muscleman

I am not saying I will do this. I am just saying if people who have decided to short it, which symbol to go with. You can definitely short the TLT, but if another crisis event shows up, this thing will move back to 130 quickly. I think buying cheap stocks still make better sense to me.

I think this is a good idea with very limited risk. The yield cannot go below zero, so there is a ceiling on these 10 y note prices. I think you can either follow them to short the futures, which has the lowest margin requirement and trading cost, or you can short the 1x long ETF.

I think it is better to short the 2x treasury long ETF, or directly short the 1x treasury long ETF. 2x ETF has a lot of trading costs, so if you short it, even if the underlying price stays the same, the ETF will drop.

What growth do you expect from their future EPS? That is the key. When Buffet acquired the Northern SanaFe, It was some PE like 11, which is not very cheap, but look at the EPS growth since then... If NOV grows the EPS by 20% for the next few years, this will be a huge win. If the EPS is flat, you won't lose money by buying at 11 PE. Of course if the EPS drops, you will lose money. That's a fair statement, what's your growth estimate? I personally prefer to use FCFE rather than Net income, and from that angle, the earnings multiple doesn't come out nearly as generous. Usually don't growth companies have less FCF than the EPS? I guess you are valuing it as a mature business that doesn't grow and generate a ton of FCF each year. They need the cash to grow their business. Their revenue per share growth has been very high in the past 10 years. The real question is whether their real business economics is good? This could be masked by the growth, so it is not easy to figure out. I am still diving into it. I think it is obvious that the shale oil and gas drilling will be booming for the next decade, so it will be nice if we can benefit from it. :)

Gold kept dropping. Is there a lock up requirement for Paulson funds? Maybe we should short his holdings as he will be forced to sell them to meet redemption requests. ;D

Congrats Sanjeev! I envy you that you have so many star investing friends! :)

According to Sanjeev in one post above you, SAC has settled with the government. Why is there another probe? Is there more than one insider trading case? :o

I read some of his books. People usually say he is a speculator that is purely lucky. I am not sure if that is true. He trades more frequently than most value investors, and if he is purely luck based, he cannot possibly prosper for such a long time. His worth max draw down in his entire career is only 22% for once, and never exceeded 20% even one more time. His books are very confusing and I could not understand what his method is. But I doubt it is value investing based because he trades commodities as well. One thing that I truly like in his book is that he said when there is a balanced good news and bad news, usually the market will keep going up. Only when there are only good news will the top be there. I think right now we still have a little bit of bad news from Europe, and probably that is what keeps the market in the bull stage. Also recently Buffet said that he thinks the current market still has many fairly valued stocks. I didn't start learning investing before 2009, so could anyone please tell me if we had a lot of fairly valued stocks in 2007, or everything was quite over valued at that time? Maybe we will still have 1-2 more years of bull market? ;)

Did we have similar day traders starting in 2005, 2006 or 2007? I am just trying to figure out when is our next top. :) Right now everything looks quite bullish. I am not sure if this is already the top, or there will be 1-2 more years, and what will cause the bear market.

Hi muscleman, I partially, but not fully, agree with you. Mr. E. H. Harriman was used to say: So, after appreciating from $10.45 (my purchase price) to $14.80 in 8 months, and in the meantime also distributing a 5% special dividend at year end 2012, for a total return of little less than 50%, TPOU is now trading at a 9% discount to NAV ($16.31, see file in attachment). It is obvious that, if you are interested in a “quick and easy” 10%, EXO.MI at a wider discount to NAV might be a better choice than TPOU. Vice versa, if you are interested in something that will grow, I still prefer TPOU. I simply think “the opportunistic son of a bi…” business model of Mr. Loeb is far superior to the EXOR’s more static business model. After closing the gap to NAV, sincerely I don’t see how EXOR could grow as fast as Third Point. And Third Point will grow: 1) After increasing NAV per share 22.5% last year, it has already increased NAV per share 18.4% in 2013, both far above its long term track record, despite the $13 billion under management. 2) Mr. Loeb focuses on “special situations” of any kind: in stocks, in bonds, in real estate, in currencies, etc. The markets he operates in are huge! And compared to them $13 billion are just a flimsy sum of money. 3) When AUM will actually start to become too large (many years from now) and therefore to impair results, Mr. Loeb will give money back to shareholders through special dividends. For those who reinvest the dividends, TPOU might still continue to be a compounding machine. So, I prefer EXOR right now as a trading opportunity, while I still prefer TPOU as a long-term investment. giofranchi I see. That makes sense. Thank you! :)

Are you saying that you would trust PV-10 estimates? My problem with the oil & gas industry is that I don't trust them. They can distort the economics of their wells with few repercussions. This is a recipe for disaster. Rampant lying in the industry with few repercussions for lying is a recipe for disaster. This is how I see the majority of independent oil and gas companies out there (and junior miners, chinese reverse mergers, etc.). It will end badly. What does book value have to do with anything? Full cost versus successful efforts accounting will yield different book values for the same company. I'm starting to think that they are buying things outside their circle of competence. Buffett's style is to do business with people with integrity. So if the management team is honest, then you can probably trust their resource/reserve estimates. He has invested in oil&gas for a long time... Exxon, PetroChina, Conoco Philips, etc. I don't think he ever got burned with reserves or economics being overstated. Munger or Buffett has made some kind of comment about being bad at judging resources/reserves (and technology). In hindsight, his forays into commodities don't seem to have been as brilliant as his other moves. He hoarded physical silver, invested in Cliffs a long time ago, etc. etc. I think that Buffett is on another level compared to other investment managers out there. It's just that it's hard to get crazy returns out of some commodity industries. Here's what he said in his 1989 letter: Thank you! So when you say independent oil and gas companies, do you mean the junior ones, or even the major ones including BP and Exon? I now at least understand why it will be better to buy Exon than DVN, as posted by the other member here. These big oil companies are able to grow to today's size for a reason.

I started a separate thread for that discussion. Let's not distract people who are interested in TPOU. http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/which-stock-broker-do-you-use/

I am currently using Fidelity. They have international trading, but very expensive. Forex cost is 1% of the principle, plus commission per trade. This morning I bought some EXO.MI, and I had to pay 1% for their forex division to exchange my usd into euro, and then 19 EUR for their stock division to get the trade done. If I sell in the future, the cost is similar. I used Scottrade in the past, but didn't like it. It doesn't have international trading, and OTC trading for low priced stocks is very expensive. (1% of principle) I asked Interactive Brokers before and it seems like their International trading is the best. Also they provide the "Enhanced yield program", which allows me to lend shares out to earn some interest. But their custom representatives are very rude, and if you have a margin account, they have the policy of instant liquidation, so your account could be wiped out with one bad tick on one of your symbols. Since I only hold a cash account, I shouldn't have this problem though. My other concern is that IB forces you to pay a minimum of $10 per month for commissions even if you don't trade, and another $10 per month for US data fees. International exchanges will cost you extra data fees. So in general, the reason I choose fidelity is because: 1. My employer opened my 401k in Fidelity, so it will be easier to manage all account in one broker. 2. Fidelity works with TurboTax, which makes tax filing much easier each year. 3. I trade mostly US stocks, so the higher cost for international stocks occastionally isn't that bad.

http://online.wsj.com/article/SB10001424127887324767004578489130300876450.html How much will this impact NOV? Who will have the biggest impact?

This is a no brainer when it was trading at 20% discount. But right now the discount gap is quickly closing. Given this fund has 11 Bn assets, I doubt if Dan Leob can continue to grow at 17% a year. Therefore I think other investments will be more attractive right now. For example, EXO.MI.

What growth do you expect from their future EPS? That is the key. When Buffet acquired the Northern SanaFe, It was some PE like 11, which is not very cheap, but look at the EPS growth since then... If NOV grows the EPS by 20% for the next few years, this will be a huge win. If the EPS is flat, you won't lose money by buying at 11 PE. Of course if the EPS drops, you will lose money.

There is far less volume. https://www.google.com/finance?q=OTCMKTS%3ATPNTF&ei=dJaVUdjiG8OuiAK0qQE This thing didn't trade between May 8th and 15th.

My own filing. Ok. That sounds good. I thought all stocks trading on LON has to be GBP currency based. I didn't know TPOU is USD based. How could that happen? That is so weird. Why don't you get a broker that can trade in international exchanges? It is much better to do it that way.

Yeah. It is narrowing quickly. I am confused why the US shares are listed in LON? I have never bought any closed investment firm's shares before. Is there any difference in filing taxes in the US between normal stock companies and closed investment firms' shares?

How do I buy the US shares? TPOU seems to be a symbol in LON exchange.

I think it depends on per well IRR. If the per well IRR is very good, then it makes sense to use all the FCF to grow the business. In case of DVN, I am not very familiar with it, but if it can make 50% IRR, why not use all the FCF to drill and grow?

Or better yet, buy Tesla stocks. ;D

Why not Google "oil and gas reserve estimation" and come to your own conclusions? Or try this Wikipedia page for a start: https://en.wikipedia.org/wiki/Oil_reserves Management teams can: 1- Hire only engineers that are extremely optimistic. 2- Pressure the engineers to deliver a high number. I don't think that they pay them off to inflate reserves. It's not bribery but the effect is the same. It's because reserve estimation is inherently uncertain. You might get a lot more or a lot less oil/gas than you initially expected. It's really hard (or impossible) to differentiate between honest mistakes and dishonest estimations. A side effect of this is that it is almost impossible to prove fraud. This means that there will be few repercussions for inflating reserves. If this is so difficult to do, why do we still see super investors buying E&P names? Do they have any special edge in it?

So even for super investors like Carl Icahn, he could not take a look at the detailed data room in CHK before he decides to attack McClendon?

Thank you! So the primary issue is how to get an accurate PV-10 value then?