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#51
General Discussion / Re: Compounding
Last post by Mark P. - June 06, 2016, 11:38:19 PMGreat article Dex. Thank you for sharing. I am very appreciative of my parents who taught me this principle when I was young.
#52
General Discussion / Compounding
Last post by Dexter - June 06, 2016, 11:19:47 AMWhile doing some weekend reading, I came across this article on compounding.
http://www.usatoday.com/story/money/personalfinance/2016/06/05/compounding-financial-concept-saving/85295910/
The line that stuck out to me was: "According to research out of George Washington University, only one-third of Americans actually get how compounding works, leaving most of the public in the dark."
This is truly disconcerting. Most American's are in charge of their retirements, yet only 1/3 of these individuals understand compounding. We need to remedy this.
http://www.usatoday.com/story/money/personalfinance/2016/06/05/compounding-financial-concept-saving/85295910/
The line that stuck out to me was: "According to research out of George Washington University, only one-third of Americans actually get how compounding works, leaving most of the public in the dark."
This is truly disconcerting. Most American's are in charge of their retirements, yet only 1/3 of these individuals understand compounding. We need to remedy this.
#53
Books / Re: "The Outsiders" by William...
Last post by Dexter - June 06, 2016, 11:08:05 AMHere's a cautionary (and fascinating) tale. Bill Ackman and a few other smart investors believed that Mike Pearson, former C.E.O. of Valeant Pharmaceuticals (VRX), was an "Outsider," when in fact, he was not.
http://www.vanityfair.com/news/2016/06/the-valeant-meltdown-and-wall-streets-major-drug-problem
Some excerpts:
"One of Valeant's biggest investors, hedge-fund billionaire Bill Ackman, is trying to salvage both the multi-billion-dollar investment his fund, Pershing Square, made in the company and—with Pershing Square down 18 percent so far this year after a 19 percent loss last year in part due to Valeant—his own reputation. Ackman is far from alone. The investors in Valeant were once viewed as a Who's Who of the smartest guys on Wall Street. The company's fall is wrecking both their careers and their legacies."
"After lunch, Ackman handed out copies of The Outsiders, a book by William Thorndike, which celebrated 'outsider' C.E.O.'s, mavericks who had done things differently, such as Buffett, TCI's John Malone, and Washington Post Co. C.E.O. Katharine Graham. Ackman told investors Pearson's name should be added to the list."
"'We greatly admire what you have accomplished and are delighted to be your partners once again,' he [Ackman] e-mailed Pearson. It was a huge investment. Pershing Square bought 16.5 million shares at an average price of $196 a share, at a cost of more than $3 billion, which was about 19 percent of Pershing Square's total capital."
"Ackman, whose fund bought two million more shares at a price of $108 per share, started firing off e-mails to Pearson. 'Perception very quickly becomes reality when reasonable questions remain unanswered,' he wrote in one. 'While I know that Mike greatly prefers to answer questions one on one with shareholders, the time to do so has run out . . . . As things stand, the torpedoes are in the water and the sharks are circling. They will kill the company.'"
"'That a stock could go from $230 to $30 in a matter of months in and of itself tells you that no one knew what was going on,' says Scilipoti."
"A week later, in a long-weekend board meeting, Ackman, who had come to believe there were what he calls 'serious cultural issues' at the company in terms of the pressure to produce earnings, argued that Pearson had to go. On March 21, the company announced he would leave and that Ackman would join the board."
"Ackman, who also testified, said, 'Clearly [there] were things I did not understand about the business and that was a failure of due diligence on my part.'"
http://www.vanityfair.com/news/2016/06/the-valeant-meltdown-and-wall-streets-major-drug-problem
Some excerpts:
"One of Valeant's biggest investors, hedge-fund billionaire Bill Ackman, is trying to salvage both the multi-billion-dollar investment his fund, Pershing Square, made in the company and—with Pershing Square down 18 percent so far this year after a 19 percent loss last year in part due to Valeant—his own reputation. Ackman is far from alone. The investors in Valeant were once viewed as a Who's Who of the smartest guys on Wall Street. The company's fall is wrecking both their careers and their legacies."
"After lunch, Ackman handed out copies of The Outsiders, a book by William Thorndike, which celebrated 'outsider' C.E.O.'s, mavericks who had done things differently, such as Buffett, TCI's John Malone, and Washington Post Co. C.E.O. Katharine Graham. Ackman told investors Pearson's name should be added to the list."
"'We greatly admire what you have accomplished and are delighted to be your partners once again,' he [Ackman] e-mailed Pearson. It was a huge investment. Pershing Square bought 16.5 million shares at an average price of $196 a share, at a cost of more than $3 billion, which was about 19 percent of Pershing Square's total capital."
"Ackman, whose fund bought two million more shares at a price of $108 per share, started firing off e-mails to Pearson. 'Perception very quickly becomes reality when reasonable questions remain unanswered,' he wrote in one. 'While I know that Mike greatly prefers to answer questions one on one with shareholders, the time to do so has run out . . . . As things stand, the torpedoes are in the water and the sharks are circling. They will kill the company.'"
"'That a stock could go from $230 to $30 in a matter of months in and of itself tells you that no one knew what was going on,' says Scilipoti."
"A week later, in a long-weekend board meeting, Ackman, who had come to believe there were what he calls 'serious cultural issues' at the company in terms of the pressure to produce earnings, argued that Pearson had to go. On March 21, the company announced he would leave and that Ackman would join the board."
"Ackman, who also testified, said, 'Clearly [there] were things I did not understand about the business and that was a failure of due diligence on my part.'"
#54
Investment Ideas / Re: CCXI - Chemocentryx
Last post by Mark P. - June 05, 2016, 12:06:15 AMPersonally I think this company will grow or get bought at over $2B - $3B at some point in the next 5-7 years. Their pipeline is very strong and I think you will see more licensing agreements like the Vifor one in the near future.
Mark P.
Mark P.
#55
Investment Ideas / Re: CCXI - Chemocentryx
Last post by Dexter - June 04, 2016, 10:41:52 PMInteresting idea -- thanks for sharing. I'll have to dig into this company a little bit.
What do you think CCXI is worth?
What do you think CCXI is worth?
#56
Investment Ideas / Re: CCXI - Chemocentryx
Last post by Mark P. - June 04, 2016, 11:31:26 AM #57
Investment Ideas / CCXI - Chemocentryx
Last post by Mark P. - June 04, 2016, 11:30:23 AMAfter purchasing more shares of this biotech stock this week I am now in a position to share with the message board this stock that I like so much. I came across this company several months ago by happen chance, and thus far it has been a real winner with lots of room to run.
One reason I like this stock includes the deep pipeline of drugs that appear to have a bright future. Take a look at some recent SEC filings and you will find that they have 5 or 6 products that appear posed to be real winners. They also recently signed a licenses marketing agreement on just one of their promising drugs (CCX168). The monetary compensation of this deal is $85MM upfront with total potential compensation up to $600MM. Up until this agreement was signed the market cap was just above $100MM, and had decreased significantly over the last year or two. Since this agreement occurred the stock has more than doubled.
I first bought this this stock back in early April, and have purchased it several times since then. To conclude I like the biotech industry because of the large amount of cash companies have on hand, and the potential to earn an outstanding return on my money. With research of the SEC filings I feel like you can sift through the winners and losers, but it does take time and lots of research.
http://finance.yahoo.com/q?s=CCXI
http://www.streetinsider.com/Corporate+News/Vifor+Pharma+Licenses+Marketing+Rights+to+ChemoCentryxs+(CCXI)+CCX168/11608024.html
Mark P.
One reason I like this stock includes the deep pipeline of drugs that appear to have a bright future. Take a look at some recent SEC filings and you will find that they have 5 or 6 products that appear posed to be real winners. They also recently signed a licenses marketing agreement on just one of their promising drugs (CCX168). The monetary compensation of this deal is $85MM upfront with total potential compensation up to $600MM. Up until this agreement was signed the market cap was just above $100MM, and had decreased significantly over the last year or two. Since this agreement occurred the stock has more than doubled.
I first bought this this stock back in early April, and have purchased it several times since then. To conclude I like the biotech industry because of the large amount of cash companies have on hand, and the potential to earn an outstanding return on my money. With research of the SEC filings I feel like you can sift through the winners and losers, but it does take time and lots of research.
http://finance.yahoo.com/q?s=CCXI
http://www.streetinsider.com/Corporate+News/Vifor+Pharma+Licenses+Marketing+Rights+to+ChemoCentryxs+(CCXI)+CCX168/11608024.html
Mark P.
#58
Investment Ideas / Re: TWTR - Twitter Inc.
Last post by Dexter - June 02, 2016, 01:28:28 PMHere's an article from Bloomberg that compares the daily user numbers of Snapchat and Twitter.
http://www.bloomberg.com/news/articles/2016-06-02/snapchat-passes-twitter-in-daily-usage
http://www.bloomberg.com/news/articles/2016-06-02/snapchat-passes-twitter-in-daily-usage
#59
Strategies / Leverage on Stock Investments
Last post by Dexter - June 01, 2016, 08:18:10 PMWith interest rates near historic lows, I've been thinking about the best way to get leverage on stock investments.
I wanted to poll the board and see what your thoughts were.
Select the best answer in the poll above and the results will appear. You have to be a member to vote. Poll closes in 7 days!
I wanted to poll the board and see what your thoughts were.
Select the best answer in the poll above and the results will appear. You have to be a member to vote. Poll closes in 7 days!
#60
Strategies / Re: LEAPS
Last post by Dexter - May 31, 2016, 10:16:58 PMAs a follow up to my previous post about Cornwall Capital's COF trade, I wanted to post some excepts from Jack D. Schwager's book "Hedge Fund Market Wizards: How Winning Traders Win." In Chapter 7, Mr. Schwager interviewed Jamie Mai and they discussed the Capital One trade:
Schwager: What was the trade that you put on?
Mai: We thought buying the out-of-the-money calls provided the best way to express the trade because the potential bimodal outcome made a large price move much likelier than usual for the stock. Under these circumstances, the out-of-the-money calls were most mispriced and they had more embedded leverage. We were looking at buying the January 2005 $40 calls, which were trading near $5. Then there was some marginal bearish news, and the stock traded down to about $27. The calls we were looking to buy went down from $5 to $3.50. That was a big percentage move, which made the juice in the trade look that much greater, and we bought the calls.
Schwager: How long did you stay in the trade?
Mai: We held the options for over a year, during which time, Capital One stock fully recovered. We ended up making about six times our money on the calls.
As you can see, this interview fleshes out some of the details of Cornwall's Capital One trade. The biggest discrepancy between this account and the one in "The Big Short" seems to be the amount of profit made. In the Schwager interview, it sounds like Cornwall made around 6 times their money. However, in "The Big Short," Lewis indicates they made around 19 times their money ($500,000 profit on an investment of $26,000).
I think the return mentioned in the Schwager interview is probably more accurate. But either way, Cornwall made a ton of money on this trade using LEAPS.
Schwager: What was the trade that you put on?
Mai: We thought buying the out-of-the-money calls provided the best way to express the trade because the potential bimodal outcome made a large price move much likelier than usual for the stock. Under these circumstances, the out-of-the-money calls were most mispriced and they had more embedded leverage. We were looking at buying the January 2005 $40 calls, which were trading near $5. Then there was some marginal bearish news, and the stock traded down to about $27. The calls we were looking to buy went down from $5 to $3.50. That was a big percentage move, which made the juice in the trade look that much greater, and we bought the calls.
Schwager: How long did you stay in the trade?
Mai: We held the options for over a year, during which time, Capital One stock fully recovered. We ended up making about six times our money on the calls.
As you can see, this interview fleshes out some of the details of Cornwall's Capital One trade. The biggest discrepancy between this account and the one in "The Big Short" seems to be the amount of profit made. In the Schwager interview, it sounds like Cornwall made around 6 times their money. However, in "The Big Short," Lewis indicates they made around 19 times their money ($500,000 profit on an investment of $26,000).
I think the return mentioned in the Schwager interview is probably more accurate. But either way, Cornwall made a ton of money on this trade using LEAPS.