hillfronter83
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Posts posted by hillfronter83
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I recently read a few books about Japan that helps me understand Japanese company and business in general.
Japan's New Middle Class and Japan as Number One both written by Harvard east Asia scholar Ezra Vogel. Although both books are initially published decades ago, I think a lot still apply in today's Japanese business.
How to Ignite the Low Desire Society by Kenichi Ohmae which talked about challenges faced by Japanese society today.
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Did around 18% overall. Interesting that my taxable account where I did less trading was up about 40%. In hinder sight, made several unforced errors trying to "speculate" for quick profits that backfired.
This board certainly made investing a lot more fun. Thanks and wish everyone good luck in 2020!
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I wouldn't be too concerned, at least not about the company just keeping your money. The tax issue is probably real, CVRs aren't a common structure so it's very probably there is some kind of disagreement with on how to treat this payment. And Israel is already one of the worst countries with regards to paperwork requirements with merger payments. So if they can't agree quickly, totally possible that this can drag out for a couple of years. Hope all the possibly lawyer and accountant costs aren't deducted from the CVR payment ;)
Thanks for the response. I literally got email from the CEO after reading your response telling that they got approval for distribution.
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Hi,
Early this year, I bought some shares of BioBlast (ORPN) for MA arbitrage. The merger consideration was paid in ENLV shares and some CVR depend on certain assets sale. Before the deal closing, the assets were sold to SEEL for $3.5m in two payments and some future CVRs. When I emailed the formal CEO of ORPN, she said the first payment is waiting for Israel court ruling for tax and legal issues and should be paid out "hopefully in a few weeks". Fast forward a few months now, I still haven't received any payments from CVR and CEO is not returning my email.
Should I be concerned about receiving the payments?
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I bought more BMY CVR.
I looked into this, it seems that the right implies a ~62% probably for each drug to approved, which is lower than the estimated probably. From that perspective, it seems like a good value.
What tells me to hold this odd is the Fact that the terms of this CVR (all three drugs need to be approved at a certain date) makes it so easy to avoid a payment for BMY, which amounts to $6B total, if some articles are correct. They can just push through 2/3 of the most important drugs and get them approved as quickly as possible, then delay one until after the cutoff date and presto, they just saved themselves $6B. Doesn’t take a genius to think that this will cross somebodies mind at BMY’s management. They could be quite opportunistic about this depending on which hurdles will develop with any of the 3 drugs even if it’s not the plan right now.
For sure the intentional delays are a risk. But I don't think they are a deal-breaker. Some good discussion in the comments here.
My own view of how management in large corporate settings works, has over the years dimmed enough that I assume that if there is a possibility to game an outcome, it will be gamed in all likelihood.
Don't disagree with risk from intentional delay. However in this case, they already filed NDA for ozanimod and its decision is due in a few months. Since CVR is tradable, i expect market'll react on ozanimod decision, which IMO is a high probability event.
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I bought more BMY CVR.
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I don’t understand the first thing about Bitcoin etc. but the innuendo suggests that it is somewhat like funny money, perhaps with people getting hurt? If so, Buffett has been doing this charity lunch in memory of his late wife Susie who championed helping people. Especially through the Glide foundation. It’s easy to see this collection as a slap in the face of that? Yes the bidding was anonymous but that may be the conundrum here. Online bidding and online currency.
This makes a lot of sense - at least me, personally, longinvestor.
It’s also possible that the guy paying millions figured out that he has exactly zero chance of convincing Buffett and thereby winning some credence for bitcoin. What if someone asks (again) Buffett or Munger about this topic the day after lunch? It’ll probably be rat poison still. $4M down the drain. You got to pick the right medium to market your product.
Please feel free to mentally bent it the way you want, longinvestor,
I personally still think that this dinner/charitable activity was never from Mr. Buffet's side meant to become a "clash between "religions"". Oh-well - here we are.
Well, the newly minted fact is that Sun is the one postponing.
Sun is under investigation for fraud and not allowed to leave China.
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CVS and MSG
Picked up some MSG too this AM at~$271. I am not sure what caused the sudden downdraft , but noticed that MSGN is doing even worse, is this team related?
I added MSGN in two slugs this am at 19.5 and 19.2, adding to my existing position. Knicks whiff on free agents is why they’re down. Dolan looks like an even bigger idiots after his February boasting. Fans are pissed. Hopefully this puts Jim over the edge and he sells the Knicks.
Why MSG over MSGN or vice versa?
I own both.
MSG is a top 5 position for me. With over $1B net cash you are basically paying for the Knicks here, and getting the Rangers, Rockettes/Radio City Music Hall, The Garden, and the Entertainment biz for free. The lower it goes the easier it becomes to plow money in. Under the $6B market cap number, there really isn't a better risk adjusted security out there. These are one of a kind assets that always do well over time. Pick any decades and then scale out. The returns on sports teams are insane. Even the mediocre ones. Here you own the best in both sports.
MSGN is pretty simple. Very simple and straight forward contract pricing with easy to project cash flows. They have, and continue to pay down debt, and buyback stock. You have about a $2.3B EV which is quite reasonable considering this is the only public RSN and easily the best one out there. The Knicks sucking also puts a bottom on the attractiveness of both, as it really can only get better from here. My rule of thumb with MSGN is its worth about $30 in a sale. At $25 its fairly valued as a public company, but under $22 it's an easy piece of paper to start building a position in. Under $20 its a steal.
MSG is a buy and hold forever. MSGN you'll have to trade to get your returns.
I get that Knicks is a more famous club and has much better fan base in NY area regardless of its dismal performance on court. But why do you think Knicks is worth more than $5b while Nets was sold for $2.3b last year?
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Yeah, to me the key strategic consideration here is that the people who set the IPO price seem highly motivated to get the stock price “pop” when it starts trading - even if that means accepting a lower IPO price. And, as we all know, buying from a motivated seller tends to work well.
Exactly, in general the underwriters have a big incentive not to blow up the IPO because it is horrible for their reputation and for future business. In general I don't think it is a very bad strategy to participate in IPO's and sell on the open. And it's probably not possible for big players to do this too often because they'd lose access to deal flow. Could very well be that the market is not 100% efficient here.
The main risk is that the hot IPO's get oversubscribed, i.e. you subscribe for $100k and only get $10k worth of stock. But the few times that there is a turd you probably get a full allocation. So the risk/reward is a bit skewed. In some European countries there is a preferential treatment for retail investors, i.e. you won't get pro-rated on the first $5k you invest or whatever. That changes the equation substantially and I try to max out the preferential treatment in all of these as a hobby. Pretty sure that is +EV.
Interesting. China A share has a lottery system since it's typical for price of IPO stocks to go up 50% after trading start. However, it's limited to Chinese investors, I believe.
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Does anyone have experience with SEC filings by private companies that don't trade any where (not even OTC)?
What are the purposes of filing 10-Q or 10-K for those companies? How reliable are those filings compare to a public company?
Thanks in advance.
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Interesting short Bloomberg article about an investor that I like and about investing in Hong Kong in general.
Here’s how Webb describes the basics of his investment strategy:
Owns about 35 stocks at a time, with an average holding period of “five-plus’’ years
Long only, never short
Prefers large stakes in small companies and isn’t afraid to take an activist role: “If you are going to be a minority shareholder, it’s better to be a big one’’
Doesn’t use leverage
Looks for businesses that are well-governed and undervalued
Reads the regulatory filings –- almost all of them
Avoids large caps
Refuses to manage outside money: “It’s a lot of hassle’’
Very impressive track record with a diversified portfolio.
Very interesting read. Thanks for posting!
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About 3.5% for the year. Lost money on many of my long positions. At the end of the day, special situation and a couple of acquired stocks saved me from overall loss.
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Merry Christmas! Wish everyone a great holiday and new year. Happy investing!
Vincent
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Buy the stock to lend, sell the call.
Let's use the Mar'19 30-strike Call as it has more volume. You're exposed below:
Stock Price - Call Premium - Interest received
120 - 89 - 6 months of borrow
In the worst case, you'll need to make $30 in borrow between now and March 19 to break even if the stock goes to zero. Anything else is gravy.
I suspect the call buyer would exercise the call immediately, so you wouldn't get the chance to lend your stock.
This is indeed what happened. Looks like my shares were called.
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Thank you, Sanjeev. Done!
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Did you mean to say you bought 100 shares? Because one option contract is for 100 shares, so if you just bought one your call isn't really covered.
Yes, 100 shares. This is more like a trading experiment. I feel like I'm long mania: hope it stays long enough that I can collect more lending out the shares. But no doubt, IB will be the biggest winner here, lol.
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Just for experiment/speculating, I bought a covered call position: sold 3/2019 $20 call for $126, bought 1 share TLRY for $147. If borrowing rate stay around 300%, I need about a month to break even.
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What would you do if you had access to $1b margin for a month? Let's assume the cost of capital is similar to what IB charges, 2.5%. What trade will you make?
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Actually, I think most professional money managers on here will agree, and I'm happy to put in writing if you need me to Eric...75% of the time is spent on client-related, administrative duties, accounting, legal, audit, letters, etc. The 25% of time spent on the portfolio is time that is highly flexible...you can do it anytime, including when the wife and kids are asleep, at school or occupied. For me, 90% of it is done when everyone is asleep.
And in your case, you were not a professional. You were a private investor, occupying time socializing when on the message board, and then making large, very extreme bets on a handful of occasions. It's as far-removed from a professional investor as you could get. Cheers!
With all due respect, I think arguing Ericopoly is not a professional is missing the point. Wife is not alleging him as a professional investor that manages money for clients. Rather, she is saying Ericopoly is doing this FULL TIME, like a job. Thus she is entitled to spousal support similar to arrangements made when husband holding a normal job.
Clearly Ericopoly is providing financial support by investing. However, I think if she wants to argue managing their own money is a "full time job", then she can't divide their assets. The moment she take away half of assets, he will lose his "full time job". She just can not have it both ways!
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Hey all:
There is a lot of work that needs to be done in the USA....
This is ESPECIALLY true in the industrial Midwest, particularly Michigan.
Our roads & bridges are falling apart. In the last two winters, my vehicles have been damaged MULTIPLE times from the poor road conditions. I am not the only one, most of my friends and family members have damage to their vehicles as well.
Some bridges are in SHOCKINGLY bad repair. Support pillars are crumbling to pieces. Not every bridge is like this, but a surprising amount are, especially in the city core.
I doubt the Detroit area is the only area needing substantial rework & repair.
It's not a question of whether the infrastructures need improvement. It is how we will pay for them! IMHO, this should be the priority instead of the tax cut.
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My thoughts are that you should probably do a little bit more work valuing the stub. What does the pro-forma company look like?
I took a quick look and here is my quick dirty napkin analysis:
the merged company will have about $11b sales. Using COKE's current P/Sales of about 0.48. I got about $3.8/share for the stub so current price is too expensive for me.
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About 31%. I've learned so much from this board, both new investment ideas and new knowledge!
My biggest winner were GSOL, RACE.
Biggest loser was PN, holding my bag for too long with failed a MA deal. Lesson learned!!!
Happy new year and wish everyone happy investing in 2018!
I am done with Interactive Brokers! (2019 update: I am back to IB)
in General Discussion
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None of my positions are even close to 1% of share o/s. I'm interested to know what companies they are.
What I found annoying was that for illiquid stock they wouldn't allow you to enter order to sell at bid or buy at ask because of "dramatic price movement". For example, if last trading price is $3/share, they won't allow me to enter a sell order at $2.5/share, even when I called them. By the time I can enter an order, the bid/ask will disappear, or at least not at size I wanted.
With the amount of commissions they charge on penny stocks, I'm looking at options to move assets somewhere that have 0 commission.