DeepValuePlay

Hi Everyone, I just lost access to CapIQ and was wondering if there is a free or inexpensive tool that provides access to sell side consensus. Whatever is available would be good. I'm mostly interested in revenue and EPS estimates for future years. Thanks in advance, DVP

What exactly is the draw to this particular nursing school (both from an investment and education perspective). What do they do that is so special? Nursing schools seem to be a dime a dozen. There are multiple schools in almost every metropolitan area. If you go to the local hospitals you will find the nursing staff is often highly comprised of local graduates who have done their precept there. If you have access you can read my writeup on SumZero: https://sumzero.com/pro/research/ideas/16560 a lot of info there. If I have to sum it up I'll say ASPU is special because they have low customer acquisition costs and because they are the low cost provider. Their degrees are in high demand and I expect that to continue and they are opening new campuses and expanding their programs. So far demand is exceeding supply and it is expected to continue as their degrees are 40% cheaper and the more expensive competitors are also fully booked as there are structural tailwinds. This has been cheap before the Corona outbreak and had only fallen in price. I think that in the medium term (2-3 years) this will be a home run. This could work out great in 12 - 18 months as well.

I’ll start - ASPU is my largest holding - it’s a nursing training school growing very rapidly (growth rates of 30-50%). People will need more nurses in case of an outbreak. Further - most of the program are online or mostly online. Using a 15 times EBITDA multiple (which is reasonable or even conservative for a company with such growth) I believe the share price goes beyond $25 within the next couple of years. They are also the low cost provider - they offer all programs at significant lower prices than competitors - which could help in a recession.

I would love people to share undervalued investments that they believe won’t be affected by a large Corona outbreak in the US or could even benefit from such an outbreak.

If one believes in his ability to beat the indices over a long period of time he would want to invest his own money that way. Also LPs would want to know you eat your own cooking. I just don't understand how can someone want to put their money in an index unless they don't believe in their product. That said, the product for most of the investment world sucks and it could make sense to index in your PA, but that means exactly that - you don't believe in the product your selling. If one understands compounding and believes in his ability then he should throw indexing out the window. That is just my opinion. Sure, 100% of hedge fund managers believe they can outperform, but few actually do. Maybe the product you sell to investors is different than what you need yourself. But consider this. Maybe this is someone with a $1m portfolio (unlikely, but whatever, simple numbers). Market does 10% over the long term, they believe they can do 14%, which after 2/20 is about a 11% return for investors. So they beat the market. If this person can do 14% on their funds in 10 years they'll have: $3.7m. Let's say they start with $15m in assets. If we have steady 14% gains a year in ten years the fund will be $38m in AUM. They will make $5m in 2% fees, and $6.8m in their 20% cut. Overall they'd earn $11.8m in a decade, or roughly 3x what they'd earn investing their own account. This is why hedge funds are lucrative. That 11.8m in earnings off the $15m base are from $0. To earn the same thing investing you'd have to have 400% gains a year assuming you started with $1, and with this you start with $0. Why would you waste any time investing for 14% when you can earn 400% returns (based on the above math) by managing someone else's money? This is also why a hedge fund is lucrative if it merely matches the market. You're harvesting insane fees. I am not in the fees harvesting business. My fund actually has no management fees and only incentive fees over a certain hurdle. Is there potential to make more money with the fund than with my PA - yes. However, I wouldn't invest one cent in a fund whose owner doesn't share my risk with his own money. No one in their right mind will. Now, there are some exceptions - if you specialize in something very unique that wouldn't be appropriate as an entire portfolio (a fund specializing on short ideas for example) then I can see the manager diversify with additional investments. But with long only equity fund such the one I have - of course I'll invest in the ideas I work so hard to find.

Also if you're an investor rather than a trader, you actually trade in less than 1% of the time whereas the rest of the time is spent researching.

If one believes in his ability to beat the indices over a long period of time he would want to invest his own money that way. Also LPs would want to know you eat your own cooking. I just don't understand how can someone want to put their money in an index unless they don't believe in their product. That said, the product for most of the investment world sucks and it could make sense to index in your PA, but that means exactly that - you don't believe in the product your selling. If one understands compounding and believes in his ability then he should throw indexing out the window. That is just my opinion.

Thank you Cigarbutt !

I wanted to thank the forum for all of the feedback. For technical reasons I don't believe I can use a broker to allocate the purchases to both accounts. I was thinking about avoiding the possibility of front running by buying / selling first in the fund but was happy to hear this is industry standard. If anyone can link to the CFA document that mentions that standard that would be extremely helpful. To those who suggested I invest my PA in indexes - that defies the purpose on so many levels LOL.

I don't think he said that his hedge fund is/will be in US. Some people assumed that but I would have guessed it's not in US. That is correct - the fund will be based in the Cayman Islands for tax purposes. Both me and all of the investors are residents of the same non-US country.

IB charges for non delayed quotes, do they not?

Thank you Cevian but I was asking regarding buying individual shares...

Hi all, I was wondering how can a US individual or company can invest in the India market? Interactive Brokers don't have access... What is the right way to do that? Thanks!

I really wish I could. The mechanism through which LPs invest in the HF allows them to postpone taxes on profits in the HF until they withdraw the funds - which is a huge compounding advantage. Unfortunately, as the fund manager the taxes I would pay on profits of my own investment in the fund would be 50% and I would have to pay it at the end of every year which is devastating from a compounding point of views and deifies the purpose. Using a personal account which is separate from the HF allows me to enjoy the same tax advantage that my LPs receive. So, the tax implications of me investing in the HF are catastrophic and so I don't feel that's a valid option.

Hi everyone, I'm establishing a small hedge fund and for tax reasons I will need to manage my own account separately from the fund (I live outside the US). The intent is to manage my personal account as similarly as possible to the hedge fund. Some LPs have voiced concerns regarding conflict of interests. For example - when a new investment presents itself who will buy it first - the fund or my personal account (assuming there is potential that such buying might raise the price for low volume stocks)? I'm trying to think of a fair mechanism and was wondering how does the Separately Managed Accounts industry handles this potential conflict and avoids favoring a specific account... Any input would be highly appreciated!

Hi all, I am wondering what is the best cost effective place to subscribe to market data. I mostly need US and Canada data. Thanks in advance for the pointers!

I actually run a small ($10M) hedge fund.

Liberty, I appreciate the input. I am not big enough to matter to anyone but if there is an easy fix that would let me earn an extra 0.1% on my orders that adds up and I don't mind earning it. If it is very difficult to implement or no one really knows how then I'll revert back to my usual habits. I was hoping to learn from the community, that's all.

I read the previous discussion - not much info regarding should I now use IEX. Also the discussion is 3+ years old.. so much could have changed since.

muscleman - I thought the whole point at IEX is that it routs the order to other exchanges simultaneously so HFT can't react. Also - how do you know Fidelity and TD have better fills than IB?

I just finished reading Flash Boys for the first time. I was always aware I am being taken advantage by HFT but now understand it much better. I wasn't aware up until now that there is an exchange (IEX) that is supposedly fair. I noticed that through Interactive Brokers I am able to direct my trades to IEX and was wondering if that makes sense? I know this topic has come up in the past but it has been a few years and would love to hear your thoughts. If I can have my orders execute better that would be great. Thanks!

Hi all, I have not yet been accepted as a member to VIC (Value Investing Club). If I remember correctly I was only able to view ideas 45 days old or older. However, today I noticed it changed to 90 days old or older. Anyone else noticed that? I'm trying to make sure I'm not going crazy here... Cheers!

Hi Everyone, I am in the process of starting my own investment firm. I am pretty confident as to selecting which names to buy but am seeking advice on the following issues: 1) Trading - in the past I was using a discount broker (E Trade) to trade with my personal portfolio. Given that I will manage larger amounts of money (though not a whole lot initially - probably about $5M at launch) I was wondering if that still makes sense. Is there a trading book I should get my hands on? 2) Taxes - I am located in Europe and so are my investors - any advice regarding how to structure my firm? A referral to a decent yet inexpensive advisor would help too. Thanks