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Investment Ideas / Re: UBNT - Ubiquiti Networks
« Last post by Dustin T on Today at 01:13:29 PM »
Unconcerned, none of the "evidence" seemed like anything more than silly conspiracy theory stuff.

Robert Pera's actions speak louder, share buybacks, low salary, all of this reflects very well on his long term belief in this companies future.

I agree. Pera's actions have been very different than what one would expect if UBNT was engaged in material and longstanding fraud. Pera hasn't taken any material compensation since 2013, he is extremely parsimonious with stock based comp, and has also been aggressive about repurchasing shares whenever the stock drops significantly. The recent stock sale notwithstanding, he has also sold far less shares than would be expected for a CEO engineering a fraud. Contra Left, almost every indication is that Pera thinks the stock is quite valuable.

Exactly, if Robert Pera were smart enough to pull of that kind of fraud, it's unlikely he would be dumb enough to hide his ill gotten cash in the Memphis Grizzlies.

I've actually enjoyed watching the short and distort crowd attack UBNT. Every day they post a new article, but nothing of substance, just cryptozoology level stuff.
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... I would expect the company to start doing some financial engineering which should bring this thing to $4+ in no time.

Cardboard

There are a few things they can do on this front in the near- and medium-term:

1) Refinance Parq loan at lower interest rate (I think they are paying 8%+ now in a USD construction loan; lucky for them that CAD is now strong)
2) Buy back the preferred at 10% after-tax yield.  These shares offer higher return than most of their investment ventures ;)
3) Further monetize non-core assets and buy back the common

OTOH, they would need to redeem 17% of the outstanding Series 5 preferred shares in January so that's a $15M outlay.  Given the net cash position they are in I am not worried about liquidity.
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Investment Ideas / Re: UBNT - Ubiquiti Networks
« Last post by plusalpha on Today at 01:04:16 PM »
Contrary to the title, many good things about Ubiquiti.
https://seekingalpha.com/article/4108704-ubiquiti-time-run
not an indepth article but good comments to go thru.
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Personal Finance / Re: Good mutual funds
« Last post by TwoCitiesCapital on Today at 01:04:16 PM »
I wonder if there are possible situations in which Pimco StocksPLUS blows up. Counterparty risk? Though they are probably careful with that.

(Somewhat unrelated) Way back (around 2006-2008?) I was looking at Pimco bond fund and they were holding all kind of weird stuff (structured products? currency swaps? derivatives?). I was wondering if they gonna blow up, but they never did. I think their bond funds still do that a lot. I hold some PONDX.

PIMCO does utilize a lot of derivatives - but most of their strategies do NOT use them to obtain economic leverage for the portfolio. They simply use them because relative pricing is better than physical alternatives OR because they derivatives are more liquid than physical alternatives and etc. Futures, CDS/CDX, options, and interest rate swaps are used extensively across their funds/strategies.
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I know that you are unable to have an incetive fee type structure (i.e. a hurdle rate) with normal retail investors...even if it's in their favor.

Mutual funds can have incentive fee structure. And there are (mutual fund?) managers who reimburse fees like Chou.

(The whole "incentive fees not allowed for hedge funds for retail investors" is weird although I kinda know where it came from.)
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General Discussion / Re: Equifax Massive Security Breach
« Last post by sleepydragon on Today at 01:03:36 PM »
Why freezing credit will increase auto insurance cost?
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Personal Finance / Re: Good mutual funds
« Last post by TwoCitiesCapital on Today at 01:01:27 PM »
Hey two,

The long duration one has absolutely killed it. Wow. It also isn't a huge fund either. It actually lost less in 2008 too. Interesting. Though I'm not sure I quite understand how it works. Thanks for the idea. Is that the one you have?

Ehh...two of the three managers have none of their own personal money in it. I don't like that.

Keep in mind - stocks and bonds have both gone through a mega-rally - so of course having a leveraged fund that bought long rates + stocks was going to do well. Dunno how good the return expectations are going forward with rising rates, but the bar for outperformance is low. PIMCO simply has to outperform the 3moLIBOR +/- a spread with the fixed income portion of the portfolio.

That's not something I can mimic myself.

I'm bearish on U.S. equities so I don't own either the StocksPlus or StocksPlus Long Duration funds. Once U.S. markets are better valued, that is how I would prefer to get my passive exposures though.


I do have a massive chunk of my portfolio in their StocksPlus version of the RAE Fundamental Index for emerging markets (PEFIX) for the structural fixed income leverage and the structural advantage of RAEs fundamental weightings.

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Investment Ideas / Re: DVA DaVita HealthCare Partners
« Last post by sleepydragon on Today at 01:00:30 PM »
I have no dog in this fight.  But the responses here are interesting.  I read the report, have no opinion.

BUT since WEB owns this it's 'good'.  What if WEB sells out, will the psychology change and suddenly the allegations are true, or it becomes 'bad'?

The same thing happened with ZINC.  Everyone was rah-rah ZINC when Pabrai loved it.  Then he dumped the stock, and the stock tanked and suddenly it's terrible.  Yet nothing changed in the meantime, just the perception.

I don't know if half of your profit coming from 4% is good or bad, but I do know it's risky.  Maybe this is a larger comment about following guru's whomever they are.  Their halo can cloud your thinking.

Well, Pabrai is not Web. I would follow Web but not Pabrai. But it's not even a Web position.
If most revenue are from 4% clients, then that's risky. Here the situation is special: the 96% client (gov) getting the service at negative cost and the 4% subsidies the 96% client. The 4% doesnt have to use dva, but other alternatives, including set up their own shops at CVS, would cost more. 
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General Discussion / Re: Equifax Massive Security Breach
« Last post by sarganaga on Today at 12:55:08 PM »
My wife and I were both affected by the data breach according to Equifax.  After thinking about the potential problems, we believe that having someone attack the money in our existing accounts or committing crimes using our identities are the biggest problems for us. Credit card misappropriation, payday loans, & other borrowings are pains to resolve but less serious for us. If our credit rating is impacted by having any of these happen, we don't anticipate borrowing money for much of anything anyway. We're content with our current credit cards and use them for convenience rather than a credit line. So this is our situation. Here's what were doing so far.

(1) We signed up for the free credit monitoring with Equifax and also for free monitoring with AAA. I don't expect this to stop anything, but it will let us know if something nefarious is going on.

(2) We signed up for "True ID" at our local DMV. This was a little bit of a hassle, but might be very useful in resolving murky questions of identity in disputes.

(3) Retirement accounts are now set up as "No Money Out". To take it off requires a personal visit. While doing this, we met a few minutes with the branch manager and the person who processes this paperwork and explained our reasons for doing so.

(4) Verbal passwords and voice recognition protocols and now set up for phone calls to all accounts.

(5) Wherever possible, we have setup two factor authentication for online account access.

(6) We have not done a credit freeze yet. I'm concerned about auto insurance price increases as a result. I'm sure there are other places where the credit companies have inserted themselves as indispensable cogs with penalties for their non-inclusion. Also, a credit freeze is nowhere near bulletproof for stopping the bad guys, as discussed in the recent Forbes articlehttps://www.forbes.com/sites/nickclements/2017/09/13/3-reasons-a-credit-freeze-wont-protect-you/#385db10a42e1. I'm not sure if we will do this or not.

(7) We both file income tax with PIN numbers.

This is what we've done with our situation so far. What I mostly take away from what I've been researching is that all of us are on our own. Government officials and corporate types may make some concerned and thoughtful noises, but not too much important stuff will likely get done. This is a big deal and going to get worse.

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Hey all,

I tried searching for this but no luck.

Buffett agreed to reimburse his original partners for losses. I think Pabrai did this too. I want to say that I read somewhere that it was not legal to do "make a client whole" today but is that right? Can an investment manager make a client whole?

I don't know if it's "illegal" to do so - but it was my understanding that it's against the current regulations to suggest that you would. The problem is in the suggesting/promising you will - not necessarily in the doing.

Scenario A: You lose money and surprise clients by making them whole. (This is probably ok).
Scenario B: You tell clients you will make them whole if you lose money (This is not ok).

Also, it may change if clients are sophisticated, accredited investors. I know that you are unable to have an incetive fee type structure (i.e. a hurdle rate) with normal retail investors...even if it's in their favor.
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