Until the acquisition goes through, or until the remaining annualized returns make it no longer worth holding. Like in an extreme example, if it somehow went to $94 tomorrow, I’d sell and take the win instead of waiting over a year for the last 1.2%.
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she’s doubling and tripling and quadrupling down
I don’t think she realizes some of those companies probably aren’t gonna make it
At this point, what move does she have left? If she admits she’s wrong, she’s toast. If her fund goes under, she’s toast. Her only move is to double and triple down and hope for the best.
true she gets paid anyway, just keep the gig going as long as possible
can’t even admit a mistake on one of them though, ah the business world
also ROKU is down over 20% after riverman’s post was made 5 hours ago lololol
edit–A recent Deutsche Bank analysis reveals 62.5% of ARKK stocks aren’t making enough profits to cover their interest payments
oh they’re really gonna love a rate hike lololol
dunno what amplitude was but 60% down in a day kudos
I also want to say that I appreciate cW’s postings - reasoned, earnest, accountable.
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Appreciate that. I mean look, time will tell. Ultimately the times we’re in market wise seem extreme to me and compel me to go for it, and I understand that if I listened to everyone who said “6-8bb/hr is the max, maybe 10,” I’d have made way less money, so I’m playing with the poker “alpha” I created by pushing harder than others thought would show returns.
Given that there are enough similarities between poker and investing, I put in a lot of hours reading and learning during the pandemic (an ongoing process as evidenced by the frequency with which I’m coming in here asking @spidercrab to explain something), and I think the upside is worth the downside risk as long as I pull the plug soon enough if I’m failing.
I mean, plug 16% or 24% returns in instead of 12%, and run the math on 30 years of that. The difference is my upside. The downside is an extra year or two living off what I currently live off of to replenish retirement savings.
But if I pull the plug I’ll post it and probably become the loudest voice here avocating for index investing and if not, then my track record will eventually speak for itself.
I’m genuinely annoyed that I didn’t buy some of the ETF shorting ARKK. I wonder what she’ll do when there is no more money coming in to manage? Slink away into silence? Become a tech analyst for lolCNBC and join Kramer every morning? Claim victory on the stocks she owns that turned it back around and claim vulturous shorts for the rest?
She doesn’t need to do anything. Kicking it on the beach seems like the optimal answer (which I suppose may be covered by ‘Slink away into silence’).
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Naw man. If the bet was as sure as you describe, a hedge fund would just lever it up/use derivatives to make it a 60 or 100% return.
You’re likely underestimating the downside risk and severity. In particular, it’s not reasonable to assume that the value of the target is it’s pre-deal value if Microsoft abandons the deal. The fact that Microsoft backed out is additional information. The reason Microsoft would drop the deal is because something terrible happens to the business. (Or antitrust, but that seems unlikely.)
Or they find something in due diligence.
You would never read a book on fixing cars then think you can fix a car better than a professional mechanic. There are very very smart people who do merger arbitrage as their entire job and have done so for decades. It is laughable to think you have an edge here.
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Just FYI (from a WSJ article):
- Buffett did not buy this stock. It was Todd Combs and/or Ted Weschler, who run smaller amounts of money at Berkshire.
- Most of the purchases were made in October.
Right after reading this thread, this pops up in my news feed.
Ha ha, this is the portfolio manager version of Principal Skinner’s “no, the children are out of touch” meme.
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What would you say for $100 million a year?
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I mean, if the bet were as sure as I describe (ballpark 90%), and the downside risk was similar to what I described, I’d expect the return available to be slightly worse than the expected return in the broader markets.
17% * .9 15.3%
-18% * .1 -1.8%
15.3% - 1.8% = 13.5%
Which would be annualized to about 10%. So it’s about what I’d expect it to be, right?
Perhaps the main difference here is that I am bearish about the broader markets and other opportunities available, that I have way fewer tools available to me to go short, that I am way more hesitant to go short than a hedge fund is, and thus my criteria for evaluating this opportunity are very different?
For me it’s cash or this opportunity, because I think the markets are still overpriced. And I think that cash is subject to bad inflation.
That’s very possible.
Right, I mean I placed the likelihood of MSFT backing out on its own at virtually 0. Maybe I’m extremely wrong about that, I mean it being 5% instead of 0% wouldn’t be an insignificant, it would take the EV from +13.5% to +11.1%. I’d still be happy at that EV, so I’m okay with that additional downside.
Antitrust seems significantly way more likely than MSFT just backing out.
Depends what’s wrong with the car. My HVAC blower stopped working in my car, so I Googled it. The part was like $80-100, and it takes like 20 minutes and is pretty easy. Mechanics would charge $200-300 for labor, so I found a YouTube video and did it myself. In high school I bought a book about fixing the kind of car I had, and my dad and I would do the spark plugs, air intake, etc ourselves. Simple stuff, but it saves money. That’s neither here nor there, though.
I don’t think I have edge on them. I mean, a lot of them probably got in at better prices than I did, or levered it up, or have a better understanding of the exact EV of the play. I don’t need to have edge on them here, I just need it to still be +EV relative to buying an index fund or keeping it in cash.
Yeah I saw coverage of Buffett’s letter late last night, he is saying that they got in after the sexual harassment lawsuit took it from $95-100 a share to $75-80 a share, but before a delay in a couple of key games based on personnel changes after the lawsuit took it down to $56-65 a share. It’s still an approximately $1B position for Berkshire.
Well, I more or less agree with the headline…
BUY THE DIP
dkng down a lot today cause well obviously that stock is not a winner with inflation.
who’d own that…oh right.
Maybe her future is already having an ETF set up to buy everything that’s been battered down by about 90%.