Ronchong

Could be due to GameStop? It's about 6-7% of the ETF.

I looked at it a while back but the company is so promotional that it turns me off. There's a reference/quote to buffet/value gurus every few slides!

Completely agree! But Wood is no chump either in the competition for the prize. I've just seen a video of her where she uses the treasury yield as a discount rate for equity. Seriously? There's no risk premium anymore? Either she's selling to idiots or thinks we're all idiots. What's even more amazing is that the video was monitored by someone from her compliance team. I do not have a morning wood for Cathie wood but I recall this is also how Buffett thinks about DCF/value as well. Got to dig out that interview/letter. Buffett discounts by the treasury yield and adjusts for the equity risk premium through his margin of safety. E.g. riskier stocks would have to trade at 50% below his calculated value but he doesn't discount the risk at the DCF stage. Not quite sure what advantages this has as opposed to discounting for the risk at the DCF stage.

I get the original SPAC trade because that was a market where there was pretty much no opportunities. But the SPAC risk/reward have changed these few days,.I would say that you are lucky to even get a 15% announcement pop these days. No SPAC I know of got above $11.5 on the announcement so you are risking 5% for max 15% gain. That doesn't seem like a good trade to me. If the market ever get cheap enough, you can be pretty certain that SPACs would get sold off below their NAV. All this while, you have to liquidate your SPACs at a discount to switch over to whatever you want. Why lose 5% when you can lose none?

@shamelesscloner I recall Greg mentioning that it was high 8s/low 9s in the other thread. I got out of most of my SPACs since the risk/reward is no longer attractive. The whole idea of investing in SPACs is so that (i) You can have a quasi cash instrument with upside optionality to park your cash when there is nothing cheap to invest in (ii) You have the ability to switch it out at a small gain/close to no loss and pick up quality businesses on the cheap when the market reverse. Why is anyone investing in SPACs now when your view is that there would be bargains down the road?

On AVAN, I think you would find that Citadel owns a sizable position in most of the SPACs. This is due to their role as a market maker and not them investing out of merits. On VYGG, I put them taking Reddit public at 1%. There is a huge conflict of interest there.

Well said @shamelesscloner. 8) @Ronchong - yeah, your approach may work fine. I am a bit concerned that we are getting to the late innings of the SPAC game and that there might be a reckoning at some point. I may even pull out from the "can't lose" strategy of buying at 1-2% over $10. It's possible though that I'm early in my skepticism. Chamath vehicles are clearly popular and attractive at the right price. Anyway, I've done SPCE warrants, VVNT warrants, NKLA warrants, IPOB, IPOC warrants. Sold all of those at huge % gains (not huge absolute sums, since I don't have ? to buy big and hodl). Still have a bunch of small warrant positions in various "interesting" SPACs, most at double/triple digit % gains. I just don't think it's as attractive SPACe ;D as it has been. Peace and ? Thanks shamelesscloner for the reminder. You said in 2 sentences what I said in 2 paragraphs. I have set myself a ceiling of 11 so that is something I'm very firm about. I too think that there would be a day when the SPAC mania ends and everyday we get closer. This is why I think that the time in the SPAC market is very important, the lesser it is the better it is. Optimising for FOMO lets me get out at an earlier time, a different kind of downside protection if you were to ask me.

Sepearate question, how is everyone here categorising their SPACs in their portfolio? Does it form part of your equity allocation or do you have a separate weightage for it?

The problem I have with noname SPACs is that they stay noname for a long time. CCAC was trading around 10.4 2 months ago and it has gone nowhere dince. It got up to 11 ish today but it was trading at 10.5 yesterday (Considered long in the SPAC land). I know I'm deviating from the original value based thesis, which is to buy into SPACs close to NAV and wait for the deal announcement pop but there is another play here if you want to improve your returns but it also increases your risks a little. If you were to break down the behaviour of a SPAC, it is simply a function of: (i) how fast it is likely to merge and (ii) how attractive the target is. Like what Greg has said, SPACs have embedded time value and actually increases in value as the deadline approaches since the chances for a deal becomes higher. Branded SPACs come out of the gate at a higher price because of higher perceived (ii) but increases in a lot value faster because their perceived (i) is a lot shorter. This is aided by the hype that their holders (Typical robinhood, Reddit, stocktwits people) would build around these SPACs with their speculations and rumours. While my CCAC has gone up by 3-4%, QELL (a slightly more branded SPAC) that I had bought for 10.8 at about the same time has gone up to 13-14. IPOD and IPOF are both going for 15, 16 when they were 10, 12 two months ago. Heck, if I were to sell QELL today, it would give me an even better return that most of the noname deal-announced SPACs that I had. The good thing is I didn't even have to stick around and wait for the deal announcement if I don't want to. Ironically, just like investment, sometimes it pays to pay a little more for "quality". If you can find a branded SPAC that can goes for 10% premium or less, I would say go for it.

Robinhood CEO then went on CNBC to say that they have no liquidity problem. Hmmmmm

Is anyone concerned about the solvency of the brokers/market? Ortex calculated the losses on short position to be $70B so far. A drop in the ocean for now but there are people reporting that GME was on a path to infinity squeeze and was executed for 1k/2k per share before the brokers decides to collectively restrict trading in all the meme stocks. Gut feel is that the brokers/market makers were loose with their risk management (yet again) and are now caught with their pants down. The collective restriction yesterday was really shady

Its playing out like how you envisioned it to be! The pre-announcement SPACs start to trade at their expected value post-announcement. It's very hard to buy into promising pre-announcement SPACs under $11 now, even the unknown ones starts from $10.5. Chamath's IPOD is one of the most ridiculous SPAC that is currently on the market right now, trading close to 80% above cash value! This seems like a much profitable play than waiting for the SPAC's announcement. 1. Buy into promising SPACs at IPO 2. Wait for Robinhood gang to pile in 3. ??? 4. Profit I meant at unit launch! Sorry for the confusion, edited my post to make it clearer

Its playing out like how you envisioned it to be! The pre-announcement SPACs start to trade at their expected value post-announcement. It's very hard to buy into promising pre-announcement SPACs under $11 now, even the unknown ones starts from $10.5. Chamath's IPOD is one of the most ridiculous SPAC that is currently on the market right now, trading close to 80% above cash value! There could be another play here whereby one buys into the next IPOX, IPOY, IPOZ, AJAX, DGNR at unit launch and wait for the speculative robinhoog gang to recognise the "value" of the team and drive the price up. Much better IRR! 1. Buy into promising SPACs at IPO 2. Wait for Robinhood gang to pile in 3. ??? 4. Profit

Faster than I expected. The third spac ETF to be launched https://www.wsj.com/articles/third-spac-etf-launch-taps-into-blank-check-company-boom-11611225000?st=tqancnjk828lams&reflink=article_email_share

57% in a day, the party continues. I was speculating on the SOFI merger but went with IPOF instead thinking IPOE would be too small, damn. I think Chamath still hasnt close on his IPOD yet and there's a decent change either IPOD/F would close in the next few months given his tweets.