Liberty

I haven't yet read it, so I don't know if it's any good, but WIRED has an article that should interest those who are interested in all that high-speed computer trading: http://www.wired.com/business/2012/08/ff_wallstreet_trading/all/1?viewall=true And here's some discussion about the piece, with at least one HFT guy piping in: https://news.ycombinator.com/item?id=4360742

That's what makes this a great opportunity. The 'first glance' story looks like what you just said, but if you actually dig into each of those, it looks different, and what will matter in the end is not the 'first glance' look of things but the actual fundamentals. It reminds me of a quote by I don't remember who: "I like things where the 1 hour complicated explanation of a stock is dramatically different than the 30 second explanation." (the reason for that of course is because it allows you to get an edge over those who won't dig deeper) Personally, I've been satisfied with what I found doing my due diligence, and EBIX is my biggest position. Time will tell...

High short interest is definitely a red flag. There's a higher burden of proof on you as investor once you see that; you basically have to say, do I have an edge over these people who are ready to put up large sums of money betting against me? I certainly don't take this lightly. But even after I've become convinced the shorts are wrong on the fundamentals, it would still be possible for them - in theory - to end up being right by hurting the company via the share price. I believe that EBIX can withstand that much better than many other businesses because of its high FCF generating-ability, low debt, and good capital allocator at the helm. If it was a highly-levered company, or in a very cyclical industry, or with only a few big customers that could make or break things, or if it needed to regularly go to the capital markets to fund growth and acquisitions, or if it were particularly vulnerable to competition, or if it wasted capital on overpriced acquisitions and operations, I would be worried. But as things are, they can sit there indefinitely and collect their highly diversified, moat-protected recurring revenue stream at 40% margins, buy back shares while reinvesting in the business, while executing what I think is a very smart growth strategy. So I don't think they are vulnerable to share price volatility in the way that some other companies are (ATPG and SVU have very different margin, capex, and debt profiles, among other differences), and IMO this closes the door on the shorts hurting the business.

I'm not saying there is no risk or that it is an optimal situation, but I have to make a call with the info that I have and reasonable inferences on what I can't know. I wish I could sit down with one of the shorts and interview them candidly about their position, but that's not going to happen. When you don't have anything, you always look more menacing when you don't say anything and let people imagine that you have more than you actually do. Their strategy right now seems to be to scare the shareholders who get their guidance form Mr. Market (and sadly, that's a lot of them). They do this by making the price drop on earnings and other positive news, so that the herd thinks "oh, this must be bad news since the market is reacting negatively", and trying to get the momentum people scared (if something goes down enough, they'll sell regardless). That's all I can see right now.

Who knows? It could be based on technicals and such voodoo. Or maybe it's a private competitor doing this..? Can't really know. I believe that if the shorts had good reasons based on fundamentals, they would share them. If you had 11 million shares short and had something substantial, would you keep it a secret for this long? That info would have been in the Copperfield hatched job or in another short report. But everything I've seen is BS and distortions, so I don't think they have anything real. Just a lot of resources to manipulate the secondary market price in the short term and no moral qualms about lying, but nothing to actually hurt the business itself. That's fine with me, because it allowed me to get in low, it allows the company more buybacks, and it leave the potential of a massive short squeeze in the future. They're actually making my investment more valuable, not less. So they can keep going if they want to.

Looks like they hit the 10% short sale rule for today. I wonder if they'll try agan tomorrow..

You guys beat me to it, my notes are pretty similar. Thanks for sharing!

Looks like the shorts were a day late this quarter. Going down a lot on high volume so far this morning... Maybe the guy who's in charge of manipulating the stock was out sick yesterday... Oh well, just one more opportunity for buybacks.

+1 :)

I think maybe that's the viscose-based contract at thurso.. Viscose spot minus 1k, maybe with floor of 1k ? Not entirely sure.

I'm still digesting all this, and it'll be interesting to get more details on the CC call tomorrow, but so far it seems about as I expected. Thurso's was still in the 70%s for the quarter, and most of the profits come from the last percents because of the fixed costs, so it's not surprising it didn't generate much cash yet (also doesn't have cogen). All DP sold through Q3, which is good to hear, but would love to know pricing (probably will be discussed in the CC). Dresden seems to be doing extremely well, better than I expected. Good to hear that Landquart has started printing the big order in July (wish I knew when exactly in the month). Some work beginning at LSQ. Next few quarters should be much more interesting.

True, though ceteris paribus, a bad cotton harvest due to drought will always lead to higher cotton prices than a good harvest with no drought.

Good conference call. Pretty much everything I heard made me confident in the company's future and direction, and there are still a few things right over the horizon that should keep things interesting (two new big exchanges still haven't launched, and they apparently have very long lists of customers already signed in, and full quarters with new acquisitions once the consolidation/cost-cutting is done should have a nice impact). I liked Robin's comments about health exchanges. Basically, whether there are public health exchanges or not won't change that health exchanges are here to stay, either as private + public or just private, and they're positioning themselves to get their share of that. Robin mentioned that he'd like to make a few more acquisitions this year, and usually when he says that it means the deals are pretty much already done and we just have to wait for the official press release :) Also nice to see them do pretty well in such a soft environment for their customers (which affects transactions on exchanges, IT upgrades, and BPO levels (esp. the construction industry)). When we get to a stronger macro environment and hard insurance market, I believe this company will be an absolute monster, and with such high margins, they'll have tons of cash to either reinvest or spend on buybacks/dividends. Totally different model from, say, Salesforce.com with its tiny (or non-existant) margins. And off course, the shorts have to cover someday, and trying to buy 11 million shares from a shrinking float will be fun to watch...

Up over 6% right now. Is it finally the beginning of a short squeeze? 11 million shares sold short last I checked.. But after the past year and a half.. I'll believe it when I see it. Chances are it'll come back down (not that I care -- more time for buybacks. In fact, I wish price would stay low for longer so they could do better buybacks..), but we'll see.

No surprise, the buybacks continue: http://www.canadianinsider.com/node/7?ticker=ALS

This problem is fixed for me today.

http://www.ebix.com/pressrelease_text.aspx?artid=246 8) Now let's just see if the shorts can make it go down in price like they usually do on earning day..

http://www.bloomberg.com/news/2012-08-07/cotton-harvest-in-india-set-to-tumble-as-dry-weather-hurts-crops.html

http://blogs.reuters.com/felix-salmon/2012/08/06/chart-of-the-day-hft-edition/ It takes a bit to get going. Notice the date in the bottom left. More context provided in the Reuters article above. http://i.imgur.com/DxWer.gif

http://www.bloomberg.com/news/2012-08-06/berkshire-s-cash-hoard-swells-as-buffett-pares-consumer-stocks.html They even have a quote by Andrew Kilpatrick :)

I had a quick look after seeing a VIC writeup, but I didn't really dig deep and can't say I understand it or even know if it's undervalued yet. Anyway, I'm writing just to say that if you have a VIC membership, you should be able to find some info there.

I just want to say that it's always nice to see civil discussions here. Not that it's out of the ordinary here -- most discussions are very respectful. But it's still nice to see that it doesn't descend into ad hominem and such.. It's certainly not like that on many other internet forums :)

http://www.bloomberg.com/news/2012-08-02/buffett-railroad-beats-coal-slump-with-75-gain-in-oil-freight.html

http://www.bloomberg.com/news/2012-08-02/berkshire-benefits-as-buffett-wagers-on-u-s-housing.html

I've had the same problem intermittently today for Canadian quotes. Expecting it to be just a temporary glitch.