Gregmal

sell OTM calls on the longer dated option available.

The MicroCap conference in NY is petty decent if you are looking for access to management teams. Unfortunately most of the companies suck in terms of being worthwhile investments. Probably a good place to bring your bullshit detector. It will help you find the most productive ways to sift though the good, the bad, and the ugly.

Thought this may be a helpful thread. Given the dearth of complaints on Interactive Brokers, today I had a positive experience that to be honest, surprised me a bit. Many of the securities I own are either small-micro cap and lack the liquidity of big board stocks. One of my issues with IB is that while they'll let you margin GOOG 5:1, most sub 500m companies require 100% cash. A few days ago I questioned this policy for a specific stock. I followed up with a request to escalate it to a senior level manager and asked that they review the specific security. What do you know, they got back to me indicating that they were changing the thresholds for that security. So much for automation and shitty customer service. I was not aware that one person could request or initiate reviews for a given stock. Now I know. Figured I'd pass along in case others did not. If others have any tips or advice on ways to get better results/negotiate with brokers perhaps here would be a useful place to share them with others.

Don't make trades that scare you. I'm not talking about me making trades. Well yes, anyone who buys bitcoin (or any of the others) needs to understand volatility could be extreme at times. If you are holding for the long term that shouldn't matter, you might get nice buying opportunities from time to time. However if you are 100x leveraged....good luck. I'm not too worried. If my cryptocurrency portfolio drops by 95% tomorrow I'll still be in the black. Mortgage the house to buy Bitcoin, max out your credit cards buying Bitcoin. Find a platform that lets you use 20:1 leverage to "invest" your mortgage and credit card proceeds. Then either become rich enough to never have to work again in a short period of time, of file for bankruptcy and start over like every average schmuck citizen not gambling on cryptos. Surprised more people arent doing this.

I have been long and have decided to close out the position for now. The information on this board has been helpful with the investment but it's a small position for me and I am looking to up my liquidity position so this one fits the bill for the following reasons: Sentiment seems to have shifted, its been nothing but good news for a the last few weeks. Stock has moved from low 50's to low 70s in a very short time period. Major analyst bullishness/upgrades last few days. $4.9B number received for the medical unit was well above estimates. Buyback announcement was only a month ago. Add in the broader market being on quite the euphoric run. All these things seem very positive, which to me may indicate things could be ahead of themselves. There's still question marks and regulatory stuff that presents risk. As a value investor you buy when something is out of favor and sell when it is in favor. It usually doesn't happen in 3-4 months, but it has here. I entered in August and have a 60%+ IRR. I still like it, but am fine walking away with a respectable return and enhanced liquidity position.

I don't think you are the only one. I expect the stock to tank on that day and I expect to back up the truck if it does. Warren is irreplaceable. Maybe the effects won't be immediate. Maybe they take a decade or two, but many great and valuable businesses often gradually turn into country clubs once their founding members turn over. It's one of the reasons many rollups do not work.

This is getting absurd. https://www.cnbc.com/2017/12/11/people-are-taking-out-mortgages-to-buy-bitcoin-says-joseph-borg.html On a related note, easy money trade... shorting longer dated OTM calls on RIOT seems like a sure thing. A company that is more or less worthless and then added "blockchain" to its name becomes a multibagger within weeks.

It's just a covenant that effectively gives the lender the option to call their loans. I'm not familiar with RCII but it looks like this covenant was put in by the lenders to prevent the large owner (a PE firm) from taking a majority stake. I imagine the lenders were probably concerned that cash flow would be distributed to equity holders to the point that they might not be able to fully recover their principal if the company faced a temporary or sustained decline following these distributions. In this case, I would guess it's probably included because of the reputation of PE firms aggressively distributing to equity holders at the expense of creditors (again, I really don't know RCII's situation but that would be my guess). Management already has a 'veto vote' for takeovers in the sense that board gets to choose whether or not to entertain offers (with some limitations). This has nothing to do with management fear mongering or poison pills. This is just a lending covenant. All else equal, the covenant does not benefit management in any way. To give some perspective, change-of-control covenants were fairly common at the bank I worked at for SMID businesses. In my limited experience, they were almost always waived as long as the bank's expected recovery rate was unaffected or 'LGD remained unencumbered' (sometimes covenants related to equity holder distributions were added as a condition of the waiver (if they weren't already present) - depends on the purpose of including the covenant). The point of this type of covenant (from the bank's POV) is the bank lent to RCII and their current management. The bank may or may not want to lend to whoever the new ownership group ends up being. The primary purpose is to prevent the obligation from being automatically transferred to unknown owners/counterparties (and potentially, unknown stewards/managers). You are correct in terms of the reasoning behind it and the perspective of the underwriters. This is absolutely accurate. I was more so referring to Mr.B's presentation of this covenant within the context of a proxy fight for board seats. Most often change of control is thought of in the perspective of a takeover or go private deal(PE type stuff as you mentioned). However it can also simply be a hedge fund taking 5/9 board seats at an Annual Meeting. The fear mongering comes into play when during a proxy fight you have company executives telling shareholders "if the dissidents take 5 seats we could be in default and have to liquidate/etc". I've seen that before and it's basically dishonest bullshit.

It is basically just a scare tactic from management. Saw the same thing last year from Consolidated Tomoka's disingenuous fear mongering campaign. Management tries to use this as a poison pill of sorts. Additionally in many instances, change of control can trigger onerous golden parachutes. That said, if activists are involved, chances are they feel a shake up is necessary. So I guess in the absolute worst case that it triggers a default, what is the problem? That a company that is probably already over leveraged is forced to sell off some assets and pay it down. Don't be fooled by these clowns. The lawyer in me would also point out the word "could" in your bold highlighted paragraph. A change in control "could" cause one. But it also "could' not. All this stuff is usually negotiable.

I think the above term means something different to everyone. For me, it just means sleeping at night knowing what I am invested in and being brutally honest about what my permanent loss probabilities are. There are certain areas of the market I've found much more success investing in than others. Real estate for instance, has great optionality. Additionally, there isnt a single company or person in the world that in one way or another doesn't need real estate. The only times in history its been given away for nothing, the recipients became immensely wealthy. So to me, I understand that there is a certain floor on the value. Where as with things like tech, value is here today and maybe gone tomorrow. So I just don't want to deal with that type of headache; monitoring whether Apple will become the next Nokia or Blackberry. Or whether Blackberry will have an Apple like trajectory and recovery. Too much work to do. Same with oil and gas. Just too many moving parts and external risks. So I guess my circle of competence would be defined as "old economy" businesses. That and I've always had a pretty remarkable ability to rely on a gut feeling that ends up paying off big time. But that's an intangible and not something I can really quantify or articulate in precise terms. I'd also say brutal intellectual honesty and constant reflection are pretty equally the most important aspects of investing. Keeping your psychological state of investing sharp, even keeled and rational is probably even more integral than simply understanding a business. Knowing I'm being greedy and thus likely looking at more speculative investments helps me take a step back and re-evaluate when otherwise maybe I'd pull the trigger thinking I've done my normal due diligence. Knowing I'm pissed at management and tired of an investment might lead me to want to sell when otherwise it's not be the right move. Investing is pretty much 100% a mental game.

You can buy bitcoin and ether with a cc on Coinbase. Or you can link your bank account. Or you can use cash at a bitcoin ATM, there is probably one near you. I think that's incredibly dangerous given the majority of what's driving this insanity is the retail investor. Getting rich quick. Allowing people to speculate with high interest, non secured credit is mind boggling.

Excuse me for being new to this, and admittedly uninformed, but I was having a talk with someone earlier today and couldn't believe what I was hearing. Is it accurate that one can buy Bitcoin on these exchanges using a credit card?

I would say that is true mainly of places like Yahoo message boards, but to a lesser degree here. Basically IMO lower quality sites. VIC is great because real investments are thoroughly discussed. To me it is a trait of gamblers/speculators to fawn over exciting and sexy. Getting rich quick. I am not close enough to the CVS situation, but it broadly falls into a similar category as most stocks I follow and discuss. Boring, undervalued, great long term runway as an investment and little to no discussion on the threads of the sites I read through. To me that is sexy. To me that is exciting. I kind of ignore all the noise of the FNMA type threads where it's really just speculation and get rich quick wishful thinking. That offers me very little as a patient long term investor. And I own FNMA for what its worth. I bought it realizing my investment would either be a multibagger or a complete zero. Therefor, nothing to discuss; discussing it is a waste of time if that is my understanding of the investment. Whereas something like DVA is an evolving situation that is not exactly binary, and a better use of one's time and/or resources. Just my 2c though. I know I can come off as a douche. Not intentionally, but I don't really care either. We're all here to discuss and help each other with investments. Thats what makes the community useful. Differing opinions.

+1 on USLM. Great all around company and investment

Oddly enough, as someone who's shied away from the stock for reasons relating to it's valuation and fears of it blowing up during a recession, I'd say AMZN. Any economic slowdown would crush most retailers, making AMZN even stronger. MSG is a stock I'd consider unbreakable simply because of the balance sheet and exposure to assets that typically trounce inflation.

The rejection itself wasn't surprising. It probably is just a maneuver designed to bump the price. But nonetheless the arrogance of some of these guys is crazy. QCOM has lingered in the 40's/50's to low $60's through a massive tech bull run. These guys have not really succeeded with anything. Their business plan has shown few positive results, and none where it matters; for shareholders. IMO simply coming out and scoffing at a 40% or so premium to where the stock has lingered and simply dismissing it as "undervaluing the company" without supplying any sort of credible plan on how you(management) can do better(especially in regards to how you can do better when you've had years of opportunity yet havent done jack but now all of a sudden will...) for stockholders is reprehensible. IMO the most useful thing they've tried doing is buying NXP, and even that they can't seem to do right.

In relation to the QCOM?AVGO deal- I was a bit surprised today. How does QCOM reject such an obvious value creating event for it's shareholders when it's done nothing but fall all over itself and destroy shareholder value over the past several years? Especially when the reasoning is that the bid "dramatically undervalues the Company". I've learned over the years that it really doesn't matter how undervalued a company is if the management team is incompetent and unable to unlock this for shareholders. Where do management teams get off making statements like this? QCOM may have been undervalued, but these guys have shown zero ability to do anything about it. Now, an event comes along that unlocks some/most of that value, and these guys all of a sudden think that could/can do better? Unbelievable No position in either FWIW

IMO indexing is always moronic. But IMO most people are in fact morons; at least in terms of their ability to make investment decisions. At best, indexing is just lazy. But most people are also lazy. So maybe it's for the best...

I'll extrapolate a tad just to narrow the scope as the comments already have touched on some good points. For less liquid securities it's obviously a little bit trickier. One must also be aware of unique market conditions. Obviously Ackmans GGP trade doesn't turn out the way it does if it's sold because of a quick gain. But one had to have been aware that 2008-09 was a unique circumstance. On the other hand, something like FNMA has similar characteristics and a crazy high IV if the thesis plays out. Yet if you had taken the approach to sell FNMA after every 30% short term pop since 2011 you'd probably already have your $20 a share in gains. So as has been said, it's hugely challenging. I'd use for shit's sake, today's environment as the basis. Most securities are fairly priced. Many see big downside in the market. It also may go up more but nonetheless it's a pretty ho-hum environment. If you bought DVA at $53 a week or two ago or whatever, isn't it kind of a no brainer to take the $9 gain and free up cash?(FD: I own a small DVA position at $58, have held for a few months, and am not looking to sell but just using this as an example being it's a liquid large cap stock)

I was having an interesting conversation with someone who had recently bought GM. I've owned GM for years. Only recently has it been paying off. On the other hand, if you bought GM in June or whenever at $33, your IRR is insane. I still love the thesis, and the inherent value, but looking at it from strictly a mathematical perspective, this sort of short term return(50% or so in 4 months) is clearly unsustainable. Thus it got me thinking. Would there be a scenario where one uses set investment parameters to dictate sell decisions based off of statistically abnormal price movements on a short term basis? This would seemingly come down to a clash between one's dedication to the long term thesis and one's faith in statistics. Outside of trading around the core of a long term holding, wouldn't it kind of being a given that one should capitalise on a short term aberration? The odds that the performance will continue and you will never see your selling price again are rather slim. On the other hand, is there anything to lose really from taking a crazy IRR and wait for a pullback, consolidation, or more compelling idea? This may also depend on whether one is trading with leverage; I do quite frequently. The example I guess I'll give is that you own stock XYZ. 4 weeks after buying it at $10, it is trading at $13. 30% in a month is crazy. Maybe you think the shares are worth $20 longer term. Or CoBF favorite SHLD. You bought the other day at 5.75 and see your shares sitting at 6.60 a few days later. Berkowitz tells you it's worth $150 though. Do you sell or hold a 15% 4 day return? Be curious to hear people's thought from a mathematical perspective as well as the obvious fundamental one.

CTO

Pretty remarkable if you extract some of the numbers. His longs outperform generally, so his short book must be running -30% or so in 8-9 months. Pretty brutal.

From my experience, around 2x EBITDA. The restaurant business is a shitty business to be in. That's a direct quote from somebody I know who has started from scratch dozens of restaurants and currently owns several very high profile restaurants in NYC. For LPs or private investors, you generally look to recoup your initial investment in about 3 years.

This varies but more often than not the fund managers not willing to talk about stocks are just self absorbed schmucks who don't want to waste their time unless it's something they can get publicity out of. I've actually had decent luck with this, although hands down the best place to approach them is shareholder meetings.

lol. This thread reads like a bill of rights of managers of opm. If you read some of the comments, it's all the fault of the investor. Not leaving the money in the hands of the manager for a long time, being fickle minded, demanding annual performance for paying annually etc. Them poor souls need saving from selling and buying the index at the wrong times. The biggest joke is name dropping Buffett partnership from 50 years ago. It doesn't matter that Buffett wound up the partnership for some of the same reasons as Tilson today. Buffett was early even then. His investors would have lost money had the partnership continued. Denial does last a long time. ;) I just have never seen a fund manager who is beating the market say that investors shouldn't compare them to the market. Is investing in a hedge fund less risky than a index fund? who knows I guess. I think that's part of the problem of the modern day fund manager. Marketing is probably even more important than performance. Look at Paulson. The guys had a handful of years since the crash of -20% up to even -45% type years. He's still "The guy who made a fortune shorting the housing bubble". When guys can literally pull in assets worth hundreds of millions in fees after a few years of beating the index, I'd guarandamntee that guys marketing material is guys to start calling him "The guy who beats the market". Which is why it's dangerous to rely on a manager. Very dangerous to be lazy in your vetting of a money manager. Guys that are humble and honest are rare. So I'd say it's moreso up to the individual to find a manager or a strategy that is a good fit.