$14.5m CARES tax benefit is already reflected in the Q1 2020 financials dated May, 8 and discussed in the May, 7 conference call. So I would guess that that number is also included in the per share estimates in the proxy filed on May, 7. Of course the information in the proxy is quite sparse so far, the company gives no actual scenarios or examples. So what numbers they are precisely using in the low- and high-end of the range is anyone's guess, as far as I know. But I wouldn't say it has not been taken into account.

The saddest thing is that he didn't even actually blow up his account - he just thought he did.

Hope to see you back here at some point. Quality content. Good luck with the job. Just out of curiosity, what space?

??? Uber is a great value for customers. You might argue it's a bad value for drivers, but this would be pretty contentious argument. And if not Uber, then you have taxi monopolists which are the real leeches. Let me clarify: it's a great deal for users. So perhaps it isn't a good example in that sense. But I think you can argue that the 'gig economy' offloads the costs of social security to the tax-payer.

Value to customers is somewhat subjective, right? Some people might think ESPN is the best value for money they can get. I think the true leeches are companies exploiting loopholes in capitalism: rent-seekers and monopolists. Cable monopolists. Uber. Patent troll firms. But in the US I'd say private health care companies in particular.

Surely you, of all people here, must know that that isn’t necessarily always the best idea ..

Which you won't, because this is a value investing board :P .

See the post above. Maybe you have the Tony Soprano look and can pull it off. I'm too much of a cheapskate to buy gold and am basically a living stick figure. People would instantly assume I have a terrible disease or am a drug addict :) .

Ah, yes, I misread the question. Anyway, close friends and family you should be able to tell the truth, no? Though I never talk numbers or bring the subject up myself. And if they're not-so-close friends and family I would revert to my previous post, i.e. saying something like "I worked in finance, now I do something similar from home.". "Is it going ok?". "Yes.". Followed by an awkward silence and a change of subject. Hah, if that is the hardest part for you you must be extremely well suited emotionally for investing large sums of money. Surely losing money is the worst part. But I agree, it can be annoying and it is an underrated issue. People assume you are lazy, or leeching off your partner, or they complain about how many hours they have to work or how you could help them with X because you have nothing to do, etc. I recommend having or finding a few friends who are in the same situation. Good to talk with people in the same situation every once in a while. I read a story this year on another message board about a guy in a similar situation, who often picked up his kids from school, walking, wearing a track suit or some casual clothes. And at some point another parent inquired if he had cancer. Apparently that rumor started to circulate because surely no healthy father has lots of time to spend with his kids and wears casual clothes on weekdays .. I hope it will happen to me one day. I will verbally slaughter the poor soul asking.

At first I cheekily said I was jobless or househusband but that often got awkward. Now I usually say “I work from home (in finance or something) and keep it as vague as possible. I hate telling random people I invest / trade. People either think you are a reckless gambler and start ranting about capitalism or ask questions about cryptocurrency and Tesla (the latter is by far the most annoying). Also, in my opinion small talk about jobs is usually extremely boring and I’d rather talk about something else. My single piece of advice would be: the cheeky answers always backfire.

Yes, I see it now: intravenous bleach infusion, bombardment with UV rays, gamma rays, etc etc and patients will be straight up cured! And his apologists were out defending hydroxychloroquine because this guy was behind it... We now proudly celebrate ignorance in our culture--and you see the manifestation here on this forum and in the population at large. The consequences of said ignorance unfortunately does not merely fall on the ignorant, but spreads to the wider population via collateral damage. Oh well. A really sad state of affairs. When he was just being elected, some smarter republicans argued that Trump's rhetoric was a deliberate case of playing 3d chess to win the election and anger the libs. And that he would soften, that they could right the ship from within, etc. Gradually this line of thinking disappeared and rather than acknowledging their mistake it morphed into something else: tacit and complicit acceptance of utter idiocy.

USO did the sensible thing and is deviating from their index strategy: https://www.sec.gov/Archives/edgar/data/1327068/000117120020000259/0001171200-20-000259-index.htm Was the market trying to bust USO today? Or was the huge drop in June contracts caused by USO rolling half of its June futures to the next expiration? Fascinating stuff. Liquidity doesn't seem too bad if they can roll half their position in a few hours.