beerbaron

You are totally right! I am an Engineer in product development and risks are the things you don't know. This is what will kill you or your product. So what should you do if you don't know the risks? Well for starters you will learn more about what you think could be the risks. You would take a few hours sitting in front of a piece of paper and write down everything that could go wrong. You'll likely miss some but you should get 80% if you are good and 90% if you are experienced. Once you have your list you go each point one by one and you try to see how to protect from it either by test, material, theoretic analysis, etc... After this process you might have some issues you did not think of, but you'll be a lot better then if you did not do anything to prevent all the other things. I try to apply the same strategy to investing. I might have missed lots of risks by investing in RIM but I took great care to try to find as many as possible, find the problems early and solve... if possible. I do agree that Sino is a very high reward I just can't put any range of number on the numerator (risk). If your capable of doing it then you'll statistically be doing very good return on the long run. BeerBaron

Your 100% right Hester, when I red about the 2$ puts I got excited. Did some research and could not find any reasons for such high put price. So I did not sell any... because I could not establish an odd. It felt like I was the patsy. The whole point of investing in higher then average risk is to have an idea of the odds. For example I bough some RIM last week but I knew dam well what were the issues with the company and the phone market. But I also tough the price was not fully accounting the possibility of a turnaround... PE expansion and earnings growth do wonders in turnarounds. Now all that is left for me to do is wait and keep focused for the risks to materialize or not... but at least I know the risks. BeerBaron

You might take a look at SBSI, especially how well they have managed both side of their balance sheet. These guys breed risk management and experience. They have been in the top 10% on the investment side for a while too... Banks are good investments but I'm not sure much growth will come out in the next few years. Demand for loan just does not seem to pick-up which would point to deflation in the future. BeerBaron

Guys if you think it's not a fraud, buy calls. You'll get back your puts money and win on the calls. Who's ready to take the risk that's the question... BeerBaron

If you don't know who the patsy is... BeerBaron

what were the odds?

Why not use their foreign cash to buy back their shares on the foreign market, would that be considered as repatriated money by the IRS? BeerBaron

CHBT ... Look at the inventory turnover. This company would have to turn it's products every 4.8 days. BeerBaron

That is one the most stupid idea I have heard. Peoples are complaining that Microsoft is too spread in a gazillion of products that lose money and yet they embrace the idea of having it be managed as a conglomerate. Microsoft has enough on it's plate keeping up with competition that the last thing I would want from them is to start acquiring non-core operating companies. I like when a company is focused on it's objective so they can stay leaders. Apple has a very focused strategy and so far it seems to work pretty fine for them. As for what to do with the money Eric has it perfectly straight. Why would you want MSFT to keep your money and invest it for you? I would much rather have a dividend/buyback s I get back the money. What I do with that money after is my own choice... you can invest it in Fairfax, BRK or whoever you want why would you want to lock it at the original corporation. There is only one Buffett and only one BRK, you can't reproduce it's success without another Buffett. BeerBaron

Here are my questions for what they are worth... Digital Wallets have been present in Japan for the last 10 years. What's so innovative about them? How did it play out in Japan? Who was the winner if any and why? BeerBaron

Anybody in Canada should take a loot at MBNA Smart Cash. It gives back a nice amount in checks. I believe if credit card did not exists everybody would be better but since we don't live in a perfect world. I decided to use them as tools for my own advantage. I really don't see how having a credit card can increase my spending and I would doubt anybody on this board would too. Money burns the hands of many person but there is a small part of population that is actually net savers, what burns them is spending their hard work in useless crap. You can't help people that don't know how to manage their money, you just can't. Accept it and stop trying to pop their bubble that they are equals to Prince Charles in wealth. Debt is like a drug, you take more of it to forget about you debt problems. I like that governments force the extra disclosure, I actually laughed last month when I read it would take me 12 years to pay back a 1000$ credit card bill. It probably made some people cry too, but not the ones most concerned! BeerBaron

It's the first time I hear of ELF. I can't even seem to find a website for them... Do you have a link and/or a short investment thesis? Do a search on this forum. It's been discussed many times. BeerBaron

Calculating it is pretty easy. Antagonizing the staff is the issue. BeerBaron

Just a quick question, how will the FED control interest rate once QE2 goes away? Won't they have to sell those securities too one day? BeerBaron

I wish 10 Years would be in the 4.5% range. I would take it. Probably 35 Years out of the last 50 were above 6% so the mathemical odds of my loan being profitable look good. I have a profound hate for variable rates, especially since it<s usually the one that should not use them that opt for them. Let's use Pascal dilemna: Fixed Rate Variable Rate Interest go up to 10% You keep your house Good Move You lose your house Interest stay flat You overpaid interest. Keep House. You saved money. Good Move. Why would someone risk it's house to save 10 000$ ... I don't know! BeerBaron

Fred's Database has a bunch of loans shown. Koo might be right, the total consumer and commercial loans are plain flat. See attached graphs. BeerBaron

Viking, I'm about to renew my mortgage... which mortgage originator offers 5Y at 3.5%? BeerBaron

That is exactly what you need refinancing is part of the amount of credit in circulation. I'm just trying to get a feeling of Koo's statement about the de-leveraging of the private sector. Ideally, one would the last 5 years of the following and add them: -Top 10 Banks Load Book -Junk+Corporate Bonds This would give a fairly good picture of the lending environment. The problem with this approach is that 2008-09 were full of bankruptcies and governments interventions which would make the banks data unreliable. Anybody has other tools to evaluate if the credit is contracting for the private sector? BeerBaron

He says that private sector is not borrowing. Anybody has stats on junk and corporate bonds issuance in the last 5 years? BeerBaron

Parsad, there is absolutely no risk, Vancouver home prices never fell significantly in the long run. You are trying to get your clients good returns in the stock market but the real gold mine is right next to you! BeerBaron (For those of you less acute to human expression it was a joke!)

HOLY CRAP! You guys have a QUEBEC too??? :o LOL! As a Quebecer I'm not offended. Some people would claim Alberta held hostage the rest of Canada for the last 10 years as well :) BeerBaron

Great analysis, what did you do about regulatory risks? BeerBaron

I looked a bit at it today and could not find anything...this makes me much more cautious... who want's to be the patsy. Why such a drop? I just can't explain it. BeerBaron

50 Years ago a writer named Adam Smith wrote a book called 'The Money Game', it's the same thing all over again. BeerBaron

Let's see if I understand correctly. So basically a large fund, sells a bunch of 100$ Covered Calls when the stock is at 90$. At the last day, if the stock begins approaching the strike price I dump my shares until the stock falls below the strike. It's illegal but interesting as your biggest loss is only the difference between your selling price and the close price if you don't succeed. Plus you get the option money as a bonus. Now, guys, think how great that sounds for an arbitrageur. We can't know where the stock will close but we know it will be in a specified range because of those market manipulators... BeerBaron