aws

I usually do all my business with discount brokers like Fidelity and IBKR, but I have a situation now that they either do not know how to help me, or I just haven’t gotten through to a person who will do what needs to be done. The short explanation is: I have Mexican listed shares of a company in Fidelity account. The company has an outstanding repurchase offer: https://www.sec.gov/Archives/edgar/data/1698287/000095010323007298/dp193753_sc14d9c.htm The shares have been delisted as part of this take private action, so the only options are to sell the shares to the company within the 6-month window of the offer, or permanently become a minority shareholder, which I want to avoid. The terms of the offer is quite clear, but it is not in the format that Fidelity seems used to handling and they have not been helpful in transmitting my shares for payment. I think they are expecting it will look something like a tender offer where the representative just needs to click a button to allocate my shares, but instead this looks like more of a manual process where you must request share certificates and submit signed documents to receive payment. I’ve tried calling quite a few times and talking to different people, and it’s bounced back and forth from their corporate actions team, but never moved forward at all. The amounts involved are reasonably substantial, and my payout is fixed, so every day of delay is costing me a few hundred dollars of carrying cost. At this point I probably need the assistance of a full-service broker, preferably one who has some experience in Mexican stock transactions. Someone who will read the offer and take proactive steps, instead of just assuming more information will come in later that tells them what to do. Does anyone have a recommendation of who can help with that?

https://www.wsj.com/articles/ukraine-used-u-k-missiles-to-strike-russian-controlled-territory-russia-claims-1cf7c936?mod=mhp Biggest loss of aircraft for Russia since the start of the war. Twitter is abuzz with talks of trigger happy Russian air defense, scared by the start of a Ukraine offensive, shooting down their own aircraft well behind the front lines. However it is happening I'm all for it.

I have a somewhat weird hedge because I'm expecting a large payment (>10% of net worth) in Mexican pesos by early next month. I'm happy to see that the MXN is at 6 year highs and stronger again today.

The increment depends on the stock, not the broker. Some stocks have options tradable in penny increments up to $3 and nickel increments thereafter, others start at a nickel up to $3 and a dime over $3. It looks like the penny increment options are part of a trial program. https://www.sec.gov/rules/sro/nasdaq/2020/34-89167-ex5.pdf

Seems like the play is to keep short-term cash in money market equivalents for now and see what the new rates (especially the fixed rate) are in late October. If the fixed rate were set to go down a lot in November then you could still have some time to lock it in for the life of the bond.

But the very next paragraph: "The Depositary has been further advised that pursuant to the terms of the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion and a protocol thereto between Mexico and the United States, as amended (the “Tax Treaty”), a non-Mexican holder of ADSs whose underlying Shares are sold to the Repurchase Trust in Mexico during the Statutory Sell-out period will be eligible to claim the benefits under the Tax Treaty and, as a result, may be exempt from Mexican income tax gains realized from the sale of the Shares provided that such non-Mexican holder owned, directly or indirectly, less than 25% of the Company’s outstanding Shares during the 12-month period preceding the date of such sale, and provided that certain formal requirements set forth in the Mexican Income Tax Law are also complied with. " The shares are worth about 5% more than they trade for, you might just need to jump through some hoops to ensure full value. May be too much work for some, and I'd probably be happy dumping early for a bit less than the maximum profit to avoid any hassle.

Most of the time when you see a trade on the tape for an A share it's not actually a full share trading. Fractional shares, so as little as $1.00 value, show up the same as a full share order.

More BSMX at 6.37. Unless I'm very much mistaken you can tender these shares back to the company next week at 6.69 after they delist. It's possible you receive the MXN equivalent which was 122.6 per share, but right now that's even better at 6.79 as the peso has strengthened a bit since the exchange was set.

BSMX. It has been effectively taken private with 99.8% shares acquired after a recent tender. It gets delisted next week, but you can still tender the shares to the company at the old price of 6.69 after it's delisted. It had been trading for only about a 1% discount so not that interesting, but it randomly dropped 5% today so the spread is looking much nicer and I picked up a big slug.

I thought their daily market summaries that came out right after the bell were a pretty decent read. The rest of the site is a big yikes though so eventually I stopped even checking that.

It seems like the only way you could possibly win is if you also had one of those rebate deals. If the track takes a 20% commission from recreational players, but only 10% from the professional, then that certainty seems like an insurmountable edge and, depending on how tough those deals are to get, a pretty significant barrier to entry. It reminds me when I was playing a lot of online poker in college. The sites all offered rakeback deals in the range of 10-50% of your pro-rata share of the rake. As the games got tougher, you might be struggling to break even at the tables, and collect all your profit from the rakeback. I expect for horseracing well over 100% of the profit must come from the rebates. I would think that this is quite unhealthy for the industry. The betting syndicates would stop in a second if betting became unprofitable after rebates, so I'm not sure what value they are really adding. But if there presence drives out enough recreational players then the whole system has to shutdown.

Shorted a bunch of naked calls on BBBY. Just hitting the bid on whatever strikes of 2025 calls had a decently high bid. I probably should have done it sooner, but I kept thinking there might be a better time to short after one last pump. Now the dilution engine is in such high gear and so obvious that even the bulls must be throwing in the towel. The breaking point for me was seeing that the new credit agreement posted yesterday mandates minimum dollar amounts of new issuances each and every week in an escalating manner. This is only a $15 million minimum week and the stock is down 50%, where the following three weeks are $25, $36, and $35 million respectively. I might even have to pickup for 0.50 puts, but for those you need to basically see 10 cents by April 21st to double your money, and that seems less certain than just picking up call premium.

Poorly. I have roughly a dozen accounts in my name between taxable and retirement accounts at 6 different brokers (down from 8 brokers last year though). It's from a combination of parking shares in a variety of places to get broker sign up bonuses, to meet minimum relationship balances with banks for perks, and for certain brokers being better than others depending on the specific trade I am making. I am close enough to everything that I always roughly know where I stand which works well enough for me, but I'm sure would be chaos to an outsider. I also manage a few accounts for friends and family, but that's actually pretty clean since it's through the IBKR friend and family advisor service, so I can see consolidated holdings easily there.

When is the last time a depositor actually lost money from a failed bank from a deposit over 250k? I thought I saw some talking head at Bloomberg said it hasn't happened in 40 years (although now that I am looking for the stat again I can't find it). It seems like in practice that limit on insured deposits was basically irrelevant anyway, whether it be from a bank takeover or some other type of special assessment.

Lucky them. My South Sea era consols got called in 2014 after just 294 years of interest. https://www.nytimes.com/2014/12/28/world/that-debt-from-1720-britains-payment-is-coming.html

It's not a trivial distinction. If all losses are funded by industry, then the industry would actually have an incentive to lobby for tighter regulations to protect against higher FDIC levies to cover bad actors.

Fed is safeguarding depositors and Signature Bank has been closed by regulators: https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98?mod=breakingnews

How do you guys feel about floating rate treasuries? Current yield is just over 5% and they can float upward if rates rise. Never really looked into them before but they seem like they should offer the highest yield unless you assume there will be substantial rate cuts within two years.

From an early Buffett letter regarding work-out positions: "This category will produce reasonably stable earnings from year to year, to a large extent irrespective of the course of the Dow. Obviously, if we operate throughout a year with a large portion of our portfolio in work-outs, we will look extremely good if it turns out to be a declining year for the Dow or quite bad if it is a strongly advancing year. Over the years, work-outs have provided our second largest category. At any given time, we may be in ten to fifteen of these; some just beginning and others in the late stage of their development. I believe in using borrowed money to offset a portion of our work-out portfolio since there is a high degree of safety in this category in terms of both eventual results and intermediate market behavior. Results, excluding the benefits derived from the use of borrowed money, usually fall in the 10% to 20% range. My self-imposed limit regarding borrowing is 25% of partnership net worth. Oftentimes we owe no money and when we do borrow, it is only as an offset against work-outs." However I'm also pretty heavy in cash at the moment, about 33%, as I'm not as confident in my own abilities as Buffett might have been in my shoes. A large part of that is tax related though and will come down a lot by April 15th.

I could be out of my depths a little since I've never dealt with straddles, but my understanding of straddle rules were that they are to prevent you from getting a more favorable tax treatment than you would otherwise be entitled to by using offsetting positions. Such as going long and short the same stock or option and closing only the losing side right before the end of the year and keeping the winning side for a tax deferral, or by doing the same right before one side becomes long-term to have a low tax rate gain and an ordinary loss. So if he closed the short call at a loss he could not deduct the loss until he sells the warrant, and the short-term loss might be converted to a less favorable LT loss. So are you saying you basically treat the short call and long warrant as a single transaction with whatever the net cost basis is? It would be great if it works, I'm just not understanding the mechanics of it. Do both legs of the position have to be opened on the same day?

I was hoping there would be another Greg Abel letter in this year's report. I guess last year was a one off.

Options writing are short sales, and short sales are always short-term, no matter whether they are puts, calls, or direct short sales of stock. It also doesn't matter if you close the position early, if it gets assigned, or if it expires worthless. For tax purposes the day any of those happen is considered the day you acquired the position for tax purposes. Even if you closed a short position you had for 10 years it would still show on your tax form that it was acquired and closed on the same day. Short puts that get assigned leaves you with stock, but your holding period starts of the day it was assigned and not on the day you originally sold the put, so you have to wait a full year after that to get LTCG treatment.

March NG dropped under $2 today while this spring NG futures are 20-25% higher. I've seen this a few times where shoulder season NG trades higher than the winter and it's never really made sense to me. I would assume the logic is that the weather has dragged down the price in the short-term, and then you might expect longer term the balances to tighten and lead to higher prices. But no matter how weak the demand is right now, it's still going to be something like 10bcf per day coming out of storage, and no matter how tight the balances are in a couple of months there will be 10bcf per day of net inflows. So people are selling gas now when it's needed most at rock bottom prices to buy it back in spring at a higher price. There's probably a reason for it, beyond simply calling it manipulation, but I don't get it.

The standard is either original use or substantial rehabilitation, so it would have to be purchased before the store is open. I'll have to double check and get an opinion to make sure original use doesn't start while the tenant is building out the interior, but I don't think it does.

I'm in a somewhat unusual situation where I am almost forced to make a purchase of commercial real estate in order to maintain a tax deferral, and I've been putting off the decision. I started an opportunity zone fund about 18 months ago funded with the proceeds from short-term capital gains that would otherwise be taxed at around 50%. In order to maintain the tax deferral I need to purchase a new construction property in an census area designated as an opportunity zone. Ideally I want to invest in a triple net lease deal with zero landlord responsibilities. When doing some research it seems like there is a model called build to suit, which seems like it would be perfect if done for a tenant with good credit. There are a few deals for Dollar General stores at 5.5-6% cap rates, 15 year leases, brand new construction, which seem kind of perfect for what I need. Since opportunity zones are economically-distressed owning a discount store there seems a natural fit, and they are a giant corporation and they guarantee the lease for 15 years. It's also right in the ballpark of the size of a deal I need, which is somewhere between $1 million and $2 million all cash. The biggest problem is that I know nothing about commercial real estate. I imagine most of these deals are done by sophisticated buyers and it would be my first, and probably only such deal I'd ever do. I've only ever bought local residential real estate with the help of an agent, where this deal would be a completely different type and likely be 1000+ miles away. I'm hoping to find some good resources to begin learning about how these deals come together, good websites to scout deals (I've only been using free loopnet searches so far), pitfalls I need to worry about, or anything else that would be relevant. Any advice from experienced real estate investors would be greatly appreciated.