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JWG

JWG
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  • 2 Ways To Play Innovation In The Titanium Pigment Industry [View article]
    I own TROX and it's been a decent investment. I didn't know about this. Very interesting, thanks. Good article.
    jg
    Jul 7, 2014. 06:01 PM | Likes Like |Link to Comment
  • American Capital, Ltd: A Great Investment Opportunity As The Business Development Corporation Transforms Into An Asset Manager [View article]
    The simplest case is that the shares of old ACAS cease to exist, and for each share of old ACAS that you owned, you get some number of shares in each of the new entities. But there are a zillion ways to fiddle with that, to maximize the value to management and shareholders.

    In other words, I don't know (:-). Realistically, management doesn't know either; that's what they think about every day, that and the timing.
    Jul 4, 2014. 03:08 PM | Likes Like |Link to Comment
  • American Capital, Ltd: A Great Investment Opportunity As The Business Development Corporation Transforms Into An Asset Manager [View article]
    I think the point is that they will not do so until they reorganize.

    Then "they" i.e. ACAS will be redefined, likely by splitting up into several pieces, and likely one of the pieces will be a more conventional BDC with a dividend.

    But obviously a lot of things can happen between now and then which might change the equation.
    Jun 26, 2014. 11:43 AM | Likes Like |Link to Comment
  • Passive Vs. Active: Debating International Small Caps [View article]
    Dear Abby,

    One question: Are the alphas shown in your table net of fees?

    And a discussion: Alpha is by definition performance in excess of average, no? So "average alpha" is approximately zero, more or less by definition, no?

    So it seems rather pointless to me to discuss the average active fund's alpha. Or put another way, there is no reasonable rationale for picking an active manager unless you assume he's better than the average active manager.

    (Of course his alpha has to be greater than the excess fees he charges, where "excess" refers to the difference between his fees and those of an inexpensively managed index fund.)

    But the highest performing funds, chosen with benefit of hindsight, routinely produce performance miles beyond their excess fees (even though those fees are huge compared to index funds, like 2% and even more). The whole problem reduces to whether you believe their out-performance will persist (or maybe whether you can predict the next shooting star).

    Long OBIOX, and dramamine.

    /jwg
    Jun 23, 2014. 11:15 PM | Likes Like |Link to Comment
  • Bitcoin Seems To Be An Unstoppable Force Of Nature, Not Unlike The Jet Stream [View article]
    Don't be naive. This is not a software problem, it is a political problem. Politics trumps software, always, although it usually takes a few years. For example, governments are slowly gaining control over the internet, worldwide. You'd have to be blind not to see it.

    Enforcement: the gov't starts with a few obviously bad actors (drug dealers, terrorists) and delegitimizes the use of BitCoin. Then it demands more regulation and control. There goes the anonymity. Then choose a few large corporations who aren't paying the tax. Delegitimize them publicly as evil tax evaders, then bust them for a fine that is cheaper to pay than contest. Then work down the hierarchy with selected prosecutions and lots of plea bargaining. It's a well-worn path. You don't have to go after every little individual, just take out enough large targets that BitCoin cannot operate as a public market.

    aedius, no disrespect, but IMO: the idea that this can be countered because "there is software already being worked on to counteract that issue" is just laughable to me. And I'm a career software guy. It's not that I don't know what software can do. It's just that this is not a software problem. I wish you were right, but...

    /jwg
    Jun 15, 2014. 12:56 PM | Likes Like |Link to Comment
  • Bitcoin Seems To Be An Unstoppable Force Of Nature, Not Unlike The Jet Stream [View article]
    aedius, you didn't read my post.

    A transaction with BitCoin isn't free. It's a taxable event. If the IRS chooses to pursue it, there will be an actual money cost or a legal risk if you don't pay.

    The gubmint may or may not choose to enforce this; the laws may change. But the point is that BitCoin exists at the sufferance of the governments.

    /jwg
    Jun 13, 2014. 07:07 PM | Likes Like |Link to Comment
  • Bitcoin Seems To Be An Unstoppable Force Of Nature, Not Unlike The Jet Stream [View article]
    All that, plus you didn't even mention the the angle taken in "Bitcoin's Futile Quest to be A Currency", Wall Street Journal Op Ed, 6/1/14. It's behind the paywall but for those with access here is the link:
    http://on.wsj.com/1iqKHaA

    A few scattered quotes gives the essence of it:

    For all practical purposes IRS regulations issued in March preclude bitcoins from being used as an alternative currency...

    The IRS treats bitcoins as property. The result is that bitcoin transactions trigger a taxable event. Buyers incur a tax liability for the difference in dollars between what they paid for a bitcoin when they acquired it and the dollar value attributed to the bitcoin when they spend it. Sellers of course are subject to a tax based on the dollar value of the bitcoins they receive for a good or service...

    one who doesn't report a taxable bitcoin gain is guilty of tax fraud, which is a felony...

    In other words, the future of bitcoins depends on users willing to log all transactions, report them at tax time, and pay a tax or to engage in tax fraud. As soon as one of them ends up in prison, that will be the end of it...

    Why bitcoins to begin with? We already have a virtual currency, the dollar...
    Jun 12, 2014. 10:30 AM | 5 Likes Like |Link to Comment
  • American Capital Is Attractive Below $15: Here's Why [View article]
    Back in Feb '14 I compiled the quarterly data on shares bought back and new shares issued. Between 9/30/2011 and 9/30/2013 inclusive, they bought back 83.9 million shares, and issued 18.80 million shares. New issuance was therefore 22.4% of buybacks.

    I believe the new shares are all, or almost all, issued to management (mainly via options that they then exercise). Management have been consistent sellers, so they are paying themselves in shares and flipping them.

    I guess I thought this was a little bit high -- not enough to destroy my faith in the story about buying back at a discount to NAV, but enough for me to say thatt although they are shareholder friendly, they are even more friendly to themselves. Not uncommon, but still a significant cost to shareholders.

    So to the extent that they accelerate the process of unlocking value by some kind of restructuring, I think that's good. I'd like to have the value unlocked sooner, rather than paying them 9 million shares every quarter while we wait for the market price to catch up to NAV.

    To fbellt50: I understand exactly how you feel. Nevertheless, financial engineering is what these guys do for a living, and it's easy to see the opportunity here (separating assets that have very different market multiples and investor-sets; maximizing the value of those NOL's; etc) And they have said for a long time that they might eventually do some sort of reorg. So I'm hanging in and maybe buying more.

    /jwg
    Jun 10, 2014. 06:42 PM | Likes Like |Link to Comment
  • Correction 2014: Take Cover [View article]
    User 27nnn: So "ultimately" means "in the next 2 years"?
    Jun 8, 2014. 11:35 PM | Likes Like |Link to Comment
  • American Capital, Ltd: A Great Investment Opportunity As The Business Development Corporation Transforms Into An Asset Manager [View article]
    Excellent article, good discussion too. Followed
    Jun 2, 2014. 04:06 PM | Likes Like |Link to Comment
  • Book Review: 'The Art of Short Selling,' by Kathryn F. Staley [View article]
    Very helpful, saves me a lot of trouble finding a copy or else paying
    $45 for a used one to find out what you told us all.

    Good point about the lack of a definitive text on the subject, and I
    think you cite the right reason: it's hard to do and even harder to
    make a coherent theory.

    THanks
    jwg
    May 4, 2014. 01:36 AM | Likes Like |Link to Comment
  • Concerning The Performance Of Individual Investors [View article]
    good stuff. The trope about the average individual investor overtrading and underperforming was way overdue for some more detailed breakdown.
    /jg
    May 1, 2014. 12:25 AM | 1 Like Like |Link to Comment
  • An Intuitive Method For Ranking Stocks [View article]
    Very nice. Where are you getting your data?

    Reminds me a lot of "What Works on Wall Street" by O'Shaughnessey except he is a big believer in back testing, which as you point out, tends to imply using them for blind formula investing.

    Jwg
    Apr 30, 2014. 11:21 PM | Likes Like |Link to Comment
  • How Much Does Seeking Alpha Pay Its Contributors? [View article]
    >> Does it happen only with options articles?
    Emphatically not.

    >>How many times you clicked on the title only to find out that the article is not what you hoped it to be?

    Frequently. I wish they'd show the author in the list-line too for example.


    >> I really don't see it as a big deal if you clicked on the title and wasted >> 10 seconds of your valuable time.

    The big deal is that in the 2 minutes I spend scanning the site for new posts that interest me, I can only scan 10 or 20 headlines instead of 100 or 150.


    /jwg
    Apr 14, 2014. 11:36 AM | 1 Like Like |Link to Comment
  • How Much Does Seeking Alpha Pay Its Contributors? [View article]
    I am one of those who is not interested in reading
    about options, or at least not much, and I'd find it
    annoying to be clicking on a line item from Latest
    Articles or Top Ideas only to find it is actually
    about options.

    So I would be mildly against reintroducing options
    coverage unless it were under some separate part
    of the site.

    Plus I agree with Eli that options are well covered
    elsewhere, perhaps because it is more technical and
    short-term, whereas the kind of fundamental analysis
    of stocks that the better SA articles provide is scarcer.

    /jwg
    Apr 14, 2014. 10:21 AM | Likes Like |Link to Comment
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