Olmsted
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Posts posted by Olmsted
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Thanks for posting!
Regarding AIG:
This doesn't include any expectation of the stock returning to a mid-single-digit multiple of book value, a level at which the company has traded at in the past.A bit aggressive, no? I take it this is the author's commentary and not anything B2 would discuss.
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What amazes me was that gas in today's dollars was only $3.75 in 1918. Since this was relatively early on in the adoption of the automobile and a national distribution infrastructure, I am surprised it was not much more expensive. Perhaps there was still some of the dynamic of it being a 'by-product' of kerosene refining.
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Only Seeking Alpha since the quality of the articles there is unquestionably superior to anything one can find elsewhere. I believe that if alive now Graham would probably be posting there as well, it's that good.
You made me read this twice. ;D
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I've been trying to stay out of the political discussions, but come on guys . . .
You really think Peter Schiff going out to the DNC convntion, interviewing certain individuals, editing the video, and then posting on YouTube gives an accurate view of the Democratic base? I guaranty you if someone had done that at the GOP convention, you would have gotten just as idiotic responses from some of the individuals there. You know, Randian-type raving.
Also, I just have to say that Peter Schiff is an idiot.
It's probably cherry-picking, but I think betting against the stupidity of a randomly-selected voter is a losing bet. On the left and right.
I wouldn't call most voters stupid, although I would say that most voters are not very well informed. I think that most people are highly susceptible to being influenced by the questions that they are asked, and when you ask a stupid question in a twisted way, a lot of people will answer in a stupid way.
It's seems likely to me that if you were to actually have a real conversation about profits and business with most voters, whether on the left or right, they would have far more nuanced views about business and might recant their stupid one-line answers when challenged.
Fair enough!
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I've been trying to stay out of the political discussions, but come on guys . . .
You really think Peter Schiff going out to the DNC convntion, interviewing certain individuals, editing the video, and then posting on YouTube gives an accurate view of the Democratic base? I guaranty you if someone had done that at the GOP convention, you would have gotten just as idiotic responses from some of the individuals there. You know, Randian-type raving.
Also, I just have to say that Peter Schiff is an idiot.
It's probably cherry-picking, but I think betting against the stupidity of a randomly-selected voter is a losing bet. On the left and right.
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I don't use stops, too paranoid about flash crashes and the like. I'm not here to defend them.
I do want to comment on the somewhat idealized value investor notion that you research something, determine an intrinsic value, buy at a discount - and if it gets cheaper, great! Buy more. It's logical, but I do find it oversimplified. It kind of presumes that you can out-analyze and out-research everyone else. Perhaps a selloff is irrational, or perhaps a rational investor with a similar value philosophy just knows more than you do and is selling. I think it's naive to automatically assume the former.
A declining price has presaged bad news many times in my investments. A perfect example would be my ill-fated foray into GNW. After I bought it went up 20%, then proceeded to slowly sell off right back to my cost basis - then boom! Australian unit IPO was called off. It immediately crashed. Probably not coincidentally, Baupost's next 13F showed that they sold out at prices close to the top. Someone clearly had figured out the bad news well before I did. "The market" was telling me that I had missed something.
Situations like these are why people use stops, and why the value paradigm of "if it's cheaper, it's on sale" does not always work. Sometimes you just don't know what you don't know.
Anyone have wisdom on this conundrum? It is easily my biggest perennial challenge and frustration as an investor.
My apologies if I set up a strawman.
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Woo-hoo!
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I don't miss him. As Buffett it is not only how intelligent you are, it is also how hard you work and the level of your ethics. Clinton does not pass the ethics criteria in my book.
I second that. On the other hand, W had ethics but made many poor decisions. I believe O's ethics are on par with Clinton's, but unlike Clinton, his only talent is drumming up the masses. He is not a policy guy, just a community organizer writ large. Between the three, I'll go with Clinton.
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Even many Republicans miss him, honestly. He presided over 8 years of better policy than his Republican successor.
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Damn it Olmstead! I thought it was something significant.
The guy will probably get hired by Chippendales! Cheers!
Haha, sorry Sanjeev - but I thought we could all use a little levity!
Your post bared more light on BAC for sure.
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Not sure if this will move the stock, but for what its worth:
http://www.cnbc.com/id/48915269
:)
Selch burst into a conference room where executives from Columbia were meeting to give them a piece of his mind. He wound up giving them a piece of something else as well.First Selch asked if he had a non-compete agreement, which on Wall Street is usually a way of threatening to quit and go to work for a competitor.
After the executives said he didn't have a non-compete, Selch mooned them, told one of the New York-based executives never to return to Chicago, and left the meeting.
Extraordinarily, Selch wasn't fired. Instead he was issued a formal warning. Selch’s boss testified that while 99 percent of employees would have been immediately fired, Selch was one of the one percent who could be granted a one free mooning reprieve. The executive actually fought for Selch to keep his job.
When Columbia CEO Brian Banks found out about this incident, he insisted that Selch be fired. The behavior was too “egregious” to allow Selch to continue at Columbia. No free mooning at Bank of America, Banks decided—even if you are in the one percent.
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The trial court granted summary judgment to the defendants in the suit. Last Wednesday, a three-judge appeals panel upheld the trial court, describing the mooning as “insubordinate, disruptive, unruly and abusive.”
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As you hint at, there are different kinds of leverage in an investor's portfolio (laying aside for a moment portfolio companies' characteristics which twacfoa discusses). I think a key distinguisher is whether it is "callable" or not, e.g. margin at your brokerage versus one of the TARP warrants we discuss so much. Different risk profiles to each. Margin's biggest drawback is that it can turn you into a seller at the worst times.
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Sanjeev, thank you for all that you do in maintaining this board.
++++1
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Ha - good call. As someone getting out of the military shortly, the specificity of experience spelled out in most job postings is concerning. I imagine that talent + initiative will eventually persevere, though. I plan to pull a Hank Greenberg and storm into a boardroom or two.
You will probably do well with a more direct approach. Bring some ideas and an understanding of what you can bring to the table. Then just make as many approaches as you can, all the while trying to bring value to the table. It's not about getting a job but providing the other person with more value than you are taking away. For a hedge fund PM, this could be some good ideas that would fit their investment style, or just new angles/information on positions or ideas under consideration. I've met several hedge fund founders (later running billions of AUM) who got their first break through offering to work for free, just to prove themselves. They were hired because they offered more value than they were taking and got a chance to prove it.
Thank you for the thoughts! I plan to.
For the record, I was joking about the boardroom storming - I remember reading that anecdote about Greenberg and found it amusing.
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I've always thought hedge fund job job postings where pretty funny sometimes. You'll see analyst positions with a requirement that you generate your own successful investment ideas. If I could pull successful investment ideas out of a hat, why would I want to be your analyst? You become an analyst to move up the ladder in hopes that one day you can LEARN to generate your own investment ideas.
It'd be like saying, "Investment banking analyst position opening. Must bring a large book of business." If I have a large book of iBanking business, why the hell would I be an analyst?
This is just a specific example of more and more businesses abdicating any interest in training, and trying to build skill sets rather than just hiring *exactly* the right person who has done exactly the same job...and most people who fit that, why would they want exactly the same job they have now? Then businesses complain about not being able to hire anyone.
Ha - good call. As someone getting out of the military shortly, the specificity of experience spelled out in most job postings is concerning. I imagine that talent + initiative will eventually persevere, though. I plan to pull a Hank Greenberg and storm into a boardroom or two.
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Google Credit Bubble Stocks for some good capital arbitrage discussion and ideas. Check out the bonds or preferreds on some of the distressed names brought up as value investments on this board. You are probably familiar with many of them since they have been discussed in depth here. Think of who will file for ch11, and if equity will be wiped out as a result. Or who will raise massive amounts of capital in secondaries, or do a big debt for equity swap. Figure out which bonds will likely be the fulcrum security, then see if they or the class above them are cheap enough to go long bonds/short equity. See if call options on the equity are cheap enough to buy to hedge a miraculous comeback.
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CRM stock price is high because revenue growth is high. Revenue growth is high because of an admittedly great product along with a motivated sales staff. The sales staff is motivated by high compensation, largely in high-priced CRM shares.
Flattening revenue growth = share price decline = sales staff need to be paid in cash = massive losses = implosion
The question is when? I have never been good at timing an implosion like this. The cycle I describe in the first paragraph can go on for a loooong time before a catalyst breaks the chain. I'm inclined to try to short on the way down, after that catalyst has emerged. But by then put premia are high and it is less profitable. Suggestions, anyone?
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I hope EMH - the hypothesis - is alive and well. EMH is a paradox - it can only explain market pricing if a sufficient number of investors are combing reports, news, etc. and attempting to find fundamental value and arbitrage away inconsistencies. If enough investors think EMH is reasonably explanatory, they would abandon such efforts, which would lessen the market's efficiency.
I love EMH practitioners and preachers. I wished everyone accepted EMH - everyone but me. Kind of like I wish every male but me were gay.
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CCRT has done a similar tender offer in 2011, and another time before. Look at the chart around May 2011, and you will see that the stock has fallen sharply soon after the tender offer expired. Also, insiders are participating in the offer. The performance of the company is horrible, and I suspect that these offers are just a way for big shareholders to get rid of their shares at a good price before it is too late.
Maybe the way to play it is to short the stock just before the tender offer expire.
If you do this, might not you be shorting shares that at that same moment are being validly tendered?
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Odd lot provision? Checking now...
nope :(
Yep, looks that way. Too bad - I love those! One of the few times the deck is stacked in favor of the small investor.
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Odd lot provision? Checking now...
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That's the one.
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Plan has posted some good resources. Here's one manager's take on the preferreds:
http://www.gatorcapital.com/Assets/PDFs/2011_Q4_GFP_Letter.pdf
I think I have a presentation comparing them to the railroad bonds of the 1940s - will check once I get back to my main computer.
Keep in mind when looking at different preferred classes that some are $25 par, some $50 par. The most liquid Freddie's are the FMCKJ series at .10/dollar, but you pay a slight premium for that liquidity.
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Preferreds seem like the natural bet if you think that. They're trading at about $.06/$1 right now.
Michael Lewis Profile of Obama
in General Discussion
Posted
Yeah, I thought that was kind of a weird rhetorical device Lewis used to tell the story. Didn't really add anything to the Obama story in my opinion (though as a standalone piece, I like that he was recognized).