gokou3
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Posts posted by gokou3
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More AZP.PR.A. A solid Canadian 8% yielder, would benefit if interest rate goes downward and the company further leverages.
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MO @<$40, 8.5% fwd yield.
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More WFC
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Another catalyst later in the year might yet involve Trump, just as in 2016. If China and the U.S. can fashion a trade peace, and convince the markets that they mean it, a lot of people will find themselves on the wrong side of the trade.
In such an environment, it would obviously be a very bad idea to hold bonds. Stocks might benefit at least initially from the sentiment that a total slowdown could be averted. But if there is something to buy for now, to protect against these eventualities, maybe it might be a bet on faster inflation through the bond market. It can, after all, be done very cheaply. And if this does indeed prove to have been the moment of revulsion, it would pay off.
What would be a good instrument for placing such a bet as a retail investor? I remember around 2010 Soros or his proteges made a similar bet on interest rate increases using some derivative instruments, but I forgot what it was and I wouldn't be able to access such instruments anyways.
Maybe not a perfect answer to your question but Eurodollar futures could be a decent play with the current ECB climate.
Thanks, this seems to be a good instrument for a highly-leveraged bet... and with options, the downside is limited.
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Another catalyst later in the year might yet involve Trump, just as in 2016. If China and the U.S. can fashion a trade peace, and convince the markets that they mean it, a lot of people will find themselves on the wrong side of the trade.
In such an environment, it would obviously be a very bad idea to hold bonds. Stocks might benefit at least initially from the sentiment that a total slowdown could be averted. But if there is something to buy for now, to protect against these eventualities, maybe it might be a bet on faster inflation through the bond market. It can, after all, be done very cheaply. And if this does indeed prove to have been the moment of revulsion, it would pay off.
What would be a good instrument for placing such a bet as a retail investor? I remember around 2010 Soros or his proteges made a similar bet on interest rate increases using some derivative instruments, but I forgot what it was and I wouldn't be able to access such instruments anyways.
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More BRKB at $199.50 8)
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ENB. The delay with line 3 and the issue with line 5 will come to pass eventually.
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I tried with BRFRF (OTC version of BUR.L), I set my price about 1% over the london price but still couldn't get a fill.
If not already so, you may want to have your order open during the times when both the US and London markets are open... only 2 hours of window in the morning.
Also, per my broker, the UK govt charges two levies, 0.1% and 0.5%, on all stock transactions. So there's not much arbitrage profit for the ADR MM if you only offer a 1% premium.
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Started small position in BUR.L. Pretty expensive commission with a Canadian big bank broker (>$100, +forex). Damn, will switch to IB eventually.
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The 8.4% yield sounds very enticing, but if Canada central bank starts dropping rates these rate-reset or floating rate pref shares may re-test their 2016 lows. Patience wins.
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More AZP.PR.A. Going ex-div next week.
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Sold LBRDA and CHTR over the past few days. It may be a stupid decision as CHTR is on the cusp of gushing FCF, but I have made good returns on them in 16 months so I think there could be better opportunities in the rest of the Liberty empire and the rest of the market. Sitting on about 30% cash at the moment.
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BRK @$199
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Only 184k shares traded today and it's down 7.5%. Another 41.8M to go (ok, I have dramatized this somewhat as some of these new shareholders will hold onto theire shares, and some pre-selling in the form of short sales prior to the conversion date have also taken place... still).
Management is making it clear that it will sit on the sideline and let the share price collapse before doing any buybacks when it stated in their press release that "The Corporation also announced that it continues to consider and evaluate the possible implementation of a normal course issuer bid and/or a substantial issuer bid in respect of its Subordinate Voting Shares."
Disclosure: None, but may buy into the common if it drops much more.
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DUNDEE CORPORATION ANNOUNCES COMPLETION OF CONVERSION OF
FIRST PREFERENCE SHARES, SERIES 5 (May 15, 2019)
http://dundee.financial/dc/-/media/DGC/DC/2019-05-15-Series-5-Conv-Final.pdf
So is Friday May 17th (T+2) "D-day" in terms of the avalanche of new shares hitting the Pref E holders' broker accounts and onto the market?
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Meanwhile, Dundee has said it’s seeking to bring in a new partner to Parq by Tuesday. All told, investors had pumped more than C$1 billion in long-term debt and equity into Parq by the end of 2018, according to filings. Dundee, which put in C$142 million of that :o :o, has said it doesn’t expect to fully recover its investment and that it could take another year or two before Parq is closer to stable operations.
"They don’t necessarily think they’re going to get their money back," said Hood. "But they do think that they’ll get a substantial portion back and that’s why they don’t just give up and sell it."
The first Parq reference in Dundee's filings is in their March 2015 AIF.
It must have taken some really impressive talent to lose dramatic amounts of money in a real estate development located in Vancouver over the past 4 years...
As a Vancouverite, can't agree more. This will take someone like a Brookfield with multi-facet RE experience to turn around.
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I notice Ned Goodman transferred his stakes to a trust just a couple days before the bloodbath:
https://www.canadianinsider.com/node/7?menu_tickersearch=DC+%7C+Dundee
Wonder if anyone knows the rationale / benefit for the Goodman for this transfer?
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I took a pretty good short position this AM. The huge selling pressure from the prefs is likely to hurt the stock dramatically after the exchange takes place. Also, new buyers can buy the prefs at a discount which will lower demand for the shares.
I actually think the terminal value for minorities here is zero. Their strategic plan is to invest their incoming funds into merchant bank deals in the junior mining sector. I expect all incoming funds to go to crappy juniors and exec comp. They will probably do a tender after the deal closes, but I bet it's at <$1.
I share your sentiment. I had only the Series 2 & 3 preferred but have now exited them all. I wouldn't be surprised if management will screw the Series 2/3 holders next, e.g. suspending the dividends citing cash constraints. Today's pop may be as good as it gets - I could be wrong and overly pessimistic though since with the Series 5 conversion, the 2 and 3 are indeed in a much better position in the capital structure. OTOH the ice cube is melting very quickly (continuing Parq losses / cash infusion, selling assets below book value, throwing cash at junior miners, G&A, etc.)
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They have various alternatives...
Cash bid for all of the E pref's at $17.50 would cost them $63mm cash. Use bank line & some cash from current holdings.
Put forward an extension of the E's by a year or more
Some combination of cash & common or other prefs to settle the E's
Seems ridiculous to redeem them for common when the potential dilution is so high - believe this is only a bargaining tactic. Especially when they have $160mm in value sitting in DPM shares.
My NAV calc right now ranges from $3.38/share to $5.00/share with the $3.38 valuing all prefs at par & the $5.00/share NAV taking current market prices for all prefs. This NAV assigns $0 value to the Parq development.
Cash at the end of Sep was $26mm and they received $14.5mm from Union, $24 from Dundee Securities and probably burnt about $20mm in G&A and the pref dividends. So current cash absent other asset sales should be around $40mm.
(Putting myself into Goodman's shoes)
"So let's see, should I screw the common shareholders (which my family owns 20% of) or the Series 5 holders? Of course the Series 5 guys. Why not give the patsies a stick and a carrot - they can either...
1) convert their series 5 shares for commons per prospectus and get a 32% immediate haircut (based on today's DC.A closing price, without assuming further price pressure from such event), or...
or
2) convert to the "Series 6" preferred with a 2022 maturity at 7.5% dividend rate, AND A PAR VALUE OF $20. This would be a lesser 20% haircut, and will almost make the holder whole 3 years later after dividends. Also, this offer would be a 10%+ premium to the current Series 5 prices to encourage the new-ish shareholders and arbitrageurs to bite. This also eliminates $16M of liability in one stroke without any dilution."
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I think the "series 6 conversion" scenario is quite likely. Of course, I am biased as a Series 2 & 3 pref holder.
So the Goodmans decided to screw themselves up instead... maybe they are dumber than I thought. Or perhaps they want to kill the common share price and then swoop up the shares on the cheap.
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AZP.PR.A (yesterday)
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They have various alternatives...
Cash bid for all of the E pref's at $17.50 would cost them $63mm cash. Use bank line & some cash from current holdings.
Put forward an extension of the E's by a year or more
Some combination of cash & common or other prefs to settle the E's
Seems ridiculous to redeem them for common when the potential dilution is so high - believe this is only a bargaining tactic. Especially when they have $160mm in value sitting in DPM shares.
My NAV calc right now ranges from $3.38/share to $5.00/share with the $3.38 valuing all prefs at par & the $5.00/share NAV taking current market prices for all prefs. This NAV assigns $0 value to the Parq development.
Cash at the end of Sep was $26mm and they received $14.5mm from Union, $24 from Dundee Securities and probably burnt about $20mm in G&A and the pref dividends. So current cash absent other asset sales should be around $40mm.
(Putting myself into Goodman's shoes)
"So let's see, should I screw the common shareholders (which my family owns 20% of) or the Series 5 holders? Of course the Series 5 guys. Why not give the patsies a stick and a carrot - they can either...
1) convert their series 5 shares for commons per prospectus and get a 32% immediate haircut (based on today's DC.A closing price, without assuming further price pressure from such event), or...
or
2) convert to the "Series 6" preferred with a 2022 maturity at 7.5% dividend rate, AND A PAR VALUE OF $20. This would be a lesser 20% haircut, and will almost make the holder whole 3 years later after dividends. Also, this offer would be a 10%+ premium to the current Series 5 prices to encourage the new-ish shareholders and arbitrageurs to bite. This also eliminates $16M of liability in one stroke without any dilution."
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I think the "series 6 conversion" scenario is quite likely. Of course, I am biased as a Series 2 & 3 pref holder.
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Isn't this trade a bit early relative to the prices seen during 2014-16? The high quality prefs like bce may go to 50% par again if there are signs of Canadian cb rate drop which may happen given the challenges in the oil and real estate industries.
Fairfax India new issue
in Fairfax Financial
Posted
Listed and quoted in USD on the TSX. They report in USD as well.