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Owen

Owen
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  • About Time For Another Sweet Hershey Stock Split [View article]
    Heinz wasn't cheap, but it was reasonably valued before the takeover. I can't see Buffett paying for HSY at these valuations.
    Jan 10, 2014. 03:26 PM | Likes Like |Link to Comment
  • About Time For Another Sweet Hershey Stock Split [View article]
    Right, and people who pay their bills on time are also, on average, better drivers, yet you can't improve your driving by paying your bills on time.

    Many people confuse causation with correlation. Stocks don't go up because they split. They go up--and many ultimately split--because the company fundamentals are positive.
    Jan 10, 2014. 11:26 AM | 3 Likes Like |Link to Comment
  • About Time For Another Sweet Hershey Stock Split [View article]
    In what way does a stock split help investors? Do you also get your twenty dollar bills broken into ten dollar bills so that your wallet feels fuller?

    Stock splits made sense thirty years ago, when we were forced to trade in board lots of 100 shares or pay substantial premiums for odd-lot trades. Now, with discount brokers and ECNs, you pay the same commission and get the same price whether you trade 100 shares, 50 shares, or a single share.

    This excitement over the prospect of a stock split is reminiscent of the stupidity of the late 1990s, where every meaningless event was seen as a reason to bid a stock up.
    Jan 10, 2014. 10:06 AM | 2 Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    The "days to cover" figure assumes GNI's typical daily volume of 10k-30k, not the 100k-500k daily volume we've seen this week, which would make the days-to-cover around 0.5.
    Jan 9, 2014. 04:28 PM | Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    Looks like nobody is covering their shorts. I'm seeing less than 6,000 shares available to borrow, and the rate is still above 47%.
    Jan 9, 2014. 12:12 PM | Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    IJR already quoted the relevant policy from the IB site below (http://seekingalpha.co...), and I admitted my mistake.

    Institutional investors may be able to collect the full rebate, but apparently retail brokerage clients can, at best, get only a portion of it. At 50% of the 48% rebate rate, even at $40 it was a raw deal.

    My apologies for the confusion.
    Jan 8, 2014. 09:27 PM | 1 Like Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    Agree, which is why you won't see me going long this dog.

    My point was, using fairly reasonable (if far from certain) assumptions, there may be a case for owning the stock.
    Jan 8, 2014. 05:22 PM | Likes Like |Link to Comment
  • Priced For Perfection, This Engine Is Definitely Running Out Of Steam! [View article]
    Sorry, I couldn't get past the first line.

    The way I see it, there are two kinds of analysts out there: those who question the conventional wisdom and apply analytical methodologies to everything, and those who repeat hackneyed old quips without ever questioning them.

    The picture of Newton got my hopes up, but the subsequent falsely-attributed quote told me all I needed to know.
    Jan 8, 2014. 03:19 PM | Likes Like |Link to Comment
  • Priced For Perfection, This Engine Is Definitely Running Out Of Steam! [View article]
    > "What goes up must come down." Sir Isaac Newton

    Really? Do you have a citation for that quote?

    Secondly, gravity doesn't act on security prices, since prices don't have a mass. Traders can bid stocks up and down arbitrarily, despite the common usage of the term "momentum" by analysts.

    Thirdly, if what goes up must come down, when are we going to see the Dow Jones index back at 100, as it was in the 1910s?

    If I were you, I'd stay away from meaningless clich├ęs.
    Jan 8, 2014. 10:10 AM | Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    Yes, Charles, you called it correctly a year and a half ago.

    However, your statement about COP getting "67,000 acres of highly profitable land for free" is misleading. COP gets the land "for free" in the same sense that the hotel where you stayed gets your room "for free" when you check out. Those 67,000 acres were never permanently sold to the trust. The original lease term was not for an indefinite period, and the price at the time reflected the finite duration.
    Jan 7, 2014. 04:35 PM | 3 Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    "But they do own land. Not just leases." - where do you see that? They clearly spell things out for us:

    "The Trust owns interests in fee, both mineral and nonmineral lands, on the Mesabi Iron Range in northeastern Minnesota."

    All the trust owns is the right to collect a fee on the mineral mining on that parcel of land. It does not own any land. This fee collecting right was leased for a period ending next year.
    Jan 7, 2014. 01:45 PM | Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    Right, and in normal times, this cash balance would be enough to compensate the broker for the stock loan fees. However, ever since we went into a zero-interest Fed policy, brokers collect less than 0.2% a year on those cash balances. If the borrowing fee is 0.25%, your broker is funding your short to the tune of about 0.05%/yr, which as I said, comes from the commission, or from charging you 6%+ on margin debt (if you happen to be using margin), which is the largest source of income for many brokers.
    Jan 7, 2014. 01:34 PM | Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    They don't own the land. They are the leaseholder of the mining rights, and that lease expires next year.

    If they wanted, they could reassign the lease to someone else, but it would still expire next April.
    Jan 7, 2014. 12:41 PM | Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    Right; most brokers will swallow the borrowing fee when you short through them, as the $5-$10 commission they charge you more than covers that expense for them. If the stock is hard to borrow, they'd make you cover it after a few days, or in many cases, not allow you to short it at all.

    However, when typical commissions are $0.30 to $2 per trade, the broker can't afford to cover the cost of borrowing for you.
    Jan 7, 2014. 12:35 PM | Likes Like |Link to Comment
  • Great Northern Iron Now Worth Less Than $21, Will Fall To $0 In 15 Months [View article]
    My mistake, IJR. I was not aware of the 50% haircut.
    Jan 7, 2014. 12:28 PM | Likes Like |Link to Comment
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