I dipped in and threw a couple percent on top of my RGR position for $48, which is way off following a fail to long-term moving averages.
I’m not sure what caused the selloff, but it’s a good buy here.
I’m still being very conservative with my cash. From last fall to date, I’ve played my hand flawlessly, and I don’t intend to start letting performance slip through my fingers now.
Comments »I sold out BXG at $9.98 from $9.78 for a small 2% gain. The arbitrage has occurred fully – pricing in approximately zero risk of the deal falling through.
The deal is set to close in April and not a peep out of the SEC or any promising noise from the lawsuit. It appears that one Mister Alan Levan has emerged triumphant in his quest to bankrupt his BBX shareholders by making huge all cash offers for corporations he probably isn’t sufficiently talented to manage.
Monsier Levan makes off with BXG’s MBS captive fund and all its glory. BBX, his equity flagship, continues taking multimillion dollar beatings. Levan’s reputation will be flacked by the SEC until they finally drop all charges (spineless cowards). And everybody eats mud, with the one exception of Al’s personal paycheck (which seems to be the only surviving party here).
Well done, Al…
I pray to whatever darkforces have been unearthed with the unsealing of Ploutonion to murder this deal. Should they answer my call, I will be waiting with cash to buy the knee jerk selloff, heavily. This is such a steal for this company, it’s almost unfair. Especially with the default rate on their property mortgages plummeting to below 6% like they have. And this firesale will barely fill in the whole Levan has left in BBX. The guy is using up all the fresh water to put out the fire he started.
It is absolutely repugnant.
Comments »BXG’s shareholders approved the $10 buyout on Thursday, which means my only hope of retaining the company comes way of SEC intervention or a successful injunction from the lawsuit taking place. Seeing how 80%+ of the shares outstanding approved the merger, the only hope I see here is that some of the shareholders manage to plead to the SEC that a minority of people have arranged a sweetheart deal for themselves at the expense of the rest of the shareholders outstanding.
Unfortunately, I purchased my own position too late in the game to vote against the deal and I’m left thinking that getting myself wound up in the alternative process (not accepting the $10 buyout and instead accepting “fair value” at the time of the sale) is a losing strategy. Who determines this “fair value”? My thought is fair value for the company and its cashflow is $15. I’m sure the company skeleton will just be rushing to pay me that…
As it stands, I am prepared to just take my 2% gains from the $9.78 level and call it a day. I may sell out the position for cash, if the stock keeps closing the $10 gap before the deal finalizes.
In closing, BXG’s shareholders are capital idiots, who apparently enjoy being robbed in broad daylight by their own board of directors.
Comments »I must say, that when you’re sitting on a massive cash position and adequate hedging, it’s just not possible to become excited about stuff. The raucous of the 9th floor has shifted its melody from the deep baritone of market concerns to a soft reggae; that is almost nauseatingly soothing.
But though the 9th floor is quixotic in its machinations, the ground below is a bustle of activity and noise demanding my constant energy and more than replacing the displaced frustration and effort. 2014 is separated by a chasm, and in many respects I am an engineer of the bridge needed to span it. You do not realize it yet, but if our team fails in our endeavors, your life is going to be absolute hell when we careen off the edge. Actually, it may be a forgone conclusion at this point anyway.
My current positions are as follows:
I have 20% cash.
10% of my book is short the euro by way of EUO. 10% is shorting oil through SCO.
12% of my book is in physical silver.
20% of my book is in CCJ. The rest of is pretty evenly divided between AEC, CLP, BAS, RGR, AGQ and BXG.
I estimate my position is equivalent to a 55% cash position, since the inverse ETFs are so especially potent.
Comments »
The most popular (and esoteric) argument for gun stocks being overpriced seems based largely on a riddle that goes something like this:
“You tell me, what happens when gun legislation passes and the buyers realize everything will be okay?”
Which is lovely. I enjoy riddles. And word games. And the works of Nabokov. But this isn’t about playful respite; this is about making money and being right. It becomes my duty, therefore, to thrash you.
I now present three illuminating bullets (I just proofread this and realized I made a pun):
* Stocks like RGR are only trading where they were before sales went crazy
* This legislation will not be hindering gun makers – background checks are perfectly doable because they will most likely have maximum waiting periods attached (1 month or less or else all clear); that’s a minimum to get the measure through the House (if anything even can)
* And, the big shebang…RGR hasn’t raised gun prices and I’m not sure the others have either
Yeah, see that’s the big open secret here. Guns are selling out of stock, but RGR’s CEO was adamant that his company would not be raising prices because, as he phrased it, “gun buyers as a group have long collective memories.” He doesn’t want to prey off his customer base, so RGR hasn’t raised weapons prices at all.
Ergo, once this bill passes and people go “oh, wait, that’s not so bad,” there will be no price incentive for them to cancel their order (“I could sit back and wait for prices to calm down…”). That, right there, isn’t happening. The guns that have been jumping in price are private sales. So, in RGR’s case (and I suspect the other manufacturers as well), there’s no clear financial edge to back out.
There is, however, still the looming possibility that Republicans could lose more seats (remind me, what is the popularity of the GOP at the moment?)…
(I told you I like riddles too)
And so, I am afraid (I’m not actually afraid) that this robust bounty of profitability RGR and the gun market at large are seeing is very much sustainable for a duration of at least a year (possibly two). While eventually and inevitably these orders will slow down, I really couldn’t care less. You see, the stocks are not pricing in this raw influx of cash, and one solid year of the orders they’re experiencing is the equivalent of several years worth of business, all front loaded and with minimum inventory risk attached.
Comments »I added a position in SCO for $40.19.
This takes my artificial cash position north of 50%. We are at the “edge of disappointment”, where things are neither good nor bad, but merely “meh”.
“Meh” gets you killed.
Europe will flare up again. Cyprus doesn’t matter particularly. The underlying reason we keep hearing about the EU is because the EU is fundamentally fucked on a spindle. The cost of holding the euro together, not just in terms of money, but in terms of man hours, resources, lost opportunities, bitter resentment, livelihood,…is just immense.
It’s never just about the money. When the economics and numbers don’t work, it should usually be a warning sign that you’re screwing something up largely. Money is a metric for measurement; hence why when obnoxious social justiciers whine about people only caring about the money – refusing to just go along with their latest “great idea” – I have a resounding urge to punch them in the throat.
I really don’t understand why European citizens are subjecting themselves to this. It’s not like they’re avoiding the losses…the pain is coming either way, so it’s a choice of accepting that, making changes to improve their underlying format, and moving on, or…not accepting that, getting the beat down anyway and setting themselves up for more failure later.
Anyways…Italian/Spanish/French debt is docile now, but it’s just a matter of time before the next explosion. Europe continues to miss deficit reduction targets by a quarter mile, and they’re all in recessions.
Dangers to the SCO position would include if the ECB and Fed were ever permitted to team up like Batman and Robin; doesn’t seem in the cards at the moment (or ever), but it’s worth stipulating that I really believe Bernanke & Co would view $150 oil as a “successful policy outcome.”
For the meantime, however, I’ve got decreasing industrial production overseas, an oil production bonanza here at home, and a hundred-years demographic movement towards smaller commutes all playing to my hand.
Comments »
