ValueArb

This is my bubble tracking portfolio today. https://app.photobucket.com/u/crandyhill2/p/7254206d-e5e3-497a-a14a-6827001e262a I have one year puts against Tesla (200s and 400s), Nikola($7.50), Virgin Space ($7.50), and Plug Power ($10), so it sort of feels good when I see the entire board in red, but I kind of wish they would go up another 50% in the next few months so I can buy cheaper puts. This is an experiment for me, first entry into options since Krispey Kreme days. What I'm finding out is that options are so costly that I'm underwater slightly on these positions even though they are all down since I put my positions on in the last few weeks. Huge spreads mean that an option might have a bid/ask of 0.40/0.60, and if you are forced to buy near 0.60 and the stock goes down, the options might jump to 0.45/0.65 and trade at .55 cents, giving you a 5 cent paper loss. I'm starting to develop an appreciation for what the Big Short guys went through in 2007, when the defaults were rising but their positions were being marked down.

Plug Power (PLUG). It's even cheaper since I got in a few days ago, has dropped like 15% so now it's only 87x EV/sales, and 38x book value, and the laws of physics still seem to be against the idea that hydrogen fuel cells will ever be competitive with batteries for most applications. Oh, and what I bought was 2021 $10 Puts.

Did he say whether he sold the rest of his position?

It's easy to have a focused portfolio. Simply research 2-3 investment ideas per day (10-20 per week), and only buy the top 1% of your ideas. As long as those ideas have a large margin of safety and no significant leverage or negative risk optionality themselves, succeeding with a ten position or less portfolio is easy!

Interesting story from Matt Levine today.

Michael Burry is back running money at a new Scion fund https://app.tikr.com/investor?id=5050303654

BTW: I just realized IB has a "IB Lite" level that doesn't charge for inactivity. Not sure if its available in Europe but you can try that.

Thanks to both of you for the help.

I have some questions for anyone with any insight into how public companies securely hold Bitcoin on their balances sheet. 1) How do they secure the BTC from theft, both internal and external, and what tools to they have to detect attempts? 2) How is BTC handled in an audit? How do auditors confirm the claimed amount is securely held, and not stolen or fraudulent?

Excellent tool, thanks for the recommendation.

Sorry, I don't have a direct answer to your question, but.... I use IB, and even though I've been sloth like in my trading activities, going months or years without buying or selling anything, I've never seen that fee. But I have my IRAs there and they all have 6 figure balances. I'd see what the balance cutoff is for them to waive the inactivity fee.

Other than shorting companies with balance sheets heavy with BTC, are there any more direct way to short BTC? Is there an options market for it yet?

By that logic you should never own any listed stock since 2-4% bankers fee has been paid on almost any of the them when they got listed. That is what this is in aggregate - Bankers fee in another form. It’s just a funnel that is bringing hundreds of new companies to the listed market. But of course a lot of them would be average or below by definition but so will there be some exceptional ones. But sure focus on a wrong tree and miss the forest. Minor nit, IPO fees are typically 7%, and even direct listings pay the bankers (Palantir paid $50M+ in fees if my memory is correct). Correct me if I'm wrong, but I see a big difference between buying SPACs before they've merged with their target, and buying any stock, including a former SPAC, after those fees are paid. In the second case I'm not paying the fees, the previous owners took the value hit. And my understanding is that in general, buying SPACs before their merger has not done well historically. Finally given the market is fully valued, I would also worry about the performance of new SPACs going forward. But as you all have pointed out in response to my grumpy denunciation, it all depends. Sub-par returns from a class isn't proof there aren't super profitable individual opportunities in them. So now after further consideration I must flip flop. If WEB launched his own SPAC, I would very likely invest, and if I"m going to buy into the "great man" theory of coat-tail riding, that also means there are likely at least one or two other existing SPACs I'd be interested in if I did the due diligence on their sponsors. Which also means I just publicly outed myself as a bombastic liar and a hypocrite, all in under 24 hours;) Making me the first one ever on the internet, I think?

My approach would be to figure out the right combo of search terms to search sec.govs listings. Look at the filings for previous spin-off parents to get the right verbiage for these announcements.

I wouldn’t give Warren Buffett a 20% finders fee, let alone the rest of these yahoos.

This

Heres an example of the most micro of micro-caps, and most butt of cigar-butts. Infinite Graphics - INFG, hasn't filed financials since 2003. Last traded at $600 in September and October. Looking at their web site I can't tell if they are still in business or not, may have sold/licensed off all their products a year or two ago. The interesting part? It paid a $400 dividend on January 4.

Congratulations! Looking forward to taking mine when I'm eligible.

I don’t understand the issue. It’s easy to create short positions in excess of actual share count, you don’t need “naked shorting” as an explanation. Borrow a share, sell it, borrow it from the newbuyer, sell it again, now you have two short positions for a single share. Short positions aren’t shares, they are obligations to purchase shares.

I haven't read either yet, but even the little I know about this guy right now gives me an uncontrollable urge to short everything he touches.

Heres another for my bubble portfolio. Zillow, 15 times sales, only 22% growth and $150M loss despite the hottest real estate market in history. "Hottest real estate market in history"? you might be questioning. I just sold my home after a quick remodel, in October when I started my realtor said that the market index of buyers/sellers, which normally bounced between 80 and 120, was at 350. After we closed this week, they said the market was if anything, hotter. Any inventory is selling so fast that available inventory is something a fraction of normal, but sales volume is high. As evidence, we got three offers at $20k-$30k over our asking price before remodel was completed, or property shown, or even marketed. We never even became inventory. This is Scottsdale, Arizona, but I am betting its not a huge outlier from rest of company.

Consider adding PLUG and RUN to the bubble portfolio Thanks! Will do.

Just reading this thread today, and feel like it's too negative. The market is inefficient in general, and less efficient the smaller the market cap. Not a lot of meat on the bone for a professional analyst running tens of millions of dollars in a five million dollar market cap stock that trades only tens of thousands of dollars a day. My experience was from 2002 through 2007, when I quit my job to invest full time, starting with a $400k portfolio and needed to spin off a six figure income to live on. Focusing on the pink sheets and microcaps I still ran it up over $1M before the market crash. Not quite a 50% return, but then again I'm not that smart. The nice thing about the lower regions of the market is there are often little arbitrage-like opportunities where you can make a few thousand in a transaction with a high certainty of success, those "workouts" help smooth out swings from your bigger positions and keep the graph moving up and to the right. The hard part is you can search for weeks, sometimes months, to find the next one.

It's got an enormous revenue base, so that probably helps keep R&D down as a percentage. But also 6% now vs. 2% at a fraction of the sales requires a massive increase in R&D spending, maybe their Titan (car) program and VR? The reason I used Apple is I think its a great example of quality, targeted R&D. Jobs was famous for killing almost all of the existing R&D projects at Apple when he rejoined, too many without hard goals that could produce products within the next half decade. Secondhand, it sounds to me like he was a fan of putting more resources into fewer projects, and carefully selecting those based on real innovative opportunities. One example include the original iPad, which he canned at the product launch meeting when it couldn't meet his high standards. And the iPhone, which he allowed the iPad team to compete against the iPod team to design. He invested a lot into building a strong team to make a tablet computer, when it was early to market he kept that expensive team together merely as a backup plan to the iPod Phone. So spending extra for two competing teams didn't phase him because he believed it was an important market worth a lot of R&D investment. And it turned out the backup plan won, and he threw a thousand engineers at Project Purple to get it done, which had to be over $250M a year.

I am building a bubble portfolio, that I have puts against. Am hoping to add to it, should Bumble be next (up $10 today but no options yet, darn it). SPCE -Virgin Galactic TSLA - Tesla NKLA - Nikola