frommi

Had some ideas for this this year, as long as it is planned, nothing speaks against it. Was several times thinking this year about selling VRX put options near 80-90, would have been a good idea in hindsight. But i made some stupid bets on short-term put options in june that has cost me some money, or buying TLT for 2 weeks probably just out of boredom. Really interesting to go through all the trades of the year and rethinking of why i did that trade. Buying options with less than one or two years to expiration is definitly something i will not do again. (Made a big comment in my depot spreadsheet, maybe it helps.) On the other hand without making short term sell decisions on some stocks, i would have lost a lot of money this year. For example i made money on VRX,SEC.TO,OUTR,Intralot and AIQ. Holding these stocks for 12 months would have easily cost 20% of my networth(instead of making 10%). Of course we can argue that buying them was the mistake in the first place.

At least its a lot more tax efficient, but on the other hand the 500 original companies of the S&P500 outperformed the index (and when you equal weight at the start even more). So maybe its a good idea to build an index yourself with >100 companies. It shouldn`t be too hard to exclude the crappy businesses. On the other hand you are back to active investing then. Maybe do it like Buffet and make buy once sell never decisions, that should be even better. My goals for 2016 are 1) hold my weight 2) make more friends 3) stop trading options, OTC, microcaps and illiquid stocks and stop making stupid short term trades. (the last one was already on last years list, if someone has an idea to force myself to not do it, its welcome.)

Merry Christmas to all. May the force be with you!

CCP

IBM, BXE.

KMI and BP

Made LVNTA+EXPE short my biggest position today.

He opened a 20% gold position last quarter at current levels, maybe not a bad idea for next year.

Thats not true. Bonds are flat, IWM is up 6% since 9/30 and BBRY for example is up 19% since then, so overall they shouldn`t have lost that much in october. Eurobank is immaterial now. Its crazy how they lost a billion and you don`t even see it in the results (BV). If they suddenly have a good quarter they will hit the ball out of the park.

I have accounts at cortalconsors, comdirect and ib. I suspect that these "free" brokers either sell your data or your order flow, both is more expensive in the long run than ib. And i want access to futures, options and short selling. I am really happy at ib so i don't see a reason to search for another broker.

Value investing in large cap stocks has given only an edge of 2-3% in the past (~1% from 1990-2013), its not that hard to lose it through fees or some emotional traps everybody has. See page 9 of the attached document. Scientific_Paper_Momentum.pdf

Rebuild my short position in XBI, Russel 2k futures and FTSE100 futures. Net long only ~10% now.

Covered the rest of my shorts on XBI. Did that with Russel 2k futures last week already and bought more LMCA, TDG, BRK, DNOW, CHRW and IBKR.

Profit margins erode through competition when there is no true moat or through inflation that can not be passed to the customer, roic erodes because it becomes harder to invest bigger chunks of capital. So in most businesses you see both mean reverting but at some only roic.

But that doesn`t mean its the optimal holding period for everyone. When you deploy capital in tenth of billions, its not really a matter of choice. There are not a lot of businesses that can compound capital at >20% forever (if they exist at all), so when you want to compound faster than that your only chance is to increase your inventory turnover or to use leverage.

Yes but they didn`t use leverage as far i know and when you compound at 27% for a decade and than have a 50% or 60% drawdown its not the end of the world. Especially when you look at the story, i mean he has only played with internet stocks in late 1999 because there was immense pressure from his investors, i doubt that he would have done it when he was a private investor at that time. Just shows how dangerous it can be to invest OPM.

Haha the typical anti market timing comment, what you can`t be right 100% of the time? Than its useless! There are a lot more ways to skin the cat, the really good guys know more than one way to make money. Value investing is just one tool.

FFH

Just wanted to thank you for opening the thread. I received my digital gold card from IB today after using the simple number card for a long time. Without this thread i wouldn`t have known that there is a better and more secure version.

Thanks, good idea.

Yes, shorted it again. Its like getting an ETF with 100 pump and dump stocks that have recently been pumped. Or i am just too stupid to understand these biotech valuations.

Pretty much this, covered XBI shorts and short Russel futures in the opening and after that bought a lot of stuff, like CMPR,IBKR,LILA,CSU.TO, etc. Really crazy what a difference one day/hour can make.

Historically when you hedged from august to october you didn`t gave up performance, regardless of where the market was. I would bet that only doing it when the market was expensive and with some kind of valuation bias would have improved overall performance. Now you can laugh about these statistics or dismiss them, but it is was has worked over the last 50 years. (and funny fact is, still nobody does it that way)

This is something I agree with somewhat... Not all drugs in pipeline are going to be wonder drugs...but how can we be sure and exclude the ones which are going to be? If the thesis is to short a basket... Also like in venture capital investments, does one blockbuster drug make up for the losses for the rest and still provide an adequate return on capital? It could be a bubble if that threshold is passed....how could I be reasonably certain about that without knowing how many blockbusters, how big of a blockbuster and how quickly it will be a blockbuster. My theory is that up to this point most of the biotech companies that really have something in store are already bought. And yes its a basket bet of just going short XBI.