siddharth18
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Posts posted by siddharth18
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You rob a bank - you lose your freedom (go to jail).
You rob market participants/investors to the tune of hundreds of millions (maybe even billions) by front-running/insider trading - you pay a fine and move on.
Yup, silly. But the bank robber probably can't afford a cadre of lawyers to battle the government for another ten years.
Do you believe that US is cutting Cohan any slack in this case? I think Bharara would really like to throw the book at Cohen but this is the best they can do with the scant evidence they have. If they had more damning/smoking-gun type evidence (like Raj Rajaratnam), I'm sure Cohen would already be handcuffed by now, rotting in a jail cell.
He's smart/lucky to have not kept any meaningful trail that would incriminate himself - hence he created such a complex web of entities that mostly existed only to shield him from personal responsibility/liability, while concomitantly funnel all the profits back to him. That's why all his underlings go to jail while his capture is elusive, at best.
To think about what his actions mean for the economy and the world - it's mind boggling. A single person's machination that constantly and consistently embezzled the market participants by obtaining access to market-moving information ahead of all others and acquiring all the monetary benefit of bringing such efficiency, but unfairly.
For what little he has provided to the society, he now possesses the power to obtain goods/services and channel society's hard work/labor into pleasing his whims to the tune of $9,000,000,000.
Just look at his trades: Link
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You rob a bank - you lose your freedom (go to jail).
You rob market participants/investors to the tune of hundreds of millions (maybe even billions) by front-running/insider trading - you pay a fine and move on.
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This video's pretty illuminating:
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Since this thread seems to be the IB questions base, here are some lingering ones I'd really appreciate some feedback on:
(1) What additional services/data services are recommended? IB charges for data feeds. If you don't buy them, how old are the quotes? Are they selling level 2 quotes in these feeds or something else? Any free alternatives?
(2) Is securities lending or the alternative where you lend directly worth it for small international stocks, say $50M-$100M and lower? What's the demand and rates like?
(3) Is there any real difference between friends & family and family office accounts if you aren't a RIA and aren't charging fees? How does logins/security work with the USB 2-step authentication in either of these accounts?
1. I have a TDAmeritrade account that provides free level 2 quotes. Based on the market price/order book I see, I place limit orders in IB.
2. Rates for securities lending mainly depend on demand and supply. IB will take 50% of the cut.
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Amusing article. It's vanity fair so you can't really take it seriously.
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Can anyone enlighten someone like me, who's not familiar with corporate governance laws/rules, with what happens if they agree to let him have two seats on the board?
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Wanted to post it here since this is an IB focused thread.
I'm long EBIX and it has a borrow/rebate rate of -40% according to IB's Short Stock Availability Tool:
http://i.imgur.com/7IvYlXj.png
But they are only counting the Market Fee Rate between 2-11% in my account.
Any idea why?
http://i.imgur.com/SAGO24w.png
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400% in 12 years translates to a CAGR of 12.25%...definitely above average.
I was more impressed by his drive, background and age rather than his returns.
BTW here's a new link to the article if the old one's pulled: http://www.marketwatch.com/story/the-400-man-1328818316857
No, check the math Siddarth...closer to 14.5% annualized, during a period when the S&P did less than 5% annualized. Cheers!
Ahh rookie mistake by (won't be the last)...I counted the final value as 4 instead of 5. ::)
Cheers!
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400% in 12 years translates to a CAGR of 12.25%...definitely above average.
I was more impressed by his drive, background and age rather than his returns.
BTW here's a new link to the article if the old one's pulled: http://www.marketwatch.com/story/the-400-man-1328818316857
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I'm not really a fan of standing for long hours. Isn't that one of the cause of osteoarthritis?
Yhe "cartilage" between your leg bones doesn't regenerate after damage. So utmost care must be taken to ensure that no excessive weight (or reasonable weight for excessive amount of time) is placed on your legs.
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http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539873749
Two glaring issues regarding the outcome:
1. The illicit profits were generated by the fact that the Terpins had information that seller of call option didn't. In the spirit of fairness, don't the "illicit profits" really belong to the seller of the call options? The seller was cheated, ironically, he didn't have insider information and played by the rules. Why shouldn't he get the money that was recouped? Why does the money belong to the government now?
2. Why no jail time? What happens to someone who engages in the same behavior and doesn't have the $3 million to settle with SEC? What if they don't have to money to buy the "get out of jail" card?
PS: Steven Cohen would be proud.
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Yikes! No amount of money is worth being imprisoned in China.
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So basic value investing won't work anymore? If so, I am probably screwed because I am too dumb to do anything else.
+1
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Following the adage that prevention is better than cure, I'm looking for any guidance on how one can pick a great lawyer. I have, fortunately, never had to deal with lawyers in the past but I'm looking to do estate planning and set up asset protection and I figured I'll definitely need a lawyer for it.
Obviously I'd like the most bang for my buck and would prefer a lawyer who would place his fiduciary duty (of serving his client) ahead of personal gain (of running the meter).
I've asked my family/friends but none have any recommendations, so it feels like uncharted territory. I could just run down the list of estate attorneys in my area, asking each one about their fees, etc but apart from that, anything else?
TIA.
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Wow, simplifying something so damn complex. Kudos.
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Anything that would reduce flaming, sarcastic comments, petulance - I'm for.
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http://i.imgur.com/s3i6bf1.gif
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Maybe I am a little biased because I dislike conflict in general. Usually it's a lose-lose situation.
If you look at Buffett... he used to invest in cigar butts and then amass a sizable position in the company. Then he would approach the board or CEO about making changes to the company. At Berkshire Hathaway, he made a deal with the CEO to tender for shares for below intrinsic value. That seemed like a win-win situation. Buffett gets a high rate of return on his investment (he didn't get intrinsic value for his shares but who cares). The CEO gets to keep his job. There wasn't some ugly public battle where the activists pretty much push the CEO into acting like a complete douchebag (there are posts on my blog about Selwyn Resources).
Unfortunately, the CEO decided to try to screw Buffett by doing the tender offer at an eighth lower (or a sixteenth; can't remember). So Buffett didn't tender and bought majority control of the company and then fired the CEO. ;D The rest is history.
He also realized that investing in cigar butts is not as good as finding the See's Candies, GEICOs, etc.
I agree that fight is the worst way to resolve a conflict but at the end of the day, I suppose, all that matters is whether it works. And the participants usually drift towards a strategy that they feel is most effective and least expensive and has a high success rate. Looked at Loeb's track record, I'd say so.
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His tone has certainly changed over the last year. Back when there were talks of LBO (and HLF was trading around 35), he said ICahn wouldn't possibly pay price in the high 50's or 60's given the "risks" associated with the company.
Now he says HLF won't be able to raise money at 4%, or that no bank would possibly underwrite $3B of debt issue or that HLF won't maintain its current earnings multiple if it raises $3B or that the buyback won't generate any shareholder value.
Regardless, I think those that are waiting for a synthetic price movement due to an impending (the mother of all?) squeeze are exposed to the perennial business risk HLF faces.
At a $35 price point (as late as August), one just had to believe that the company wasn't going away overnight with it being around for 30+ years, having a strong lobby, diversified international revenue base, Icahn by your side and a you had some comfort in being a contrarian.
Holding at $70 is a completely different story. The consensus view has fundamentally shifted, and everyone seems to think that Ackman has failed, that HLF is legit and the only way foward for the stock is UP and UP. And trouble usually starts to brew when EVERYONE thinks something's going to happen.
The dynamics of the vicious machine, that is the market, are not always manifest, are often under-appreciated, and almost never are as simplistic as they are portrayed. Someone said it best early this year - Ackman can be right and still be broke. By reducing his stock-based short and initiating a derivative based short he is more or less acquiescing that his initial game plan wasn't as successful as though and there is a very real possibility that it would backfire on him.
And let's not forget - the onus is on HIM to bring about change, action and eventual halt to the ostensible pyramid scheme. He's fighting an uphill battle against - Herbalife's corporate stash, their world-class lawyers, lobbyists, advisers, political connections, all who have imprimatur of the God father in this saga - Carl Icahn, and, to a smaller extent - Soros.
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I don't drink coffee either, so this may be speculation on my part, but I think that it's part of the brand strength. When Buffett talks about Disney, Coke, etc owning consumer's mind, it's more than just price or quality or value. It's the overall experience that's created and nurtured by company over the years that no mom-and-pop company can replicate easily.
Similar to how Panera Bread does it. I think Panera is hugely expensive (and nothing that they serve is hard to make) but the ambiance, the lighting, the music, the wallpapers, their video ads, the exotic product names, etc just come together to convince you to pay almost $10 for half a sandwich sandwich and small bag of chips.
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Feasted on organic delicacies and imbibed vintage wines at a cost to shareholders? HOW DARE THEY?!
On a more serious note, I always have fun reading Dan Loeb's letters. If nothing else, I can make some nifty additions to my growing arsenal of esoteric vocabulary.
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Loading up on NFLX, TSLA, YELP, FB, P, ANGI.
Just kidding. Been adding EBIX, AWLCF, TSE:AM.
Source - SAC to Plead Guilty, Shutter Offices & Pay $1B Fine
in General Discussion
Posted
Well I definitely think no party is doing each other a favor. The only evidence they have of Cohen is him acting negligently and failing to supervise his underlings even in the face of obvious insider information. According to the government, he knew (or should have known) that his staff were trading in insider information but he failed to prevent it. That's as far as they have gotten in terms of evidence.
As far as Rajaratnam, they had a lot more evidence. They had wiretaps of him actually asking/talking about nonpublic information. I don't think they had it on Cohen. Why else would he not have been arrested/jailed like Raj? A case like that is too easy to prove, don't you think?
I'm just guessing here, but I think - for SAC, even a trial of negligence would've been humiliating. Regardless of the final verdict, may be Cohen figured it was too much trouble to get involved in years of litigation and the public airing of dirty laundry. May be he was just happy to pay 10-20% of his wealth and put everything behind him and move on.