writser

rb, I'm not an expert on backoffice stuff but I think you are incorrect. The clearer is not relevant here. All trades on Euronext France settle through LCH Clearnet (https://www.euronext.com/nl/node/779). IB is a member of LCH Clearnet. All brokers directing orders to Euronext Paris are members of LCH Clearnet. That is the whole point of a central clearing party. But the custodian handles the corporate action, not the clearer. For example, if you receive a dividend, the transfer agent / share registrar of the company will make sure the custodian (and all other holders on the register) gets a cheque or wire. The custodian will then distribute the money to their clients. The clearer has nothing to do with this. And with a corporate action, your broker will send instructions to the custodian. The custodian bundles these instructions and sends them to the transfer agent, who will then execute the corporate action in conjuction with the company, update the share registry and subsequently inform the custodian of the changes and/or wires cash to the custodian. Also in this case the clearer is completely sidestepped. The only function of the clearing house is to eliminate counterparty risk when buying / selling and to consolidate multiple transactions. As Hielko pointed out, the problem here is (probably!) that this corporate action is not available for US entities, due to security laws. The custodian knows your nationality because they need that to, for example, determine correct withholding taxes (and for corporate actions such as this one). Moving your shares to a different custodian will (again, probably!) not solve the problem as the transfer agent still sees that he has to deal with a US shareholder who is ineligible to participate in the offer. If this is the case, and I think it is the case, (but to make sure you could contact Fidelity or another broker to see if they can tender your shares) your best bet would be to contact the buying broker (Gilbert Dupont) to see if they can buy your shares outside of the tender offer in a private transaction. I translated the prospectus using Google and that seems to be a possibility, which is why I suggested you contact them. Then, the final question is how Gilbert Dupont is going to buy your shares. Will Euronext cancel the trading halt and can you sell on-exchange? Can Gilbert buy through an OTC transaction on Euronext (which, to be fair, would settle through LCH Clearnet) that the IB trading desk can facilitate? Or can you transfer your shares from IB to Gilbert's account with a FOP transfer? Or would you have to register shares in your own name and get the transfer agent to pick up your position? These are questions outside the scope of my knowledge and IB and Gilbert Dupont should figure that out between themselves. It's probably going to be annoying to orchestrate this as a retail shareholder. But if you request a physical certificate you immediately forego most of these possibilities. Opening your own custodian account would probably be an enormous hassle in Europe and would also limit your options. On top of that, you would be trying the exact same thing from that custodian account that your broker could do for you, without any back-office experience whatsoever. I would never consider that unless explicitly requested. Have you ever tried to reach out to a custodian? They will do their utmost, utmost best to avoid having anything to do with retail clients. "Hi, I'm Spekulatius, can you help me with completing these complicated forms so I can participate in a corporate action in Cameroon that probably conflicts with US security laws? Maybe we can lie about my nationality? And can you deposit the money in my Paypal account afterwards? Thanks." Finally, my guess is that if you do nothing, at some point somebody at the custodian will panic because they still have these shares and they do not immediately want to transfer them to a registrar in Cameroon, because nobody has done that before and nobody wants to hang on the phone with Cameroon for a few hours to discuss your case with somebody who probably knows more about brewing beer than shareholder registries. At that point the custodian might contact IB. Or the custodian might contact the transfer agent, who might contact SABC. If you have harrassed all parties down the chain relentlessly I would guess the ball starts rolling at that point. Of course that is a bit speculative and who knows, your shares might end up on the registry in Cameroon. Even if so, at that point I'd be willing that SABC would remove you from the registry and send you a wire, if you harass them long enough. It would be good to clarify that with SABC legal because it would mean you have a backup plan (or a main plan :P). Then again, I (fortunately!) didn't work in back-office so I could be wrong about some of these things. In fact, I might be completely wrong in which case I'd gladly hear so. It's a mysterious world behind your trading interface. One I prefer to avoid as much as possible. And, as I said before, I have no clue about IRA's so I don't know how the above would affect your tax status, or would affect whatever else that is relevant for IRA's.

Calling a French broker would be very awkward indeed and I would also desparately try e-mail first. But in my experience, if you really want to get things done, calling is simply more effective (basically in every situation).

Yes, you are probably correct with regards to the tender offer. I'm not a US resident so these restrictions do usually not apply to me. Forgot about that. Still it might be worth a try to see if Fido can help. Also, reading back my previous post I think my advice could be seen as slightly conflicting with what Gregmal was saying. Just to clarify, Gregmal is an esteemed forum member and by no means should you discard his knowledge. Greg has been treated horribly on this forum in the past (me being one of the instigators of that) and going forward one should treat his posts with the care and respect they deserve. Greg, if you want me to rephrase or change my advice because I have offended you in the slightest, please let me know. Everybody should be able to give his or her or hir (if you are transgender) opinion without fear of repercussions.

Do you have a Fidelity account? I can't open an account there but I heard they're a decent option for Americans wanting to trade foreign stocks. You've got some time left. Maybe it's a long shot but you could open an account and try to find out if they see the same regulatory problems .. Something like that would be by far the easiest solution. Alternatively, it seems that BNP Paribas is the transfer agent, you could try to get IB to get BNP to transfer the shares to your own name and then contact Gilbert Dupont (the buying brokerage firm) to sell your shares - or you could, after the tender offer expires, try to get IB to sell the shares to Gilbert Dupont (maybe tendering is not allowed but a direct sale is .. ) I would try to contact Gilbert Dupont in any case (from the prospectus: Gilbert Dupont, whose head office is located 50, rue d'Anjou, 75008 Paris), maybe they know what you should do. This whole route does not seem like it would be a fun experience though - how is your French? In short, I would contact Fidelity and other brokers to see if they can faclitate something and at the same time, harass IB, SABC and Gilbert Dupont relentlessly with e-mails and phone calls. Try to get them to contact each other and try to get contact details from somebody relevant at BNP. I'd be very careful with converting your shares to physical certificates. Once you are out of the institutional system I am afraid things will only get more difficult and you will be completely out of the loop. I'd probably rather just hold on to my shares at IB and see what happens. Situations like this "feel" extremely dangerous but we don't live in South Park (*poof* aaand it's gone). At some point down the road there will probably be an opportunity to monetize your position because in the end nobody is interested in having an American with a few shares on the registry in Cameroon; the buyers want you to sell your shares. Especially if it's a small position I'd be tempted to just hold out .. I'd say eventually somebody at some back-office will run into insurmountable problems and escalate and especially if you've been spamming everybody down the chain relentlessly they will probably get back to you with an offer to make a wire transfer or they will resume trading on Euronext or IB changes their mind when they are faced with some Cameroonian forms they have to complete or whatever. I have been in some similar hairy situations (liquidating distributions from a delisted Dubai company, tax issues with a Kazachstan GDR delisting) and my experience is that while it feels terrible dangerous thing usually work out. The relentless harassment is important though, corporate bureaucracy is your most dangerous enemy. Important disclaimer: this is just like, my opinion. Also, about the consequences of shares being in an IRA account I have absolutely no clue. An interesting adventure ..

To get them interested you could also buy a basket of consumer stocks they’d know, i.e. Mattel, Coke, Disney, Google, McDonalds, etc. Add a new one every year. Maybe not the best option from a rational perspective but I always though that would be a cool way to teach kids a bit about investing. You could also buy 1 share of such a company each year and put the rest in an index fund. Then you can act like an annoying dad every once in a while: “you know, when I buy a happy meal you earn 0.0000001 cents!” etc.

It's a shame that this wonderful, kind, humble human being with an enormous brain decided to leave this forum. Perhaps he can start a private 'safe space' forum with Greg and a few others where they can safely discuss their godlike returns and super smart strategies without being offended and harassed by pea-brains like me. The quality of that forum would be mind-numbing. Obviously I would never get an invite and I would not be able to read any of their posts about how to generate 60% p.a. returns for the rest of my life. But I can live with that being the punishment for my past misdeeds. I feel so bad about this whole episode that I'd even consider renting a web server for them to set the whole thing up. I would call the forum 'Greg's gay safe space' - gay of course meaning care-free because that's what the place would be without all the hecklers. But another name is fine too of course. What about 'Greg and his no-brainers'? Obviously referring to all the opportunities you guys see out there. Let me know if you guys would be interested in starting up such a thing. Anyway, I wish dear forum member RuleNumberOne all the best in his future endeavors. And in case it helps to change his mind: RuleNumberOne, buddy, if you decide to stay here I will never, ever, ever question anything you post ever again. My IQ is simply too low to comprehend what you are doing. I'm sorry about that. Please accept my heartfelt apologies.

Dear Greg, if you actually read the post I referred to, our friend stated that the 5-year CAGR of his IRA's was lower than his wife's, which was 38%. A few months after that he claims that his IRA's 5-year CAGR was 56%. That is a huge discrepancy and I thought it was interesting to point that out. Of course, given that you feel offended by such nitpicking I will have to rethink my behavior in the future. Macro traders are some of the nicest people out there but they are a minority that is often subject to abuse. I respect that you stand up to fight for their rights. The righteous fire in you is as strong as it is in Ellen DeGeneres. That said, please allow me to table a minor suggestion: I believe the term 'a pos' stands for 'a piece of ****' and I'm sure we can both agree that that term is far too controversial for the safe space you and I are trying to create here. I have received several PM's over the last few years from people who are dissuaded from posting here because of profanity like that. You have to be more careful, it is very easy to offend people inadvertently. May I politely suggest 'inconsiderate' as an alternative phrase? Also, I am not sure about the term 'two hoots'. Are we talking about the cry of an owl here? Animals have feelings too and it seems a bit offending to suggest that the cry of an owl is inferior, to, for example, the clucking of a chicken.

Well said Greg. From now on I'll try to be nicer when people are spouting nonsense. It's a bad habit of mine and I wasn't aware that I was discouraging your friends from doing the same. I admire your notion that this forum should be like a college campus safe space where all minorities (chartists, macro traders, ..) are welcome to post whatever they want and where we don't criticize anything or anybody, lest people are offended. Some might call that 'pandering to snowflakes' but not you. You are simply fighting for the rights of the oppressed minorities. Standing up to the bullies. I applaud you for that. Your post has been an eye-opener. Until today I never realized that I actually am one of the villains, and that you are the Alexandria Ocasio-Cortez of this forum. Who would have thought .. Also a big thanks for not picking apart my superficial stock picks last year, even though it would have been very easy for you. You correctly deduced that I don't care about my analysis being correct, I just want to feel appreciated. Negative feedback does not help with that. In that light would it be too much to ask if you could post a kind word in every thread I opened last year? It would make me feel really good. I'll do the same thing with your threads if you would appreciate that. Consider it a peace offering. We could maybe watch a Michael Moore movie together afterwards. Thanks.

Thepupil, I appreciate your effort but surely you know deep inside that nothing good will come from this. There’s an unverifiable 5 year CAGR (that changes every other post ..) implying “investing god” but a verifiable 10 month post history implying “ignore list”. I prefer verifiable track records ..

RNO has mentioned nothing of his concentration or exposure levels (feel free to chime in: are you holding one or two of these stocks at a time, or a combinatino of all of them). IRA's can't use margin and he said no options, which makes this even more of a herculean feat. I understand the benefits of piling in and out and using vol to your advantage...but this is more than that. 17x in 7 years is some serious moneymaking and deserves a little more exposition on RNO's part, for the benefit of the class here. You know what is the most impressive part? In July 2019 the 5-year CAGR of his IRA’s was ‘comfortably above 25% - 30%’ (link). I guess the last few months he really upped his game.

Agreed. FWIW It's not even cap-weighted, it's share-price weighted. Any discussion involving this index is just total nonsense.

Have you tried talking to them before writing a passive aggressive shaming letter?

For an average company the dividend yield is what, ballpark 3%? I don't know your tax circumstances but where I live US dividends fall under a tax treaty and 15% is withheld. That implies a slippage of ~0.5% annualized. If I really like a specific company and it pays out a dividend in the low single digit range I would consider that slippage acceptable. I don't bother selling / buying back around the dividend but you could do that, though I think a certain amount of withholding taxes is usually priced in. But of course the correct answer is: it all depends. On your tax situation, the size of the dividend, how much you like a stock vs. the alternatives, etc. etc.

Thanks for the kind words all. Not sure I deserve them. My portfolio should withstand a big crisis first. Some shameless self-promotion: last year I've been shifting some stock discussion to Twitter instead of CoBF. I think it's a decent platform to share some real-time thoughts about stocks and the stock market. @thewritser. Jet lagged and deprived of sleep after a return flight from a tropical island I read 'even though I don't like him'. Which would have been totally understandable but is fortunately not the case. I took a quick peek. Seems cheapish indeed but with a ~$3.5m mcap overhead will quickly erode any value (even though it is only estimated to be $300k / year, which many American nanocaps can only dream about .. ). Even more importantly, I am unqualified to say anything sensible about the ongoing tax disputes. Given that the company implies that losing these cases causes 'significant uncertainty around the company's going concern' I feel like I can quickly discard this company until the transfer tax issues have been clarified. In my limited experience, when a tax authority is interested in suing you they can make life very difficult for you for a very long time. Not to mention legal costs when your market cap is $3.5m. FWIW, this seems like a company with a cool history. Also, I forgot to mention one of the more stinging lows of the year that demonstrates what an idiot I sometimes am. During H2 2019 I was notified about a liquidating real estate fund (non-US) that supposedly was attractive. I did some reading, looked at the latest quarterly, modelled the liquidation and yes: it looked quite attractive indeed. I quickly bought a decent position as shares weren't trading frequently and there was a bit of a time constraint. The next day I found out that some non-current liabilities were on the next page in the quarterly. Never bothered to flip the page or do some very basic calculations .. Idiotic. I quickly updated my model. Guess what: shares were actually reasonably priced. Instead of trying to sell my position (which was a bit difficult: again, an illiquid name) I said to myself: Writser, you are actually being too conservative with your estimate of liquidating costs. Also your estimate of rental income is probably a bit too low. I fiddled a bit with the numbers so I could just about convince myself that holding was slightly more attractive than selling. Needless to say, a few days later the company came with new guidance that was 100% in line with my model before I started tinkering with it and shares dropped a few percent. In the end the whole situation turned out great but the process was a disaster. Forgetting a page of the financials: terrible. Doubling down on your mistake: unforgivable. Now let's get this thread back on topic.

Just got back from vacation, did some administrative work today. 2019 return: 29.05% (in EUR), give or take a few basis points. Returns since I started doing this full-time: 2014: 17.51% 2015: 11.89% 2016: 36.96% 2017: 22.86% 2018: 15.41% 2019: 29.05% About 22% annualized. Everything in EUR. Numbers might be slightly different than posted in previous years because I made a small retroactive change in how I treat tax credits generated by my portfolio. I only pay a flat wealth tax and use tax credits to offset most of it, so my performance is basically net of taxes. As in previous years, I think my headline number is conservative. I have acquired a nice collection of CVR's, liquidation trusts, escrows, tax refunds and other untradable stuff over the years. My brokers (and thus I, for wealth tax purposes) value most of these assets at cost or zero and in terms of fair value that is too low. In particular, I have a large Sapec tax refund incoming in a few weeks, valued at zero. That should add another ~2% to my performance. And as another example, one of my largest positions this year was IAM.TO. So I have a decent position in the IAM CVR, valued at zero, but I think it is very likely that it is worth significantly more. Anyway, bla bla bla. Just saying that you should take the headline numbers of individual years with a grain of salt. Also, some of my positions are so illiquid that they can swing around 10% or 20% in a single trade. A bit of reflection: I'm quite happy with how the year went. I'd like to think that I have a reasonably conservative portfolio with not a super high beta. No high-conviction huge positions. Lots of special situations, some deep value stuff, no leverage and usually a 5% - 15% cash position. 50+ positions, very high turnover. Largest individual position < 5% at the moment. Not your typical 'punchcard' portfolio. I'm skeptical about my abilities and like to spread my eggs. That way I don't blow up if I make a few horrible mistakes. Also, it keeps me busy and I enjoy it :) . Long term I'd be extremely happy if my portfolio returns around 10% with a bit less volatility than the market. So far I'm doing way better than that. This year in particular was nice: I don't expect at all to keep up with the market in a year in which it is up ~30% but I managed to minimize the damage. Of course that might mean that I am simply taking way more risk than I am aware of .. Finally, some highlights this year: I was involved in a few individual trades this year where I am 99.99% sure I generated significant alpha and where that alpha materialized in a few minutes / hours / days. A few of them were very satisfying. Usually it is close to impossible to determine whether you have an edge on the market. Trades like these give me a bit of confidence I'm doing something right. I am very content with my track record in Italian real estate funds (link). The past four years my basket appproach and opportunistic trades in this space generated a >20% IRR with a large sample size. ASFI was a deep-value idea that worked out perfectly this year. ATXI was a very enjoyable and profitable stock to analyse and trade around. Same for SMTA. BMY rights were also very interesting to look at. They appreciated 50% already since the merger close a few weeks ago. A situation I'm going to track closely in 2020. Finally, by far the most enjoyable special situation of 2019 was becoming a father. And some lows: I underperformed my personal benchmark again .. I'm a bit sloppier and lazier than the benchmark. Also, I'm too stubborn / stupid to analyse / buy stuff that is basically more expensive than net cash. Hemacare, XPel, Viemed, GAN PLC were very solid ideas but I just can't get comfortable with ideas like those. I have owned Hemacare on and off during the past few years (it has been a 100x bagger) but whenever it is up 20% in a few days I sell my position, only to regret it later. I said last year that I should try to improve a bit in that area but I'm basically still an utter bottom-scraper (though up to some point it is also a style difference that I can live with). Something similar happened with ATXI and ASFI this year. My theses were correct, I made some good money but I think I should have been more patient with letting the theses run their course, rather than start selling as soon a a stock is up X%. Something to work on (again) in 2020 .. Also, PACB was only a small position for me but probably one that I entered when I hadn't done my homework as well as the rest of the market. In general I have the tendency to buy small positions too aggressively and size my best ideas too passively. I think sizing is one of the most difficult parts of investing. Another low: I posted a few times in the politics section. Fuck me.

Seems like it has to do with them getting into trouble with FINRA for allowing affiliates to trade without restrictions. Probably they were too lax at first and are now compensating by being extremely obnoxious. We’ll see where it ends .. So US only.

If only they were. I cannot sell or buy ASFI anymore even though I just hold 100 shares worth $1000 .. Admittedly I had a larger position in the past but even then I wasn’t close to owning 1% which would be 65k shares - a position worth a few hundred k and three weeks of trading volume ..

Yes, it’s fucking terrible. To make it worse, on top of the 1% rule they seem to select positions arbitrarily, e.g. I also got restricted from trading in some securities where I own far, far less than 1%. I also hear from people that they can trade some stocks in one account but not in another. All seems quite a clusterfuck and if they keep this up I’ll probably have to move a significant part of my account elsewhere.

I’m not particularly enthusiastic about anything at the moment. Then again, I seldom am. Some picks: BMY/RT - CVR that pays out $9 in certain scenarios. As I said somewhere else: “Perfect storm: FDA uncertainty, skepticism about Bristol-Myers incentives, (perhaps) index selling pressure, and you need to have some knowledge of probability theory, medical knowledge and have a huge risk appetite. Basically the perfect unlikable security.”. Seems a nicely priced bet (for a tiny allocation) to me. Already up ~50% in a few weeks but I think it should trade even higher. Conduril - Still one of the cheapest stocks out there. But will it ever rerate? Boustead Projects - Decent owner-operator bla bla bla company with lots of real estate on the books. Plans to spin off a REIT. You get paid for waiting. Italian real estate (QF funds). Trading / holding these funds has generated a 20%+ IRR for me the past 4 years. Not sure if that is sustainable but I like the risk/reward of a basket of these (and such a basket is one of my larger positions).

Also some discussion here: https://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/cki-clarke-inc/570/ I hate the SEDI interface. I have been using ceo.ca since it was recommended in that thread.

Would you mind sharing the idea? I'm curious. PM is fine too. I have a small position in the Bristol Myers CVR. Trades at $3, pays out $9 in certain circumstances, worthless in all other cases. I think that that is a typical situation where you might want to tinker around a bit with the Kelly formula, just to get a feel for what an optimal position size would be if your assumptions are correct. What usually happens is that you think: I make these and these assumptions and I'm comfortable with a 2% position. Then you plug your assumption in the formula and it tells you you should increase your position tenfold. The interesting question then is: is your position sizing way too conservative or are your assumptions too optimistic? In practice I usually end up with a much, much smaller position though. What that implies I'll leave to the reader. Back in the days I used to play a lot of poker. An old married couple of regulars at the table had some cool stories about even longer ago, when counting cards in single deck blackjack was allowed and profitable. Usually the blackjack tables were filled with a mix of card sharks and casual players. They'd all have some fun, banter a bit and play for minimum bet size. Then at some point the remaining cards in the deck were favorable and all the card sharks would suddenly switch to maximum bet size, i.e. suddenly bet 200 instead of 5 or whatever. The dealer obviously knew what was happening, wasn't fazed at all and continued bantering with the card sharks. At some point all the sharks switched back to minimum bet size and the game continued as if nothing had happened, even though some card sharks just lost or won a huge amount of money. Rinse and repeat. Apparently this really freaked out the casual players who didn't have a clue about what was going on. Would have loved to be there. Not at all. If you find attractive 'lottery ticket' stocks or options and make some very basic assumptions about them the Kelly criterion will show you that you should keep your position sizes small, completely the opposite of what you are saying. The Kelly criterion also shows you that, in terms of position sizing, it is very important to look at downside protection if you are wrong, rather than solely looking at the upside if you are right. Something that a lot of investors tend to overlook. In general, I think the Kelly criterion can be a useful tool to challenge your own position sizing in certain scenarios. I think that that is a useful exercise every now and then, to avoid getting too attached to your own preconceived notions about sizing. The alternative is solely relying on gut feeling and experience.

Happy holidays. May the market crash in 2020 :) . Time for some excitement!

Sure, if you misapply the formula, don't know its limitations or make garbage assumptions you can lose money. That doesn't mean that the math is wrong, it just means that you are being stupid. Unfortunately no amount of math can change that.

seems to me that there is less than meets eye re Kelly Criterion. the math is remarkable, but the estimation of one's edge as compared to market odds is the crux, and this is of course in the eye of the estimator. since I am not a math maven, reading Thorpe's scholarly stuff wont help me and so I am left thinking that like anything else, there is a garbage in garbage out problem...which likely applies to any system Yes, very true. It's way more suited for black-and-white stuff like blackjack. Kelly also assumes the bet is settled instantly and doesn't take into account opportunity costs. Both not true in the stock market. Still, I occasionally like to tinker a bit with the Kelly criterion. Especially with binary situations like mergers / CVR's / regulatory approvals required (i.e. biotech). For example, assume a simple takeover bid at $10, stock trading at $9, pre-announcement it was trading at $5. You can plug these numbers in the Kelly formula, play around with a range of probabilities and tinker a bit with the downside in case of a deal break. That way you get a pretty good feel for position sizing. Look at the huge difference between optimal sizing when downside is very small vs. very large: basically the mathematical proof of Buffett's rule #1: never lose money. A short read by the CFA institute about applying Kelly in practice in the stock market: link. I thought that was a decent primer. It's not an ideological framework. It's math .. If you play blackjack in the casino you can fool around with any 'ideological framework that suits you' but in the long run you will never beat somebody who uses mathematically proven optimal bet sizes. In the stock market it's a little different because, as cherzeca pointed out, the difficult part is estimating your edge. Still it is good to know the theory and not something ideological that you should discard if it doesn't work a few times in a row.

Isn’t that supposed to be the “good literature” on the Kelly criterion? Or do you want something more academic? In that case I’d simply start at the Wikipedia footnotes.