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What are you buying today?


LowIQinvestor

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Finally got into the SHLD bonds eh? Which ones did you buy?

 

6.625 '18s. I like the lien vs SRAC (and the way lower price). While I'm pretty sure they're undersecured at present, I think there's a chance ESL makes a credit bid with its debt higher up the capital stack for some of the things they want. If what they want is actual operating stores and they're willing to pay something around current assets for them that is very helpful, imo. I think the unsecured holdco debt has a very good chance of being a zero. I suspect the SRAC/18's will end up the fulcrum security, and I think there might be value hiding in the real estate, likely even in the RE that has been pledged for debt.

 

I realize that this sounds exactly like the thesis that equity holders had for years, so I've kept this a pretty small position. The difference (imho) is that now there is a hard catalyst - these assets are getting dealt with in the court process.

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And sold some 140$ nov18 puts on FB for 5.6$, the premium is really fat. Looks like the market expects a pretty big move after earnings.

 

*EDIT* I also bought a TSLA bear call spread 300/400 MAR2019 for 47$ credit because i just love the drama.

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Frommi,

 

I am interested in why you were short the DAX.  It seems quite cheap to me, from a simple statistical perspective.

 

That was my seasonality trade. I buy these puts every year on the first day of May and sell at the end of October or if the DAX goes down by 20%. Over the past 100 years this has hedged a portfolio without extra cost. Every 4-5 years the puts are 5-6 baggers. While this looks like an even trade it boosts portfolio performance by 3-4% on average and reduces drawdowns from -50% to -20%. That was also the a good way to survive the bear market of 1929->1932. I am a pretty fearfull guy and need this stuff to stay fully invested. I am sure i will look stupid for selling them one day too early on monday. :)

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