Picasso
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Posts posted by Picasso
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Whitney Tilson.
So much for that idea
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Whitney Tilson.
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It's clearly not authentic.
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LOL
Use the internet carefully ;D
Amazing
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Goldman has a valuation of $32 for either fmckj or fnmas.@Doc, using the 30 year treasury for the cost of capital I got $66/share NPV.
I used cost of equity as these are non cumulative dividends coming from net income. Not that any of this is happening but at least can be compared to other investments this way
I thought investors just misread what Goldman actually said?
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But these are $0 strike warrants. Most anti-dilution provisions will reduce the strike or allow for participation in any new equity raise. When you have a $0 strike with no limits on the increase in warrant issuance in front of any equity raise, it makes the equity totally uninvestable. I don't think I've ever seen that before. It's such a great deal for the warrant holders that I can't imagine why they would amend the terms.
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That's how I read Section 2.1, but if someone has a different read, I'd be open to hearing it.
https://www.treasury.gov/press-center/press-releases/Documents/warrantfnm3.pdf
that's how i read it too merkhet. i didnt realize that. so if junior pref exchanges for common, for example, the number of govt warrants increases. i agree that govt warrants and common are not parri passu. i have never seen this for a public company.
this also makes it impossible to issue more common stock, imo. who wants to pay up for a share of common stock knowing that he is also funding a free .8 share warrant for govt? so if there is to be a recap, this provision has to change, because there is no recap. taking it one step further, no junior pref holder would exchange for common for the same reason, which govt may want to do, so this provision (if used by treasury) makes any kind of workout that restores equity value unworkable.
This is amazing, the government actually issued magic warrants. No wonder they did 79.9%, they basically get the benefit of owning the entire business without placing any of its debt on the government balance sheet. It also makes the existing common equity worthless because no capital would ever make its way back to common equity holders except for the ones that own those warrants. I don't have a view on the preferred yet but I can't imagine why anyone would speculate on purchasing the equity with those kinds of warrant rights. It also makes me wonder, with a deal like that why would the government want to make any changes? It's basically 100% ownership even without the NWS. It seems like a bet on Mnuchin not screwing over his buddies and if we're talking about the NWS being un-American, that sounds pretty un-American too.
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I'm not sure I follow either. Order of dilution doesn't matter, the warrants will be diluted unless they're magic warrants. And if they're those kind of magic warrants then commons are worth zero.
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Stunned at the fact that some on this board are bullish from today's interviews. Seems clear to me that there won't be anything done until after tax reform is implemented -> DTAs will take a hit -> GSEs will require another draw. Seems like he has bigger things on his mind.
This has become an investment based on reading between the lines of what one man says, I'm strongly considering selling the majority of my position right now but need to think through this a little bit more.
Also, wasn't Henslaring an enemy 4 months ago? Suddenly it's bullish that Mnuchin is discussing GSE reform with him?
No position but in agreement with this. It starts getting speculative when you have to read between the lines and analyze tones. If Trump had not won (a seemingly improbable event), I can't imagine these securities would be trading anywhere near current market prices.
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I am just wondering, why do folks here think that recapitalizing FNM or FRE means that existing shareholders or preferred shareholders will get anything?
I am also not sure that Mnuchin get's to decide what is going to happen with FNM/FRE. He may just get the guidelines from Trump and if that is the case, and Trump want the best deal to pay for projects, well that could mean that the current shareholders get screwed over.
Mind explaining to me how you get new private money/investors to recapitalize a company and commit hundreds of billions of dollars while taking the first loss in a new entity when previous shareholders were liquidated?
Is this something you would invest in and expect other to do also?
Seems like no one has a problem investing in GM these days.
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The best part is he wanted to BTFD, not short the stock.
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What a load of useless non-information his letter is. Same bullshit every year.
+1
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You hear that folks, POTUS said New NAFTA Deal could pay for the Wall. Doesn't sound like any other imminent source of funds are being earmarked for public coffers anyways. Then again, I'm no Psychiatrist, (it's true) but isn't that how stalkers read their tea leaves too? I swear I saw a sign in my toast this morning that looked like Warrants were being cancelled. Or maybe, that was just my subconscious aligning what it thinks of this investment theory(read:gamble), with my breakfast of choice, toast.
Ah yes, nice to see MSM highlight the Ayatollah's rant out about the "real" US and declaring that now you will see our ire. As if it's POTUS's fault that today, Feb 07, 2017, due to POTUS IranBan, radical wackjobs all over the world are going to start blowing themselves up in suicide attacks while yelling allahu akbar. Like one of Jeffrey Dahmer's victims fighting back to Jeff's reply "Oh ya, well now I'm going to eat you!" Wait for it, next death, POTUS fault, 100%. Won't matter who, what, where, when, why. Unfortunately how radicals view things as well, facts don't matter anymore, anywhere.
I appreciate the wide latitude here, but I find this all relates to the constant drip-drip Chinese Water Boarding Slo-Mo Stlye, Antagonizing of POTUS. What's in it for him? imho....He will never, ever receive widespread intangibles such as respect, recognition, admiration etc (deserved or otherwise) unless he personally punches a suicide bomber's plane out of the sky. Grotesquely, sadly, but assuredly so, unlike what they did with obama (read:FastFurious/Benghazi/VA etc) MSM will keep a body count in POTUS watch.
Uh, that was morbid, so I give you this. I noticed a disclaimer on a bottle of sleeping pills the other day that read "May cause drowsiness." May.....cause drowsiness!? WTF is that, wasn't that the point!? What's next, a disclaimer on a box of condom's that reads "May contain nuts" lawyers huh....sheesh... ;D 8) ::)
PM,
+1
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Fun fact: /u/fscomeau pioneered the term YOLO on /r/rwallstreetbets which was the inspiration behind my @yolocapmgt twitter handle.
I'm fairly certain this is all a big bamboozle but it should be entertaining.
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We should start a thread on religion.
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Seems like a lot of the members with 30+% returns in 2016 had a lot of exposure to commodities in 2016. Just wondering if you guys can provide more details on how you were positioned going into 2016? Did you have the existing commodities position already? Were you able to pick the bottom or come close to picking the bottom? One of the member had mentioned that he was down 40-50% in 2015 and the near 100% was just getting him back into being even. If you can share if the 30+% was just getting you back to even or if it truly built upon your flat or positive returns in 2015, it would be very helpful.
I know that FELP was a great trade for a lot of people on the board.
I think I was down 30% from peak to trough by the time Jan 2016 rolled around. Almost every energy related stock was cut in half from the time I first started buying. And I didn't start buying "energy" until maybe Oct/Nov of 2015 so I feel for the guys who started buying in late 2014.
I owned one stock at 3-4x FCF, it went to 2x FCF and a friend said "it might as well trade for 1x FCF, what's the difference at this point." He's right though, you can't really manage market volatility in some of these blown out stocks. I'll be happy to find something at a 50% yield, but someone might pick it up at 100% a few weeks later for whatever crazy reason.
For some coal/gas E&P stocks, weather is playing a big factor in the returns. If we had another warm winter I doubt things would have turned out this way in the later months of 2016. Or the Trump victory? It's probably important to ask where some of these stocks would be trading without some of those improbable events.
Which is why I think writser and Hielko are putting up some great returns since they seem to be diversified enough to avoid being labeled as outliers or lucky.
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40% here, a third of that came from FELP (thanks Picasso!), if only I had the balls to go deeper...
Usually 5-10% in cash.
Happy with the results as I was in Sri Lanka for Februari so missed out on the bottom.
Couple of small mistakes this year but nothing really big, which is nice as 2015 kicked my ass (-20%).
Another member of the FELP mafia, nice!
Really impressive results writser.
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You didn't give the most important part of your prediction. When? If you are going to make a prediction you can't leave out the most important part of it. Short of a global catastrophe that permanently damages our civilization the DOW WILL hit 30K someday. Certainly before 2030. Are you saying 30K in 2017-2018?
I think he's just saying the path of least resistance is up, Dow 30k is meant more as a jokey price target to illustrate the point.
Plus the best experts never give both time and price. Remember that poor lady by the name of Meredith Whitney?
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This extends to every friend and family member. I refuse to invest for them.
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I don't think many people understand what they're getting into by buying into these companies.
It is clear that the former system with Fannie and Freddie as private entities with implicit government backing was unsustainable and led to perverse market effects. There is strong bipartisan opposition to turning these two GSEs into the hands of private ownership again.
Except that one side wants to get rid of the entities all together by starving them of their capital. The other side wants them recapitalized to ensure affordable housing, and would rather see them in private hands than in constant jeopardy as they are in their current state. Furthermore, it's all up to the Executive Branch anyway, and if not, the Judicial Branch. Congress is the least important of the three.
They are not under "constant jeopardy" as they are under government conservatorship currently. The case can be argued that without the government's backing, these entities would cease to exist and the common and subordinated preferred stock would be worth 0 so why should they receive anything?
The case can be made that without FDIC backing of deposits, banks would cease as well. So why should the bank shareholders receive anything?
FDIC isn't government backing, members have to pay into the insurance fund. I'm with frank on this one, with the explicit government guarantee there isn't some catastrophic risk of having a subsidiary (like the post office) not holding excess capital on their balance sheet. If they need capital, it just flows back from the parent (in this case the government). I never understood that line of reasoning. But the legality of the NWS is another thing altogether.
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This thread is awesome.
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This whole Buffett 50% thing has turned into a game of telephone. It's not hard to know what he meant, but some are twisting it into their own realities with options and crazy stuff. I think he should clarify it to a broad audience if possible.
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Someone should write to Buffet and say that we deeply respect him but members on the board are actively discussing this and the suggestions were to use heavy concentration and leverage. In the interest of preventing people from taking on oversized risk and losing their shirt in the process, can he provide more detail on what he meant and how he would do it, if it deemed to be sustainable. In the interest of helping some people blow up, he just might respond.
+1
Merry Christmas!
in General Discussion
Posted
Merry Christmas everyone!