Reinventing The Death Spiral

April 9, 2017 11:47 PM


About two decades ago, some unscrupulous hedge funds began tricking unsophisticated small cap companies into agreeing to “death spiral” converts (convertible debt). These were called “death spirals” as there was no set floor to the conversion price. Rather, they converted at some date in the future based on then market prices. Despite promising not to, these funds immediately began shorting shares with the goal of destroying the share price and converting as low as possible in order to take cont... more

Categories: Current Investments
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Believe In America (Part IV)

March 26, 2017 6:52 PM


Almost 5 months ago, Trump won the presidential race. At the time, I said Trump would herald dramatic change in how the government worked and served the American people. Along the way, regulations and taxes would be reduced and business would boom. Part of what made Trump so unique was that he wasn’t part of the Washington establishment. He couldn’t be controlled by special interests and he didn’t care about what people thought of him. Instead, he was a rich jerk who intended to bully and antago... more

Categories: Comments On Events
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Hasta Luego Mexican REITs

March 9, 2017 1:27 AM


Him: I think people are wrong. There are lots of instances where the Fed has raised rates and nothing bad has happened.Me: Name one time.Him: hmmm…. Oh crap!!Yea, we’re getting to that moment where people realize that rates may finally matter in a highly leveraged economy. My good friend Tal, made that point over a year ago.  I hope you took his warning and lightened up on interest rate sensitive assets.Let’s think of a typical REIT called Ponzi REIT (Ticker symbol PREIT). They’ve been out there... more

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NZME

February 26, 2017 5:23 PM


As I scour the world for opportunity, I’m usually looking at macro themes or misplaced pessimism or some other reason for an asset’s current undervaluation with an eventual catalyst. Sometimes, in that process, I simply stumble upon something that is unusually cheap. Normally I choose not to write about these, because being cheap tends to be boring—especially if there’s no added story. After some urging from friends, I intend to write about more of these situations. As always, the hard analytica... more

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Star Bulk Redux (Time To Book Gains)

February 24, 2017 1:54 AM


I like to invest in commodity sectors that are currently losing money but at an inflection point. The companies tend to be undergoing a winnowing process with lots of bankruptcy and dilution for existing shareholders. While this may sound terrifying for some investors, this process sets up the next bull market for that sector as it consolidates players, reduces capacity and often eliminates debt. More importantly, with assets in that sector valued at a substantial discount to replacement cost, t... more

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