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I've been answering emails privately for the past year. If you sent me something, I've responded. I felt it was time to update some popular email topics on Ask Kuppy.


Kuppy, Now that AIM has cut its dividend, does that change your opinion?

I buy stocks based on valuation. I see dividends as an extra bit of upside or a way to lower my cost basis. If I think something is cheap, I don't care if they cut the dividend. If anything, something cheap usually has some financial leverage and retaining the cash from the dividend helps to de-risk the thesis. Less downside is always appreciated as sometimes, I really do get the thesis wrong. By cutting the dividend, AIM will retain approximately $120 million a year on the common stock and almost $20 million on the preferreds. That's a lot of risk reduction. I've used the share price decline following the dividend cut to add to my position. I don't know what else to say. Nothing has really happened except the shares dropped and the thesis was de-risked.

On a separate note, I received a few dozen emails asking what I was going to do now that the dividend was cut at AIM. I responded to everyone this time, but it's hard to respond to everyone in the future. I am not an investment advisor and am not offering investment advice. This site is about what I'm doing with my money. It is intended to open a discussion amongst friends and readers. Please, do not buy shares of something if you do not understand it. If you buy something because a guy you've never met bought it, then you're on your own if something happens. If you want to discuss the pros and cons of the investment with me, that's a different story and the reason that I have this site in the first place. (Rant over).

Looks like you sold the shakeout in Bitcoin, right before it went parabolic like you predicted. Did you ever get back in? Did you ever get your money back from Bitfinex?

I sold because I felt that repeated headlines of bitcoin thefts would reduce the attractiveness of Bitcoin. Clearly, I was wrong. That said, I made about 35% in 4 months, so it wasn't the worst investment ever... I had thought that Bitfinex had lost all of my bitcoins as they were blocking access to user accounts for almost a month. It turns out, that in the end, most of my Bitcoins were fine. I did lose those Bitcoins that I had used as collateral for a margin loan to buy more Bitcoins (you're supposed to leverage fx, right??). In any case, I unwound everything and haven't looked back.

HK,

Does Amazon buying WFM remind you of AOL buying TWX and using overvalued currency to take out something real?

Yes and no. AOL was swallowing something that was likely worth much more than itself in order to preserve value. AMZN is worth something and using its currency to buy something complementary--that's what shareholders give you overpriced currency to do, in the first place. Will it mark a top in FANG craziness?? It just may. However, I'm not putting any of my own money on that view.

When will the TSLA bubble finally collapse in accelerating losses and accounting fraud?

Smarter guys than me keep asking themselves that... lol. FWIW--I have no positions in TSLA

Kuppy,

Still own Energold?

Unfortunately, I still have a few. I intend to sell the rest of them on the next uptick. Sometimes, you just get an investment wrong. This was one of my worst.

Dear Harris,
I'm a long time reader of your blog and appreciate your posts.
Out of curiosity, how'd you decide to stay out of energy in mid 2015? The early 2016 crash was great timing on your part, but a lot of sophisticated investors lost their shirts getting in mid 2015.

I’m not going to say that I 100% side-stepped the decline in energy. I took a few small bruises. The main thing protecting me was that I normally don’t invest in commodity producers any more (I had a bad experience in gold mining names in 2008). So I was insulated simply b/c I didn’t look. When things got into silly-land, I got involved in credit and a lot of pipelines and other MLP assets but that’s only when it got REALLY silly in early 2016.

OK, I get it. Short DRYS. But I'm not into shorting anything. I see DRYS is sinking even as I write. My question: When will be the time to go long? At much less than a penny a pop how wrong can a buyer be if he buys for 60 cents vs 24 cents? After all, this thing will come back to life eventually, maybe $2-3 or more.

Traders can maybe make money trading DRYS. However, it sure seems like a hard way to make a dollar.

Kuppy,

How does the SEC let something like DRYS continue to screw over shareholders?

They're too busy downloading porn to notice... lol http://www.dailymail.co.uk/news/article-1364692/Sleazy-SEC-workers-caught-downloading-porn-office-computers-earning-figure-salaries.html

Are you still a big fan of Trump? It looks like a total Klusterfuk over there.

I'll admit that it's not quite going how I had hoped. That's why I sold most equity assets this spring when it seemed like lower taxes and less government were likely to take much longer to be implemented. As for Trump himself, he remains a true schmuck--however I think he'll ultimately outsmart all of those gunning for him and fix America as the problems are so obvious and easy to fix, if not for special interests getting in the way of the fix. At least Trump is the first president in ages who can actually verbalize what the problems are. The others were part of the problem.

Awesome trade in SBLK. Anything else interesting in shipping?

I'm watching a few sectors and individual companies. It's hard because every time you think that supply will abate, someone goes and orders more boats, even though demand is only growing slowly. There will be opportunities though. I'll let readers know if I do something in the sector.

IF everything is overvalued, how do you keep your mental sanity? How do you stay active in the markets? I find it so hard to sit in cash when the market keeps going up each day. I feel like I'm missing the opportunities.

To start with, everything is NOT overvalued. There are opportunities. It's just harder. I stay busy by visiting companies, going to conferences and travelling. I'm always trying to learn about a new industry or sector. You never know when something will get you thinking about something interesting. This period of market overvaluation is a great time to increase your experience in sectors that interest you. It beats being tied to the computer.

As for the market itself, I don't care what it does each day. I am only looking at individual situations. I rarely even notice what the market itself is doing. If you miss some upside by not being involved, who cares?? You'll miss a lot of pain on the way down too.



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