The Coming Demographic Shift: How To Invest [View article]
Half truths are whole lies: 1) According to the LPHI filings, the current life settlement market stood at $4 billion in transactions two years ago. According to Conning Research's November 15, 2012 press release, the yearly transactions in 2011 was at $1.2 billion, significantly less than $18 number you concocted. See: http://bit.ly/16629PC
2) LPHI is currently being sued by the SEC and in multiple class-action lawsuits alleging fraud, stock fraud, breach of fiduciary duty, and RICO centering around the way they calculate life expectancies when valuing policies before selling fractional shares of those policies to the investing public (see pages 55-59 in the 10-K/A). LPHI is accused of purchasing a large life insurance policies marketed using life expectancy estimates from traditional providers, and then repricing the same policies for sale to the investing public using a much shorter LE. The plaintiffs claim the shorter LE was provided by a Reno oncologist who under testimony stated he has no actuarial experience and never attended a life settlement conference. The lawsuits have not yet gone to trial.
3) Life Partner's was recently investigated by a Texas NBC affiliate, KSHB TV 41. This TV investigative report, along with negative articles from several newspapers (like the WSJ), will not help Life Partners turn around sales (see:http://bit.ly/11Hs36b) .
4) LPHI is quickly running out of cash, with negative CFFO and large reported losses (the amended 10K for the previous fiscal year was filed this week). The company believes in their filings that these losses will continue unless the SEC suit is settled successfully. Despite these losses, the company continues to pay an enormous dividend with over 50% paid out to shares controlled by the founder mostly held in an offshore family trust.
5) The new 10K is expected soon, and I wonder if your article is designed to pump the stock before it appears? If the management of Life Partners is correct--they sign off on the financials--nothing will change unless the SEC suit is successfully settled. Are you betting that will happen?
Stating or writing several truths before adding things that aren't true is an old technique of fraudsters and those involved with propaganda. Where I come from, a half-truth is a whole lie.
BTW, I would like to see Life Partners turn things around, but first they have to settle the SEC and other suits, and then they have to have clients who are getting their expected returns. RIght now there is nothing that indicates to me that anything will change.
Gazprom Net Income Drops 37%: Should You Be Worried? [View article]
I became frustrated with Gazprom and shifted into RSX a while back, similar to your suggestion in this article. At some point the world has to recognize how cheap Russia is. I still can't figure out how it can trade cheaper than Pakistan, since the political risk is better and the corruption isn't worse. The upcoming Winter Olympics in Sochi could be the inflection point. I guess we'll know in a year.
The Case For Investing In Russia (Despite The Risks) [View article]
No one can question if Russia is cheap on a relative or absolute basis...it is. Heck, it is cheaper than Pakistan. But what will cause USA funds to invest in Russia? I dunno, but it could be the Sochi Olympics that get people to notice.
Herbalife: Here's Why You Won't Hear Ackman's Defense This Time [View article]
herbs4mike,
I don't know what herb you smoke (lol), but most retail stores have terms to pay their suppliers. Anyhow, HLF was never accused of not having a product for the "business owner." The products do exist. They are accused by Ackman of hiding the fact that a new "business owner" (using your vernacular) has little chance of succeeding, and that the purported "sales" figures are likely distorted.
Herbalife: Here's Why You Won't Hear Ackman's Defense This Time [View article]
This is relatively simple, at least to me: Any law that is not enforceable isn't a law. Even if Ackman is correct (and he probably is) no regulator wants to take on the MLM industry just because almost everyone who enters a scheme loses money. It is just like someone starting out as an insurance agent or stockbroker...over 95% will not be around in a few years. The regulators don't care if 95% of the MLM people lose money. So if no statute to protect the people who buy into a MLM scheme is enforced, Ackman can be both right about the alleged fraud and wrong about the stock price.
This could be one mother of a squeeze. Ackman can hedge most of his position easily enough, but at some point the stock price separates itself from reality making Ichan the financial winner.
Star Scientific (STSI -4.8%) refutes a story published last week on TheStreet.com in which accusations are leveled at the firm that it misled investors over the involvement of Johns Hopkins University with research on the nutritional supplement anatabine. "The (anatabine) study was not sponsored by the Johns Hopkins School of Medicine, and the company never reported otherwise." [View news story]
The stock seems like a great hype job, using lots of irrelevant "facts" to promote lots of false hope. Surprisingly, there could be something good, but how can you tell? The question I have is why the promoters don't talk about who is converting the options and dumping the cheap shares whenever the price spikes?.
Russia is likely far less corrupt than Pakistan, yet it sports a lower P/E ratio. Something is out of whack, and it is investor perception. But what will change investor perception, and when? The inflection point could be the 2014 Winter Olympics in Sochi. There are now great "stories" coming from the US Ski (Alpine and Nordic) and Bobsled teams, that are largely ignored because most people only care about this stuff once every four years when it is spoon fed to them through the much maligned NBC coverage. If you haven't noticed, the rich on Wall Street like to ski (and even buy ski areas). Next winter, while the wives shop for furs in Russia's PETA-Free zones, they will shop for investing opportunities...and then attend the games. Russia is mega-cheap, but it won't be forever. The inflection point to investing there could be the winter games.
Don't Short The Market, Buy Volatility Instead [View article]
The idea, at least to me, is to find a trend early and then act appropriately. You gave solid ideas in this article, but we don't know if what we saw today is the beginning of a trend or not. I am betting that we already saw an inflection point, which was Faber's prediction of a 40 percent decline. The other inflection point was a couple of fiscally conservative friends asking me about books to get them started in trading.
It takes guts to short the market now with all that retirement money still pouring in until mid-April, which is why I liked your article so much. Regardless, if this train starts rolling downhill without brakes the ride will get more bumpy, and that bodes well for your VIX call. As you can guess, I took no profits today (I may regret that) and even bought VXX calls.
Is This The End Of Life Partners Holdings? [View article]
LPHI reported yesterday and the financials are terrible. They decided (again) not to impair the trust investment. Revenue per transaction has dropped by close to 60% since many of these transactions seem to be resales (I'll check with investor relations about that). The management discussion indicates that nothing is expected to change for a while. I am not sure how this can trade above book value, but it is and continues to do so!
"Despite the progress we have made in our efforts to rebuild confidence in our company, the large drops in revenues, the significant legal and professional fees, and operating losses we have experienced over the First Nine Months of this year have eroded the strength of our financial condition. The SEC suit and other litigation have been highly damaging to our business, and we do not anticipate a substantial recovery in our revenues and net income while the SEC suit and the other private litigation continues. To mitigate these developments, we continue to invest significantly in programs to develop and strengthen our relationships with new and inactive licensees. We are conserving our cash in anticipation that the suit will not be quickly resolved. We have decreased our cash dividends and may make further cuts and could eliminate the dividends. We have sold the majority of our portfolio of investments in policies and are reducing our investments, including investments in policies."
All of MLM is a pyramid scheme...but so what? Most people in these "legal" pyramid schemes will lose money, but not too much money so the courts don't care. The question for me is perception. How will Acman's presentation change the perception of investors and the distributors? I find people in these schemes have already drank the Kool-Aid, and will ignore facts forever. Investors see China as the unending supply of suckers, and don't see a loss of revenue ahead.
Is This The End Of Life Partners Holdings? [View article]
dankahan,
I believe the information you seek is reported to the TDI. I think reporters have gotten those statistics in the past using the FOIA.
LPHI's auditors are not required to calculate A to E ratios and they typically do not "follow the money." They do write qualified or unqualified opinions.
Is This The End Of Life Partners Holdings? [View article]
$91 million in payout represents 4.8% of $1.9 billion. If that is all that has matured in 18 months I would have to think the SEC's contention about the likely return many investors would receive is correct! The amount of the maturities should be MUCH higher based upon the when the policies were purchased assuming the Dr. Cassidy LE. The bulk of the policies were sold between 2007 and 2010 and assuming a 4-7 year LE spread, a lot more policies should be maturinga! I imagine the payouts are closer to a Fasano or EMSI LE and not the LE Dr. Cassidy produced. Unfortunately, the LEs on the policies sold to LPI are not disclosed. FY 2007 $151mm FY 2008 $415mm FY 2009 $694mm FY 2010 $590mm
It doesn't seem the overall returns will come anywhere close to meeting the double digit expectations set by LPHI's CEO. These expectations can still be found in interviews and speeches currently found on the LPHI website (http://bit.ly/ROTIx7). There will always be early maturities, but if the late maturities are really, really late (like the SEC suggests, the overall return to a fractional investor with several policies may not meet expectations (the SEC complaint suggests returns will be closer to 0.40% if industry accepted LEs were used). It seems the lack of returns when expected explains the resale market and all the premium forwarding.
I am glad a few policies returned 20%. Statistically it is probable some policies will return much greater. The problem with not using an accepted performance presentation standard is that the policies that have NOT matured are not included with the universe of policies sold to fractional investors.
The State of Texas did not see thier case dismissed, but did lose the battle to call the fractional investent a "security." Some think they may come back with a deceptive trade practices suit. I have no idea, but suspect we'll all eventually know more about the intentions of the AG sooner than later.
Understanding Carl Icahn's Oshkosh Strategy [View article]
OSK was run in a similar way for decades (since it was known as Oskosh Truck). It remains a company that is relevant since specialty trucks with component parts never go out of style. It is also a company that will do well after any war. But will economic value be added by selling off parts of the company that may rebound in a few years time? I dunno. Can being more proactive really add top line growth? Again, I dunno about that.
The Coming Demographic Shift: How To Invest [View article]
1) According to the LPHI filings, the current life settlement market stood at $4 billion in transactions two years ago. According to Conning Research's November 15, 2012 press release, the yearly transactions in 2011 was at $1.2 billion, significantly less than $18 number you concocted. See: http://bit.ly/16629PC
2) LPHI is currently being sued by the SEC and in multiple class-action lawsuits alleging fraud, stock fraud, breach of fiduciary duty, and RICO centering around the way they calculate life expectancies when valuing policies before selling fractional shares of those policies to the investing public (see pages 55-59 in the 10-K/A). LPHI is accused of purchasing a large life insurance policies marketed using life expectancy estimates from traditional providers, and then repricing the same policies for sale to the investing public using a much shorter LE. The plaintiffs claim the shorter LE was provided by a Reno oncologist who under testimony stated he has no actuarial experience and never attended a life settlement conference. The lawsuits have not yet gone to trial.
3) Life Partner's was recently investigated by a Texas NBC affiliate, KSHB TV 41. This TV investigative report, along with negative articles from several newspapers (like the WSJ), will not help Life Partners turn around sales (see:http://bit.ly/11Hs36b) .
4) LPHI is quickly running out of cash, with negative CFFO and large reported losses (the amended 10K for the previous fiscal year was filed this week). The company believes in their filings that these losses will continue unless the SEC suit is settled successfully. Despite these losses, the company continues to pay an enormous dividend with over 50% paid out to shares controlled by the founder mostly held in an offshore family trust.
5) The new 10K is expected soon, and I wonder if your article is designed to pump the stock before it appears? If the management of Life Partners is correct--they sign off on the financials--nothing will change unless the SEC suit is successfully settled. Are you betting that will happen?
Stating or writing several truths before adding things that aren't true is an old technique of fraudsters and those involved with propaganda. Where I come from, a half-truth is a whole lie.
BTW, I would like to see Life Partners turn things around, but first they have to settle the SEC and other suits, and then they have to have clients who are getting their expected returns. RIght now there is nothing that indicates to me that anything will change.
Gazprom Net Income Drops 37%: Should You Be Worried? [View article]
The Case For Investing In Russia (Despite The Risks) [View article]
Herbalife: Here's Why You Won't Hear Ackman's Defense This Time [View article]
I don't know what herb you smoke (lol), but most retail stores have terms to pay their suppliers. Anyhow, HLF was never accused of not having a product for the "business owner." The products do exist. They are accused by Ackman of hiding the fact that a new "business owner" (using your vernacular) has little chance of succeeding, and that the purported "sales" figures are likely distorted.
Herbalife: Here's Why You Won't Hear Ackman's Defense This Time [View article]
This could be one mother of a squeeze. Ackman can hedge most of his position easily enough, but at some point the stock price separates itself from reality making Ichan the financial winner.
Star Scientific (STSI -4.8%) refutes a story published last week on TheStreet.com in which accusations are leveled at the firm that it misled investors over the involvement of Johns Hopkins University with research on the nutritional supplement anatabine. "The (anatabine) study was not sponsored by the Johns Hopkins School of Medicine, and the company never reported otherwise." [View news story]
Time To Invest In Russia? [View article]
Don't Short The Market, Buy Volatility Instead [View article]
Don't Short The Market, Buy Volatility Instead [View article]
It takes guts to short the market now with all that retirement money still pouring in until mid-April, which is why I liked your article so much. Regardless, if this train starts rolling downhill without brakes the ride will get more bumpy, and that bodes well for your VIX call. As you can guess, I took no profits today (I may regret that) and even bought VXX calls.
Is This The End Of Life Partners Holdings? [View article]
"Despite the progress we have made in our efforts to rebuild confidence in our company, the large drops in revenues, the significant legal and professional fees, and operating losses we have experienced over the First Nine Months of this year have eroded the strength of our financial condition. The SEC suit and other litigation have been highly damaging to our business, and we do not anticipate a substantial recovery in our revenues and net income while the SEC suit and the other private litigation continues. To mitigate these developments, we continue to invest significantly in programs to develop and strengthen our relationships with new and inactive licensees. We are conserving our cash in anticipation that the suit will not be quickly resolved. We have decreased our cash dividends and may make further cuts and could eliminate the dividends. We have sold the majority of our portfolio of investments in policies and are reducing our investments, including investments in policies."
Analyzing Ackman's Herbalife Pyramid Claim [View article]
Is This The End Of Life Partners Holdings? [View article]
Is This The End Of Life Partners Holdings? [View article]
I believe the information you seek is reported to the TDI. I think reporters have gotten those statistics in the past using the FOIA.
LPHI's auditors are not required to calculate A to E ratios and they typically do not "follow the money." They do write qualified or unqualified opinions.
Is This The End Of Life Partners Holdings? [View article]
FY 2007 $151mm
FY 2008 $415mm
FY 2009 $694mm
FY 2010 $590mm
It doesn't seem the overall returns will come anywhere close to meeting the double digit expectations set by LPHI's CEO. These expectations can still be found in interviews and speeches currently found on the LPHI website (http://bit.ly/ROTIx7). There will always be early maturities, but if the late maturities are really, really late (like the SEC suggests, the overall return to a fractional investor with several policies may not meet expectations (the SEC complaint suggests returns will be closer to 0.40% if industry accepted LEs were used). It seems the lack of returns when expected explains the resale market and all the premium forwarding.
I am glad a few policies returned 20%. Statistically it is probable some policies will return much greater. The problem with not using an accepted performance presentation standard is that the policies that have NOT matured are not included with the universe of policies sold to fractional investors.
The State of Texas did not see thier case dismissed, but did lose the battle to call the fractional investent a "security." Some think they may come back with a deceptive trade practices suit. I have no idea, but suspect we'll all eventually know more about the intentions of the AG sooner than later.
Understanding Carl Icahn's Oshkosh Strategy [View article]