American Capital: A Unique BDC With No Dividend And A Large Buyback Program [View article]
Excellent article, Albert. My feeling has been that ACAS should fall a bit with AGNC, but more like 1/4 to 1/6 of the AGNC drop, so unless interest rates rising causes a problem, the drop is likely overdone. From a long-term hold perspective, you can find a silver lining in the drop, as the company is buying back at $13 per share instead of $15 per share.
Factset's Buyback Quarterly is a must-read for followers of corporate share repurchases. In Q4, buybacks rose 9.6% even as markets posted record highs, leaving Mike Shedlock to wonder: "Is this yet another case of 'here we go again'?" [View news story]
The S&P was never even within 100 points of record highs in Q4, and was 200 points (13%) off of record highs in the middle of Q4. Everything we've seen since indicates companies were quite brilliant to have been buying in Q4.
A very bullish presentation from Longboard Asset Management helped Tesla (TSLA +7.4%) rally today. Calling Tesla the auto industry version of Apple (others have made that analogy in some form) due to its brand, management, and disruptive impact (among other things), Longboard predicts shares will hit $100 within 18 months and $200 within 5 years. The firm expects Tesla to grab 80% of the global EV market, praises the company's engineering skill, and expects a heavy short interest (44% of the free float is shorted) to help fuel a rally. (slides) Update: SA commenters report having seen Longboard's presentation earlier. However, it was only today that it received media coverage. [View news story]
I'm pretty sure Apple doesn't have negative earnings.
Magnum Hunter's $401 Million Eagle Ford Sales To Penn Virginia Helps Both Companies' Growth Plans [View article]
Why would you think that MHR is selling at a discount? The author points out above that MHR sold at a price that was more than 2x what Sanchez just paid for their recent Eagle Ford acquisition, per BOEPD.
Do you know what MHR bought this acreage for? $2M. Yes, two million dollars. Three years ago. Since then they've spent $263M developing the acreage and have pulled out $80M in net cash flow.
I call that a nice return on investment.
This also confirms what a steal SN pulled off in their deal. Long both.
Texas Hold ‘Em Tournaments And Value Investing [View instapost]
That would take a long time to expand on, but the short answer is that Sklansky is an actuary turned poker player, whereas a lot of the others are poker players trying to explain complex probabilities.
One example is that Helmuth ranks small pocket pairs far higher than math would suggest, but he makes them work for non-math reasons. First off, they're binary - if you don't flop your set, you're out, and if you do flop your set, they're relatively simple to play, so you cut down on the mistakes you make with those hands. Second, when the flop comes K-9-4 and you show aggression, most opponents put you on a pair of Kings rather than a set of 4s, so there's very often a stealth factor to your true strength.
Texas Hold ‘Em Tournaments And Value Investing [View instapost]
It's a bit unbelievable to me how many books on poker use flawed math, ranging from minor / insignificant to major / contradictory. It's also funny that the authors who do get the math exactly right are not in the top tier of players in the professional world. Only Sklansky and Malmuth have the math right. However, even the books that have the math the furthest off, like Helmuth, have a lot of useful advice outside of the math.
Your article is terrific, and I have found a few other similarities between investing and poker in my experience. First, alongside Expected Value is always variance. An out-of-the-money call option and a utility stock could have the same EV, but you might have a 60%+ chance of losing your entire investment on the former. I liken Hold Em tournaments and no-limit games to high-beta investment choices, and 20-hour grinds in a limit ring game to low-beta investment choices.
Second, the bad beats are very similar in the two. In both, you find yourself in situations where you should have won, only to find something very unlikely happened at the worst possible time. It's a tough feeling to live with, because there are no offsetting situations where you should have lost and got lucky to win, because in both poker and investing, if you've identified a negative EV situation, you've exited.
Third, I find a strong similarity between being up big on a stock and realizing you've got the nuts. The strategy of maximizing that big win contains the same exhilaration and considerations in both arenas.
Ellington Financial (EFC) reports estimated book value of $24.52/share on Feb. 28. This is down from $25.69 at the end of January, but the company paid out $1.52 in dividends during the period. The stock price is $24.90, putting the shares at a premium to book for the first time in recent memory. (PR) [View news story]
It was trading at a premium to book for the last two weeks of February prior to the dividend.
American Capital: A Unique BDC With No Dividend And A Large Buyback Program [View article]
Factset's Buyback Quarterly is a must-read for followers of corporate share repurchases. In Q4, buybacks rose 9.6% even as markets posted record highs, leaving Mike Shedlock to wonder: "Is this yet another case of 'here we go again'?" [View news story]
With Plenty Of Cash, Hydrogenics Is A Buy [View article]
A very bullish presentation from Longboard Asset Management helped Tesla (TSLA +7.4%) rally today. Calling Tesla the auto industry version of Apple (others have made that analogy in some form) due to its brand, management, and disruptive impact (among other things), Longboard predicts shares will hit $100 within 18 months and $200 within 5 years. The firm expects Tesla to grab 80% of the global EV market, praises the company's engineering skill, and expects a heavy short interest (44% of the free float is shorted) to help fuel a rally. (slides) Update: SA commenters report having seen Longboard's presentation earlier. However, it was only today that it received media coverage. [View news story]
Magnum Hunter's $401 Million Eagle Ford Sales To Penn Virginia Helps Both Companies' Growth Plans [View article]
Do you know what MHR bought this acreage for? $2M. Yes, two million dollars. Three years ago. Since then they've spent $263M developing the acreage and have pulled out $80M in net cash flow.
I call that a nice return on investment.
This also confirms what a steal SN pulled off in their deal. Long both.
Texas Hold ‘Em Tournaments And Value Investing [View instapost]
One example is that Helmuth ranks small pocket pairs far higher than math would suggest, but he makes them work for non-math reasons. First off, they're binary - if you don't flop your set, you're out, and if you do flop your set, they're relatively simple to play, so you cut down on the mistakes you make with those hands. Second, when the flop comes K-9-4 and you show aggression, most opponents put you on a pair of Kings rather than a set of 4s, so there's very often a stealth factor to your true strength.
Texas Hold ‘Em Tournaments And Value Investing [View instapost]
Your article is terrific, and I have found a few other similarities between investing and poker in my experience. First, alongside Expected Value is always variance. An out-of-the-money call option and a utility stock could have the same EV, but you might have a 60%+ chance of losing your entire investment on the former. I liken Hold Em tournaments and no-limit games to high-beta investment choices, and 20-hour grinds in a limit ring game to low-beta investment choices.
Second, the bad beats are very similar in the two. In both, you find yourself in situations where you should have won, only to find something very unlikely happened at the worst possible time. It's a tough feeling to live with, because there are no offsetting situations where you should have lost and got lucky to win, because in both poker and investing, if you've identified a negative EV situation, you've exited.
Third, I find a strong similarity between being up big on a stock and realizing you've got the nuts. The strategy of maximizing that big win contains the same exhilaration and considerations in both arenas.
I'm sure there are more....
March Madness Trading Challenge [View instapost]
March Madness Trading Challenge [View instapost]
March Madness Trading Challenge [View instapost]
March Madness Trading Challenge [View instapost]
Ellington Financial (EFC) reports estimated book value of $24.52/share on Feb. 28. This is down from $25.69 at the end of January, but the company paid out $1.52 in dividends during the period. The stock price is $24.90, putting the shares at a premium to book for the first time in recent memory. (PR) [View news story]
March Madness Trading Challenge [View instapost]
Exelon Cuts Dividend, Market Yawns [View article]
QR Energy Offers An 11.1% Yield, Backed By Hedges [View article]