Cunninghamew

I turned 28 this year. Last year my investable assets finally surpassed my loans from grad school, but... Then I got married to a medical student :(

I make a new mistake about every day, but towards the end of college I pretty much wiped an acct of mine clean. A little background... I got very lucky from 2004-2007. I started investing (gambling) a small amount of savings I had from highschool and was fortunate to compound that capital quickly (no reason other than sheer dumb luck). For example, I made a killing (in teenager terms) off of ELN (Elan Pharma) in 2005. I bought the stock after its lead drug Tysabri killed a few people in trials. The drug ended up getting approved with a black box label and was probably like a 5x bagger for me. The first E&P I ever purchased, MHR was acquired at a nice premium by Cimerexx (note MHR has been reincarnated agian). The point is I got lucky off the start. We were in a bull market and it felt like everything I touched made money. I wanted more and so I started to read about and trade options. The options trading started in earnst around 2007 for me and I focused almost exlusively on out of the money options in the E&P space. I was buying near dated OTM calls on a lot of E&P names around earnings and conferences when I thought they would announce well results. I racked up what was a ton of money for a college kid (me at least) in my options account ($ thousands) and when commodities peaked in mid 2008 I lost it all in about 2 months. I litterally took it about $200. Needless to say I was a speculator not an investor. Big lesson learned: Dont mistake luck in a bull market for skill I still wonder today if any of my ideas would qualify as an investment to Ben Graham or if he would say they are sepculation.

I have seen a few posts on who the best investors are, but I was wondering if people would be willing to share who they thought the great educators are? I.e. people on this board who not only provide investment ideas, but also good rationale as to why that idea is compelling. I personally have benefited a lot from reading the posts of two individuals. Furthermore, I frequently run search's for their posts and read them even if they are not ideas I am involved with. I will start with mine Packer16 - obviously a good track record for ideas on the board, but also a great teacher. He is willing to engage in a constructive dialogue with anyone and gives thoughtful answers. PlanMaestro - I never really touched financials (exception insurance) untill I read his postings. After reading his stuff on some of the financials I found myself reading his blog where he outlines his own journey in learning about how to value and understand banks. One caveat here is this guy loves to post links to articles he is reading. If there is an article about the company he is following he had read it. Fiat is a great example and one where I simply cant keep up with his pace.

How long has lending club been around? And do they publish statistics? Like default rate by loan grade etc

Nice Ballmer avatar... that guy scares me

Wow thanks everyone.. I will have to check out Charlotte. The research triangle is also a definite possibility for her. They have a good pediatrics program that she is interested in at UNC. J Bird we like the south and we like moderate size cities with character. I have a good job in Dallas and her school is great, but we are not big fans of staying here. Dallas is like LA without a beach. We have been trying to create a short list of cities we like and it is hard to find a good mesh (i.e. high probability of me finding a good job) and being a city we like. Here is the list of cities we like, but our hands are going to be forced based upon where she matches. The goal is to apply to a bunch of programs in cities (that have good prospects for me), decent programs, and fit our preferences. Once we have a good list it will all come down to the match. They apply to a ton of programs, so we need a big list 1. Austin - my employer would be a good resource for me finding a job here 2. Little Rock - this is where our family is, but finance jobs are few and far between 3. Dallas - this is status quo for us 4. Charleston, SC - we absolutely love this city, but job prospects are probably bleak here... Def our fav city 5. Nashville 6. Memphis - close to home and decent program. There are a few asset managers in the area 7. Chapell Hill - good program for her, but I don't know about job prospects 8. Bay area - she and I both love San Fran, but the cost of living is what scares me (I would def need to find a good job). They have mutliple programs that are awesome. Long-term CA is a bad place for doctors though New ideas for me to research thanks to y'all 1. Charlotte 2. Atlanta - I don't know why we havent talked about Atlanta 3. Cleveland - I have neer been, so I don't really know what to think about that idea. I know they have the Cleveland Clinic, which is awesome We have both 86ed Chicago and NYC... we are small town folk at our heart. I will have to look into Rochester, but our inclination to move way northeast is prob not high Again, thanks

My wife is finishing up med-school and soon to be applying to residency programs. We need to find a city that works for both of us. I currently work in finance. The question is what is a cool city where it would be easy to hunt for a related job? The catch - we are small town southern folk (originally from Little Rock, AR) who couldn't handle life in a place like NYC... going there for work is enough We currently live in Dallas

Now that UCP LLC ("UCP") is a stand alone entity, I was wondering if anyone has tried to put a value on it? Is the easiest way to value just to look at "lots owned" and ascribe a conservative value to each and then discount it back, because real estate is fairly illiquid and you cant monetize today. I.e. they owned 4,363 lots as of 6/30/2012. The latest 8-k indicated that the average selling price per lot was $126k. If I want to be conservative lets just assume $90k per lot. That gets me to a current market real estate value of about $392,000,000. Then some discount would need to be applied from here. My assumption is that all of the cash outlays for "lots owned" have already occured, so they can just sell them and it is all gravy. Is that correct? Outside of transaction fees and taxes you would incur... I would not give any value to the lots controlled to keep things simple, but it looks like they can aquire more properties at fairly attractive rates. Additionally, they raised a lot of cash during the IPO that will be held on the balance sheet. I am assuming the cash was raised so they could fund homebuilding via Benchmark Communities and hopefully realize a higher ASP (looks like the margins are better). Would you look at the Enterprise Value / Value of the Real Estate?

Just finished reading this book. Easy/quick read. Great primer for anyone interested in learning about the high yield market. Thanks for the recommendation. Sidebar: Is it a rule that any book with association to Joel Greenblatt has an awful title. "How to Make Money with Junk Bonds" by Levine, Forward by Greenblatt (thank god he was not the author or the title would have been worse) "You Can Be a Stock Market Genius" by Greenblat (great book, but definitely embarissing to read in public) "Little Book that... "

Now that is proper due diligence.... thanks GG

I have never been a big fan of upstream MLP's. I will go ahead and say that I think in the LT their business models are flawed. Its like a bad arbitrage game (below is an explanation of why I think they stink overtime). However, the recent negative press surrounding LINE and BBEP seems to be dragging down the entire group. My question is are there any worth starting research on? Are any babies being thrown out with the bath water? ARP? Why Upstream MLP's bug me (1) you produce an extremely volatile commodity (2) you distribute your earnings from producing said commodity (3) the commodity or your resource potential is a depleting asset that you must replace to continue with distributions (4) this means you have to find more places to drill and/or acquire other producing assets (5) if you are buying other producing assets during elevated or rising commodity price enviroments you are paying up for said resources (6) so when commodity prices fall you are stuck holdings a depleting asset that has less value... distributable cash flow falls and so does the distribution further compounding these issue are the way they go about biz (1) all of these guys issues tons of equity, because it is to hard to fund CAPEX organically and pay a fat distribution (2) after they issue equity they buy more producing assets/maintain existing ones (3) this allows them to up their distributions (4) the market rewards them for growing their distributions i.e. stock price increases (5) this in turn lowers the cost of equity (6) they retap the equity markets for capital

1. Taxes - you will need to issue a K-1 for each LP... the only issue I think of with tax exempt accounts investing in the LP would be UBTI generation 2. Are you starting a Family LP or just an LP? I think of a Fam LP as an estate planning tool. 3. The funds will be wired to the partnership's brokerage account and each limited partner will then own x% of the LP 4. My firm is SEC registered and the GP of an LP, so we are required to get an annual audit, but I don't think you will have to. Check, bc audits are not cheap 5. Additions and redemptions - lots of thoughts here. (1) redemption terms need to match up with your investment horizon... nothing sucks more than having to liquidate a position where the thesis has not played out... if you are just doing equities probably quarterly with 30 to 45 days notice (2) the less frequent your flows are (redemptions & additions) the easier it will be for you to administer the fund... assuming you self administer. Also, you need to give a lot of thought to how you are going to administer the fund. Depending upon the fee schedule you use and the addition/redemption frequency this can get complicated. If you have specific questions let me know and I will ask our back office guys anything you want

I was wondering if anyone played in the bio-tech space. I have always been intrigued by what I call "free call options" in the space for obvious reasons. 1. Bio-tech stocks generally do not trade with the market, but rather around their events. 2. You can sometimes find companies trading below the value of their cash (which will burn with R&D) and/or the present value of existing royalty streams with a near term trial on some other drug. I am not talking about speculating around FDA trials. I am talking about finding small companies with a downside floor (i.e. cash or NPV of royalty) and the potential to make a lot of money if a certain drug does pass a FDA trial, hence the term free option. Here is an example of a stock that played out earlier this year and still exhbits a lot of those characteristics (FYI... I heard a pitch for this stock and started to follow it). FURX Pharmaceuticals (FURX) - in Dec of 2012 could be purcheased for approx. $18 per share. At the time the company had a drug (Alogliptin) that was approved/marketed in Japan. The drug was marketed by a Japanese company Takeda Pharma and FURX recieved a royalty from its sales. Assuming a 5% growth rate, 15% discount rate, and 0 terminal value when the drug went generic the guy making the pitch derived a NPV for Alogliptin of $20 per share. In late March of 2012 the stock sold off strongly when the FDA / EU rejected the drug in phase III, bc it wanted more data. Immediately following the sell-off the CEO made large open market purchases. As I already stated, the drug was being marketed in Japan and the company was recieving a royalty stream from those sales. Investors at that time could purchase FURX at a discount to its Japanese royalty stream and get a free call option on two events. 1. Potential approval of Alogliptin by the FDA/EU once the company presented more data in 2013 2. Another drug (MuDelta) is currently in phase III (it uses opiods to induce constipation). MuDelta had a highly successfull phase II study in terms of efficacy and safety. Furthermore, the study was huge with 802 patients enrolled. At the start of this year the FDA and EU approved alogplitin and shares jumped to a high of $42 (~100% gain) on the first free call option. Since that time the stock has sold off, but now the company has downside protection in terms of a greater Alogliptin royalty stream (EU & US in addition to Japan). The NPV of the new royalty stream is likely greater than the current stock price of $33.90 and one free call option remains. I do not own any shares, but am trying to study up. There are plenty of other examples in the space of just interesting situations where you don't even need the free call option. Think PDLI and MAXY... these were simple value stories. I just wanted to post and see if anyone follows the space. I am always interested in learning about these type of ideas.

Hi Merkhet. This is a good book about the interaction of rates, inflation and multiples. http://www.amazon.com/Unexpected-Returns-Understanding-Secular-Market/dp/1879384620 His website is also great. If you read all the white papers here you would get 90% of the book. http://www.crestmontresearch.com/. The guy use to teach classes at SMU, but don't know if that is still true. Might be worth seeing if there isanystuff floating around from his teaching days

I almost invested in SIRO and actually sent emails to my dentist and a friend who is a dentist asking about the technology. They acted like it was revolutionizing the practice. I can dig up those emails if anyone is interested in the company. I never made an investment, because I thought once the market was saturated with their technology it was end of story. I was hoping there would be good reoccuring rev. from selling the molds for the cerac machines (that SIRO makes), but this was unclear and I passed. Needless to say the stock is up about 90% since my decision to not invest. It feels like the stuff I research and forgo investing in always does better than the stuff I do, but oh well. Better to pass up potential gains than to grab real losses.

Sorry... my "I have held this from the beginning comment sounded arrogant." To compensate for such an annoying comment I will add that I am down 20.55% (price basis) on my EXC holding. I also owned HPQ for a decent portion of last year and some of this year (exited at a mid-teen loss)

I manage a small portfolio for work. Also, have a few PA things, but they are much smaller holdings (I am not listing redundant securities) AIG 12.29% <-- no need for comments GY 9.5% <-- this is what I am most excited about... assuming Rocketdyne acquisition closes OAK 8.54% <-- have owned from the beginning... added more recently when it sold off with rest of income names VOD 8.06% <-- have owned for years... price goes nowhere, but income has been great and writing calls against on VZ deal spikes is nice MBI 6.61% <-- no need for comment DVA 5.97% <-- no need for comment EXC 5.94% <-- this is the bain of my existence... really need natural gas prices to continue march higher BP 5.7% <-- no need for comment... this has also been a frustrating stock to hold MET 5.27% <-- I like most of the insurance plays out there from a rate aspect GM+B 5.01% <-- mandatory prefs AGCO 4.94% <-- very cyclical... margins story... great growth as they have mkt share in EM where tractors are underutilized... current FCF is understated SD 4.77% <-- no need for comments other than this one scares me a little AIQ 4.02% <-- thanks Packer WFC 3.07% <-- Brooklyn investor's article was the icing on the cake that got me to buy NBHC 2.55% <-- this is boring and just a stock... very well capitalized, but unclear if there is ever a path to make money on it ALSK 1.57% <-- another packer idea... just bought it yesterday Other: small stuff from spinnoffs and research ideas (I am one of the lazy people who buy tiny positions if early research is compelling) Stuff I am considering / or in my PA RJET INFU PRXI - the selloff in the last two weeks has caught my eye RHP - I hate REITS, but this one is better than most and misunderstood. It has sold off a lot recently MKL

I follow whale wisdom on twitter and they tweet when new filings come in. This site is slow to update, but I like their formatting J3SG.com

I don't know if anyone will find this helpful, but below is a list of funds that I think highly of (of course all value guys). It is always fun to see what pops up in their 13-Fs Less obvious funds Brahman Capital - has not filed yet. Long/short equity.... these guys study mgmt intensively. Focus on high FCF Yield stocks with great capital allocators FPR Capital - has not filed yet. Long/short (mostly long)... focuses on high quality biz with good operators. The guy who runs this fund is smart and they are long-term shareholders of most stuff Litespeed - has not filed yet - great event driven fund Goodhaven - ex Fairholme guys running a mutual fund Corsair - has not filed yet - great long/short (mostly long) fund... good at special sits stuff Hirzel Capital - small L/S equity Big name funds Baupost, Third Point, Appaloosa, Berkshire, Lonepine, Viking, Fairholme, Sequoia, etc

Dan Loeb's 1st quarter 2013 letter is out and has a blurb about LBTYA not Liberty media, but I thought I would share anyway "During the First Quarter, we increased our exposure to LBTYA, Europe's largest cable operator, following the announcement of its acquisition of VMED. The acquisition triggered a wave of investments by arbitrageurs, who created an attractive entry point for us by putting pressure on LBTYA shares. Initiating a position in VMED allowed us to purchase LBTYA at a material discount to its pre-announcment pro forma trading levels. Our initial interest in LBTYA was spurred by multiple catalysts and favorable geo tailwinds. Relative to the US cable market,Europe offers materially higher volume growth, lower churn, and meaningful penetration opportunity. Before yearend, we expect catalysts in the stock to include the closeing of the VMED deal, the initiation of a substantial buyback plan, and the unveiling of accretive wireless and B2B initiatives. The wireless mkt in LBYTA's key West Europe markets generates over $73 bill of annual rev, presenting LBTYA with the opportunity to redifine the MVNO market, leveraging a unique WiFi footprint, full back office and system control, and attractive quad play bundles. LBTY also appears poised to ramp up its B2B efforts, particularly in Germany. We believe Liberty’s strategic value as the primary alternative to the incumbent telecom operator’s fixed infrastructure in its markets is overlooked. The growth of mobile broadband will put pressure on carrier spectrum allocations, enhancing the importance of WiFi offload and wireline backhaul infrastructure. In a mobile broadband world, having a strong ground game is more important than ever for wireless operators and European cable players are well‐positioned with dense, upgraded fiber infrastructure offering considerable headroom. In our analysis, pro forma Liberty Global could generate more than $6 per share of free cash flow in fiscal 2014 when factoring in the considerable buyback plan announced along with the acquisition. Through VMED, we had the opportunity to create Liberty Global at slightly more than 10x FY2014 free cash flow per share, giving us the cheapest free cash flow multiple in European cable in a deal that will be free cash flow accretive and meaningfully de‐leveraging to Liberty. Despite the move in the shares following the VMED announcement, Liberty Global’s relative value remains attractive, especially given the recent appreciation of its European cable peers and the interim appreciation of slower growth, mature cable operators in the United States. We believe the shares could trade toward 15x pro forma 2014 free cash flow per share and compound at ~20% per year following the closing.