NoCalledStrikes

I love the ability to read 10 or so posts on a page simply by scrolling. It's the ease of use that drives content creation. Solutions that require a click for each post drive me bonkers, but I'm sure that would bother Sanjeev too so I'm not too worried.

First, I'm not a professional adviser.... but based on my experience with a family friend, you should tell your client about the violations, not because it will change anything in the near term, but because its not ethical for you to sit on this information and you will sleep better knowing you tried to help. In my case, the questionable adviser was an outgoing person who had excuses lined up on how his violations were from government regulation run a muck. This played well to my friend's politically conservative nature who found the adviser more believable than regulators. Over time, the adviser's investments high commission private REITs, performed spectacularly poorly even though the quoted price in the statements never went down - until the end - when they eventually liquidated for 25 - 40 cents on the dollar. I sent her some information on private reits and made clear that I didn't think her adviser's strategy was appropriate, but his pull was too strong. And while I didn't rescue my friend from those particular investments, she is more careful now going forward. You are dealing with powerful forces of denial, so I wouldn't want to get into a comparison of your services vs the bad adviser's. Frankly, the other guy who can sell that crap is by definition a better sales agent than you are since you are probably (I hope) incapable of selling that kind of stuff. Rather, I would suggest educating him or her by finding third party information such as Jason Zwieg's WSJ articles on annuities and the FINRA databases for looking up adviser violations. Tell your clients who own annuities that many annuities, especially complex ones, are problematic before mentioning that some advisers who sell them often get into legal problems. Lastly, I would offer your services to your client should they ever decide that that particular annuity they own, may not be meeting their financial needs. If your client is open to admitting a mistake, they will appreciate your help. If they don't want to learn this about their investment, your soft approach will not offend them, and you guys will implicitly agree to never bring up the topic again.

Currently, TD Ameritrade is reasonably pink friendly these days, but years ago they weren't (for me). IB is hit or miss, but won't let you transfer them in (unless you bring over 5M in assets). In my experience, broker policy changes without rhyme or reason, so best to have accounts at a few different brokers. There is probably no best broker for pinks, just least bad ones. Until recently, Merrilledge was making me call in to place orders (of shares I had bought through them!), but a couple months ago, they starting letting me place those orders online again. Its random.

The answer is in Josh Brown’s newest article https://thereformedbroker.com/2019/06/13/when-everything-that-counts-cant-be-counted/?utm_source=dlvr.it&utm_medium=twitter. There are no asset managers who represent their strategy to clients as “We buy the most expensive assets, and add to them as they rise in price and valuation.” That’s unfortunate, because this is the only strategy that could have possibly enabled an asset manager to outperform in the modern era. It’s one of those things you could never advertise, but had you done it, you’d have beaten everyone over the ten-year period since the market’s generational low. Spoiler alert: This is ultimately unanswerable, but we will know more after the next recession.

Houston, TX

One not yet mentioned is straddle options require different tax treatment. Heck, even vanilla options can mess up your existing equity holding periods. I am not the world’s most interesting trader so “I don’t usually trade options, but when I do, I always discover new tax rules.”

In my experience with lightly traded stocks, a limit order at the ask will only fill 100 shares and then the bid will move to one penny over your limit order which is of course why market orders are good to use when filling the order is more important than scalping a couple pennies. Buth then, a market order can really stick you with some bad fills, hence the allure of the adaptive algo, but alas it has its problems too. Ain't no such thing as a free lunch... Free trades at Merrill Edge are nice because you can split your order into multiple orders for free (assuming you are within your monthly allotment of free trades). But then Merrill won't trade many low price/volume stocks anymore. Years ago, I absolutely never used market orders, but over the past 10 years, I find sometimes they are just the only way to get a fill.

Which issuers/CUSIPs fit your description? ETP PRC ( a floating preferred) is one that fits my bill and which I own in small quantities. Yielding close to 9% when I bought it. BB+ rated and metrics are improving. The bonds are BBB- rated, I think and also due to for an upgrade. Does ETP PRC generate a K-1? If so, does it have any UBTI - just checking for the IRA. Thx.

The brokers used to be able to offer frequent flyer points, Apple gift cards, and the like but those are now considered illegal inducements especially for retirement accounts, but providing free trades are not. I used to just transfer the minimum dollars over to maximize my rewards. And i miss those free miles.

As a value guy, I find BRK weekend my favorite time to use hotel reward points, the rooms are at peak cash prices, but the point levels are the same as always. Personally, I sleep better when I know I've just pulled off a great arbitradge :) Most likely all the reward rooms are booked now, but almost always there are cancellations in the week or two prior to the AGM. Don't forget to search Council Bluffs, IA for a room; its just over the river and closer to downtown Omaha than 66% of the city of Omaha is to is own downtown. I have yet to find the "bad part" of Omaha and I've made the trip 15 times. If you aren't staying within walking distance of the convention center, you can park nearby. Once you decide to drive rather than walk to the CC, it doesn't really matter where you stay. If you are flying, definitely look at Kansas City, the KC airport is on the north side of town and less than 2.5 hours away. The inconvenience is well worth the $500+ saving in airfare and you'll get better rental car pricing too. Enjoy the weekend.

Merrill edge just cancelled my outstanding buy orders for CNTWW, WEDXF, SPCO. Nothing says we don’t want you as a customer like cancelling your open orders.

The new banner message from Merrill Edge today: Effective July 31, we have updated the terms and conditions of our Online brokerage as well as the definition of low-priced securities. Note: Open orders may be canceled for purchases of securities that do not meet the guidelines for low priced securities. This is an opening transaction that will no longer be permitted as part of the changes to our low-priced security policy. Please contact us with any questions. Important Information Regarding Low Value Securities Due to the risks related to low-priced securities (LPS), the Firm has special restrictions on orders in low-priced securities. A "low-priced security" is generally defined as having any of the following traits: Securities that trade over-the-counter (OTC) at or below $5-per-share and/or less than or equal to $300 million in market capitalization Securities labeled as Caveat Emptor by OTC Markets Group OTC securities that have limited or no financial disclosure information available Purchase orders in certain securities meeting the LPS definition will not be permitted.

LC - I like how LICT corporation at $13,900 a share, a 30 year operating history, and nice financials posted on its web site is considered a speculative investment, buy you can buy all the Tesla you can want for your IRA with the SEC's blessing. All I want is to sign a form saying I am a big boy and won't sue if you sell me exactly what I ordered at the price I offered to buy it at.

Muscleman - Very interesting, I just tested 4 microcaps on TD Ameritrade and they accepted my test orders for all of them. Since I entered them after hours, I wonder if I had entered them during trading hours if they would have cancelled them as they often put my small cap orders on hold before releasing them during market hours. TD Ameritrade is often very picky with me, so I had given up trying the past 6 months or so for low liquidity stocks, but perhaps they've changed (I will test during market hours before I call this a permanent change). I tried my Fidelity account and most of my OTC's were going through, but it wouldn't accept orders for Alpha Natural Resources (AANR and APNR) and Solitron (SODI) "Error:(TC9052) Opening transactions for Pink Sheets (without information) are not permitted because of the risks associated with these securities and all Microcap securities." But they would take LICT which they most definitely did not accept several months ago. The brokerage rules on this are so nonsensical. I would love to consolidate accounts, but it seems like I have to have multiple accounts if I want to be able to trade obscure stocks since there is no way of knowing who will let you trade which stock.

I just got a call from Merrilledge an hour ago telling me that effective August 1, I will no longer be allowed to buy stocks under $5 or under $300 million USD market cap. They claim this is a SEC rule and no brokers will be allowed to let their customers buy micro-cap stocks ever again, but that strikes me as absurd. For starters, if no one is allowed to buy, who would we be allowed to sell our existing positions too? This is part of a trend as For the past two years, I've had problems buying OTC stocks at Fidelity and TD Ameritrade, but no problems at Merrilledge and so have been using Merrilledge almost exclusively for legitimate (non-penny) OTC stocks. For instance, Fidelity won't let me buy LICT which sells for $13,900/share. They apparently consider it a penny stock, so I bought it at Merrilledge. In my experience, TD Ameritrade also refuses opening orders for most OTC stocks (in the past, they just required you to place them by phone). Anyway, I am in need of a broker for an IRA which will let me buy OTC listed securities which market caps under $300 million. Any suggestions?

"We also trimmed our investments in Berkshire Hathaway, Mastercard, O’Reilly, Waters and TJX. Almost all of these sales were driven by opportunities we saw to redeploy capital into either companies with better growth prospects and similar valuations or companies with similar growth prospects and more attractive valuations. The exceptions to this rule were Berkshire and Mastercard, where we felt compelled to reduce large position sizes to better reflect our assessment of future potential" Not exactly the greatest timing... Let's say they sold BRK.A in mid Q4 at $280K/share, heck it still wasn't over $298K at year end. Today its at $325. Perhaps they should have assessed the assessment of BRK's future value of cashflows with a reduced tax rate, no? Writing this caused me to lookup Mastercard, O’Reilly, Waters and TJX as well. All are up significantly. Given the low cost basis' on what they sold, there is no way they picked better than they sold. They've locked in another year of under-performance with those sells. In fairness, I don't think owning mature 500B market cap is the way to beat the S&P over the next 20 years, so I don't disagree with trimming, just the act of doing so in the face of a tax cut that most benefits mature 500B market cap companies.

It is only in the Senate version. I find it amazingly hypocritical that it only impacts individual investors. The mutual funds industry was able to lobby an exclusion when it first came out last month, so they are exempted. Can you imagine how this will be implemented? I have multiple brokerage accounts? Must I sell only from the account where I made the first purchase? What if I own shares in an IRA that are older than shares in a taxable account? Would I have to sell from the IRA first? (That may seem like a stretch - but wash sale rules don't distinguish between IRAs and taxable accounts - so why would this legislation). For the record, I have no objections to paying more income tax if the money is used to pay down the national debt, but if the discussion is about why I should pay more so that someone else gets a bigger tax break, then I can be as petty and territorial as the next guy.

I wouldn't lose any sleep worrying about the NOLs. In my history with Emergent, only the secured creditors charging 18% interest will have to worry about paying taxes.

Have the names of any of the speakers or companies been announced yet?

I'm headed to Kansas City, but highly tempted to redirect to Nashville. I will be eagerly reading the weather tea leaves tomorrow am.

Thank you everyone. The guest list on investors field guide looks awesome - Thanks! I second the take on the unevenness of Ted Seides' podcast, but thought his Tom Russo interview was excellent. I like COBF's Eric Schlein's and planetmicrocap because they have younger hosts that are still eager. The Sam Zell audio book sounds like a great listen. I also heartily recommend about half of all Barry Ritholz's podcasts. His guest vary widely, so you may not like who he interviews, but he always does his homework and is well prepared for his interviews.

Roadtrip! - I'm going to join the masses for the solar eclipse. I need about 10 hours of investing lectures, googletalks, youtube, etc. (I have the tools to convert the audio in videos to mp3's). Past favorites are Columbia Business School lectures, WEB/Munger talks, Klarham, Akre, Goldblatt, etc. Any new podcasters out there? Once I listened to about 8 Nate Tobik podcasts in a row and after the trip I profitably bought several small community banks as a result:) My favorites are old Buffett videos and recordings from the 80's and 90's before he became mega-famous. You can find them on Youtube and just use a youtube to MP3 converter. Thanks in advance!

Snowball is a great book for Buffettologists. People who think that Alice Schroeder was unfair, should only imagine what the book would be like if it were written by Michael Lewis. My understanding from my source is that Warren was perfectly happy with the book until his family read it. Warren is a good person and a great businessman, but he is not without flaws or foibles. Every year at the AGM he says that money does not buy happiness and what he really wants is to be loved by the people you want to be loved by and that it can't be done with money. You have to be lovable to be loved. Because of Snowball, now when I hear him say it, I know he's sharing knowledge he's learned the hard way and it makes it stick deeper into my psyche.

Thanks guys. I definitely suggest skimming. I can't believe how slow I was talking. I suggest using Overcast or any podcast player with a speed up function or pause remover :) CorpRaider - TWNKW warrants bounce a round a good bit - wait for a day when someone is selling to be a buyer. I was able to get some more at $2.75 just a few weeks ago. Sometimes the easiest 10% you make is waiting for an illiquid stock to drop 10% for no good reason.

I'll second the reviews. The opportunity to meet other small-cap investors at the MicroCap Conference is excellent. You're not going to find the next AAPL here, but you will grow your watch list. Tim - Hockey sounds good. I'll pm you.