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KJP

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    Energy Sector

    in General Discussion

    Posted

    12 minutes ago, nafregnum said:

    https://pracap.com/just-smash-the-buybacks/

     

    Kuppy's rationale seems well reasoned for profitable-but-unpopular companies like O&G and coal.  

     

    Obsidian (OBE) is doing buybacks.  Who else is in this unpopular sector and doing buybacks at cheap valuations instead of dividends and mergers?

     

     

    Alpha Metallurgical (AMR) is the poster child for this.  The stock price has responded (to put it mildly).

    Bionomics, Economy as Ecosystem - Michael Rothschild

    in Books

    Posted

    On 12/13/2023 at 3:45 PM, Saluki said:

    I'll give this a bump.  I finished reading the book and it's definitely worth a look if you are the type of person who thinks about mental models.  The biological processes in living organisms competing for scarce resources is a really interesting way to look at businesses and niches.  Competition and cooperation amongst different species is similar to what happens in business contexts. Even the concept of parasites has parallels in the economic world (criminals, bureaucrats, people who game the welfare system etc) .  

     

    The flawed early economics that you learn about, such as Marxism and the evenly rotating economy, are now taken with a grain of salt, but the concept of the rational person (homo economicus) still persists. Behavioral economics is chipping away at the traditional beliefs, but looking at it through a biological lens is a quick and easy shortcut. If you believe in a rational man, then there should be no such thing as someone who dives on a grenade to save his friends, or jumps in front of a car to save their child.  But if you think of it from a biological perspective: which traits are more like to make the species survive, not the individual, then it's more logically consistent. 

     

    I read quite a bit and learn a lot of facts from books, but it's rare that I read something that changes the way I look at things.  This is one of those rare gems. 

     

    You may be interested in the books and papers that have come out of the Santa Fe Institute and people associated with it, e.g.:

    https://www.sfipress.org/books/complexity-economics

    https://www.santafe.edu/research/results/working-papers/complexity-economics-a-different-framework-for-eco

     

     

    What are you buying today?

    in General Discussion

    Posted · Edited by KJP

    3 hours ago, LC said:

    KJP - I have not done work on the small banks (so many of them, difficult to sort) What are you looking at that attracts you to these small banks? Strong interest earning book? Low CRE exposure? Valuation? I feel some of the larger banks also kind of fit the bill - what do you like small vs. big? 

     

    The ones I'm buying are all very cheap and (I think) have good to very good sustainable businesses or other interesting aspects, such as access to extraordinarily cheap, permanent financing (CZBS, UBAB, MFBP), an excellent fee-based business (TRUX), or healthy insider ownership (TRUX, OPBK).  Also, I don't think any of them too many long-duration, low-yield assets.

     

    I haven't looked at any of the big banks.  I find their financials and multiple business lines too complicated to understand.

     

     

    Tidbits

    in General Discussion

    Posted

    2 hours ago, ValueArb said:

     

    My calculation is that the 15% withholding tax will work out to $7, so really only $300 gain for odd-lotters.

     

    I'm glad you and @Dinar were paying better attention to the details than I was.  I agree the withholding tax will be very high unless your exempt for some reason.

    Tidbits

    in General Discussion

    Posted

    3 hours ago, Dinar said:

    Be careful of withholding taxes!  They are very high in this tender offer.  

     

    You are right!  I completely missed this.  Following up on your note about IRAs, those interested should see this:

     

    https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4016/exempt-s-organizations-under-article-xxi-canada-united-states-tax-convention.html

     

    I don't think it's just a legal question.  Even assuming IRAs are exempt in theory, it looks like you and your IRA custodian have to file the right paperwork.  I'm going to try this in an IRA to see what happens.  I suspect my custodian will withhold the taxes.

    Energy Sector

    in General Discussion

    Posted

    On 9/21/2023 at 2:50 AM, Sweet said:


     For you to make out from here, I think companies have to buy a hell of a lot of shares back, or pay fat dividends and many aren’t.  Which comes to the major problem with these sector, in my view management generally is poor and not particularly shareholder friendly.  It’s obvious what many of them should be doing yet they don’t do it.

     

    Unit Corp. (UNTC) may interest those who agree with this view.

    Upcoming Spinoffs

    in General Discussion

    Posted · Edited by KJP

    14 hours ago, Saluki said:

     

    I own a small basket of Tobacco stocks (Mostly BTI and a little JAPAY, PM an IMBBY).  My broker doesn't allow me to directly buy Indian shares (only ADRs), so when IMBBY spins it out, I assume it will just get sold and there will be a small amount cash distributed. Might be interesting to someone with an Indian brokerage account. 

     

    Isn't IMBBY the OTC symbol for Imperial Brands PLC, which trades in London under the ticker IMB?  https://www.imperialbrandsplc.com/etc.clientlibs/imperialbrands/corporate/components/content/oar/clientlibs/resources/pdfs/imperial-brands-2022-annual-report.pdf

     

    My understanding is that the company spinning off its hotel business is ITC Ltd., which is an India-based holdco:  https://www.itcportal.com/ 

    This company trades on the Indian exchange under the symbol ITC:  https://www.bloomberg.com/quote/ITC:IN#xj4y7vzkg

     

    In short, IMBBY is not ITC Ltd.

    Estate planning advices

    in General Discussion

    Posted

    15 hours ago, jasonw1 said:

    Given there are a lot of high net worth folks in the forum, can you share your experience of estate planning?

     

    We have a simple will from 10 years, and we're thinking about update it and have a living trust.  We have both real estates (primary home, a couple of rental properties), and stock investments in tax account and retirement accounts.  If things continue, we expect we will bump to state estate tax and US federal estate tax. 

     

    People have recommended starting a irrevocable trust and start passing assets to my kids.  Today a wealth advisor suggested a list of ideas:  Intentionally Defective Grantor Trust (IDGT) w/ Lifetime gift exemption, Spousal Lifetime Access Trust (SLAT), putting rental properties into a LLC and give some shares to my kids now etc. 

     

    It seems complicated to me.  Has anyone done this? How helpful will this be?  what's the pros and cons?  How much would it cost? 

     

    I recommend contacting an attorney that specializes in estate planning for high net worth individuals and families.  Expect to pay such an attorney at least $5,000 - $10,000 to meet with you to understand your current assets and goals, advise you on options, and then draft the documents necessary to execute the plan you select.  If you have the level of assets you're talking about, then it's worth getting it done right.

    Biggest Investment Mistakes & Lessons Learned

    in General Discussion

    Posted

    1.  Laziness when markets are going up, i.e., spending too much time reading blogs, VIC writeups, Twitter, etc., rather than drilling down on specific businesses and getting very comfortable and knowledgeable about a few.  As a result, being unprepared when markets decline sharply and mentally flailing around from one potential idea to another without the confidence to swing big on good ideas.

     

    2. Not understanding/being willing to take bigger swings when I had high confidence that due to business model and balance sheet, there was very low risk of significant loss.

     

    3. Description masquerading as analysis.  Example of a post-mortem where my initial "analysis" suffered from this flaw, among others: 

     

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