11/18/2012
December 3, 2017
10/27/2012
December 3, 2017

11/10/2012

A Greek, a German, a Portuguese and an Irishman walk into a bar. The German pays.

Something like that, except even the Germans cannot afford the bill for this one….


Lately the Mongolian stock market took quite a beating. I can think of various reasons. But since you spend a large part of the year in UB I thought it would be nice if you could give your view on local companies (those quoted on MSE). What are your prospects for the coming winter / year ? How about the political climate?

For your info: I hold a broadly invested portfolio in MSE with the intent to capture the Mongolian stock market and not trying to bet specific companies.

I feel that most of the decline in the MSE is caused by the new rules that the London Stock Exchange put in place. These require additional paperwork and the opening of a bank account in order to trade shares. The process of getting current investors signed up has been slow and tedious. The net result is that there are a lot of longs that want to sell for various reasons, but very few new buyers. Basically, only guys looking to sell shares are setting up the new accounts. Everyone else is either staying long or not bothering to open new accounts to buy more shares. It’s really a very technical problem created by the London Stock Exchange which seems to have created a real problem in the short term.

Over time, I think that the MSE will be a very good stock market for investors.


how can you be so naive to believe that the oligarchy sends american troops to the mid-east to bring them ‘democracy’?
it’s always been about the military/ind complex & profit.

I’m not being naïve,I hate the military industrial complex too. The whole system is toxic—both parties


Gotta watch the whole 2 min but thought this was pretty good documentary…analogous to most traders and mkts in general…

http://www.youtube.com/watch?v=VWuiGWkd7mM&feature=player_embedded

I post this for readers who want to watch. It’s suddenly a cult favorite amongst traders…


Kup,

What’s the purpose of holding vxx with a 90% gain when you could sell and short again? It appears to me a 5% increase of profit on your current position would be a 50% profit if you sold the short and entered the short again at the new level or you could sell 100% of the current short and enter back in using only 10% of the capital to realize the same 5% net gain of keeping the current short open.

On the site, I post a price on the day that I mention it. This isn’t meant to be a suggestion of the price that I paid or received. Instead, it’s just a closing price. Naturally, I resize positions all the time and with VXX, I have constantly been adding to it over time as it decays.


Kuppy–Egd has one of those weird charts where structures repeat themselves. Let’s call it the broken off tree with shrubbery underneath, it can be traced back to 1997 on a long term chart. I have found a few other examples of the same repeating pattern in the PM area, the others all silver explorers, Mrz.v, Sol.v, and Ktn.v. What do you make of it? Is it a favorable omen? It does suggest that if the same is to happen again, and we are at the base, that a price into the low 20’s might be projected, which I think is something you have mentioned in the past based purely on fundamental grounds.

I really find it hard to make much out of chart patterns. They are just a reaction to traders moving shares around. You might be better at reading these sorts of things than me, but I don’t see much in the EGD chart that would suggest much of anything execept a very big consolidation.

As for silver, unless they continue to print huge globs of money, it’s going lower. There is a lot of supply coming.


Hi Kuppy,
I found out about your site from Above Average Odds Investing’s blog. I think you have a lot of interesting ideas on your blog and in the VIC.
I agree that buying a house with a fixed mortgage is a cheap way to short bonds, but do you have any concerns that a rise in interest rates to combat inflation will cause housing prices to fall?
I’m interested in your thoughts and also look forward to reading more about your experiences in emerging markets.

In the short term, a rise in interest rates could lead to a drop in home prices. Longer term, at these borrowing costs, inflation is your friend.


I’ve got to your blog after reading about AYR at KelpieCapital. This is a nice blog with very interesting ideas. thank you for sharing.
At first, i was really hooked up with the idea of AYR. the only big issues i thought about were the LTV and interest cover proportion.
However, i was quick to find out that there is one major thing you didn’t deal with in the post, which may really effect the whole theses. I’m talking about the Capex needs of the company, especially due to the fact that it’s aircraft fleet the oldest in the industry – average fleet age of 11.1 years.
that in comparison to:
Air Lease: 3.6 years
AerCap: 5.6
AWAS: 6.9
ILFC: 7.9
and FLY Leasing: 8.7.

Hence it’s clear that AYR is due for huge amounts of CAPEX in the following years in order the replace its elderly planes.

I would really like you to comment on this issue.

That metric is based on average age per plane. However, most of the value of the portfolio is in the newer planes that they have. After the most recent charge in Q3, an even larger percentage of the total portfolio is newer planes. Clearly AYR has an older fleet and this should be a concern. However, at half of book, a lot of that concern is reduced for me.


Many thanks for your helpful and outstanding blog. I study and think about your comments.

I live in Montana, not far from many natural gas producers, here and in Canada and North Dakota. Work responsibilities prevent me from flying off to Mongolia or Mozambique (I’d like to), but I can spend a couple or three hours a day trying to identify natural gas company-specific opportunities.

Since we can expect lots of bankrupties and asset turnover from heavily indebted gas exploers in the future, and especially in the next recession, I am wondering how to best spend my research time.

Could you please offer one broad suggestion concerning what types of opportunties I should be hunting? I think I’ll learn a lot just by reading reports daily, but I’m hoping you can provide a time saving tip or two.

I assume opportunties could crop up in the form of either equity or debt. (I don’t expect to retire on that insight.)

Thanks again for so generously sharing your valuable and interesting comments.

I really am not that close to the nat gas sector as I think that nat gas prices will stay under $4 for quite some time. Therefore, there aren’t any longs that interest me as many of these companies seem priced as if nat gas is going much higher, when as you point out, most of them are going bankrupt. For right now, it seems as though there isn’t much to do except maybe shorting a few of the more leveraged players (though I hate shorting individual companies). Maybe in a few years, there will be a chance to get long some of the companies that make it through this cycle. That said, I am short some UNG as a way to be bearish nat gas prices and capture the contango decay.