tylerdurden Posted January 15, 2016 Share Posted January 15, 2016 Somebody raised a good question on this board a couple of days a go: Somebody is buying still at these prices. I don't think it is short covering since the volume should have closed all the open short positions so far plus if i were a short why would i cover now with the increased possibility of this going to zero. Anyways, take what it's worth but there are still buyers even in this market who think this is not zero. I donno whether mohnish pabrai buys but even if he does there is a lag of 2-3 days i think until it is disclosed... Link to comment Share on other sites More sharing options...
walt373 Posted January 15, 2016 Share Posted January 15, 2016 There are always buyers in distressed stocks. A lot of them are daytraders and gamblers. Take a look at Arch Coal's price action in August and more recently. They filed for bankruptcy on Monday and you could see it coming from a mile away. There were even Bloomberg articles reporting that they were likely to file soon. They entered a 30-day grace period on 12/15 when they missed an interest payment and bond prices were trading at under 1c on the dollar, yet the stock still traded near $1 one week before bankruptcy. Link to comment Share on other sites More sharing options...
zenith Posted January 15, 2016 Share Posted January 15, 2016 Somebody raised a good question on this board a couple of days a go: Somebody is buying still at these prices. I don't think it is short covering since the volume should have closed all the open short positions so far plus if i were a short why would i cover now with the increased possibility of this going to zero. Anyways, take what it's worth but there are still buyers even in this market who think this is not zero. I donno whether mohnish pabrai buys but even if he does there is a lag of 2-3 days i think until it is disclosed... read the letter, he is NOT buying Link to comment Share on other sites More sharing options...
tylerdurden Posted January 15, 2016 Share Posted January 15, 2016 Fair enough walt373. On Pabrai letter, woaw. I totally own my decision to hold this stock but pabrai is definitely not the man he claims to be. How many times are you going to change your rules on position sizing bro? I don't think he is an honest man, sorry. Link to comment Share on other sites More sharing options...
tylerdurden Posted January 15, 2016 Share Posted January 15, 2016 Somebody raised a good question on this board a couple of days a go: Somebody is buying still at these prices. I don't think it is short covering since the volume should have closed all the open short positions so far plus if i were a short why would i cover now with the increased possibility of this going to zero. Anyways, take what it's worth but there are still buyers even in this market who think this is not zero. I donno whether mohnish pabrai buys but even if he does there is a lag of 2-3 days i think until it is disclosed... read the letter, he is NOT buying Dude relax, i saw the letter after i already posted... Link to comment Share on other sites More sharing options...
Picasso Posted January 15, 2016 Share Posted January 15, 2016 Sloppy writing for someone managing near a billion at one point, especially a mea culpa. Not to kick him while he is down but kind of telling for me. Also weird that he just picked the stock out of a hat from a Forbes screener slash clickbait article. Regarding his sizing, I think he kept the cost near 10% but it grew at end of 2014. So some of those losses were paper gain reversals. Berkshire lost $300 million on a zinc project before so maybe Pabrai is taking the cloning thing really seriously. Joking aside this guy seems to swing for the fences a lot. Link to comment Share on other sites More sharing options...
indirect Posted January 15, 2016 Share Posted January 15, 2016 Do not throw good money trying to recoup bad money. Link to comment Share on other sites More sharing options...
Parsad Posted January 15, 2016 Share Posted January 15, 2016 Folks, Do not put up copyrighted material without the author's permission! Any material, including excerpts, published without permission will be removed. Thanks! Sanjeev Link to comment Share on other sites More sharing options...
AzCactus Posted January 15, 2016 Share Posted January 15, 2016 Do not throw good money trying to recoup bad money. Fine line between averaging down and throwing money away. Link to comment Share on other sites More sharing options...
tylerdurden Posted January 15, 2016 Share Posted January 15, 2016 Folks, Do not put up copyrighted material without the author's permission! Any material, including excerpts, published without permission will be removed. Thanks! Sanjeev Sanjeev, I don't mean to be mean but I see lots of investor letters etc. which are posted on this site so i guess if you want to apply that rule you have enforce that on everything, not only one specific example. Thanks. Link to comment Share on other sites More sharing options...
arcube Posted January 15, 2016 Share Posted January 15, 2016 What letter is everyone talking about? Link to comment Share on other sites More sharing options...
tylerdurden Posted January 15, 2016 Share Posted January 15, 2016 Folks, Do not put up copyrighted material without the author's permission! Any material, including excerpts, published without permission will be removed. Thanks! Sanjeev Sanjeev, I don't mean to be mean but I see lots of investor letters etc. which are posted on this site so i guess if you want to apply that rule you have enforce that on everything, not only one specific example. Thanks. Hi Sanjeev, I believe you removed the letter. Does that mean there shouldn't have been any "copyrighted" material on this site at all? Why didn't you have deleted prior similar examples from this site and just deleted this one specificslly? I think we should have rules&principles which would be applied all cases, not selective examples based on judgement. Wouldn't you agree? Thanks. Link to comment Share on other sites More sharing options...
Vish_ram Posted January 15, 2016 Share Posted January 15, 2016 Can anyone outline any possible scenarios if ZINC files for bankruptcy ? Will the company shut down and quit existing or just their debt will be discharged with asset sell but the company with continue to function, employee and administration will stick around.. Will continue to trade as ticker symbol ZINC exchanges.... can anyone provide some color on it? Look at HERO, which went through bankruptcy. $1.2B debt was wiped out and debtors put some new money too. After bankruptcy, it started trading at 14.x and has promptly fallen to 1.x. No position. fascinating story of total destruction. Link to comment Share on other sites More sharing options...
randomep Posted January 16, 2016 Share Posted January 16, 2016 Folks, Do not put up copyrighted material without the author's permission! Any material, including excerpts, published without permission will be removed. Thanks! Sanjeev Sanjeev, I don't mean to be mean but I see lots of investor letters etc. which are posted on this site so i guess if you want to apply that rule you have enforce that on everything, not only one specific example. Thanks. Hi Sanjeev, I believe you removed the letter. Does that mean there shouldn't have been any "copyrighted" material on this site at all? Why didn't you have deleted prior similar examples from this site and just deleted this one specificslly? I think we should have rules&principles which would be applied all cases, not selective examples based on judgement. Wouldn't you agree? Thanks. Sanjeev, you also seem to have deleted comments that reveal what his return was up to Q3 this year. Can a fact regarding a fund (which is actually quite public as evidence by the recently posted youtube video) be deemed copyrighted material? Link to comment Share on other sites More sharing options...
zenith Posted January 16, 2016 Share Posted January 16, 2016 Since I cant post the letter (it was removed here for copyright reasons) I will just say that Pabrai is Not buying anymore of ZINC and that they do have some assets that are greater than the debt but if they do a deal, the main assets like INMETCO and Zolchem will not get much in today's mkt and unknowns are Zinc prices and if plant will make money. Link to comment Share on other sites More sharing options...
tylerdurden Posted January 16, 2016 Share Posted January 16, 2016 Since I cant post the letter (it was removed here for copyright reasons) I will just say that Pabrai is Not buying anymore of ZINC and that they do have some assets that are greater than the debt but if they do a deal, the main assets like INMETCO and Zolchem will not get much in today's mkt and unknowns are Zinc prices and if plant will make money. Thanks very much for sharing. That was really valuable to some of us here. Also I think he was trying to prepare his investors to the worst by saying the worst is over at 0.62 share price, even if he loses everything. He believes there are many opportunities which will make up for this loss in his portfolio. It is tough to be an investment management salesman i guess.... At least Einhorn admits when he makes a mistake of not selling (Micron), Pabrai didn't seem to be making that type of self critique at all... Link to comment Share on other sites More sharing options...
hobbit Posted January 16, 2016 Share Posted January 16, 2016 read the entire letter too, Pabrai is willing to accept a 100% loss on his position. he sounds pessimistic about prospects and thinks its hard to predict where zinc is going. it could be that he is trying to lower the expectations of his investors if they have any hope left with ZINC that is. His breakeven is probably around 8 bucks and its certain that he will not make any profit at that point . in the past , Mohnish has been more granular and certain in his analysis. Here he is just saying that its hard to predict where this is going. whats interesting is that in the transcript of the annual meeting of pabrai funds ( also came out today), the CFO of ZINC sounds very confident of being able to refinance the debt. he says that even without selling INMETCO/ZOCHEM there are plenty of other options. He mentions that the 2017 debt is concentrated with a few investors who have been very supportive . Jim hensler mentioned the same in the last CC. But then they had not missed a coupon payment then I don't know what kind of deal ZINC will get from the creditors but with some dilution and rolling over dates they might still survive. Would be interesting to see who owns ZINC debt and what kind of reputation they have in the market...lets see Link to comment Share on other sites More sharing options...
tburnstead Posted January 16, 2016 Share Posted January 16, 2016 hobbit, Do you know where to find the meeting transcript for those of us interested in reading it. Link to comment Share on other sites More sharing options...
zenith Posted January 16, 2016 Share Posted January 16, 2016 i have been getting quite a few pm's. I am happy to oblige ;), I responded to everyone, let me know if I missed you by mistake. FYI I just got the message "You have exceeded the limit of 10 personal messages per hour." so send me your email in your pm to me! Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 16, 2016 Share Posted January 16, 2016 I don't think you can measure the success of a "value investor" by his long term portfolio compounding track record. You could be fooled by the record of a person who might be a nimble trader and make his money despite not buying things below intrinsic value. So merely having a good track record along with a self-ascribed "value investor" label is not enough. Instead, look up everything he has ever bought for his portfolio. Recreate his returns as if he'd bought each one of them and held them to the present (never selling), and see how his portfolio returns are under this experiment. The ultimate test of whether or not he's been a true "value investor" is if the companies have performed in a manner to indicate that he indeed was buying them well below intrinsic value. A confusing contribution to his track record is LEAR, for example. I think he made a gain on that even though it eventually went to zero. That's misleading to include in his track record, because he didn't make the gain as a result of buying below intrinsic value, instead he made the gain for being a nimble trader. HNR looks pretty bad. Then DFC, PNCL, and ZINC and maybe others. I'm just picking on the bad ones. There must be good ones too that have outperformed. But what's the real record if you measure him based on his ability to identify names trading under intrinsic value? You know, "you take the good, you take the bad, you take them all and then you have the facts of life?". The industry measures results in a funny way if trading gains (which could just be a case of outstanding spidey senses) can muddy our perceptions of a person's valuation abilities. And for goodness sakes, stop saying "high uncertainty, low risk" -- too many blowups to bear that out. Link to comment Share on other sites More sharing options...
Parsad Posted January 16, 2016 Share Posted January 16, 2016 Folks, Do not put up copyrighted material without the author's permission! Any material, including excerpts, published without permission will be removed. Thanks! Sanjeev Sanjeev, I don't mean to be mean but I see lots of investor letters etc. which are posted on this site so i guess if you want to apply that rule you have enforce that on everything, not only one specific example. Thanks. Hi Sanjeev, I believe you removed the letter. Does that mean there shouldn't have been any "copyrighted" material on this site at all? Why didn't you have deleted prior similar examples from this site and just deleted this one specificslly? I think we should have rules&principles which would be applied all cases, not selective examples based on judgement. Wouldn't you agree? Thanks. I can't review every single post. When readers report a thread or post, then I try and rectify the issue. You guys should not be putting up any copyrighted material on here unless less than 100 words. You are more than welcome to discuss what is written in the letter or even link to it, but not publish copyrighted material. Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted January 16, 2016 Share Posted January 16, 2016 One more thing, can some of you guys get off your f**king high horse and stop the back-door posts insinuating that my friendship with Mohnish blinds me to his errors in judgement. He's not a God! He's made mistakes before...anyone remember 2007/2008? He's human like all of us and he will make good and bad investment decisions, no matter how you or he chooses to frame it. It is what it is! He's a very smart guy, who will get most of his decisions right, and some will go bad...simple! I didn't copy his investment in Fiat, GM, et al like so many others on here, who are now crying foul because they jumped into ZINC and lost a bundle! I don't have a god-damn checklist, I don't clone, I don't have the nicest Swiss sidekick that any portfolio manager could want, and I have yet to ride a bike in tights! That's what you actual zealots do and then turn on the guy when he f**ks up! He's my friend...I don't kiss his ass! And why is it that I don't do these things? Because I've always thought independently, just like I've always run this message board independently. Everything I've done, I've done from the grassroots up...the hard way...independent...whether it was Corner of Berkshire & Fairfax, Corner Market Capital or now Premier. No "family money/office" as some of you guys suggest you are starting with, no huge windfall from a benefactor, no notoriety from an ex-employer...from scratch, the hard way, learning every facet of each business along the way, and making sacrifice after sacrifice. Maybe, I'm getting older, maybe I'm fed up with the bull-shit because I don't have to take it any more, but if you don't f**king like how I run the message board, then bugger off! I don't sugar coat for anyone...whether it was Sardar, Mohnish, Prem, Buffett, whoever. I'd be doing a disservice to everyone, including myself, if I did that! Cheers! Link to comment Share on other sites More sharing options...
randomep Posted January 16, 2016 Share Posted January 16, 2016 I love this message board, maybe I say that cos I got no life..... but its true. Link to comment Share on other sites More sharing options...
peter1234 Posted January 16, 2016 Share Posted January 16, 2016 I love this message board, maybe I say that cos I got no life..... but its true. +1 Link to comment Share on other sites More sharing options...
Sportgamma Posted January 16, 2016 Share Posted January 16, 2016 One more thing, can some of you guys get off your f**king high horse and stop the back-door posts insinuating that my friendship with Mohnish blinds me to his errors in judgement. He's not a God! He's made mistakes before...anyone remember 2007/2008? He's human like all of us and he will make good and bad investment decisions, no matter how you or he chooses to frame it. It is what it is! He's a very smart guy, who will get most of his decisions right, and some will go bad...simple! I didn't copy his investment in Fiat, GM, et al like so many others on here, who are now crying foul because they jumped into ZINC and lost a bundle! I don't have a god-damn checklist, I don't clone, I don't have the nicest Swiss sidekick that any portfolio manager could want, and I have yet to ride a bike in tights! That's what you actual zealots do and then turn on the guy when he f**ks up! He's my friend...I don't kiss his ass! And why is it that I don't do these things? Because I've always thought independently, just like I've always run this message board independently. Everything I've done, I've done from the grassroots up...the hard way...independent...whether it was Corner of Berkshire & Fairfax, Corner Market Capital or now Premier. No "family money/office" as some of you guys suggest you are starting with, no huge windfall from a benefactor, no notoriety from an ex-employer...from scratch, the hard way, learning every facet of each business along the way, and making sacrifice after sacrifice. Maybe, I'm getting older, maybe I'm fed up with the bull-shit because I don't have to take it any more, but if you don't f**king like how I run the message board, then bugger off! I don't sugar coat for anyone...whether it was Sardar, Mohnish, Prem, Buffett, whoever. I'd be doing a disservice to everyone, including myself, if I did that! Cheers! http://memesvault.com/wp-content/uploads/Chuck-Norris-Approves-Gif-12.gif Link to comment Share on other sites More sharing options...
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