Tanelorn,
Blue Contrarian Fund does not believe in the limited upside to short funds.
Please correct my entry as it looks bad starting out exactly where I finished last year
Tanelorn,
I did not know what you’re talking about - everything is working just fine the way I see it . In a completely unrelated note, Tanelorn Capital is off to the races with first place and a 30% gain for the first day of the contest.aristotelian wrote: ↑Tue Jan 08, 2019 9:16 am Something is wrong. The stock I picked to short is up 5% and I appear to be in last place. Clearly a spreadsheet malfunction, please fix!
Oops, fixed (long instead of short JCP). And you’re in 4th place already!FinancialDave wrote: ↑Tue Jan 08, 2019 10:11 amTanelorn,
Blue Contrarian Fund does not believe in the limited upside to short funds.
Looks like I was right about the craziness for Sears - it went from down 30% this morning to up 30% by the close, doubling off the lows all within a single day! Tanelorn Capital went from the top of the ranks with +30% this morning to, well, we do take a long term view here so we’ll just short and hold.
I’ve got your pickle antidote right here. Fixed (it was an autocomplete glitch - the fund above you in the spreadsheet had AAPL).
Thanks, fixed.librarianaire wrote: ↑Fri Jan 11, 2019 3:49 am Apologies for not making this more clear in my original post: all three positions in the Social Epistemology Cardigan Fund are Short, not Long. It’s probably better to clear this up now, while I look like an idiot, than later, when it will be demonstrated conclusively.
Thanks for running the contest.
Actaully, I have been wondering this for awhile, and one of the reasons the Blue Contrarian Fund does not pick Short bets anymore.BackOfTheNet wrote: ↑Tue Jan 01, 2019 2:22 pm Again, I meant to get this up earlier, but this is the thread for the 2019 hedge fund contest. You can find the previous year's contest (2018) here:
viewtopic.php?f=10&t=236514
Like last year, Tanelorn will be providing fixes and commentary as the year goes on.
- If a stock is taken out in a merger or a bankruptcy during 2019, we will do our best to do the right thing. An all cash offer will result in a freeze at the takeout price. An all stock offer will result in the conversion of the position to the acquiring company's shares. Mixed cash and stock offers, you'll just have to trust me to saw things off fairly.
Hedge funds have a feature much like stocks - the most you can lose is all your money. You may think this sounds bad, but consider the traditionally “safer” managed account framework where someone trades with your permission in your brokerage account with limited access. They can’t just take your money and blow it on living it up or fly off to Panama with it the way Madoff or others have done with hedge funds that were really scams. Managed accounts, however, when they use margin as many hedge fund type strategies do, can lose more than 100%, and since it’s your account, you’re on the hook if that happens. Here was an example of an options trading manager who blow up 125% or so of his clients money.FinancialDave wrote: ↑Fri Jan 11, 2019 1:04 pm I see what happens when a company goes bankrupt -- so what happens when a Hedge Fund goes bankrupt, how do you accomodate that -- with an IOU? I don't remember it happening yet, but this year may be the first.
The advantage of the separately managed accounts is that there is perfect transparency. Every customer of OptionSellers.com has their own brokerage account and they can readily see and monitor their positions. The clients merely authorized Option Sellers to perform trades on their behalf. Of course, the disadvantage of this setup is that clients are now on the hook for their underwater accounts. So, they lost not just their investment but owe more money to cover the additional losses. In a true hedge fund structure you can only lose your principal but as an LLC equity holder or Limited Partner in an LP you owe nothing further.
Yes, deadline was a week ago, sorry.
And our leaders are off to a good start, each up over 10% in the first week of the contest on the back of their presciencent short pick PG&E (PCG), who announced an intention to file for bankruptcy in the coming weeks if no legal bailout was forthcoming from California for their wildfire liabilities. The stock is down just over 50% today.Tanelorn wrote: ↑Mon Jan 14, 2019 6:54 am Congrats to ladycat, drk, and Dumb Luck for their shorts of the troubled CA utility company, PG&E (PCG). They announced this morning they are filing for bankruptcy in response to the legal liabilities associated with the their possible role in the recent wildfires.
https://www.businesswire.com/news/home/ ... 005370/en/
None of our savvy fund managers were long, and we hope none of our readers were either.
That letter will be hard to topwhodidntante wrote: ↑Wed Jan 09, 2019 6:32 pm Power Mouse Capital letter to shareholders:
I feel like I should explain the apparently crazy positions I have taken with your money for 2019. I have shorted one of the most loved, most rip roaring tech growth stocks on the planet, Netflix. What you might have missed is that Netflix is a real house of cards (wakka wakka). They are debt laden, and they are spending huge piles of their investor's cash acquiring content. Their own experiments in producing content have also proven to be a cash shredder, with licensed content getting more viewing time. I guess they did have the highly successful bird movie, but the blindfold Sandra Bullock wore is a metaphor for how blind their leadership has become.
Combine that with the fund's only long position, Disney. Sure, you could point out that Disney stock has traded sideways for five years. What idiot would go long in such a stock? The idiot who has control of your money, that's who. Disney, you see, is launching their own streaming platform later this year. And they already have Hulu, so it's possible they even know what they are doing! We expect Disney to pull content from Netflix, or charge a king's ransom for it. And you can only watch the Netflix bird movie so many times.
But you are not a fancy hedge fund manager, so you really shouldn't worry about all of this. As always, thank you for the fees. I had a nice lobster and cognac for lunch. Was your McDonald's OK? Write soon!
Your truly,
whodidntante
The year is young...SagaciousTraveler wrote: ↑Wed Jan 16, 2019 8:36 am
We all have two options:
1. Declare drk & dumb_luck the winners. I didn't see anyone else short PCG
2. Continue but have drk & dumb_luck start a real hedge fund and invest.
Ladycat is also short PCG - she’s in 3rd.SagaciousTraveler wrote: ↑Wed Jan 16, 2019 8:36 am 1. Declare drk & dumb_luck the winners. I didn't see anyone else short PCG
2. Continue but have drk & dumb_luck start a real hedge fund and invest.
Sorry Ladycat!Tanelorn wrote: ↑Wed Jan 16, 2019 10:04 amLadycat is also short PCG - she’s in 3rd.SagaciousTraveler wrote: ↑Wed Jan 16, 2019 8:36 am 1. Declare drk & dumb_luck the winners. I didn't see anyone else short PCG
2. Continue but have drk & dumb_luck start a real hedge fund and invest.
However, I’m definitely not giving up. Just because Tanelorn Capital is down 125% currently(!) on the news that Sears owner Eddie Lampert has won the bankruptcy auction and will keep the firm alive rather than liquidating everything, we still hold little hope out for SHLDQ equity holders. Certainly I’d rather be a PCG shareholder than a Sears one at today’s prices, but given the choice I’d rather be short both. Time will tell, although we will note we are grateful for the lack of margin calls in this contest.
Also...Tanelorn wrote: ↑Wed Jan 16, 2019 10:04 amLadycat is also short PCG - she’s in 3rd.SagaciousTraveler wrote: ↑Wed Jan 16, 2019 8:36 am 1. Declare drk & dumb_luck the winners. I didn't see anyone else short PCG
2. Continue but have drk & dumb_luck start a real hedge fund and invest.
However, I’m definitely not giving up. Just because Tanelorn Capital is down 125% currently(!) on the news that Sears owner Eddie Lampert has won the bankruptcy auction and will keep the firm alive rather than liquidating everything (+40% more today), we still hold little hope out for SHLDQ equity holders. Certainly I’d rather be a PCG shareholder than a Sears one at today’s prices, but given the choice I’d rather be short both. Time will tell, although we will note we are grateful for the lack of margin calls in this contest.
Ask OptionsSellers.com’s clients - they lost 125% recently. The short answer is - margin or short selling.SagaciousTraveler wrote: ↑Wed Jan 16, 2019 10:27 am I checked and you are down over 100%. How does one lose more than 100%?
It has not been a good day to bet against Sears, and Tanelorn Capital is currently down 146%. As for capping losses, I’m not sure why you would want to deprive other contestants from having someone to beat when their stock loses only 100% by capping my losses at a mere 100% . As a practical matter, there are no provisions things like this in the terms of the contest, which is mostly designed to be fun and easy to administer.Should we CAP the losses at 100% so you can't go any further? Or should we let it ride and see how negative it can get?
I think we just assume a margin clerk who checks his balances along the lines of a buy and hold long term investor - maybe once a year to see if anything needs rebalancing .whodidntante wrote: ↑Wed Jan 16, 2019 12:51 pm Is a loss of over 100% a bust out? Or do we assume unlimited helicopter angel money?
I want to see how low it can go.whodidntante wrote: ↑Wed Jan 16, 2019 12:51 pm Is a loss of over 100% a bust out? Or do we assume unlimited helicopter angel money?
I propose a third option... Have Ladycat and drk close their positions in PCG and spend their windfalls on vacations with Carnival (CCL)!SagaciousTraveler wrote: ↑Wed Jan 16, 2019 10:08 amSorry Ladycat!Tanelorn wrote: ↑Wed Jan 16, 2019 10:04 amLadycat is also short PCG - she’s in 3rd.SagaciousTraveler wrote: ↑Wed Jan 16, 2019 8:36 am 1. Declare drk & dumb_luck the winners. I didn't see anyone else short PCG
2. Continue but have drk & dumb_luck start a real hedge fund and invest.
However, I’m definitely not giving up. Just because Tanelorn Capital is down 125% currently(!) on the news that Sears owner Eddie Lampert has won the bankruptcy auction and will keep the firm alive rather than liquidating everything, we still hold little hope out for SHLDQ equity holders. Certainly I’d rather be a PCG shareholder than a Sears one at today’s prices, but given the choice I’d rather be short both. Time will tell, although we will note we are grateful for the lack of margin calls in this contest.
I was trying not to draw attention to the bottom of the barrel!
I'll be rooting for your most epic comeback. Also, if you are going to be something in a contest, it should be really good or really bad. Don't be average like me.
That's good. I'm tired of Power Mouse Capital shareholders sending me McDonald's wrappers with choice messages.ReformedSpender wrote: ↑Thu Jan 17, 2019 3:23 pm Short positions in Netflix should see a health bump tomorrow on mixed earnings. $3 billion negative cashflow projected for 2019 even after recently hiking their subscription prices
https://www.reddit.com/r/wallstreetbets ... they_said/aristotelian wrote: ↑Wed Jan 16, 2019 1:53 pmI want to see how low it can go.whodidntante wrote: ↑Wed Jan 16, 2019 12:51 pm Is a loss of over 100% a bust out? Or do we assume unlimited helicopter angel money?
Lol, I don't grasp all the details but that story makes me want to short Robinhood in next year's contest!bgf wrote: ↑Fri Jan 18, 2019 8:12 amhttps://www.reddit.com/r/wallstreetbets ... they_said/aristotelian wrote: ↑Wed Jan 16, 2019 1:53 pmI want to see how low it can go.whodidntante wrote: ↑Wed Jan 16, 2019 12:51 pm Is a loss of over 100% a bust out? Or do we assume unlimited helicopter angel money?
warning, this subreddit is not for the faint of heart; however, this person just incurred a loss in excess of 1800% and has had his account closed.
dat margin tho
from what i can gather, not being an option expert, the kid entered into a box spread with about $5,000 thinking it was a "risk free" trade based on price movement. he thought his total risk was only $500. the risk, however, is in the other party exercising the options. rather than being risk free, he had over a quarter of a million dollars in exposure. robinhood's risk management system apparently didn't pick up on this. when it was discovered somehow, they closed his account but not before he'd lost over $50,000.aristotelian wrote: ↑Fri Jan 18, 2019 8:35 amLol, I don't grasp all the details but that story makes me want to short Robinhood in next year's contest!bgf wrote: ↑Fri Jan 18, 2019 8:12 amhttps://www.reddit.com/r/wallstreetbets ... they_said/aristotelian wrote: ↑Wed Jan 16, 2019 1:53 pmI want to see how low it can go.whodidntante wrote: ↑Wed Jan 16, 2019 12:51 pm Is a loss of over 100% a bust out? Or do we assume unlimited helicopter angel money?
warning, this subreddit is not for the faint of heart; however, this person just incurred a loss in excess of 1800% and has had his account closed.
dat margin tho
I feel really good about that short in our little contest. However I don't feel very good about the 7% of the workforce being laid off.ReformedSpender wrote: ↑Fri Jan 18, 2019 7:56 am Telsa announcing layoff and lowers Q4 guidance. Troubled times continue for this automaker:
- proposed china plant to build (where will Elon find funding?)
- weakening demand
- quality control issues
- Unpaid suppliers and pending lawsuits
- debt coming due and no cash raised with stock near all time highs
and oh yeah, the big one...competition
Disclaimer: Wrecked Capital is very, very, very short Telsa
bgf wrote: ↑Fri Jan 18, 2019 8:55 am from what i can gather, not being an option expert, the kid entered into a box spread with about $5,000 thinking it was a "risk free" trade based on price movement. he thought his total risk was only $500. the risk, however, is in the other party exercising the options. rather than being risk free, he had over a quarter of a million dollars in exposure. robinhood's risk management system apparently didn't pick up on this. when it was discovered somehow, they closed his account but not before he'd lost over $50,000.
robinhood has apparently sent an email out to all its customers that box spreads are no longer allowed and that anyone who currently has one will have the position closed out lol.
he's been contacted by some finance journalists to write an article about it, so you might see it pop up in a news feed somewhere.
below is the original thread.
https://www.reddit.com/r/wallstreetbets ... n_to_stop/
Thanks! Now I just need Chipotle to give a few more people food poisoning and my other short position will be a winner! Those who shorted Tesla might be in a good position.Tanelorn wrote: ↑Mon Jan 14, 2019 6:54 am Congrats to ladycat, drk, and Dumb Luck for their shorts of the troubled CA utility company, PG&E (PCG). They announced this morning they are filing for bankruptcy in response to the legal liabilities associated with the their possible role in the recent wildfires.
https://www.businesswire.com/news/home/ ... 005370/en/
None of our savvy fund managers were long, and we hope none of our readers were either.
https://www.marketwatch.com/story/trade ... 2019-01-22SagaciousTraveler wrote: ↑Fri Jan 18, 2019 11:47 ambgf wrote: ↑Fri Jan 18, 2019 8:55 am from what i can gather, not being an option expert, the kid entered into a box spread with about $5,000 thinking it was a "risk free" trade based on price movement. he thought his total risk was only $500. the risk, however, is in the other party exercising the options. rather than being risk free, he had over a quarter of a million dollars in exposure. robinhood's risk management system apparently didn't pick up on this. when it was discovered somehow, they closed his account but not before he'd lost over $50,000.
robinhood has apparently sent an email out to all its customers that box spreads are no longer allowed and that anyone who currently has one will have the position closed out lol.
he's been contacted by some finance journalists to write an article about it, so you might see it pop up in a news feed somewhere.
below is the original thread.
https://www.reddit.com/r/wallstreetbets ... n_to_stop/
Think he'll become a Boglehead? Sort of a 'saw the light' kind of thing.
With a dissenting perspective, our Random Tulips traders did not include Facebook among short positions. We believe there is a network/addictive effect that will keep monthly active user numbers high. (It's hard for many to quit) Advertisers and company pricing will follow. Facebook, we surmise, is not unlike Tobacco for the Information Age.ReformedSpender wrote: ↑Fri Jan 18, 2019 1:55 pm Facebook now giving up most of its gains for the day after Washington Post reports that regulators are discussing imposing a record-setting fine against the company for privacy violations. Couple this with the fact that younger users, millennials and advertisers are fleeing Facebook in droves, its frothy valuation is not supportive and further downside should be expected.
Disclaimer: Wrecked Capital is short Facebook
For 2017 wildfires. Still bad for the PCG shorts. Meanwhile, INSY keeps going Up in Smoke!ResearchMed wrote: ↑Thu Jan 24, 2019 2:27 pm PG&E just found NOT guilty in CA wildfires...?
If so, that should change the contest results.
RM