ItsAValueTrap

finviz.com lets you download short interest data. Here's an old analysis I did based on that data: http://glennchan.wordpress.com/2013/12/19/there-are-too-many-short-sellers/ Interactive brokers also has a list of rebate fees by stock. ftp://shortstock:[email protected]/usa.txt You can put that data into a Google Drive spreadsheet to grab market caps. --- In my opinion, I think that rebate fees are a better indicator of future share price performance than short interest. For small caps, rebate fees are a better indicator. This is because some of the best shorts have a very limited number of shares being lent out. For large caps, this effect is less. IPOs tend to have very high rebate fees because of people flipping their IPO shares. The short selling is driven more by arbitrage than by how awful the stock is.

You guys need to stay away from these stocks. Many of the names mentioned in this thread have been inflating their numbers. Fraud is rather high. That's the reason why short interest is high. If you don't understand the lies in this sector then you should probably stay away.

Great find! The part at 1:18 provides a very different perspective on the infamous TCI/Liberty split.

Regarding dumb terminals over the Internet... I don't think they will take off. But suppose that they do. Maybe one day cloud gaming will work. I'm pretty sure that video will max out at 4K. We already know that moviegoers don't care about 4K and are satisfied with 2K. Once the demand for bandwidth growth stops, some tech companies may face headwinds. Historically, what has happened is that revenues shrink.

We've been doing that for audio and video. On the audio side you have Pandora, Grooveshark, Spotify, etc. On the video side you have Netflix. But the thing about streaming audio and video is that there are limits to how much bandwidth we need. For audio we don't need quality that is better than 192kbps mp3s. For video we don't need better than 4K. Once we get close to the limits of human perception, the demand growth for bandwidth stops.

I'm asking about what will happen to shareholders. If you look back at history, investors got waaaaay too excited about Nortel Networks and their voice over IP(-like) technology. That was partly due to fraud. But it also has to do with VOIP becoming good enough. Only so much bandwidth is needed for VOIP. We reached that stage a long, long time ago. Actually since we reached that stage the quality of calls has gone down due to people using calling cards and being ok with cost-cutting measures (which result in audio compression artifacts, latency/lag, etc.). Eventually, maybe the growth in Internet traffic will stop. I certainly think that Netflix and other on-demand services will drive huge demand for Internet bandwidth in the next few years. But that might stop. And if that happens, it may not be a good thing for Cisco, Level Three, Akamai, etc. Intel is seeing the revenues from its PC Client group drop (even though more people worldwide are using computers). Apparently he never said that.

They managed to name most of my oil and gas shorts. :o Um... you should probably avoid any resource stock written up on VIC as a long. For whatever reason, VIC is very good at identifying the worst stocks as longs- ATPG, Yukon Nevada / Veris Gold, ?Goldgroup? GGA.TO, Baja Mining, MILL, etc. etc.

Yep, pretty much! As far as storage goes, I think we're also close to the point of being good enough for most people. People can (A) switch from hard drives to SSDs and (B) backup their data via the cloud because the demand for storage hasn't grown that much relative to advances in technology. In the past, something new would always show up and drive demand for better CPUs, more storage, more RAM, more bandwidth, etc. But I think this is happening less and less nowadays. I'm sure a lot of offices are still running Windows XP. Here are some 10-Ks that talk about Windows XP or2000: http://www.sec.gov/Archives/edgar/data/708818/000070881814000008/qsii-10k_33114.htm http://www.sec.gov/Archives/edgar/data/945384/000135448814001527/cicn_10k.htm http://www.sec.gov/Archives/edgar/data/1185348/000118534814000002/praa-20131231x10k.htm - PRAA - "Our desktop PCs run the Windows XP or Windows 7 operating system." (No Vista.) 2- Adding 3-D to video might require 10-30% additional bandwidth. (Don't take that number too seriously.) Increasing the frame rate also doesn't require a lot of additional bandwidth due to the magic of video compression. I'm not sure what you can do beyond that. There's no killer consumer app that is driving demand for bandwidth other than video-related applications.

There's different types of oil. Some refineries will work best for a particular type of oil. Often, the oil is being produced in a location far away from the relevant refineries. For natural gas, there's "dry" gas and "wet" gas. Wet gas burns hotter because it contains ethane. If the gas exceeds 1100 btu, it can't be sold in most markets because a lot of equipment isn't designed to burn gas so hot. In many places, shale development has led to too much wet gas. In rare cases, wells are being shut-in because the gas can't be sold. There are different types of processing plants that can remove ethane from wet gas. Some technologies remove more than others (e.g. cyrogenic). Nowadays it's mostly cyrogenic plants (they remove the most) that are being used for shale gas because there's so much wet gas. I don't think that the energy equivalency is that relevant at the moment. Net present value. (Or standardized measure, which considers tax.) However, most companies lie about their reserves. So I would *not* rely on that metric.

It depends on how the spinoff is structured. I think that the legal contract will be fairly long. 1- It would make sense for eBay to continue to force people to use Paypal... I think. The only innovation that matters is somebody figuring out better ways to reduce fraud. Technology is the easy part. It's fighting fraud, offering convenience, and providing good customer service cheaply that's the hard part. If eBay opens up another payment option, it will make their system easier to attack. Fraudsters will attack the weakest link. There is probably some tight eBay/Paypal integration that only works between eBay/Paypal. I know that when I download my Paypal transaction data, there are fields specifically for eBay auctions. However, I don't know what anti-fraud stuff they do internally. 2- The customer service is somewhat integrated between the two companies. Somebody who gets scammed on eBay will be talking to eBay and/or Paypal. It gets complicated if you try to separate the two companies. The worst-case scenario is if Ebay and Paypal start blaming the other company and sending customers to the other company's support system because both sides have to watch their profit and loss. They will want the other company to shoulder their customer service costs.

Paypal's cost per transaction mostly has to do with fraud. If you read their early 10-Ks, it breaks out their margins and how they got pretty scared about fraud. You can read the book Founders At Work for an interview with Max Levtchin, one of the founders. Something like 30-40 of Paypal's competitors went out of business since then (including Ebay's in-house payments solution). Visa and Mastercard are different. They have amazing moats and pricing power. Since they went public they started raising prices like crazy. If others agreed with me, investors would be harassing Ebay management to buy back shares and to buy fewer Silicon Valley startups. The stock would be down today, not up.

Lassonde owns shares in ESL.TO. I've read Lassonde's book on gold. It was underwhelming. It also had terrible timing... had you listened to the book and bought gold, your investment would have gone sideways for several years. The Gold Book: The Complete Investment Guide to Precious Metals (Financial Times Personal Finance Library) Lassonde understands very well that you can make money by selling overpriced stock to investors. To some degree he talks his book; he wants people to overvalue his company. I never put in the work to figure out how much of his returns were due to skill and how much to luck. If Franco-Nevada didn't find gold then obviously its returns would not have been as good.

Well, the integration is beneficial for eBay -- but is it beneficial for PayPal? Yes. (1) The integration is win-win. More volume on Ebay is good for Paypal. (2) Ebay forcing people to use Paypal is good for Paypal. I guess I'm in the minority thinking that this is a bad idea. I feel like people never really bothered to understand Ebay and Paypal, their history, etc.

I think Paypal was and still would be a good acquisition for Ebay. ;)

Bad move in my opinion. The Paypal/Ebay integration is beneficial. The two companies often have to work together to fight fraud on Ebay. I suspect that there are synergies because both companies have to spend a lot of time and effort on fighting fraud and the activities associated with doing that, e.g. customer support for legitimate customers whose accounts are accidentally frozen.

In my opinion, it's a good thing that IB has smart risk management and won't let you margin certain things (e.g. Chinese reverse mergers) to a high degree. You don't want your broker to blow up.

They usually give you a heads up when they change margin requirements. Also, if you don't use more than 1X leverage and don't short, you can't get margin called. 2- They do liquidate illiquid positions with wide spreads first. However, you can tell IB which positions not to liquidate. You may be better off using less or no margin in the first place.

Maybe stick to the industries that are easier to understand + easier to perform due diligence on. Very difficult industries: Investment banks Some areas of insurance Mining Development-stage pharma "Less" difficult: Oil and gas Enterprise anything, e.g. IT companies like IBM Health care Next tier: Railroads Utilities Small banks Financial services Payment networks, payment processing Broadcasting Content companies (Disney, Netflix, etc.) Manufacturing Home builders Asset management companies Relatively easy: Retail Real estate Consumer products Food Restaurants Really easy: Certain forms of arbitrage Closed end funds Companies that own mostly cash and stocks Difficult to predict: Technology (e.g. read Bill Gates' book The Road Ahead and see how many failed predictions are in that book) While information on many areas of technology are available on the Internet, I don't like areas where even the smartest people have difficulty predicting the future. ----- I would personally stay away from the stuff that is really difficult. In hindsight, I realize that mining is extremely difficult even if you are well-read. I've been trying to sharpen my knowledge of retail because there's a lot of stocks and lots of good long/short opportunities. Some people like the late Sam Walton have become incredibly rich from retail. Figure out what works for you though.

+1 As a Canadian, I also have a TD Waterhouse for my RRSP and TFSA. Norbert's Gambit works for that. But clearly Interactive Brokers has ridiculously low currency conversion costs.

1- If you believe that insider trading is real, then it would make sense that (in aggregate) the buyers of volatility have an edge. 2- I suspect that the market will balance itself out. If selling volatility is unusually profitable for a long period of time, then eventually too many people will flood into that trade. And then some freak event wipes out all the gains from that strategy. Historically that is what usually happens anyways. I have no idea what the real answer is.

Iron ore is cyclical. Chinese government policy is causing unusually high levels of demand for steel and therefore iron ore. Coal is facing structural headwinds but it's also cyclical. At some point I think you have to start getting bullish. Brian Dalton of Altius is going long coal right now. I think Gamestop will, sooner or later, hit an inflection point. Digital distribution of games + online retailing is extremely compelling. For example, PC gaming is very healthy and it has almost completely moved to digital distribution via Steam.

What do you think about NAMEV and eNom? (I've written about them at http://wp.me/p1mOGr-UV ) Though I do agree with you that nothing is particularly cheap. It's probably because most of the people who own it don't understand it?

Let me help you... ;D http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/vrsn-verisign/ - the Verisign thread http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/dmd-demand-media-11074/ - the Demand Media thread

Congrats!

Complete bullshit. The cost is ZERO to install solar for the poor (as long as they own the home). Solar City comes out to the house and installs the solar for no money down. Zero Zilch Nada. The rate Solar City charges is less than what they are already paying the utility. So they are guaranteed to pay less than they currently do each month. After five years, they can ask Solar City to remove the panels if they aren't happy -- they will remove the panels at ZERO cost. 1- My bad, the article is old and came out before all the new financing plans became available. 2- If I remember correctly, doesn't SolarCity have credit requirements for their financing plans? So technically people with bad credit are somewhat disadvantaged. 3- People without solar are effectively subsidizing the people with solar. That's potentially a problem if consumers without solar figure it out and want cheaper electricity. There is a subtle wealth transfer here that makes solar appear more economic than it actually is.