ERICOPOLY

Here it is from October 2011. HOLY BAILOUT - Federal Reserve Now Backstopping $75 Trillion Of Bank Of America's Derivatives Trades http://dailybail.com/home/holy-bailout-federal-reserve-now-backstopping-75-trillion-of.html

I think the derivatives book was moved to the bank a while back. You can search the thread or the web. I thought that happened in late 2011 when the stock was circling the drain. Probably made the counterparties feel better.

They formed in 2009. What's their history before that? Is this the same Baker Street? http://www.bakerstreetcapital.com/ Yeah, I believe that's the site. From what I know, it's ran by Vadim Perelman. He left Force Capital in 2009. He's a pretty young guy. Around 31 or so I think. Force Capital just reported a sale of 86% of their SHLD holding. So his prior employer was getting out just as he was getting in. They sold 3.9 million shares and he bought 1.5 million. Eric do you have a link? I'm just repeated what is mentioned here: http://www.nasdaq.com/symbol/shld/institutional-holdings Thanks Eric. The SEC site shows Force has actually increased their position 13F as of March 31, 2013 411,719 shares 4,124,200 calls http://www.sec.gov/Archives/edgar/data/1317601/000131760113000004/a201303-13f_hr.txt 13F as of June 30, 2013 639,390 shares 4,730,000 calls http://www.sec.gov/Archives/edgar/data/1317601/000117266113001202/xslForm13F_X01/infotable.xml Nice. Okay, I'm joining the chorus of people burned by 3rd party reporting.

They formed in 2009. What's their history before that? Is this the same Baker Street? http://www.bakerstreetcapital.com/ Yeah, I believe that's the site. From what I know, it's ran by Vadim Perelman. He left Force Capital in 2009. He's a pretty young guy. Around 31 or so I think. Force Capital just reported a sale of 86% of their SHLD holding. So his prior employer was getting out just as he was getting in. They sold 3.9 million shares and he bought 1.5 million. Eric do you have a link? I'm just repeated what is mentioned here: http://www.nasdaq.com/symbol/shld/institutional-holdings

They formed in 2009. What's their history before that? Is this the same Baker Street? http://www.bakerstreetcapital.com/ Yeah, I believe that's the site. From what I know, it's ran by Vadim Perelman. He left Force Capital in 2009. He's a pretty young guy. Around 31 or so I think. Force Capital just reported a sale of 86% of their SHLD holding. So his prior employer was getting out just as he was getting in. They sold 3.9 million shares and he bought 1.5 million.

I remember that he was worried perhaps about all the interest rate derivatives out there. Here is my take... there are people on both side of these derivatives, so a move up could be just as devastating as a move down, in theory. Everyone, all parties, expect that rates could go back to 4%. Just pull up a chart of last few decades history. But very few would have realistically expected rates to go as low as they did over the past few years. Now, if the 10 year falling to 1.5% wasn't expected, and yet everything held together nicely, then I'm not worried about the reverse happening... going back to 4% which nobody thinks is unreasonable.

That's a good way of phrasing the reason why I decided to make a trade of it. The people who trade based on charts should get sucked into it and that should make the short more expensive by the day. So then it turns and people who trade on charts+momentum will find it attractive. But it seems like this goes on every year and it stalls out no lower than $60. Meanwhile, so long as there is nothing immediately pressing (liquidity) to make the stock suddenly dive lower, this trading is probably relatively safe as far as trading goes. And the tons of assets they possess make that nearly a lock. Why not go for some '15 OTM options then? You could even go for short-dated options since you can use the tax losses? If not you get an easy bagger if this one spikes up again. Of course, this would be a trade pure sang. I think most of the last 100 posts were mainly conjecture about what "might be". I hold 80% of my common SHLD stock in the RothIRA tax free account. On the whole I'm leveraged but I hedged the BAC side of the pie because the puts are much cheaper. I don't have any SHLD options at present. I bet the stock is up a good amount tomorrow with news of Berkowitz raising more money.

Today I read that Fairholme is opening to new investors again. Some new money will likely go into SHLD.

I don't know who I bought my shares from. And you, who did you buy yours from? It's been banned for a long time.

That's a good way of phrasing the reason why I decided to make a trade of it. The people who trade based on charts should get sucked into it and that should make the short more expensive by the day. So then it turns and people who trade on charts+momentum will find it attractive. But it seems like this goes on every year and it stalls out no lower than $60. Meanwhile, so long as there is nothing immediately pressing (liquidity) to make the stock suddenly dive lower, this trading is probably relatively safe as far as trading goes. And the tons of assets they possess make that nearly a lock.

That has been discussed quite a bit. I recommend reading through this message board from beginning to end. I've done that at least 3 times in it's entirety as part of my research before I bought a single share. I only hold about 5 companies at any given time so I tend to do quite a bit of studying prior to making an investment. Anyway, check out the discussions we've had on the potential for a short squeeze. Thanks Luke, I've done my best to keep up with most of the discussion, but probably missed more than a few messages. I know it has always been a small float, but I went through every holder with more than 5,000 shares today (making sure not to double count any sub-advisors or stale reports) and incorporated all of the 13Fs that came out last night. I have never seen anything this close to a corner since FFH, when naked shorting was essentially legal. I haven't seen anyone else go through all of the new filings since last night, but if someone else already has I apologize for beating a dead horse. -t-bone 1 T-Bone 1 Would you be interested in posting your findings? Agreed, there is a huge short interest! I've always believed that a huge short interest creates somewhat of a synthetic increase in the shares outstanding. For example, SHLD has 106 million shares outstanding. 13 million of those shares are owned by people that are long the stock and lend out their shares to be re-sold by short sellers. The new buyers of the 13 million shares also consider themselves owners (these are the people that bought the SHLD shares from the Shorts). So, in many ways you have 119 million (106 + 13) shares that are believed to be owned by people, not 106 million. It's a wild, wild phenomenon. And that 119 shares can grow to 132 million if the new owners of those 13 million shares also choose to lend the stock. Then the 132 million can grow to 145 million if the new owners... .... etc etc... etc... Then it grows to a trillion, then a billion trillion, etc... etc... All naked short selling gets you is a free short (no borrow cost).

The costs associated from closing down stores and severance are counted as operating expense. Are you stripping out the costs from closing stores and severance when you are viewing operating expenses?

http://thehill.com/blogs/on-the-money/budget/316015-budget-deficit-reaches-606-billion-cbo The federal deficit seems to be shrinking by 368B$ this year and 100B$ of it seems to be unrelated to tax revenue increases. I wonder if the 26% decline (from 52 week high) in the only true money is related directly to that.

And looks like version 5.0 is now out in the wild (screenshots from somebody who has car with the installed updates): In this release they have already released the first fix to the energy loss problem when vehicle is not in use. Plus it looks like some map improvements, WiFi tethering, Tow Mode, Screen Cleaning mode (so you can wipe the touchscreen). The additions to Driver Profiles seems to be tied to the key fob. So for example, if I unlock the car with my key it will adjust the driver's seat to my preferred settings. And if my wife unlocks the car with her key fob (and no, I didn't give her one... just hypothetical of course) then it will adjust the driver's seat to her preferred settings. I haven't played that much with the driver profiles yet, but I think it will even remember your preferred power steering settings (be it "standard" or "sport").

Regarding Berkowitz' public comments on his investments... Take a look at "Case Study I", where he goes over Bank of America. Does he even make any mention anywhere about legal risks for the bank? So, take that for what it's worth. He doesn't perhaps discuss all the bad risks that he knows about.

I believe a major contributor to the decline of BAC's stock in summer of 2011 was the plunge in the interest rates that occurred at the same time. The net interest margin compression, loosely translated, shrunk the size of the shovel with which BAC needed to dig itself out of it's real and perceived problems. Higher rates, bigger shovel. Bigger shovel, more resiliency. The higher the earnings power relative to your liabilities, the lower risk. Lower risk, better stock price.

A 4% 10 year wouldn't make the stock go down. It would make it go up. The earnings potential that would unlock is very beneficial. Take the interest rate increase in the most recent quarter -- completely absorbed by earnings. A couple of more quarters like that and we're there, with no net hit to capital. The stock would then price in the better forward earnings, and we'd come out better than if the rate movement had never occurred.

So far I can't talk myself into selling out. The part about where Eddie claims that net inventory liquidation is funding the store closures is... I believe... just trying to get the message out that closing stores doesn't immediately threaten them. I can't find another reason why he'd phrase it that way. This way you could close stores and not be desperate to sell the underlying real estate -- closing the stores does not put a cash pinch on the company that would make them a distressed real estate seller. It's a good message now that I think of it.

I think that sounds right in the lab but if the earnings are being goosed by the Federal deficit then it may be a long wait. I sort of see them continuing deficits until the consumer is done deleveraging, then as the consumer picks up they can begin to cut back on the deficit. Thus, it might be a very long wait. In the meantime, those $100 range earnings may accumulate for years and years and years. Or might not. Just pointing out that the normalized earnings probably has something to do with fiscal responsibility. I have tried to stay clear of things where I'd be crushed -- I know that around tangible book value BAC is not inflated.

Or they let a good portion of it sit in large, growing cash piles, or pay down debt, instead of investing it. That would lead to poor growth as well. But perhaps whenever that deleveraging subsides, they invest the incoming flows again (or pay it out) and earnings growth picks up.

I know they are not being used for buybacks. I was illustrating that with a 2% dividend you can certainly have a 4% real growth rate in earnings of the S&P500 -- the easiest example for that is the one where the company just retires shares. It's not what they are actually doing, sure, but it's to show that you can perpetually grow at a 4% rate forever without any actual economic growth. Cutting the dividend to 0%, they could grow at 6% just by buying back shares. Instead, they could pay a 6% real dividend yield. But for whatever reason they don't do that. I'm only bringing it up because you're talking about P/E of 11 or something which is an earnings yield of 9% real if inflation is 0%. That is far too low -- you're coming up with an earnings yield that far exceeds 6% real.

They formed in 2009. What's their history before that? Is this the same Baker Street? http://www.bakerstreetcapital.com/

Fully understand what you are saying. I was trying to find out if the battery solution was more cost effective. Or at least I wanted to find out how cost effective the battery thing is. Simply getting a price would do the trick. But they don't have any North American salespeople perhaps. I'm wondering if I keep repeatedly trying, one of these days I'll find that they've hired employees to sell their product. Then if they are very responsive and eager to get my business at that point I'll buy the stock. Then in the next quarterly earnings report the stock will soar because suddenly they'll have sales in North America.

The P/E according to this source is 18.62. http://online.wsj.com/mdc/public/page/2_3021-peyield.html That's a 5.37% real earnings yield if the inflation rate is 0%. It's not 6% real yield, but it's close. If the market pulled back 10% then you'd be at roughly 6% real earnings yield. As you point out, the dividend rate is 2%. Well, if the other 2/3 of earnings were spent solely on stock buybacks, then real earnings per share would be growing at a 4% clip. Thus, 6% real returns.

Isnt the earnings yield on the stock (or stock market) the real earnings yield? Earnings yield on the bonds is nominal. Most of the arguments I see aganist the Fed model is related to this. Both Hussman and Cliff Asness have written extensively on this. Vinod A really big issue is that you don't really get to keep a large slice of what they claim they'll pay you on these Treasury bonds. In my case they tell me I've got to give them 40% back. After that 40% is gone, what's the chance of my after-tax returns beating inflation? It's the biggest nonsense around. The very people who claim to give you a return then take it back -- it's the Treasury in both instances! I'm not kidding! The 10 yr yield is really only 1.62% for such people (not the 2.7% that most believe). Stocks have the advantage of getting much of the returns tax-deferred (with all capital gains forgiven upon death). Thus, in the real world the risk premium is much wider between stocks and bonds than most people believe.