last I saw it PRSC shares were something like 25% of their AUM. Thats crazy, so I buy them selling down for diversification coupled with a view that its had a good run

Billion dollar market cap with slow top line growth making $31 million/year in profit with no room for improvement on costs or margins? And now insiders selling? Easy sell. Was a nice pick back in the day, but those numbers and facts usually mean it's time to cash out.

I haven’t followed Colieums portfolio super close but I want to say PRSC has been a super heavy % of their portfolio for years now. I also want to give Shackleton more credit for why he’s selling beyond “it’s had a good run”. He seems to be more sophisticated than that. Just too much of a coincidence for me that all these changes are going on at the same time as Coliseum now is starting to sell in the open market.

Hard to read too much into that selling. They're bag holding PRPL and maybe just needed liquidity to buy more or meet some redemptions.

Sent from my SM-G930F using Tapatalk

It’s not just the selling, it’s all these changes going on at once that seem significant.

Cutting a lot of things for losses overall so that I can go irresponsibly short on TSLA. Only keeping conviction longs, though depending on the situation I probably cut ORBT as well. Sometimes you have to ante up when presented with a potentially life altering bet.

Current longs (based on size)
AGO, DS, ORBT, HFRO, EFC, DGLY, PRSC preferreds

Super balls deep short: TSLA

Waiting at the wings: a pile of cash to go even more short TSLA.

Are you short or buying puts on TSLA?

Both. In one of my accounts, I can keep a short interest free as long as I have cash to cover and it isn't hard to borrow, so I'm straight short in that one, and buying leap puts hand over fist in my other accounts.

Interesting forum thread link: "A Different Approach To Asset Allocation"

In it, a broke econ grad student (NW = -50k) in 2007 decides to invest in the stock market, heavily leveraged. He goes busto and hits NW = -200k in early 2009.

The idea he's stuck on is "time diversification." Consider a worker who takes the traditional path of saving and investing some % of his income. He might have 0k in the market in 2000, 250k in 2010, 600k in 2020, etc... Why expose yourself to a slope of increasing risk? If your equity exposure is constant across time, then a 'sequence of return risk' won't be such a big deal (whoops!).

He got the idea from this short article: mortgage your retirement. Anyway, I found it fun to read and examine the way this guy thinks.

Good find. Thank you!

stinkypete from these forums, a man I respect, said a few years ago that about 300% net long is the optimal asset allocation. I agree with him.

This doesn't apply to now of course. The bull market is too far advanced and valuations are too stretched.

https://finance.yahoo.com/quote/SNH.DE?p=SNH.DE

has anybody take a look at Steinhoff after the scandal?

It's trading at 3.5 EV/EBITDA

p/e 0.27, but obv they have a huge amount of debt...

what do you guys think?

market timer still posts on the forum and is doing well nowadays. I think he has a $1 to $2 million net worth now.

I believe this concept was discussed at length in this book as well: https://www.amazon.com/Lifecycle-Inv.../dp/1458758427

He would have been hard-pressed to do worse if he tried, given that he claims that he has an annual household income of $400k and annual expenses of $100k.

IIRC, he decided to go all cash and real estate (mostly cash) in 2011 or 2012.

Two lessons can be learned from this: 1) Income minus expenses matters a lot. 2) Sticking with his original scheme didn't happen* and he'd have at least an order of magnitude more money today if he had went with damn near any other investment scheme.

*it virtually never happens because people will **** themselves at every opportunity

Do you guys think SPY or QQQ is a better buy for a 10-15 year timeframe? (>in b4 shiller pe)

QQQ is less diversified and if you're buying index ETFs its because you believe in EMT so may as well go for the only free lunch in EMT, diversification.

up 162% from this post

I'm not involved/haven't looked at Steinhoff but I remember thinking this company was very questionable. It first started when they purchased Mattress Firm at a gigantic premium and then they bought out one of our crappy "value" investments which also had zero relation to the rest of their portfolio besides also being a retailer. Their deal due diligence seemed really poor and I guess it's showing.

Given there's a lot of debt trading between 50c to 90c ahead of you (a bunch at 78c, it seems like most debt is subsidiary debt with I'm assuming no parent guarantee) it's unlikely you will get anything out of a reorg if one occurs besides possibly an out of money option. I haven't had much experience with reorgs outside of the United States but from what I've seen it can get really ugly if the lead creditor decides to just screw everyone else as the process doesn't seem to be as formal or "fair".

Dumping one of my crown jewels (the PRSC preferreds) to go even deeper short TSLA. Keeping everything else, so pretty much an all in.

Current longs (based on size)
DS, AGO, ORBT, HFRO, EFC, DGLY

Super duper balls deep short: TSLA

Waiting at the wings: a pile of cash to go even more short TSLA. Gonna decide what time frame/strike to buy more puts after Q2 earnings.

What tlsa puts you buying and why?

I can't convince myself that any long term puts are a great bet ATM. They are expensive as fk and it cant be as easy as tsla being out of cash in spring/summer 2019 = game over. Although EM's behavior screams meltdown and that is a giant positive.

To me it seems like there will be a better opportunity for a long term short in the future.

June 200s, 150s and 50s.

Really the question boils down to can they conduct a capital raise or not in the next few months. If they can, then I concede defeat for now and will take my 30-50% loss in IV.

If they can't, I don't see how in the world they can survive the March 2019 convertibles unless they jack the stock price beyond $360 and maintain it. If they cannot, then it's literally game over.

The big issue I see is that it seems like a decent bet, but why are institutions and insiders still holding if an obvious and imminent doom is just a few months away?

I'm assuming all EM has to do is have a profitable quarter and he will be able to rope in some capital.

It's actually backwards; if the insiders sell even one share that isn't for tax purposes, then I will concede defeat as well. That the insiders haven't sold a single share this year other than for tax purposes is a very big tell. Either they have materially negative information preventing them from selling, or they are enjoined from selling by the SEC at this point. Or, they are choosing to light money on fire intentionally to gaslight shorts, which I suppose could be a thing.

I assume EM will have a profitable Q3 if he survives that long. The question is whether he can raise or not, because I think if he could have raised he would've done so by now, so he might also be enjoined by the SEC or from the capital markets from doing so. If it's the latter, then I suppose it is possible that he can raise, but perhaps not with a whistleblower lawsuit pending.

As for the large institutional holders, who knows what they are waiting for.