merkhet

orthopa, the GSEs don't have enough capital. A prerequisite to any release would be that they'd have to rebuild that capital -- either through (1) capital injection or (2) buildup over time. If it's (1), I could see a situation where the preferreds are paid off or converted into equity at par to inject $35 billion into the companies w/ an additional injection of $X billion from adjusting the strike price of the warrants. That would mean that the common gets diluted substantially. I wouldn't be surprised if the common went to zero and the preferred gets completely paid off.

http://www.bloomberg.com/news/articles/2015-10-16/obama-adviser-set-to-dismiss-rumors-of-fannie-freddie-share-sale That would be a setback. EDIT: I don't have access to double-check this myself, but someone has informed me that Michael Stegman is actually not on the schedule for the Mortgage Bankers Association Expo that started this weekend. So... that's a bit of a twist. http://events.mortgagebankers.org/102nd_Annual/sessions/default.aspx EDIT #2: Looks like someone found Stegman. http://events.mortgagebankers.org/102nd_Annual/sessions/MoreInfo.aspx?c=90884

The short answer is that the preferred holds less of a risk of being a zero than the common. Significantly less, in my opinion.

I had the exact opposite reaction to the Mad Money interview. Listen to her response to Cramer starting at 4:08 when he asked "Why didn't you just speak with the Journal reporter months ago?" Her response was basically "well, the Journal wrote a good piece a year ago, I published an op-ed on the Journal, but in this case the sources focused on detractors who said I would never succeed." She then offers a pretty weak response that the Journal only provided a "three day window" in which she was unavailable before the Journal had to publish. So, that's a bit of a dissembling response in my book. She basically didn't respond for months because she didn't like the article that was being written. Then she says that she finally decided to respond after months of inquiries but by the time she decided to respond, the schedules didn't match up. These are things that wouldn't hold up w/ a cross-examination, but that's not really Cramer's job. No opinion on fraud or anything like that, but I found her answers to Cramer to be questionable.

http://fortune.com/2015/10/15/theranos-elizabeth-holmes-wsj/ Some more responses by Theranos

The Granovetter riot model is one of my favorite models. I have some suspicions about Gladwell's appropriation of that model for his slow-moving riot hypothesis, but nonetheless, it was an interesting read.

The Whale Rock Capital interview was fantastic. Anyone familiar with his firm and/or their track record?

I'm just happy he's stopped talking about a wind down.

More fun stuff from an interview w/ Corker on CNBC this morning. http://video.cnbc.com/gallery/?video=3000431791 Notice how Corker is talking about turning the GSEs into utilities...

Yea, there's a huge temperament component "hurdle" even above the high hit rate "hurdle."

Politico piece?

The only thing that worries me about the Political Alpha article is that I've never heard of them before. Their website does not instill confidence either, so I'm going to take it with a grain of salt...

I think other people have discussed this before, but when you're going to go for concentration, you need to make sure that your hit rate is pretty high. Maybe the 85%+ range. Otherwise, you get unfortunate results. The underlying assumption of saying that you shouldn't put more money into your twentieth best idea if you can put more money into your best idea is that you are very seldom wrong on your ranking of ideas.

On Bloomberg about a half hour ago, Ackman referred to a research report making the rounds today re the GSEs. See below from the TimHoward717 website.

Cubs are on the verge of winning the WS. Govts lawyers want to bury the fact that they had a copy of "Grays Sports Almanac 85-15" Sorry. Didn't understand what you said. Could you please explain a bit? It's a Back to the Future Part 2 reference. http://backtothefuture.wikia.com/wiki/Grays_Sports_Almanac

They certainly do if the company has no competitive advantage/moat, or if it does but that moat is eroding. But certain industries have better ROICs than others, though, so a software or pharma business that reverts to the average ROIC in its industry might still do better than the average airline or junior miner all else being equal (and it never is, so this is just a theoretical exercise). I agree. I think my original post was unclear. Let me try again. In the situations where there is mean reversion, what is the metric that mean reverts? Do the profit margins erode or do the returns on invested capital or both?

lol

Yea, that's great advice. I do something similar by planning a small Vegas trip when I'm in danger of feeling an itch to "do something."

I would also note that, in addition to Scott's post, it's not altogether clear that education and/or additional education creates additional opportunities and/or wealth. This is because there is no natural experiment and/or control group. It's not altogether clear that someone qualified to go to college/grad school/professional school, etc. and didn't wouldn't also end up in a similar place than his or her alter ego who did end up getting said education. And this is coming from someone who has two bachelor degrees, a JD and an MBA. As a side note, most MBA programs will teach you nothing about investing correctly and possibly the exact wrong thing about investing. (Columbia is a notable exception.)

All good posts. I'd mention, though, that it's not clear to me whether profit margins or return on invested capital (or both) mean reverts over time. I suspect it's returns on invested capital, but I'm not 100% sure.

Wonder what this is about...

The most important part of that order is in the original motion itself. (http://www.valueplays.net/wp-content/uploads/13-465-0245.pdf)

Nope. While I like the cast, I'm less than enthusiastic about their ability to inject drama into something that is usually boring for most people and/or difficult to portray on camera.

cubsfan is correct. Prior to Q4 2014, the shares were not traded on a US exchange. They were traded either in the Italian stock exchange or OTC in the U.S. The reason it looks like he started buying in Q4 2014 is because that's when they listed on the NYSE, so that's when it shows up on a 13-F filing.

I know we're all a little antsy given the black hole of news lately, but the Pope? Really?