Annaly Capital: Cautious About Its High Yield [View article]
I believe NLY started to get a stronger following after Bill Gross recommended it in BARRON'S (see huthuto's comment above).. NLY is complicated because the assets it invests in do not have a simple structure and there is the potential cost of funding issue. So you end up betting on the jockey as much as the horse, and so far the jockey has a good record.
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.
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.
Life Partners is subject to a Temporary Restraining Order that prevents the company from paying a dividend, at least until after a September 24 hearing. Until then the judge will not them dissipate assets in a way that might enrich management.
Citron vs. Harbin: 5 Questions Shorts and Longs Should Be Asking [View article]
Adam,
I have a book that will be published this summer that contains a chapter about fraud. My research determined the amount of fraud in China is massive. For example, how can you have $1 billion + (US dollars) Ponzi schemes using ant farms without someone in the government knowing about it? How can all these RTOs go bust without consequences from the country where each firm is domiciled? China is easily on par with the USA in terms of total fraud. The major exception is with the government, with China being far more corrupt.
Citron vs. Harbin: 5 Questions Shorts and Longs Should Be Asking [View article]
Nice balanced write-up.
There is alleged to be a fraud with Chinese RTOs (Perhaps something similar is going on here?) that begins with pumping up the price of the stock. Then the chairman, his wife or whoever "borrows" from a friendly bank using a ton of inflated stock as collateral. The loan is non-recourse. Then the bank hedges their bet with PUTs knowing the loan will never be paid off. The stock is eventually sold, the stock price collapses, the bank loses nothing and keeps the family business. Everyone wins but the USA investors. Is that going on here? Is Left right (couldn't resist the pun) or is Left wrong? We'll know by December.
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.
Overstock.com Was Ineligible To File A Registration Statement Last December [View article]
The ongoing saga of OSTK proves the Cockroach Theory correct. It you find one (accounting) roach, it is certain a lot of them are nearby. This is another thoroughly researched piece authored by you.
Dividend Champions With Yields As High As 17.5% [View article]
Your statistics regarding LPHI are wrong or dated. LPHI has negative cash flow and a negative revenue growth rate. The company has not had a positive "levered free cash flow" for a while. In fact, it is burning through cash. Cash should now be less than $12,500,000, meaning LPHI could have zero cash left after as little as three more dividends at the current rate ($3.6 million per dividend plus legal fees for the SEC lawsuit plus numerous civil suits).
Coffee's Latest Rally May Leave Investors Jolted [View article]
Doyle3000,
GMCR is indeed expensive, but the only thing that will kill this premier momentum stock is the future earnings expectations dropping since the SEC is dilatory. We will likely have to wait for the next earnings release to see if they are indeed cooking the books, assuming the timing of their CAO hire is timely (they are likely cooking since FCF is still negative and can't be reconciled using CAPEX). IMHO GMCR is going to end badly for many momentum players just like SODA, and will remain nerve wracking to trade and/or short.
Getting back to the article above, coffee prices to the consumer remind me of cable in that the pricing is elastic. The pricing may not be passed along should some players think they can gain market share (and perhaps sell more donuts).
On two occasions I wrote a number of calls on GMCR and hedged (my version of a bear spread) by purchasing double OTM calls of the near month. Both times I was wrong but got bailed out from trading the spread due to the crazy volatility. This reminds me of SODA before it tanked. I am hoping GMCR tanks more than SODA since SODA has no accounting issues related to the "f" word.
Shorting a Stock: 20 Investment Lessons From Life Partners [View article]
217GaryR, "You know now it is illegal to short stock unless you own it? " Gary, that statement says volumes about your understanding of shorting and this stock!
1) The SEC is not "losing the Wells Notice" (btw, it is a "Wells notice"). The Commission is waiting for Life Partners to respond. The purpose of the Wells Notice is to allow a company to defend itself before the Commission decides to act. What the company says in their defense can be used against them in other suits.
2) IMO The State of Texas has a good chance of having successful results, which is precisely why Mr. Pardo and Mr. Peden ignored the TSSB subpoena and were subsequently sued. The SEC v. Life Partners Inc. and Brian D Pardo is not followed in other states (the best I can tell), and was successful to LPI because the defendants proved at the time there was no post transaction entrepreneurial effort. Well guess what? 17,000 resales and tens of millions of dollars in premium financing relates to a bunch of post transaction entrepreneurial effort! These investments are being managed after the sale. Brian Pardo and Justin Blount (who once clerked for a district court judge that ruled in favor of LPI) authored an amicus brief that will likely be used against them regarding the registration issue.
3) The SEC has not "lost three times trying to control this asset class." The Commission did lose on appeal regarding Life Partners. The facts the court used in making that ruling are different now that there is premium forwarding and the resales. The SEC is clear with there desire to make these investments subject to registration in order to protect the investing public.
4) The class action lawsuits I mentioned have indeed produced negative results for LPI in terms of public awareness. I assume this is one reason why current sales are pathetic. LPI, as you must be aware, is late with filing both the 2011 10-K and the most resent 1Q2012 10-Q. If you read the most recent SEC filings you will see that the company is likely to report loses for both the 4Q2011 and the 1Q2012 based upon declining sales due, in part, to negative publicity surrounding the lawsuits.
These lawsuits have all recently been filed. Some of the suits are likely consolidating. You are wrong in assuming "the shark lawyers smelling blood but they are coming up empty handed." These lawyers have a great amount of evidence even before formal discovery in the form of TDI statistics, a vast amount of advertising material, Mr. Pardo's public comments, the premium forwarding, the resales, etc. The discovery phase of these law suits will be quite interesting since many of the dots will likely be connected! But that has not yet begun. Remember, the wheels of justice grind slowly...
5) Is everything I say slanted? No. I tried to stick to the facts and I even understated some. Please let me know if there is anything factually incorrect about the article. The history of the Dr. Cassidy LEs is fact. The percentage that the LEs are off is an understated fact in my article (many are off by over 100%). The way the fractional product was/is advertised is fact. The premium forwarding and resales are fact. The coming losses are fact (see SEC filings). The SEC Wells notice is fact. The filed lawsuits are factual (and will take years in some instances to conclude). The district court judge that ruled in favor of LPI and recently recued himself from hearing the current cases for being a close friend of Mr. Pardo is a fact. E&Y resigning after Mr. Pardo threatened the firm is a fact. The new accounting firm having only two offices is a fact based upon their web site. The BOD seemingly doing nothing is an opinion, but could very well turn out to be a fact. Taglich Bros. refusing to continue coverage is a fact. Mr. Pardo's family trust being domiciled offshore is a fact. The Wall Street Journal and The Life Settlement Reports negative articles is factual. The State of Colorado fraud suit settlement is a fact. The TSSB suit over the lack of response to a subpoena is a fact. The drop in cash is likely an understated fact. IMO the company now has less that $20 million in cash and cash equivalents after payment of the last dividend. The potential NASDAQ delisting due to the delayed filings is a fact. LPI's margins being far above industry average is a fact. There are a lot more facts I did not include in the article for the sake of brevity.
Offshore Israel: Investing In Natural Gas Where The Commodity Is Still Worth Something [View article]
Gazprom is losing its monopoly in Europe (I am long OGZPY) and is partnering all around the world in an effort to have its ubiquitous paws everywhere. Putin visited Israel for several reasons, and the Leviathan gas field was one of them. Russia stopped arming Syria about the time Iran started sending fighters there. Expect Gazprom to develop the Israeli gas fields and perhaps have a leading edge in working with their recent oil finds. Despite the corruption, an investor should take Gazprom seriously at less than 3x earnings. Monster cheap valuation, cheaper than almost any third world country.
Gas is indeed in a decline, and the stock was punished as a result and has settled for now at the current valuation. At least one analyst recently changed his rating from an overweight to a hold. I don't care. I simply see investor perception changing about Russia, and a rising tide lifting all the ships.
What I didn't put in the article is the chance of a global recession, which is now "100%" according to Marc Faber. Is it possible a recession and a lower gas price is already reflected in the market price of gas and Gazprom? I don't know, but I do know a stock with a 2.7 multiple that has steady revenue will likely drop less than a similar stock with a 15x multiple should we enter a global recession. Meanwhile, an investor can collect a dividend (which may lessen) while they wait for the global economy to improve.
10 Stocks With Yields Over 10% Go Ex-Dividend Next Week [View article]
LPHI? The Texas State Securities Board is trying to shut them down. The TSSB filed suit claiming the firm is in a "dire financial situation". The judge refused to shut them down an appoint a receiver (for now). Depositions will start on Aug. 30th. The judge did stop the firm from dissipating any assets (this includes a dividend) pending the hearing. The court ordered the firm not to destroy books or financial records. This is the #1 firm on your list?
Annaly Capital: Cautious About Its High Yield [View article]
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.
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.
Not All Dividends Are Worth It [View article]
Citron vs. Harbin: 5 Questions Shorts and Longs Should Be Asking [View article]
I have a book that will be published this summer that contains a chapter about fraud. My research determined the amount of fraud in China is massive. For example, how can you have $1 billion + (US dollars) Ponzi schemes using ant farms without someone in the government knowing about it? How can all these RTOs go bust without consequences from the country where each firm is domiciled? China is easily on par with the USA in terms of total fraud. The major exception is with the government, with China being far more corrupt.
Citron vs. Harbin: 5 Questions Shorts and Longs Should Be Asking [View article]
There is alleged to be a fraud with Chinese RTOs (Perhaps something similar is going on here?) that begins with pumping up the price of the stock. Then the chairman, his wife or whoever "borrows" from a friendly bank using a ton of inflated stock as collateral. The loan is non-recourse. Then the bank hedges their bet with PUTs knowing the loan will never be paid off. The stock is eventually sold, the stock price collapses, the bank loses nothing and keeps the family business. Everyone wins but the USA investors. Is that going on here? Is Left right (couldn't resist the pun) or is Left wrong? We'll know by December.
Gazprom Net Income Drops 37%: Should You Be Worried? [View article]
Overstock.com Was Ineligible To File A Registration Statement Last December [View article]
Dividend Champions With Yields As High As 17.5% [View article]
Coffee's Latest Rally May Leave Investors Jolted [View article]
GMCR is indeed expensive, but the only thing that will kill this premier momentum stock is the future earnings expectations dropping since the SEC is dilatory. We will likely have to wait for the next earnings release to see if they are indeed cooking the books, assuming the timing of their CAO hire is timely (they are likely cooking since FCF is still negative and can't be reconciled using CAPEX). IMHO GMCR is going to end badly for many momentum players just like SODA, and will remain nerve wracking to trade and/or short.
Getting back to the article above, coffee prices to the consumer remind me of cable in that the pricing is elastic. The pricing may not be passed along should some players think they can gain market share (and perhaps sell more donuts).
On two occasions I wrote a number of calls on GMCR and hedged (my version of a bear spread) by purchasing double OTM calls of the near month. Both times I was wrong but got bailed out from trading the spread due to the crazy volatility. This reminds me of SODA before it tanked. I am hoping GMCR tanks more than SODA since SODA has no accounting issues related to the "f" word.
Shorting a Stock: 20 Investment Lessons From Life Partners [View article]
"You know now it is illegal to short stock unless you own it? " Gary, that statement says volumes about your understanding of shorting and this stock!
1) The SEC is not "losing the Wells Notice" (btw, it is a "Wells notice"). The Commission is waiting for Life Partners to respond. The purpose of the Wells Notice is to allow a company to defend itself before the Commission decides to act. What the company says in their defense can be used against them in other suits.
2) IMO The State of Texas has a good chance of having
successful results, which is precisely why Mr. Pardo and Mr. Peden ignored the TSSB subpoena and were subsequently sued. The SEC v. Life Partners Inc. and Brian D Pardo is not followed in other states (the best I can tell), and was successful to LPI because the defendants proved at the time there was no post transaction entrepreneurial effort. Well guess what? 17,000 resales and tens of millions of dollars in premium financing relates to a bunch of post transaction entrepreneurial effort! These investments are being managed after the sale. Brian Pardo and Justin Blount (who once clerked for a district court judge that ruled in favor of LPI) authored an amicus brief that will likely be used against them regarding the registration issue.
3) The SEC has not "lost three times trying to control this asset class." The Commission did lose on appeal regarding Life Partners. The facts the court used in making that ruling are different now that there is premium forwarding and the resales. The SEC is clear with there desire to make these investments subject to registration in order to protect the investing public.
4) The class action lawsuits I mentioned have indeed produced negative results for LPI in terms of public awareness. I assume this is one reason why current sales are pathetic. LPI, as you must be aware, is late with filing both the 2011 10-K and the most resent 1Q2012 10-Q. If you read the most recent SEC filings you will see that the company is likely to report loses for both the 4Q2011 and the 1Q2012 based upon declining sales due, in part, to negative publicity surrounding the lawsuits.
These lawsuits have all recently been filed. Some of the suits are likely consolidating. You are wrong in assuming "the shark lawyers smelling blood but they are coming up empty handed." These lawyers have a great amount of evidence even before formal discovery in the form of TDI statistics, a vast amount of advertising material, Mr. Pardo's public comments, the premium forwarding, the resales, etc. The discovery phase of these law suits will be quite interesting since many of the dots will likely be connected! But that has not yet begun. Remember, the wheels of justice grind slowly...
5) Is everything I say slanted? No. I tried to stick to the facts and I even understated some. Please let me know if there is anything factually incorrect about the article. The history of the Dr. Cassidy LEs is fact. The percentage that the LEs are off is an understated fact in my article (many are off by over 100%). The way the fractional product was/is advertised is fact. The premium forwarding and resales are fact. The coming losses are fact (see SEC filings). The SEC Wells notice is fact. The filed lawsuits are factual (and will take years in some instances to conclude). The district court judge that ruled in favor of LPI and recently recued himself from hearing the current cases for being a close friend of Mr. Pardo is a fact. E&Y resigning after Mr. Pardo threatened the firm is a fact. The new accounting firm having only two offices is a fact based upon their web site. The BOD seemingly doing nothing is an opinion, but could very well turn out to be a fact. Taglich Bros. refusing to continue coverage is a fact. Mr. Pardo's family trust being domiciled offshore is a fact. The Wall Street Journal and The Life Settlement Reports negative articles is factual. The State of Colorado fraud suit settlement is a fact. The TSSB suit over the lack of response to a subpoena is a fact. The drop in cash is likely an understated fact. IMO the company now has less that $20 million in cash and cash equivalents after payment of the last dividend. The potential NASDAQ delisting due to the delayed filings is a fact. LPI's margins being far above industry average is a fact. There are a lot more facts I did not include in the article for the sake of brevity.
Offshore Israel: Investing In Natural Gas Where The Commodity Is Still Worth Something [View article]
Gazprom: A Mega-Cheap Valuation [View article]
What I didn't put in the article is the chance of a global recession, which is now "100%" according to Marc Faber. Is it possible a recession and a lower gas price is already reflected in the market price of gas and Gazprom? I don't know, but I do know a stock with a 2.7 multiple that has steady revenue will likely drop less than a similar stock with a 15x multiple should we enter a global recession. Meanwhile, an investor can collect a dividend (which may lessen) while they wait for the global economy to improve.
10 Stocks With Yields Over 10% Go Ex-Dividend Next Week [View article]