tag:blogger.com,1999:blog-4815867514277794362.post2393800937268129135..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Great Northern Iron and the persistence of worthwhile counterpartiesJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-4815867514277794362.post-78552709986875082532014-01-08T15:13:32.423+11:002014-01-08T15:13:32.423+11:00:D Had it on my screener since the post. And final...:D Had it on my screener since the post. And finally, some sense in the market.tiruhttps://www.blogger.com/profile/09576188203768579619noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-65481639082486484152012-12-05T13:11:14.464+11:002012-12-05T13:11:14.464+11:00There is a literature in experimental economics sh...There is a literature in experimental economics showing that securities just like this one reliably produce bubbles above fundamentals in laboratory trading games. Interestingly, the players who stick to the fundamentals are not the ones who make the most money; the biggest winners (and losers) are the "greater fool" investors who try to time the bubble.<br /><br />See http://www.theatlantic.com/magazine/archive/2008/12/pop-psychology/307135/srpnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-28633998347821467932012-11-20T10:53:08.469+11:002012-11-20T10:53:08.469+11:00what quant funds look at fundamentals anymore? mos...what quant funds look at fundamentals anymore? most of them are 'market neutral' who arb out micro-mili-second deviations. Or try to sniff out a big order coming down the pipeline.<br /><br />Speaking of robots: it took me 5 times to post this because of the anti-robot phrase tester.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-38445510715382145552012-11-16T21:32:51.178+11:002012-11-16T21:32:51.178+11:00John, who's making the 20% return on the borro...John, who's making the 20% return on the borrow if not the owners? If that return is equal to the premium as you say, then you can buy this stock and either make or lose money dependent on what happens to the iron ore price. Any quant fund buying it is certainly going to be lending it out, so it is only the widows & orphans who are getting done.The Rioja Kidhttps://www.blogger.com/profile/06462814606739183471noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-20967751480744247482012-11-15T16:38:53.671+11:002012-11-15T16:38:53.671+11:00Surely this depends on what sort of capital gains ...Surely this depends on what sort of capital gains tax position that you have? You can use the capital loss and get the income-anyone shed lioght on this?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-80750464114326736552012-11-15T15:31:31.508+11:002012-11-15T15:31:31.508+11:00I wouldn’t be so sure it’s computer driven trading...I wouldn’t be so sure it’s computer driven trading. Could mum and dad investors cause the issue? A similar thing happened with Australian listed Bass Strait Oil and Gas Trust. In early 2000, three years into its ten-year life, it was so cheap that the NAB-guaranteed capital returns alone made for an extremely attractive investment – you couldn’t lose even if oil production and oil price went to zero. Four or five years later, with just a few years left on the security, it was similarly overpriced in a higher oil price environment (can’t remember the exact details). Over those last few years, in my job I must have answered a dozen or more queries from retail investors attracted to the apparent 20% (or so) yield and apparent exposure to higher oil prices. They were all shocked when I told them it would be worth zero come 2007. I don’t know whether the retail yield-chasing weight of money is enough to drive the price up, but I doubt it was computer models causing the overpricing around 2005 in BSO.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-88101504663754036862012-11-15T15:13:55.312+11:002012-11-15T15:13:55.312+11:00Not sure it applies here, but often index funds al...Not sure it applies here, but often index funds also have to hold stocks regardless of the fundamentals (although not sure if there would be any niche indexes where this may fall into). Haydennoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-18221735685571795682012-11-15T15:01:28.200+11:002012-11-15T15:01:28.200+11:00I scratched my head reading "will generally c...I scratched my head reading "will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and properties)"<br /><br />Thought it was a typo, then a scam to keep the properties. Going on the website, I understand the rationale in 1906. Looks like the company scheme is clean and, yes, anyone holding it and not selling at current price is dumb (even if he can lend it because lending should help the price go down to its real value minus a discount for the risk)<br /><br />Looking at volumes and trading range advertised on yahoo, it looks like there is a lot of dumb money around.<br /><br />Thanks for the post, I started to miss your articles.dedenoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-48707024103618003252012-11-15T14:15:09.051+11:002012-11-15T14:15:09.051+11:00So brokers have an enormous incentive to hawk it t...So brokers have an enormous incentive to hawk it to muppet clients, and then lend out the security to shorts. Yeah?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-82319047730800612052012-11-15T07:01:27.381+11:002012-11-15T07:01:27.381+11:00With a borrow that high a sophisticated institutio...With a borrow that high a sophisticated institution could definitely capture some of that yield. Dividend chasing retail investors not so much.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-4518913780066430242012-11-15T04:33:36.686+11:002012-11-15T04:33:36.686+11:00Stevie,
Usually it is the banks/prime brokers who ...Stevie,<br />Usually it is the banks/prime brokers who take the lending fee not the underlying holders.<br />Underlying holders just give them permission to lend (or not).Nickhttps://www.blogger.com/profile/01164675502109841117noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-26630731074226154642012-11-15T03:31:07.360+11:002012-11-15T03:31:07.360+11:00I think GNI is an example most of all about how mu...I think GNI is an example most of all about how much harder hedge fund investing has become because in the old days not as many people were chasing borrows like this and it would have been profitable to short.Alexnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-3946129684393233342012-11-15T03:25:14.232+11:002012-11-15T03:25:14.232+11:00If you own it and can lend it out at close to 20% ...If you own it and can lend it out at close to 20% pa it's probably not a bad investment - so these holders doing the lending might be rationalAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-85487923816577000112012-11-15T02:47:57.670+11:002012-11-15T02:47:57.670+11:00Yeah, Andrew Left wrote about this one some time a...Yeah, Andrew Left wrote about this one some time ago on the Citron blog. He called it a stock that only a computer can love.<br /><br />The other trust that he mentioned at around the same time is WHX. This one is even more fun, because the price has already collapsed to *below* the expected PDV of expected future payouts. A naive trader might think that there is an arbitrage opportunity here, but there isn't.<br /><br />You see, if you own WHX during a distribution, then you have to file a tax return in something like 8 states! Thus, fair value *should* be less than the PDV of expected future payouts, just because of the tax headaches.<br /><br />I wish more stocks would "bury" things in public view in their 10-K, to give an informational advantage to real investors rather than computers. You know how Garry Kasparov used to play "anti-computer chess," where he'd deliberately play in a completely different style, because he knew that the computer had been trained on his previous games? I wish there were more "anti-computer stocks" available.<br />Tomnoreply@blogger.com