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  • Two charged with insider trading on Herbalife [View news story]
    Hi Dampflok,

    Not necessarily.

    Some insider trading cases are complex and the SEC treads very carefully and slowly. This is especially true when multiple positions are involved. Sophisticated "insiders" have many "tricks" up their sleeves. They learn to obfuscate their activity.

    For instance, placing numerous trades (some winning, some losing) all around the trigger date, making it appear more random, etc..

    This particular case seems like it was a slam dunk. A "nobody" all of a sudden buys lots of puts. Probably no previous trading pattern in the stock. SEC can goe to court not needing to tie lots of obfuscations together.

    Everything's a guess, but no one is in the clear until the Statute of Limitations runs out (5, or 6 years depending upon factors, as long as it's not patterned)
    Oct 1 10:17 AM | 5 Likes Like |Link to Comment
  • Two charged with insider trading on Herbalife [View news story]
    Hi Clayton,

    Many ways to find out, it would only be speculation.

    That said, try this on ... the SEC may be conducting a much larger insider trading examination. If so, they would look at sales/purchases around trigger dates. This one came up first, as it's pretty obvious.

    It may mean there are more to come.
    Oct 1 08:51 AM | 4 Likes Like |Link to Comment
  • Major Stock Market Selloff Looms As The Fed's QE3 Ends [View article]
    The market goes up....the market goes down.

    There will always be moves of 20% or more in both directions.

    So, simply stating what everyone knows provides no helpful information.

    Tell me WHEN the correction will come and then you've got something of real value. All this speculation about whether it will be 10%, 20% or more is not anywhere near as valuable as saying if it will be next week, next month, next quarter or next year.
    Sep 28 03:39 AM | 3 Likes Like |Link to Comment
  • Master Limited Partnerships And Your IRA [View article]
    Hi Philli,

    Agree.

    It has been my experience that the IRS goes 99-44/100% by reporting.

    If the item in question is not reportable (cash salaries and barter would be an example) then the likelihood of getting away with not declaring it is pretty good. Audit agents mostly just "match" up reported items with documentation. Comprehensive audits are few and far between

    The issue with recapture is that it is not currently reported. It is much like stock basis, which, until recently, was not reported (only sales proceeds). People got away with murder. That led to IRS changing reporting requirements and now basis is also reported.

    I think at some point the IRS will just require the MLPs to file the supplemental schedule with IRS and then the IRS can just do a simple computer "match-up".

    I know the IRS is looking at the whole MLP taxation issue and it is reasonable to believe that something will be done at some point. When and what... your guess as good as mine.
    Sep 11 03:19 PM | Likes Like |Link to Comment
  • Master Limited Partnerships And Your IRA [View article]
    Hi Philli,

    It seems that their answer is just "gobbely-goop". The ordinary losses are applied each year to shelter the distribution from tax. Only losses in excess of distributions end up being carried forward and they can be applied to offset recapture.

    Any way you slice it, the distributions end up being subjected to UBTI, either through the k-1 on an annual basis, or the 990-t, to the extent they were not reported on the annual k-1.

    Recapture is absolutely taxable, one need only look at the instructions to 990-T, it says so in plain language.

    You are also right, in that, most MLM's are structured in such a way to shelter current distributions and therefore cause sizeable recapture at point of sale.
    Sep 11 11:33 AM | Likes Like |Link to Comment
  • Master Limited Partnerships And Your IRA [View article]
    Hi Phili,

    Thanks.

    Currently the "reporting mechanisms" make it difficult for the IRS to catch-up. In this sense the link is accurate. The UBTI recapture is reported on the supplemental sales schedule and not the k-1, so you're "on your honor" to carry it forward and pay the tax.

    However...two things....

    1) It is an audit lottery

    2) The reporting requirements are likely to change in the future. They have recently changed regarding options, stocks, etc.. All the IRS need do is require the UBTI recapture be reported on the k-1 or require the supp.schedule to be filed with IRS. Then...party over.

    It isn't a matter of "if", but "when".

    Each individual investor must weigh this with the other considerations and be willing to face the good or bad.

    At least you have the info to make an informed decision.
    Sep 10 09:56 PM | Likes Like |Link to Comment
  • The Importance Of 'Suggested Retail Price' To The Herbalife Fraud [View article]
    Hi six,

    I think your reasoning is problematic. Anyone that truly understands what law suits require would easily understand why HLF does not sue.

    In order for HLF to prevail in a law suit it would have to prove, as a minimum, that the statements are false... for instance that it is NOT a pyramid but a lawful MLM.

    The determination of whether or not HLF is a pyramid is likely to be resultant from the current FTC and other agency investigations. If these agencies "clear" HLF, then HLF would be in a much better position to assert false statements and sue, if they wanted to.

    Furthermore, since these investigations may include criminal charges, no Judge would hear a civil case until such time as and when the criminal proceedings have been dealt with.

    So, in short, it would be premature for HLF to sue until the FTC, et al, are settled. To do otherwise puts the cart before the horse.

    Ones desire to keep the horse before the cart is not evidentiary of anything other than common sense.
    Sep 4 08:44 PM | 5 Likes Like |Link to Comment
  • The Bull's Self-Delusion [View article]
    .......".......People forget that interest rates are the heart, soul, and life of the free enterprise system, and that falling rates are reflective of the demand for money..........."

    This is not totally accurate.

    Whereas interest rates may be .."the heart....free enterprise..." ......

    Falling rates are a function of supply in relation to demand, not, as you suggest, diminishing demand. For instance, demand can remain constant and interest rates will go up/down by adjusting the supply.

    Now, as a matter of differing opinion, I would argue that "profit" not "interest rates" are the "heart, sole and life of the free enterprise system", but I acknowledge my opinion is not crafted with an intent to support an otherwise flawed thesis.
    Sep 2 08:57 AM | Likes Like |Link to Comment
  • Chapman And Hempton On Herbalife: The Blind Are Leading The Blind [View article]
    Hi QTR,

    ........"...........he will eat the premiums on a new set of options, if necessary, to continue his Herbalife short. Hey Bill, me too! ........."

    How's the call option premiums doing that you bought pre-earnings?

    Are these the premiums you're talking about "eating" or is it a new set of option premiums?

    Do you have a record of how much you've "eaten" so far and will you let us know?
    Aug 17 08:41 AM | 10 Likes Like |Link to Comment
  • Ackman's Gravitas Statistically Provable: Look Out Below [View article]
    HI QTR,

    How's the call option you purchased pre-earnings doing? Or was your article misleading?
    Aug 14 09:54 AM | 8 Likes Like |Link to Comment
  • Why It Still Makes Sense To Buy MLPs [View article]
    .........."........... large portions of the payments to investors from MLPs might not even be taxable until the units are sold. Not only does this enhance compounding by deferring taxes, this might also convert current income into a future capital gain,.........."

    Sorry, wrong.

    Whereas you're correct in saying that depreciation, etc., shelters current income payments form taxation, upon sale, these amounts are "recaptured" at ORDINARY INCOME rates, not capital gains.

    One needs to factor in the effect of paying a deferred ORDINARY INCOME rate vs. other investments that have the potential to receive qualified dividends at favorable rates.

    Those that are interested can visit (http://seekingalpha.co...)
    Aug 8 09:40 AM | 8 Likes Like |Link to Comment
  • Herbalife Insiders Are Buying, But I'm Not Buying It [View article]
    HI QTR,

    What ever happened to the call you bought pre-earnings?
    Aug 7 10:05 AM | 3 Likes Like |Link to Comment
  • Linn Vs. LinnCo: Is It All About Taxes? [View article]
    Hi Rip,

    Exactly, that's why he needs to keep copies of the k-1's so he can show what they were.
    Aug 6 01:28 PM | Likes Like |Link to Comment
  • Linn Vs. LinnCo: Is It All About Taxes? [View article]
    Hi Bill,

    If your UBTI is under $1,000, no need to file anything.

    Just keep track of everything. You may have more than $1000 UBTI on sale and any loss carry-forwards will help to offset them.
    Aug 6 09:06 AM | Likes Like |Link to Comment
  • 'Deep Blood Kettle', Ockham's Razor, Faith And Reason [View article]
    Hi Willy,

    ......"....I didn't substitute COGS for S/2 because S/2 is not the only value of COGS, as in your "proof" where it equals a 42% discount to SRP or 58% of SRP......."

    WRONG, again. "...Tangled web...". COGS is exactly the right term if you are trying to express multiple values. It covers all values 50%;58% or whatever. It is non-specific... whatever COGS is, it is. Instead of substituting the best possible answer, the only answer that incorporates ......"S/2 is not the only value...." correctly and without ambiguity, you chose a "phrase" that is totally deceptive and when viewed at face value means something completely different than what you claim to "intend. At least that's your "story" and you want me to buy it.

    Next: ...".....->"My recollection is faulty here."

    Nice dance. "....Tangled Web..."

    You are responding to my specific request to show WHERE I used "many". Saying your recollection is faulty was not an admission of error. It is simply saying that you can't remember WHERE you said it. You repeated a similar claim in another comment when you said it will take a while to find "many" and you'll get back to me ... something you never did.

    .."... (me)This is just too easy. I was using a substitute phrase for Kristina just to show you how absurd your substitution game is played...

    Boy, you really don't get it, do you? I made a simple typo and I could have just said "oops, sorry". Instead, I took the opportunity to expand upon my subject matter by illustrating how ridiculous your "phrase substitution" game is .... instead of acknowledging simple , benign, error one can rise to a level of absurdity.

    So, Katrina, instead of Kristina, was a mistake. But my statement about having used Katrina as a "phrase substitution" was deliberate and meaningful.

    See how easy it is, if one is just willing to acknowledge a simple benign error. Don't you wish you had done the same?
    Aug 1 09:25 AM | 3 Likes Like |Link to Comment
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