writser

Small update post-mortem. It was difficult to find back this topic. Interesting read about the "the betting event of the decade", Mayweather vs. McGregor: https://www.espn.com/chalk/story/_/id/28366850/the-betting-event-2010s-mayweather-vs-mcgregor . Fun read, recommended. There are other ways to make money besides value investing.

Either he will resurface as a great investor or you'll read about him in the newspaper because he went on a rampage with a semi-automatic in a Wall-Mart wearing only his socks. Flip a coin.

As a foreigner I just wanted to chime in and say I'm baffled every single year by the idiotic consequences of the way investments are taxed in the US. Apparently you have to buy businesses you don't want to own because others have to sell businesses they want to own and then a few weeks later you do the reverse. And if you don't you have to pay extra taxes?

We've been watching Peaky Blinders. Very enjoyable. Also, if you are a huge nerd you might like Rick & Morty season 4. One episode even featured FinTwit / CoBF's favorite entrepreneur. No, not Gio.

I looked into this, it seems that the right implies a ~62% probably for each drug to approved, which is lower than the estimated probably. From that perspective, it seems like a good value. What tells me to hold this odd is the Fact that the terms of this CVR (all three drugs need to be approved at a certain date) makes it so easy to avoid a payment for BMY, which amounts to $6B total, if some articles are correct. They can just push through 2/3 of the most important drugs and get them approved as quickly as possible, then delay one until after the cutoff date and presto, they just saved themselves $6B. Doesn’t take a genius to think that this will cross somebodies mind at BMY’s management. They could be quite opportunistic about this depending on which hurdles will develop with any of the 3 drugs even if it’s not the plan right now. For sure the intentional delays are a risk. But I don't think they are a deal-breaker. Some good discussion in the comments here.

As far as I know, all three legs are still 'on track'. According to the latest CELG 10Q: One can do both legs on margin. Deal close expected tomorrow. No sure money, but a decent bet. Time to leverage up the account?! I closed that position, bought BQBBV (the CVR on an when-issued basis). Much easier. Didn't know that security even existed (though it seems tradable only as of today).

Buying CELG, selling BMY. Effectively buying the CVR @ $1.84, which was valued at $3.83 in May by BMY (link, page 10). As far as I know, all three legs are still 'on track'. According to the latest CELG 10Q: One can do both legs on margin. Deal close expected tomorrow. No sure money, but a decent bet. Time to leverage up the account?!

rocketfinancial.com is something similar. But the good think about Morningstar is that you can see financials from stocks worldwide, not just US stocks. I haven’t found a replacement that offers the same range of stocks.

I used Morningstar a lot to take a first peek at / get a quick overview of the financials of a new company but that's now impossible. How the fuck can I quickly determine anything useful about the cashflow of a company from this 10-page mess? I'm surprised they haven't changed it back yet. It's so terrible. Must be costing them a lot of customers in the long run.

DOVA. I think it's a decent place to park excess cash for a few days. But I'm a sucker for CVR's.

Even back in the $8.40s SMTA still looks cheapish to me. Not hard at all to come up with an expected distribution figure of over $9, even using conservative assumptions. How did you go with SMTA? Looks as though the distribution has been paid (either that or there is some catastrophe causing a 90% drop). No, stock went ex-div for $8 today. I bought, then I bought more, then I bought more, etc. Was by far my largest position yesterday. Though not very risky given the large upcoming distribution. Basically you could invest a ton of money with very little risk to end up with a small position in the stub on the cheap. I like situations like that. Good spots to park your excess cash for a few weeks if you do your homework.

The cheapest stock.

True up to some point. I think there's a difference though. If you look backwards at Berkshire there is not only history of good returns, but also a history of solid decision making and closing on savvy deals. In hindsight you can analyse what Buffett did and conclude: his thoughts on Geico, See's Candy, Coca Cola, American Express, Bank of America, BNSF, his hedge fund bet, etc. were spot on (and, in all fairness, not so spot on with Berkshire, Kraft, ..). But I think all in all history suggests that Buffett is a great investor, which would suggest future outperformance is perhaps possible. You still have to judge for yourself whether he is getting senile or not, whether he can generate alpha with such a large capital base and what will happen when he dies. But I think there is some predictive value in his track record. And if he starts dry humping Becky Quick on CNBC you can think "he's losing his mind" and sell your shares (though did he really lose it? Maybe he's just faking it). On the other hand, if you look at a graph and say: "I could have bought BAC at $22 and sold at $24 a few times", is there any predictive value in that? Why would it work in the future? Why would it be a more profitable strategy than buying at $22.50 and selling at $23.50? Or, even more extreme, than buying at $22.90 and selling at $23.10? Or than buying and holding? If the strategy stops working after a few months, should you be patient or adjust your price levels? Can you explain when and why the strategy works? Can you explain when and why it stops working? If you make the roundtrip a few times, are you simply lucky or are you a good investor? Maybe there are answers to these questions, but I don't think Cardboard has them. I for sure don't have them. Not saying you can't make money the second way. Just saying that I prefer situations where I can explain beforehand why I expect to make money, and where I can explain afterwards whether my thought process was correct. That way I can hopefully avoid making repeat mistakes. And it gives me a (tiny) bit of confidence if something blows up in my face.

ACHN. Domestic merger, small deal for buyer, two different CVR's that you get on the cheap and a $40m reverse termination fee on a $700m deal (on a net-cash basis). Might open a topic at some point about it - curious if anybody has thoughts about it. There could be some antitrust issues.

I think he pretty much gave up on posting here. A shame, I liked his posts as well. CoBF's Walter Schloss.

I'll join the circle jerk. I agree with most of the names dropped in this thread (subtle brag - thanks for the mention!). I'll add three names: Foreign Tuffett, Hielko, and KJP. Picasso was great too but he basically stopped posting. I'm sure I'm forgetting a few names, mostly because not everybody spends as much time here. For example, what I think is one of the more interesting threads lately basically is a discussion between three people who hardly ever post here. Also, I think the question is not that important: good posters occasionally fuck up and bad posters occasionally have great ideas. Do your own due diligence. What makes a good contributor? For me the answer is pretty simple: somebody who brings up original, concrete analysis. I think I can safely state that Packer is one of the most valuable contributors to this board. Browse through his posts: he replies to a wide range of stock threads and every post contains either a) concrete analysis or b) questions that are relevant for concrete analysis. Perhaps more importantly, what does he not post? - blurbs with zero added value. - vague macro views. - anecdotal evidence. - results and results-oriented analysis. - what other people think. - pictures of his cat or political viewpoints. - countless links and short news flashes. - no-brainer ideas, guaranteed winners and other displays of overconfidence. - angry posts. - meta-stuff about 'what diet is best for value investors', 'who is the best poster on this forum' or 'how can I apply Secena's philosophy to my stock portfolio'? Just rational, independent analysis.

My bad.

Of course I know that. My point was that the return you generate doesn't tell you whether the underlying strategy has blow-up potential or not. You can pick up pennies with high turnover, or with high leverage, or with high profit margins, but, to answer your question, even if your strategy returns 30% p.a., yes, in the end you are still picking up pennies in front of a steamroller. Also, you sell insurance on blue chips. I don't know how you calculate your ROC but consider me extremely skeptical about that strategy generating a 30%-40% risk-adjusted return for a retail investor. It's not exactly rocket science.

Is it really picking up pennies when your making 30-40% ROC a year? Ask the traders from LTCM.

Cardboard you are a very smart trader. Using your concept I started looking for similar situations. I think I found an even better one: buy Microsoft at $137, sell at $139. You could have done that about six times the last two months. So that would be around 1.05^6^6 = 68% annualized. That seems even better. The only risk is that you get stuck with a very high quality company below $137, or risk further upside above $139. Of course if there is a calamity then Microsoft could go bankrupt or be down a lot but Bill Gates would probably bail out the company. Also, if there is a calamity, what would happen to the rest of the market? While I know that hindsight is 20/20, I think that one could do much worst than trying this out. Especially with all the brokers going to $0 commission it seems like we can make a lot of money here. Many thanks for your idea. Do you have more suggestions? I'm looking forward to a fruitful discussion. Writser

Wrister, could you elaborate on the specific reasons you are not interested in the discussion on CoB&F? Is it the quality of discussion? Is it specific behaviors or practices that are an issue? Is there something that would make the section useful to you? Do you find the contributions of some contributions useful? By the way, thank you for the excellent contributions you have made on CoB&F. You have posted tons of good materials and comments over the years. Thanks for the kind words. With regards to your question: I think the politics forum is a cesspit. US politics is so polarized that there is no real discussion anymore - it's just democrats insulting and triggering republicans and vice versa. Participating in those flame wars is counterproductive: you will only reinforce the beliefs of yourself and your opponents and you will get frustrated and angry. And even the rare well-intentioned thread gets hijacked quickly. Second, I'm mostly here to find and discuss opportunities in the stock market. I'd rather not know the political viewpoints of other posters because if they post something I consider idiotic in the politics section I might be biased when they actually post a good stock pitch. Third, even though I rationally know the politics board is a waste of time it is immensely tempting to reply to people posting stupid stuff online (the famous XKCD comic). It takes self restraint not to do so. And I prefer to use the limited daily amount of self-restraint I have to not blow up in the stock market and to be nicer in real life. If I block the politics section I save self restraint. Fourth: when I log in on this forum I want to see under recent posts what stocks are being discussed. That's what I am here for. I don't want to see: "Bribery race heats up: Bernie versus Botox Betty" "Who's More Creepier..." "Call me when you're lonely" "The Twat of South Carolina!" It makes the 'recent posts' section less useful for me. Not to mention that it is fucking sad and depressing to see that trash every time you visit the forum. In short: ignore the politics board and you will be happier, less biased and it will be easier to suppress the urge to masturbate in public places.

Bingo. I'm interested in politics. I'm just absolutely not interested in CoBF members discussing politics.

Thanks for the book tip. Decent overview.

I came across this today: https://www.sec.gov/news/press-release/2019-189 . The SEC is proposing changes to rule 15c2-11 which would make it more difficult for brokers to offer quotes on OTC stocks without current financials or shell companies. At this point it's not completely clear how exactly the rules will change (and if they will change), so this is all a bit speculative but any thoughts on how this would affect CAOX, PDER, PDRX and other OTC forum favorites? I guess that for some companies it will act as a pressure to start filing but for other companies (like CAOX?) it might imply that liquidity will dry up even more (if that is possible ..). Still some open questions. What exactly is "publicly available"? Also, I'm not an expert on piggy-backing. Can somebody explain to me: if I enter an order for CAOX in my brokerage account, does that also fall under rule 15c2-11? I.e. can't IB / TDAM / Schwab publish my price if they are not allowed to piggyback anymore? Or does that rule only hold for prop orders and can they still publish customer flow? I'm afraid it's probably the former.

Curious sell-off, perhaps because it is not possible to tender anymore at some brokers? Admittedly an extremely weak thesis but the setup in general looks ok too (huge tender, insiders not selling, shares close to a three-year low so some bagholders might not be willing to sell) .. Still one hour left at IB. Might buy a few shares and tender at any price.