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  • Why I Haven't Sold My ARCP Shares... Yet [View article]
    American Realty's business model relies on pushing fee-laden products onto ill-informed retail clients through brokers with more interest in fees than their client's well-being. Therefore, why would you be surprised if the same casual disregard for others also applied to their own investors?
    Nov 10, 2014. 06:10 AM | 1 Like Like |Link to Comment
  • Captive Audience Pays Big Dividends - Lock In 5.6% Yield With Corrections Corp. Of America [View article]
    Woody, nice article. We have liked CXW for quite a while, written about it on SA. We think you're correct.
    Mar 11, 2013. 04:28 PM | Likes Like |Link to Comment
  • How We'll Painlessly Avoid The Fiscal Cliff [View article]
    jasoncarver you need to look at the 10Q. Book value $189,074MM; shares outstanding 1,652,388 (Class A equiv). BVPS $114,425 in Class A terms, $76.28 in Class B terms. They've said they'll pay no more than a 10% premium top BVPS if buying back stock.
    Nov 15, 2012. 05:00 PM | Likes Like |Link to Comment
  • Long Gold Miners/Short S&P 500 ETF Pairs Trade [View article]
    That's not as good. You need twice the equity (or you borrow on margin) and the hedge ratio requires more frequent adjustments. I don't think long SH is more efficient than short SPY if you run through the cost of financing correctly.
    Sep 10, 2012. 08:29 AM | Likes Like |Link to Comment
  • Manchester United: It Takes A Brit To Explain Why America Has Been Fooled [View article]
    Tom, what a great article! And not just because I'm an Arsenal fan (though I don't own their shares either). To think MANU is more egregiously priced than FB! And being a few years older than the writer (born 1962) I do recall the Dennis Law goal against Utd that sent them down. I remember Law was in tears after scoring.
    Aug 28, 2012. 08:01 AM | Likes Like |Link to Comment
  • The Principal-Agent Problem At Coeur D'Alene [View article]
    On June 26 we were long CDE. We no longer are.
    Jun 29, 2012. 10:18 AM | Likes Like |Link to Comment
  • The Principal-Agent Problem At Coeur D'Alene [View article]
    Venerability gives us too much credit. We are invested in the mining sector which generally looks cheap, and are not bearish on gold/silver at all. We just aren't invested in CDE, same as their management.
    Jun 29, 2012. 09:52 AM | Likes Like |Link to Comment
  • The Principal-Agent Problem At Coeur D'Alene [View article]
    Krebs' compensation information is from CDE's proxy statement. I highly doubt the company will be sold to a friendly buyer. It wouldn't make any sense, Krebs wouldn't make any money out of it. Best case for investors is a hostile buyer shows up motivated by the steep discount to NAV. The same is true of many names in the sector. There's no reason to expect CDE's management will do anything to enhance shareholder value. It would be counter to their interests. Also note that former CEO Wheeler has 0 shares. He obviously understands where management's attention will be focused.
    Jun 27, 2012. 08:44 AM | 1 Like Like |Link to Comment
  • J.C. Penney: Valuing A Company Undergoing An Extraordinary Transformation [View article]
    Thanks Ben. You are doing exactly what I hoped readers would do. I wanted to set the framework for how to value an investment in the equity as if you owned the entire business forever. To avoid assuming what multiples the market would pay sometime in the future and be able to compare it across asset classes, I analyzed the equity as a perpetual security (but looking at in two stages with higher growth initially and then applying a terminal multiple based on lower long-term growth for out-years is an even better way). It’s best to use the long-term government debt for a starting point when determining the appropriate discount rate (~3% today). Using this platform for analysis, one must provide a best guess as to what the new jcp will look like which may resemble the operating performance of its own past, that of its competitors today, a new concept that emulates the most profitable retailers today, or something else. Then they should determine for themselves the additional discount for uncertainty, what future earnings may be and the likelihoods of various scenarios they foresee.

    May 23, 2012. 12:18 PM | Likes Like |Link to Comment
  • The Value of Hedge Funds: 2 Differing Conclusions [View article]
    TonyP4 you'd like my book!
    May 9, 2012. 08:40 AM | Likes Like |Link to Comment
  • The Value of Hedge Funds: 2 Differing Conclusions [View article]
    Rhodri, I am the author of The Hedge Fund Mirage. Thank you for taking the time to write about my book, and to contrast my findings with those of the AIMA/KPMG publication.

    The crux of the issue is whether investors deciding on an allocation to a portfolio of hedge funds should use the AIMA/KPMG methodology of time-weighted returns, or the asset-weighted approach I recommend. You note that best practice is for individual managers to report time-weighted returns and most if not all do. But for the industry as a whole, since there's such a huge difference between time weighted and asset weighted results, and since there is correspondingly such a reliable negative correlation between industry AUM and industry returns, why isn't it prudent for investors to consider whether today's hedge fund industry as a whole is over-capitalized? That size is the enemy of performance is widely recognized by asset managers; isn't it reasonable for investors to consider the same possibility for a whole industry? Especially one that theoretically relies on extracting "alpha" from public markets. Or put another way, what industry IRR would be sufficiently poor for you to conclude that hedge funds were too big?

    In the 90s hedge fund investors did very well. There just weren't that many of them. Since then hedge funds appear to have demonstrated that the absolute limits to alpha have been reached, based on the last ten years. Your article doesn't directly address this fundamental issue.

    If investors as a whole haven't made money in hedge funds - and I'd note that the AIMA/KPMG study doesn't actually address this issue since it focuses only on a theoretical, equally-weighted portfolio initiated in 1994 - shouldn't that provoke a reassassment of conventional wisdom? I don't believe you can find credible research to demonstrate that investors in aggregate have done substantially better than treasury bills. Indeed, my book was completed before 2011's sorry results were in, so it's now even worse!
    May 9, 2012. 08:27 AM | 3 Likes Like |Link to Comment
  • Chesapeake's CEO Once Again Shows Poor Judgment [View article]
    I wonder how CHK's apologists feel now that the special deal Mclendon had to invest in wells with undisclosed debt has been acknowledged by the Board as flawed and stopped, and the news that he's been running a hedge fund.
    May 2, 2012. 10:03 AM | 1 Like Like |Link to Comment
  • Chesapeake's CEO Once Again Shows Poor Judgment [View article]
    steve miller 70, the $112MM compensation figure is widely reported in the media, lifted from a recent lawsuit.

    You'll note if you read carefully that I said he was paid that amount in 2008, not 2010.
    Apr 22, 2012. 05:25 PM | Likes Like |Link to Comment
  • Chesapeake's CEO Once Again Shows Poor Judgment [View article]
    McClendon is cherry picking among the assets, not the wells. CHK doesn't consist only of wells. If it's not a conflict why isn't there a CHK share class that represents simply the economic interests in the wells, allowing other shareholders to invest on the same terms as the CEO? We've never invested with him, never will.
    Apr 19, 2012. 07:53 AM | Likes Like |Link to Comment
  • MLPs And The Growth Of Natural Gas Infrastructure [View article]
    Numbers, I have no insight on the IRA question, it's really a tax issue. Conventionally MLPs are held in taxable accounts and therefore benefit from the tax-deferred nature of the distributions. MLPTX and other similar ETFs pay corporate income tax, so the conversion of K-1s into 1099s comes at a considerable price. If you compare MLPTX with AMZ (the Alerian Index) you'll quickly see that MLPTX delivers about 65% of the return of the benchmark. Investors with sufficient assets to construct a diverse portfolio of MLPs ($500K and up) are better off to own them directly.
    Mar 9, 2012. 01:51 PM | Likes Like |Link to Comment