Gregmal

https://ca.reuters.com/article/businessNews/idCAKBN1EE02J-OCABS Down 20% intraday before eventually closing down 4.5% on the day, & suggestions that some of the punters are exiting …… “However, for Japanese retail investors who are estimated to account for 30 to 50 percent of bitcoin trade worldwide, a more worrying warning may have come from a Japanese day trader guru known as Cis. The individual trader, who claims to own 21 billion yen ($186 million) in assets, tweeted over the last 24 hours that he had sold cryptocurrencies.” Maybe Makoto reads this board? …. “The listing of two bitcoin futures makes it easier for institutional players to trade bitcoins. Futures also enable players to go short on bitcoins, which was difficult without liquid futures,” said Makoto Sakuma, researcher at NLI Research Institute in Tokyo. SD I noticed that Bitcoin Cash went up while Bitcoin was going down. This drop coincided with Coinbase adding Bitcoin Cash. It could just be people moving some money around. $ flowing out of the high price Bitcoin & into the lower price Bitcoin Cash, is a sign that the retail demand/liquidity of Bitcoin is slowing; retail is seeking cheaper alternates. Problem is that Bitcoin is driving the tide, so as the Bitcoin tide ebbs; all boats fall - including the price of Bitcoin Cash, Etherium, etc. Hence either sell now & buyback later, or short via the futures/options markets for very high premiums. The 'trading' game has changed, and the professionals are now at the table. Nothing wrong in that, but either know what you're doing or be as least as good as they are. SD I don't follow the BTC price movements all too closely but of late it definitely seems to be displaying the classic "air slowly leaking from the balloon" syndrome. Whether this is just consolidation after a massive move, or the beginning of the end, who knows.

I hope Warren Buffet changes the name of his company to "Berkshire Blockchain", in seconds it will be the most valuable company in the world leaving Apple in the dust. Unless of course Apple changes its name to Apple Blockchain. Its pretty amazing actually. Even stranger IMO is XIN, highlighted a couple days ago by a fairly well respected author on SA, with real assets, profitability, a dividend, and supposedly blockchain technology partnerships with 58.com and IBM... barely budging 10%. Went long yesterday for a swing trade but it seems like people only want crappy, worthless companies to invest in.

Two of the cardinal rules of shorting, at least the way I learned, was never short on valuation alone, or when you need something to change in order for the short to work out. When you look at a lot of the mistakes of guys like Chanos(VRX was hailed as a success but he shorted in like 2011 in the 50's and had to hold for 5 years), Einhorn (AMZN and many more) and Ackman(HLF) a lot of pain could have been avoided simply adhering to this. DVA would fall into the same category. Barring a major regulatory change, this will likely be a bad short.

Frankly I don't think the technology element is important enough to matter at this stage of the game. It's simply too complex and I'd gander 90% of the people buying this don't have much of an idea how it works. Otherwise, an exercise I have typically found helpful when evaluating something is looking to build a case contrary to the consensus. Consensus is that this is obviously a bubble and therefor, a short(if one is able to). However, I've come up with quite the list of things that to me would indicate this can and will go on for quite a while. -Obviously, consensus is negative -Is it really much different than something like gold? Many people investing in gold do not actually own physical gold. And gold itself is essentially just a shiny pebble. It's use is being a store of value. In that sense, to me, it is not much different than BTC except for the fact that you can make jewelry out of it. Than again I've never been a huge fan of gold so maybe I'm biased. -while it isnt "hard" to buy it, it is still supposedly a bit restricted in terms of amounts the newer BTC buyer can purchase at first. -you can buy it with credit cards readily available to the poorest of retail investors -the "major rally" really has only encompassed the past couple months. Maybe you could say the past year, tops. It really hasnt been that long. -Hardly everyone and their mother is rich from BTC. My understanding from studying most bubbles is that many people typically get rich, at least on paper before losing it all -no institutional investments -barely any acceptance from the big financial institutions(although this seems to be changing) -Such an obvious short that IMO we are seeing the next step of the bubble, mechanisms that allow for one to express a short position; the setup for what could be a massive short squeeze. Institutions have gotten this market sooo wrong(TSLA, NFLX, AMZN, heck even the SPY) it seems to me almost a given they will get their asses kicked with BTC before it implodes -How do you define an IV? Its totally ambiguous, just like many of the things that tend to make insane moves. There is no possible way to set a "value" parameter on this. Thus, any price can be justified. Then I look at what stops it, and... maybe government intervention or a major concentrated holder dumping? That's really about it. As any value investor knows, valuation alone is not a reason to short something, and at this stage in the game, thats the only case

sell OTM calls on the longer dated option available.

The MicroCap conference in NY is petty decent if you are looking for access to management teams. Unfortunately most of the companies suck in terms of being worthwhile investments. Probably a good place to bring your bullshit detector. It will help you find the most productive ways to sift though the good, the bad, and the ugly.

Thought this may be a helpful thread. Given the dearth of complaints on Interactive Brokers, today I had a positive experience that to be honest, surprised me a bit. Many of the securities I own are either small-micro cap and lack the liquidity of big board stocks. One of my issues with IB is that while they'll let you margin GOOG 5:1, most sub 500m companies require 100% cash. A few days ago I questioned this policy for a specific stock. I followed up with a request to escalate it to a senior level manager and asked that they review the specific security. What do you know, they got back to me indicating that they were changing the thresholds for that security. So much for automation and shitty customer service. I was not aware that one person could request or initiate reviews for a given stock. Now I know. Figured I'd pass along in case others did not. If others have any tips or advice on ways to get better results/negotiate with brokers perhaps here would be a useful place to share them with others.

Anyone who's ever taken out a mortgage, a student loan, or even a credit card has utilized leverage. It all comes down to risk management. Some other theoretical. I know plenty of people who own big real estate portfolios and as such have shitty liquidity positions. Is borrowing against the real estate to buy stock crazy? What about if you have 100k equity balance but are levered 3:1, owning 300k in a stock portfolio. But have 50% LTV on a 750k house, 50k in a checking account, and 100k invested in various small businesses? Do we apply what we consider leveraged to just the stock portfolio or one's entire net worth? In the case of net worth, said person is levered 2:1 on their house. Many might consider that, plus 3:1 on a stock portfolio, plus illiquid investments in local businesses to be very risky with only 50k cash on hand. I personally, would not consider that risky. I think the biggest thing when discussing margin and/or leverage are understanding and being clear about the parameters in which it is being used.

I'd imagine it also then has something to do with one's ability to access leverage. One could very easily be modestly levered and still have liquidity in the event of a drawdown. If you are using leverage the single most important aspect is managing it.

Yes, I am almost always utilizing it. It really does come down to knowing when to bet big or otherwise simply constructing the portfolio to be lower risk. A diversified portfolio of preferred stock or investment grade bonds levered 3:1 likely won't kill anyone. Especially if actively and competently managed. Same thing for a low beta portfolio with holdings that have little correlation. I also like using leverage to put on merger arb plays. Essentially if each position is viewed as an independent opportunity to make money, It's a little different than just being a pig and wanting 2x the returns of such and such security. Additionally, I have certain equity positions that I am comfortable with my understanding of in terms of volatility and risk. For instance, there are certain positions I will margin 100% as I am confident in their stability. IE GM in the low 30's I determined to be: cheap at 4-5x earnings, supported via a 5% dividend yield, have a margin of safety with 35% of mc in cash, and stable future cash flows given my views on the auto market. I viewed the "volatility risk" as downside being mid to high 20's. So a draw down from 32 to 25 wouldn't exactly kill me. This is just an example. I evaluate this kind of stuff on a case by case basis. I don't view it as risky as I'm comfortable with what I own and confident in my assessments. If I'm wrong I'm cool with that. The chances of the things I'm invested in "never coming back" are very remote. My leverage typically hovers around 1.3. As a side note, if I remember correctly, in 2009, the year Tepper did 100%+, he was levered like 3-4:1. Sometimes you just go with your gut.

Or another way I've always looked at it; if the analysts were any good at what they do, they'd be running money, rather than writing book reports.

Don't make trades that scare you. I'm not talking about me making trades. Well yes, anyone who buys bitcoin (or any of the others) needs to understand volatility could be extreme at times. If you are holding for the long term that shouldn't matter, you might get nice buying opportunities from time to time. However if you are 100x leveraged....good luck. I'm not too worried. If my cryptocurrency portfolio drops by 95% tomorrow I'll still be in the black. Mortgage the house to buy Bitcoin, max out your credit cards buying Bitcoin. Find a platform that lets you use 20:1 leverage to "invest" your mortgage and credit card proceeds. Then either become rich enough to never have to work again in a short period of time, of file for bankruptcy and start over like every average schmuck citizen not gambling on cryptos. Surprised more people arent doing this.

I have been long and have decided to close out the position for now. The information on this board has been helpful with the investment but it's a small position for me and I am looking to up my liquidity position so this one fits the bill for the following reasons: Sentiment seems to have shifted, its been nothing but good news for a the last few weeks. Stock has moved from low 50's to low 70s in a very short time period. Major analyst bullishness/upgrades last few days. $4.9B number received for the medical unit was well above estimates. Buyback announcement was only a month ago. Add in the broader market being on quite the euphoric run. All these things seem very positive, which to me may indicate things could be ahead of themselves. There's still question marks and regulatory stuff that presents risk. As a value investor you buy when something is out of favor and sell when it is in favor. It usually doesn't happen in 3-4 months, but it has here. I entered in August and have a 60%+ IRR. I still like it, but am fine walking away with a respectable return and enhanced liquidity position.

I don't think you are the only one. I expect the stock to tank on that day and I expect to back up the truck if it does. Warren is irreplaceable. Maybe the effects won't be immediate. Maybe they take a decade or two, but many great and valuable businesses often gradually turn into country clubs once their founding members turn over. It's one of the reasons many rollups do not work.

This is getting absurd. https://www.cnbc.com/2017/12/11/people-are-taking-out-mortgages-to-buy-bitcoin-says-joseph-borg.html On a related note, easy money trade... shorting longer dated OTM calls on RIOT seems like a sure thing. A company that is more or less worthless and then added "blockchain" to its name becomes a multibagger within weeks.

It's just a covenant that effectively gives the lender the option to call their loans. I'm not familiar with RCII but it looks like this covenant was put in by the lenders to prevent the large owner (a PE firm) from taking a majority stake. I imagine the lenders were probably concerned that cash flow would be distributed to equity holders to the point that they might not be able to fully recover their principal if the company faced a temporary or sustained decline following these distributions. In this case, I would guess it's probably included because of the reputation of PE firms aggressively distributing to equity holders at the expense of creditors (again, I really don't know RCII's situation but that would be my guess). Management already has a 'veto vote' for takeovers in the sense that board gets to choose whether or not to entertain offers (with some limitations). This has nothing to do with management fear mongering or poison pills. This is just a lending covenant. All else equal, the covenant does not benefit management in any way. To give some perspective, change-of-control covenants were fairly common at the bank I worked at for SMID businesses. In my limited experience, they were almost always waived as long as the bank's expected recovery rate was unaffected or 'LGD remained unencumbered' (sometimes covenants related to equity holder distributions were added as a condition of the waiver (if they weren't already present) - depends on the purpose of including the covenant). The point of this type of covenant (from the bank's POV) is the bank lent to RCII and their current management. The bank may or may not want to lend to whoever the new ownership group ends up being. The primary purpose is to prevent the obligation from being automatically transferred to unknown owners/counterparties (and potentially, unknown stewards/managers). You are correct in terms of the reasoning behind it and the perspective of the underwriters. This is absolutely accurate. I was more so referring to Mr.B's presentation of this covenant within the context of a proxy fight for board seats. Most often change of control is thought of in the perspective of a takeover or go private deal(PE type stuff as you mentioned). However it can also simply be a hedge fund taking 5/9 board seats at an Annual Meeting. The fear mongering comes into play when during a proxy fight you have company executives telling shareholders "if the dissidents take 5 seats we could be in default and have to liquidate/etc". I've seen that before and it's basically dishonest bullshit.

It is basically just a scare tactic from management. Saw the same thing last year from Consolidated Tomoka's disingenuous fear mongering campaign. Management tries to use this as a poison pill of sorts. Additionally in many instances, change of control can trigger onerous golden parachutes. That said, if activists are involved, chances are they feel a shake up is necessary. So I guess in the absolute worst case that it triggers a default, what is the problem? That a company that is probably already over leveraged is forced to sell off some assets and pay it down. Don't be fooled by these clowns. The lawyer in me would also point out the word "could" in your bold highlighted paragraph. A change in control "could" cause one. But it also "could' not. All this stuff is usually negotiable.

I think the above term means something different to everyone. For me, it just means sleeping at night knowing what I am invested in and being brutally honest about what my permanent loss probabilities are. There are certain areas of the market I've found much more success investing in than others. Real estate for instance, has great optionality. Additionally, there isnt a single company or person in the world that in one way or another doesn't need real estate. The only times in history its been given away for nothing, the recipients became immensely wealthy. So to me, I understand that there is a certain floor on the value. Where as with things like tech, value is here today and maybe gone tomorrow. So I just don't want to deal with that type of headache; monitoring whether Apple will become the next Nokia or Blackberry. Or whether Blackberry will have an Apple like trajectory and recovery. Too much work to do. Same with oil and gas. Just too many moving parts and external risks. So I guess my circle of competence would be defined as "old economy" businesses. That and I've always had a pretty remarkable ability to rely on a gut feeling that ends up paying off big time. But that's an intangible and not something I can really quantify or articulate in precise terms. I'd also say brutal intellectual honesty and constant reflection are pretty equally the most important aspects of investing. Keeping your psychological state of investing sharp, even keeled and rational is probably even more integral than simply understanding a business. Knowing I'm being greedy and thus likely looking at more speculative investments helps me take a step back and re-evaluate when otherwise maybe I'd pull the trigger thinking I've done my normal due diligence. Knowing I'm pissed at management and tired of an investment might lead me to want to sell when otherwise it's not be the right move. Investing is pretty much 100% a mental game.

You can buy bitcoin and ether with a cc on Coinbase. Or you can link your bank account. Or you can use cash at a bitcoin ATM, there is probably one near you. I think that's incredibly dangerous given the majority of what's driving this insanity is the retail investor. Getting rich quick. Allowing people to speculate with high interest, non secured credit is mind boggling.

Excuse me for being new to this, and admittedly uninformed, but I was having a talk with someone earlier today and couldn't believe what I was hearing. Is it accurate that one can buy Bitcoin on these exchanges using a credit card?

I would say that is true mainly of places like Yahoo message boards, but to a lesser degree here. Basically IMO lower quality sites. VIC is great because real investments are thoroughly discussed. To me it is a trait of gamblers/speculators to fawn over exciting and sexy. Getting rich quick. I am not close enough to the CVS situation, but it broadly falls into a similar category as most stocks I follow and discuss. Boring, undervalued, great long term runway as an investment and little to no discussion on the threads of the sites I read through. To me that is sexy. To me that is exciting. I kind of ignore all the noise of the FNMA type threads where it's really just speculation and get rich quick wishful thinking. That offers me very little as a patient long term investor. And I own FNMA for what its worth. I bought it realizing my investment would either be a multibagger or a complete zero. Therefor, nothing to discuss; discussing it is a waste of time if that is my understanding of the investment. Whereas something like DVA is an evolving situation that is not exactly binary, and a better use of one's time and/or resources. Just my 2c though. I know I can come off as a douche. Not intentionally, but I don't really care either. We're all here to discuss and help each other with investments. Thats what makes the community useful. Differing opinions.

From my understanding it is the Board, with the general direction nudged by Dolan. The CEO departure was a little surprising, but if there is a company where the management team really isn't all that important to me, it is this one. Its never going to be an EPS darling. Operationally they never really make a ton of money. It's solely about one of a kind assets and being given by my estimates, at least a 30-50% discount. I've been a part of this basically since the spin from Cablevision. I still own MSGN and added to it recently. Thats the cash flow monster. I almost feel as if the split of MSG and MSGN was a stupid short term move done to appease the Wall Street jerk offs. Sperately, MSGN is a machine, but boring. MSG is exciting and unique but really doesnt make much money. As one they were kind of perfect IMO because they each balanced out the weaknesses of the other. I'd also mention, that for all the crap Dolan gets for being a whacko, the part about him being anti shareholder is a classic misconception. Take a peak at how you'd have done being invested in any of the Dolan companies or spin outs. The track record is pretty awesome. MSG is his baby.

http://www.espn.com/nhl/story/_/id/21704910/dallas-billionaire-tom-dundon-agrees-buy-carolina-hurricanes Hurricanes said to have gotten about a $500m valuation. Probably one of the most obscure teams in the league. From what I've always been told, Dolan loves the Knicks but doesn't really give a shit about the Rangers. Wouldn't be totally shocked if he put them out there looking for about $2B.

Anyone still looking at this? Aside from the known value, my perception is that a lot of anticipation was built into a potential REIT conversion that is now likely off the table should the GOP tax bill get passed. Started a position here today. Curious if others see anything else to the story other than the "now it's boring and doesn't have a catalyst" angle which is one of my favorite reasons for entering a position.

I do not even know how to assess if GM would be one of the winners in AV space. As a GM shareholder, that would be awesome but would not put too much hope on it. It would seem to me that either a Tech company like Google with AI chops or a company controlled by industry consortium would end up with the AV OS. Here is what I have written before on AV: Many companies are investing in autonomous driving including Google. It is likely that all the companies would have the technology that is on par with each other as they cannot be deployed until it works nearly flawlessly. Alternately, optimal solution in this case would be for the best autonomous software to be widely adopted by all the market participants. It would be in the best interests of the industry that all vehicles have the best possible software. In any given road, an autonomous vehicle would be just as safe as the least safe vehicle in that particular area. Thus, even if one company had a superior autonomous driving technology, it would not be a big competitive advantage by itself if it is the only one using it. There are further advantages to using autonomous driving software from a single provider as it would be simpler and probably more safer to coordinate and manage interactions between vehicles. The company whose technology was adopted would end up with a royalty stream that all companies would have to pay for using that software. So most likely scenario is that one or two companies would have a dominant share of on autonomous driving software but that company would not be able to monopolize the profits as much as the market share would indicate. All the automobile companies would have to cooperate and this would be more akin to Visa/MasterCard when they are owned by the banks. Vinod hyten1, All are valid points. 1. I simply do not have an opinion on who might be ahead in AV tech. I have not read anything that would make be believe that one company is ahead of the other. It seems more likely that many (Google, GM, Tesla, etc) would have roughly the same level of maturity. Just given the nature of the problem. All the big companies know about its importance and the problem has been researched for a long time even though at a lower level of intensity - way back in 1995 when I am doing M.S. my lab mate Phd is in autonomous driving. Given the diffusion of ideas through the research community, I do not think any one company can keep the lead to itself. All the big Auto companies are investing in this - the only difference is how much they talk about it. GM seems to be having FANG/Tesla envy. Hence the optimistic presentation. So I am skeptical of their lead and talk about "winner take all". I simply do not see what GM has with "everything under one roof" that Google does not have. 2. I agree the best need not necessarily win in the marketplace. There might be three possible scenarios with AV software a) One company licenses the AV software to many Auto companies. Could be a tech or Auto company. b) Many Auto companies have roughly equally good AV software c) One or two companies dominate the AV software and monopolize Auto market My comment is along the lines that either a) or b) is more likely. If it is (a), then it seems likely that it could be a standalone company that owns the software with many Auto companies owning equity interests in that. To me it looks like AV is a big expense for all companies and it seems more economical to pool the expenses. At first each would try to do on their own, come the next business cycle downturn, they might instead choose to partner. This looks to be a somewhat weak form of how Visa/Mastercard came about. Or this is entirely my hallucination! GM is betting in ©. Of course, it is in their interest to make shareholders believe in that possibility. 3) As to safety, I thought companies self interest would be to have safe AV vehicles both to promote adoption and reduce accidents which expose then to liability - which would mean helping competitors as well. Vinod Just own GM and GOOG, problem solved.