Pine Research & Trading

Long/short equity, special situations, arbitrage, options
Pine Research & Trading
Long/short equity, special situations, arbitrage, options
Contributor since: 2013
Hi Doug, first, I think your work here on CEF's is great and it has helped me. Thanks!
According to cefconnect (, BGR has UNII of -$3.32. What are your thoughts about that? Is that a red flag?
David Merkel wrote a piece on this at the end of March. I think it is worth looking at regardless of one's position and point of view.
I think pretty highly of his writing in general. I have no axe to grind with TWGP: no position and no opinion. I began to get involved and then read the article and realized I would not be able to make a good enough decision on my own without more preparation than I could afford to put into it.
what about the scenario where a dentist builds clientele through Birner and then walks out with their book of clients? is this something that management addresses? i'd imagine that it happens at least somewhat regularly. it may be that it is okay and priced in -- like athletes prior to free agency.
If you liked the idea, but wanted better value -- it is available as Chorus is now trading CAD $3.59.
ZF and ZTR are continuing stock buybacks. they've bought quite a bit over the past year or so and they are planning on buying more. currently ~12% discount for ZF.
Great tip, thanks. Using it right now.
Again, thanks for the input. As I don't have the experience in the industry as you do, it is good to get your perspective.
Hopefully, I was pretty clear in the article about my view of Chorus stock: it is attractively valued with a margin of safety and pays a great dividend. With the caveat that there are real risks and belongs as a portion of a portfolio -- not to bet the farm.
Thanks for the link. I'll take a look. I have heard the same anecdotally, but it is good to have something to look at.
APF running a tender for 20% of their outstanding shares.
To highlight concerns for airlines that don't have as good a franchise as Chorus:
(Note this is from the Onion and is meant to be humor, not reality).
(Thanks Chris DeMuth)
Thanks for reading and for the kind words.
I started buying CHR in 2013 prior to the pop after the arbitration decision. I have actually increased my position as I learned more about Chorus (at around current prices).
Yes. The editors noted the illiquidity of CHRVF and I recommend transacting in CHR A shares. Due to technical reasons, SA was unable to list this under CHR-A so that CHRVF was the only choice.
The withholding tax is a great point. Thanks.
@caapt727, you make 2 different points. first, the airline business has been traditionally lousy. true enough. i've made clear that Chorus/Jazz does not have a traditional airline. they operate on a targeted margin basis based on flight hours and other inputs. if you feel that Chorus is still trapped in an old airline model, i'd argue the evidence of the CPA and the excellent record of consistent profitability does an excellent job of showing how Chorus is NOT your typical airline. so while i agree with your quote and otherwise avoid airlines, it does not apply to Chorus. in fact, i'd argue that it is this perception that partly contributes to the value in Chorus equity.
your second point, that if they smaller carriers pay more that their advantage decreases is a truism. the question is whether Chorus is having a problem keeping or obtaining pilots. please provide evidence either way of this (i really mean it, i'm not trying to be argumentative, i very much want to see the evidence -- that is what is great about comments).
one final thing -- Chorus operates under the Air Canada umbrella. the CPA operates to the advantage of both companies. Air Canada definitely will work to squeeze Chorus and that is why they went to arbitration. But these two companies are intertwined and Air Canada (at least for now) does not have an interest in putting Chorus out of business.
thanks for reading and for your comments (and to Alexander Valtsev)
you might think that selling the puts was a good idea. that's fine. but i suggest a little intellectual honesty: put selling is a bet on the market.
by my calculations, these puts were sold at market highs and volatility lows. to me, that is the opposite of "the price is right." merely because a trade works out does not qualify it as a good trade.
if you still don't agree that put selling is a bet on the market, i'd suggest you do a little research on options. and it doesn't matter whether they are european or american style. the puts are clearly worth more with the market lower than with the market higher. and even if he didn't need to post margin on them (good for him!), it still impacted his income statement.
good luck.
"These puts have generally been misunderstood. They were not bets on the market; they were insurance-type contracts that transferred volatility from the insureed to Berkshire for a premium."
Really? It was definitely a bet on the market. That's what puts are. Their value fluctuates based on the value of the index and the price of volatility. And that is why Berkshire took such huge mark to market losses on them when the market tanked and volatility exploded. The losses directly impacted the book value of Berkshire.
Whether the accounting was conservative or not does not impact the post-mortem of the trade. But it does note how Buffett is careful enough to not let even his bad trades keep him from not opening shop the next day -- just like how he does not guarantee subsidiaries debt by BRK.
don't confuse the outcome with the decision process.
overall, he is demonstrably very good at making decisions. and is overwhelmingly good at documenting not only results but how to make good decisions in his letters. that is what makes them valuable. not only that, but he is generally open about when he makes a mistake. i think readers of his letters would benefit more from understanding this properly.
"Give Buffett credit, though, because he structured some clever trades that have made a lot of money. Value investing won vs. option pricing. "
I read this as referring to when he sold puts in 08. Those were not clever trades. Nor were they value investing. That trade was the equivalent of buying in March 2000. He sold at the high of the stock market in price and the low in volatility in options. His follow-up rant about how options traders don't know how to price options because they are based on volatility and the market "has" to go up, made him look like a rube.
I have no issue with giving Buffett his due as an investor. He deserves every bit for his acumen. But there was no way this one could be classified as a "clever" trade. And honestly, I've read more than a few of your articles. You focus on process and don't judge based on outcomes. I'm surprised you had this take on it.
Great stuff. funny timing, too. have started Schilit's book and was just thinking that it should be part of the whole process/checklist.
yeah, i suspected as much. let me know if you find a good source. i'm planning on creating a substitute for bloomberg professional on a shoestring budget. this kind of info would be helpful. if i find something, i'll pass it along. disappointing that cefconnect doesn't allow for some sort of download capability.
I'd be interested in the risk adjusted return and sharpe for the NAV's. i think that the price data is good to know, too, but it is at least as important to know the NAV data.
one of the reasons that it is attractive to look at CEF's is the volatility surrounding the NAV. that is the "good" vol; i'd like to know the measure of the fund's investments.
thanks for the article.
Right now reading via audiobook "I Know who you are and I saw what you did" by Lori Andrews. subtitled, "social networks and the death of privacy."
It is not necessarily the best read, but she highlights some of the egregious practices by current internet players. i thought i was both aware of what was going on and paranoid. i was off by something like a factor of 10. i found out that a real estate site (wells fargo, i think) was showcasing potential homes based on the racial statistics of the zip code of the user. i had kinda thought we ditched that 50 years ago or so.
Am also reading Rex Stout, "The Doorbell Rang." It is a Nero Wolfe mystery. Very enjoyable. Picked it up because it is also revolving around the theme of privacy but this time in the 60's and the FBI.
I'll also second Thinking Fast and Slow.
Also on audiobook, The Iliad by Homer, translated by Stephen Mitchell. My son and i spend a lot of time in the car together due to ice hockey commitments (his). Alfred Molina reads it well. I had figured that if i played it while he was in the car, he would get some good chunks of it and that would be great. it was a very proud moment when, early on, he insisted that i not go on ahead without him so that he could hear it in its entirety. It is my first time reading the Iliad. plenty of action and plenty of thought provoking. some don't like the mitchell translation but it fits my purposes and is enjoyable.
now i have to find the unbearable lightness of being!
Congrats. Wishing the best to the whole family.
And for all of you unfamiliar with Greenwich Hosp, you can rest assured that Chris is a man who takes care of his wife. If there is any hospital on earth that can maximize the comfort of a woman in childbirth, that is it (my first was born there).
hysterical. thx.
are there financials available for bombay stock exch?
Great post. Also good to find the link to the Katsenelson post. Thank you for bringing up an important, but often ignored topic.
i'll echo that. thanks stepppo
The quote from above is from the yahoo/reuters article. The bloomberg news is a bit more mixed:
A U.S. Food and Drug Administration advisory committee voted 12-6 that Sanofi provided substantial evidence of the drug’s effectiveness for treating patients with relapsing forms of MS, and 11-6 that the company’s trials weren’t conducted well enough to assess the drug.
“That seems contradictory,” Mark Clark, an analyst with Deutsche Bank AG in London, said by phone today. “Either they were adequate and proved something, or they were inadequate and proved nothing. We’re somewhat confused.”
interesting that the CVR's have not moved as much as i would have thought (i.e, up 7c as i write)
"In a surprise decision, an advisory panel to the Food andDrug Administration voted 14 to 0 that the drug should beapproved despite its potential to cause cancer and other seriousconditions."
is this annotated by you?
why choose? enjoy the buffet.