Margin Trading Vs Short Selling - What's the Difference
Margin Trading Vs Short Selling - What's the Difference
The difference between the Margin Trading and Short Selling
What is Short Selling and How Does it Work?
Margin Account Vs Cash: Which is Better for You
Fidelity.com Help - Margin and Selling Short
OSTK massive collapse coming… here’s the proof
https://preview.redd.it/x042k1znzbk51.jpg?width=980&format=pjpg&auto=webp&s=f8b3ee88af87d8250f9330159122ff2910676db0 This is the highest probability short I've seen in years, aside from KODK at $50. I can tell you with glass-eye autist accuracy where OSTK's sales growth is headed for the current (3Q) quarter and beyond. Above is the simple quarterly sales growth (yoy) in yellow. Climbing quarterly sales growth equals climbing EV/Sales multiple (blue). Open and shut case, nothing to see here, right? Well, OSTK doesn’t report monthly sales, or we could more clearly see what’s happening with sales relative to this apparent sales growth hockey stick…. But, through combining a couple different sources of information, we can actually calculate monthly sales. I did this, because I suspected I might find something interesting… and did I ever. Step 1: Using available monthly industry data overlayed with monthly interpolation of OSTK quarterly sales data, we can calculate a very accurate picture of all pre-COVID monthly OSTK sales data. Of course, through the Apr-Jun COVID period things get wonky. But that’s also where things get interesting… We can combine the aforementioned calculations with very helpful recent clues that mgmt unwittingly dropped for us to see what’s coming for OSTK sales. Overstock.com mgmt:
April 30th (Q1 call): "April retail sales up over 120% YoY" May 12th (Annual Stockholders Meeting): "QTD (4/1 - 5/12) retail sales up over 130% YoY" June 10th (Investor Day): "Overstock Retail sales in April and May up over 120% YoY"
Side note:Did you catch that? Giving “April retail sales” on Apr 30th was a QTD update; and again, on May 12th, we got the same QTD update… But then for some reason, a full ten days into June, mgmt dropped the QTD and focused back only on April and May. Hmmm, I wonder why they dropped June off…
July 30th (Q2 call): ...\crickets* [no more updates on sales]*
Side note #2:Hmmm, now not only is a detailed QTD update missing, for some reason mgmt isn't telling usat allhow sales are doing through the first month of the new qtr (July), as they did on the prior qtr call. Just wait, we’ll see why.
Aug 11th (press release): Just 12 days later, mgmt quickly pushes through a sale of 2 million shares of OSTK to the public for the generic “general corporate purposes”.
Side note #3:Hmmm again- it’s almost as if they know the current levels being speculated into their stock (then ~$95) are unsustainable, and they want to take advantage quick while they still can… So, in those first incidents, OSTK's amateur-hour mgmt got so giddy when their declining, shithole business had a one-off dried turd bounce to brag about at the beginning of the pandemic lockdown that they lept with joy and let the kimono slip open. Step 2: With pre-COVID monthly sales now at our disposal, as calculated in Step 1, and knowing for a fact that Apr'20 and May'20 sales growth was in the range of ~121-139%, we can now easily solve for Jun'20 sales, giving us an incredibly accurate picture of the real story and look-ahead for Overstock (not to mention the blatant drop-off in excitement via mgmt communication right around June, which you’ll understand in a moment). What does this reveal? Mgmt’s short-sighted elation for those dizzy couple of months blinded them from seeing what was coming right around the corner, such that they should have kept their mouths shut to avoid embarrassment. It would have been nicely concealed in the consolidated quarterly sales figure, but with their comments above, we now know the truth: sales are dropping offHARD. Overstock’s market share is plummeting back to its steadily-declining ways. Solid yellow line is actual, and to help with visualization, I included my estimates with the dashed yellow line: https://preview.redd.it/ape17gstybk51.jpg?width=980&format=pjpg&auto=webp&s=09f48045346515ffff16285841ed70fb59aaee1d A different picture starts to emerge… That hockey stick quarterly growth line in the first chart no longer matches with the EV/Sales chart’s initial hockey stick move when we look at it monthly. June is coming down hard- it looks more like the little dipper. And wait till you see OSTK’s industry market share trend using this new-found info (along with the publicly available industry-wide monthly sales data): https://preview.redd.it/w2xh2yaxybk51.jpg?width=979&format=pjpg&auto=webp&s=e6eb4ed2a5a355ce9e0b8841561080de3d14a320 Look at that trend, which until now was concealed from public view due to the company’s consolidated quarterly reporting (top chart), and guess what that EV/Sales multiple chart (and stock chart) is going to look like once people realize this over the next 3-9 months? I used a conservative 125% for Apr and May; if I’d assumed the more likely higher figure (~130%), combined with knowing the consolidated quarterly sales were up 109%, the June drop-off would look even more dramatic. As for my fwd estimates, keep in mind I gave them a typical Christmas bump for winter 2020 (see monthly sales chart), even though it's likely a lot of would-be Christmas home furnishings sales were pulled way forward because of spring lockdown temporary-work-from-homers. And note the gray ghost line in the mkt share chart- that's an extrapolation of the trend from the prior three years, pre-COVID anomaly. I even gave them a 25% long-term boost in market share (e.g. 1.20% vs. 0.95%) above the three-year trend, assuming they get a big "eyeballs" benefit from having had this temporary blip of lockdown sales. The estimates show, even with those generous assumptions, they're still going to see 2Q21 qtrly yoy sales of -50% or worse. Ouch. The dashed line in the first chart shows that monthly projection in the form of quarterly (yoy) sales growth. Look at it again and think about matching that trajectory to the coming EV/Sales line, and hence, the stock chart. Skip to the bottom for the rec, but if you want some honey mustard dipping sauce to go along with your short/put OSTK tendies, here it is: Even on top of what you just saw above, this is an excellent short: Overstock is a market-share-losing company within the shitty industry of selling and delivering home furnishings. The industry deals with expensive shipping, logistics/returned/damaged-merch challenges, thin margins, and no barriers to entry. Remember how anytime AMZN announces it’s entering an industry, all the existing industry players get killed? Yeah, AMZN is competing here. Also some little guys named Walmart, Target, Wayfair, Houzz, and hundreds of others. It gets better: they're also still distracted by and wasting scarce resources on a tech fad/bubble from a couple years ago that is unmentionable here. They even tried to sell the main retail business (98% of their sales!) to focus on the aforementioned fad; there were no buyers. Profitability has been non-existent since this company started… more than 20 years ago. Even including last quarter’s COVID anomaly, if I’d plotted OSTK’s market share against just the e-commerce portion of the Home Furnishings industry, which is outgrowing the rest, not only would OSTK’s lockdown market share spike be flatter or non-existent, the long-term declining trend in its market share would be even more pronounced vs. its e-commerce peers.
The bottom line:
They report 3Q20 on ~Oct 29th; sales will def still be up yoy (the tail of the aforementioned pull-forward in home furnishing sales), but up way less than the +109% anomaly for 2Q20, and def down QoQ (this is for the LF-degens, see below). Hard to predict exactly how the market will react to just that qtr, and certainly depends on whether it’s trading at/above the highs of last week. I'm short shares, because at the very least, the dried turd hits the fan when they put up the big negative yoy numbers in 2Q21. If the stock stays elevated for long enough and/or climbs higher in the meantime, I'm also backing up the truck on spring+ 2021 far-OTM Puts. TLDR; OSTK sales and mkt share collapsing- long-term price target $15 (that's being generous). High-functioning degenerates: Short shares, keep some powder dry for margin/DCA in case it shoots higher in the interim. Common degenerates: far-OTM Puts, Mar '21 or later, as they come available. Low-functioning degenerates: you know https://preview.redd.it/y6ez677u1dk51.jpg?width=785&format=pjpg&auto=webp&s=62ac901274c7b4b04e782ee38e4e80afbd2df806
$PSTG: PURE STORAGE for them, PURE TENDIES for you
This is actually my first DD I've ever posted so fuck you and forgive me if this doesn't work out for you.I've been looking at $PSTG for a while now and if my buying power didn't get so fucked from my decision to buy 8/7 UBER puts, I would have been already all over this play. What had got me looking into Pure Storage was an unusual options activity alert. I've looked into this company before but didn't entirely understand what they do. Now after looking at them again, I'm still not exactly sure wtf they do....BUT I've gotten a better clue. Basically what I got from my research is that these guys fuck with "all-FLASH data storage solutions (enabling cloud solutions and other low-latency applications where tape/disk storage does not meet the needs)."......and ultimately what this all means to me is that these are the motherfuckers making those stupid fast laser money printers with the rocket ships attached. And that's something I'm interested in. Now, here is the DailyDick you all degenerates have all been fiending for: Fundamentally: PureStorage remains one of the few hardware companies in tech that is consistently growing double motherfucking digits, yet remains constantly cucked and neglected by investors (trading at 1.9x EV/Sales). https://preview.redd.it/ek7ugjsewnf51.png?width=1118&format=png&auto=webp&s=f9c7e72c95e450a105e44223937422d896eeeb21 The 36 Months beta value for PSTG stock is at 1.62. 74% Buy Rating on RH. PSTG has a short float of 7.28% and public float of 243.36M with average trading volume of 3.16M shares. This was trading at around $18 on Wednesday 8/5 when I started writing this and as of right now, it's about $17.33 💸 The company has a market capitalization of ~$4.6 billion. In the last quarter, PSTG reported a ballin'-ass profit of $256.82 million. Pure Storage also saw revenues increase to $367.12 million. IMO, they should rename themselves PURE PROFIT. As of 04-2020, they got the cash monies flowing at $11.32 million . The company’s EBITDA came in at -$62.81 million which compares very fucking well among its dinosaur ass peers like HPE, Dell, IBM and NetApp. Pure Storage keeps taking market share from them old farts while growing the chad-like revenue #s of 33% in F2019, 21% in F2020, and 12% in F1Q21. Chart of their financial growth since IPO in 2015: https://preview.redd.it/gwlmy82v4nf51.png?width=640&format=png&auto=webp&s=b6508cd5f641da4086b70d8b8007da034e982fd7 At the end of last quarter, Pure Storage had cash, cash equivalents and marketable securities of $1.274B, compared with $1.299B as of Feb 2, 2020. The total Debt to Equity ratio for PSTG is recording at 0.64 and as of 8/6, Long term Debt to Equity ratio is at 0.64.Earning highlights from last quarter:
Revenue $367.1 million, up 12% year-over-year
Subscription Services revenue $120.2 million, up 37% year-over-year
GAAP operating loss $(84.9) million; non-GAAP operating loss $(5.4) million
Operating cash flow was $35.1 million, up $28.5 million year-over-year
Free cash flow was $11.3 million, up $29.0 million year-over-year
Total cash and investments of $1.3 billion
I bolded the Subscription Services Revenue bullet because to me that's a big deal. Pure Storage keeps them coming back with products such as Pure-as-a-service and Cloud Block Store and everybody knows that the recurring revenue model is best model. Big ass enterprises buy storage from vendors such as Pure Storage in the cloud to prevent vendor lock-in by the cloud providers. $$$ >!💰< What are Pure Storage's other revenue drivers? Well these motherfuckers also have the products to address the growth of Cloud storage as well as the products to drive the growth of on-prem storage. For on-prem data center, Pure sells Flash Array to address block storage workloads (for databases and other mission-critical workloads) and FlashBlade for unstructured or file data workloads. On-prem storage revenue is mainly driven by legacy storage array replacement cycle. https://preview.redd.it/01su6chrwnf51.png?width=1129&format=png&auto=webp&s=16e6a705f9392291bc0c3932c815802d9101365e So far, it seems like Pure Storage's obviously passionate and smart as fuck CEO has been spot on with his prediction of the flash storage sector's direction. Also seems like he's not camera shy either. Pure Storage's "Pure-as-a-Service and Cloud Block Store" unified subscription offerings is fo sho gaining momentum it. This shit is catching on with enterprises, both big and small. COVID-19 increased the acceleration of our digital transformation and the subsequent shift to the cloud. This increased demand in data-centers is going to drastically help Pure Storage's future top and bottom line. To top it off, NAND prices are recovering! (inferred from MU earnings). I expect Pure Storage to get some relief on the pricing front because of this which obviously in turn should improve revenues. PSTG's numbers look pretty good to me so far but are they a good company overall? Even when scalping and trading, I don't like to fuck with overall shitty companies so I always check for basic things like customer satisfaction, analyst ratings/targets, broad-view industry trends, and hedge fund positioning.. that sort of thing.Pure Storage stands out in all of these fields for me. https://preview.redd.it/4n0e5nve5of51.png?width=373&format=png&auto=webp&s=495416bb6f5a2dab77f3ac483ca4d9510b39037c Customers like Dominos Pizza and many others all seem to be happy AF with no issues. I can hardly even find a negative review online. Their products seems to be universally applauded. Gartner and other third party independent analysts also consider Pure Storage's product line-up some of the best in the industry. The industry average for this sector is a piss poor 65.Pure Storage has a 2020 Net Promoter Score of 86 https://preview.redd.it/3w51io8yvmf51.png?width=698&format=png&auto=webp&s=4f7d06825d0ad9d126216e5069af2f9c3636f86a Enterprises are upgrading their existing storage infrastructure with newer and more modern data arrays, based on NAND flash. They do this because they're forced to keep up with the increasing speed of business inter-connectivity. This shit is the 5g revolution sort to speak of the corporate business world. Storage demands and needs aren't changing because of the pandemic and isn't changing in the future. The newer storage arrays are smaller, consume less power, are less noisy and do not generate excess heat in the data center and hence do not need to be cooled like the fat fucks at IBM need to be. Flash storage arrays in general are cheaper to operate and are extremely fast, speeding up applications. Pure Storage by all accounts makes the best storage arrays in the industry and continues to grow faster than the old school storage vendors like bitchass NetApp, Dell, HPE and IBM. Pure Storage’s market share was 12.7% in C1Q20 and was up from 10.1% in the prior year - LIKE A PROPER HIGH GROWTH COMPANY.HPE, NetApp and IBM, like the losers they are, lost market share.According to blocksandfiles.com, AFA vendor market share sizes and shifts are paraphrased below:
“Dell EMC – 34.8% (calculated $766m) vs. 33.7% a year ago
NetApp – 19.3% at $425m vs. 26.7% a year ago
Pure Storage – 12.7% at calculated $279.7m vs. 10.1% a year ago
What if I told you OPERATION 10 BAGS is actually OPERATION 20 BAGS - Courtesy of Albertsons (ACI)
Edit 1: I wouldn't rush to get in immediately with how poor SPY/QQQ look at open. Waiting until later in the day when they've maybe bottomed out is likely a better move Edit 2: Broader market looks to have stabilized. Congrats if you bought the dip. But now is time to get balls deep - I'm in the process of tripling my position u/trumpdiego 's post from a few days ago on ACI inspired me to do some research of my own, and it seems operation 10 bags may actually be a 20 bagger Post for reference:https://new.reddit.com/wallstreetbets/comments/huq9eq/operation\10_bags_brought_to_you_by_albertsons/) TL;DR: ACI is a leader in multiple sub-sectors that the market has been pumping lately. Their stock hasn’t increased as much as competitors in the last month, and it is cheaper than all of them on a P/E basis. Grocery prices have been rising faster than ever before. ACI is driving customers to their stores at a rate higher than anyone else in the industry. Online grocery sales were likely close to a record $19B in Q2. ACI’s online grocery sales were up +243% in April, and close to +220% this last quarter. Both of those last two facts suggest over $36B in quarterly revenue, compared to a street consensus of ~$23B. TL;DR for the TL;DR: Albertons Companies (ACI) 8/21 $20C’s are going to the moon when they report earnings before market open on Monday 7/27, but potentially sooner if any other online grocers report what you’re about to read below. And I'll show you exactly why referencing the data that the big bois use to evaluate investments. Primer for the type of autist who likes to know what he’s YOLOing options on: ACI is a food and drug retailer that offers grocery products, general merchandise, health and beauty care products, pharmacy, and fuel in the United States, with local presence and national scale. They also own Safeway, Tom Thumb , Acme, Shaw’s, Star Market, United Supermarkets, Vons, Jewel-Osco, Randalls, Market Street, Pavilions, Carrs, and Haggen as well as meal kit company Plated based in New York City. Additionally, ACI is the #1 or #2 grocer by market share in 68% of the 121 MSAs (Metropolitan Statistical Area) they operate in. And here’s the good part: ACI is a leader in the online grocery shopping/delivery marketplace. They offer home delivery services in ~65% of their 2,200 stores, and have partnerships with Instacart, Uber Eats, and Grubhub to facilitate 1-2 hour delivery in 90% of their locations. Guess whose stock is up 75% this quarter? Grubhub. Think the market likes food delivery? Besides online grocery shopping, what else is surging due to COVID-19? Meal kits. And guess what, ACI is one of the only grocers with a meal kit offering. Demand is surging so much that Blue Apron (APRN) decided to go public on June 24th, and is already up 22.47% since then. Think the market likes meal kits? Now back to your regularly scheduled programming: Before I get into the industry and ACI specific numbers that make me TSLA levels of bullish on ACI – let me tell you what the market thinks. Q: “Why do I care what the market thinks? I’m smarter than it!” – Probably most of you. A: “Because it doesn’t matter how right you are if the market doesn’t agree, especially when YOLOing short term options. Market Trends: Over the last 30 days, ACI shares are up a meager 3.43%, currently trading at a 7.3x P/E multiple of consensus 2020 earnings. Check out what the most comparable companies to ACI have done over the last 30 days, and associated 2020 expected earnings P/E they are trading at: Grocery Outlet (GO): +11.30% (39.7x) Kroger (KR): +9.16% (11.9x) Sprouts Farmers Market (SFM): +15.71% (15.1x) So what does that tell you? The market loves grocery stores right now in corona times (no shit), and ACI is relatively the cheapest stock out of all of them. The performance of Grubhub (+75% in Q2), Blue Apron (+22.47% since 6/24/20 IPO), and literally every single online retailer tell you the market’s opinion on online shopping, food delivery, and meal kits as well. If ACI were to trade at KR’s 11.9x P/E, that would make the stock worth $26.15, +63% from close today. Wonder what that means for option tendies… Oh what’s that? You’re asking why ACI could start trading on par with KR at a 11.9x P/E? Great question! Let me get into why this sexy boi will print: Starting from a macro perspective, CPI: Food at Home (NSA) is the consumer price metric that tracks inflation in food prices as grocery stores and related establishments. After deflating -.16% in 2018 and inflating just .03% in 2019, CPI: Food at Home (NSA) is +4.74% thus far in 2020. Why is this? Food prices are historically correlated with Disposable Personal Income, which also increased at its highest rate ever through Q2’2020. So as long as big daddy Powell has the money printer going brrrrrr, Albertsons will be making more and more money on each sale. Now, this food price inflation does benefit every grocer. However, let’s take a look at the ID Sales (which is the grocer equivalent of same-store-sales) trends recently for ACI and its main competitors that I was able to find data on:
So through at least April, ACI has been in a class of their own when it comes to generating repeated traffic at their locations. Courtesy of the fine people at Morgan Stanley, we also know ID Sales were +16% in June (so you can deduce they were in the +17% to +20% range in May), and still up “double-digit percentage” thus far in July. So far we’re established that ACI is selling their products for the most they ever have, and generating more traffic at identical stores than all their competitors. This data is affirmed by JP Morgan’s foot traffic index which shows ACI taking customer from Kroger. But wait – here’s the sexy part: Time to forecast ACI’s online sales this quarter using published industry data: According to new research released 7/6/20 by Brick Meets Click and Mercatus, U.S. online grocery sales hit a record $7.2 billion in June, up 9% over May. Let’s do some quick maths and deduce that online grocery sales were $6.61B in May. Now let’s be super conservative and say May was a 20% increase over April (realistically I would guess closer to +5-10%), and that gives us $5.51B in online grocery sales in April. This means we likely had ~$19B in online grocery sales in Q2. As ACI represented 1.60% of the online grocery marketplace in 2019, that would imply $304M in online revenue this past quarter. This is very conservative though, as even after assuming a 20% drop in April relative to May, we also assumed their market share stayed at 1.60%. Remember those nice people at JPM who’s foot traffic tracker told us that ACI was stealing customers from KR? Well they also estimate ACI’s 1.60% market share in online groceries to reach 2.50%-2.80% in 2025, with a CAGR (cumulative average growth rate) of ~9% in market share per year. That means their 1.60% market share is likely 1.744% now. Take 1.744% of $19B, and:
!!!!That means $331.36M of online sales!!!!
Remember this number Now that we have an estimate for ACI’s online sales based on the broader industry trends, lets come up with an estimate using only company data: On their last earnings call, management noted that online sales had grown 83% in 2018, 39% in 2019, +278% in the first 12-weeks of 2020, and +243% in April (Remember this number too!). Can you hear your Robinhood account balance going brrrrr? If not, the oven is about to get turned up faster Jerome can print a milli: Math time! · ACI did ~$265.4M in online sales in 2018. Source: https://www.digitalcommerce360.com/2019/11/04/albertsons-embraces-omnichannel-retail/#:~:text=Albertsons%20does%20not%20break%20out,%2461%20billion%20in%20total%20revenue. · That means they did ~370M in online sales in 2019. · ACI had $62.455B in 2019 revenue. · Which means 0.59% of their sales were online. · Working backwards off their Q2’19 revenue of $18.738B, we arrive at $111M in online revenue. · Let’s be conservative and assume some sequential decline from their April online sales growth (the second number you should have remembered) and put Q2 online sales at +220%.
!!!!That means $355M in online sales!!!!
Remember that first number I told you to keep in mind? $331.36M. Considering entirely different data sets were used to find each number, it may not be so crazy to think it could be a pretty accurate forecast of the online sales when they report earnings. But since you’re so smart I know you’re on the edge of your seat wondering what that would mean for their total revenue Let’s take the average of both forecasts, and use $343.18M as our forecast for online revenue. Given online sales were 0.59% of 2019 revenue, it would imply $58.166B in revenue this quarter, compared to the $22.78B street consensus estimate. Admittedly, online sales staying at .59% is unrealistic due to how many consumers would shop online instead of in the store. Here’s some more math to deduce the new percentage: · In 2018, 0.44% of their sales were online · When online sales rose 39% in 2019, the proportion went up to 0.59% · So a 39% increase in online sales led to a 0.15% greater contribution of online sales to total revenue · Therefore a 220% increase would mean a 0.345% increase in proportion of online sales, putting them at .935% of total sales
!!!!!That gives us $36.704B in revenue for this past quarter vs a consensus of just under $22.78B. A beat by over 60%!!!!!
If you’re one of the rare autists to realize that revenue is only one half of the earnings equation, and your costs are the equally as important second half: Let’s go back to our friends at JPM, in a recent research note, after mentioning the foot traffic ACI was taking from KR, they also noted that ACI has superior gross margins to KR, as their stores are strategically located further from aggressively low priced competitors such as Aldi and WalMart. Additionally, they praised ACI’s recent cost savings initiatives that have been underway for some time now, and believe they would lead to some of the best margins in the industry. So you’re telling me ACI is going to make way more money than anyone expects this quarter, while also having lower costs? That must mean call options are crazy expensive, right?? Wrong. The aforementioned option is trading at just $0.50. That means after earnings when the stock rips to $30, they could be worth $11, does a 2,100% return sound good to you too? And for you especially literate autists, the IV is only 91.61%.
ACI 8/21 $20C
Let’s ride this fucker to the moon
Happy to respond to any questions/comments on sources for some of the data I presented or anything else your autistic brain comes up with regarding ACI
Hey guys! It has been FOREVER since my last update and a ton has happened. Sorry for the long post, but hopefully some people appreciate a detailed dive into everything. A really really really brief recap of the past fifteen parts I started in December of 2018 with $1,165 with the goal of making $10,000 in one year. In 2019, I had bought and sold over $40k in baseball, football and various sports trading cards. I had a few great successes ($1,165 into $3,085 before fees - $2,771.20 into $6,200.10 before fees - $1,086.68 into $3,190.54 before fees) and a few duds. I generally sell my cards on ebay, but utilize auction houses every now and then. The biggest bottleneck I face is submitting cards to PSA (a third party grading company), a card might have a 2-4 month turnaround time. To successfully "flip" you need to balance some of these purchases with shorter flips. In 2019, I ended with a final profit of $9,262.28 – a tad bit short of my goal. In 2020, my goal is $20,000 (fitting). Using my margins from 2019, I would need to sell around $85k in cards. You can find the previous installment here PERSONAL UPDATE First, I hope everyone is doing well and staying sane. It has been an absolutely wild three months for me, I found out I’m going to be an uncle, I got a cat and I decided I was going to propose to my girlfriend this weekend! I have still been keeping up with this project, the prices for baseball cards have absolutely skyrocketed over the past couple months, so there hasn’t been the same amount of buying as usual. I am going insane with working from home and trying to keep my head above water with everything, but flipping has been (at times) a nice escape. I am fortunate enough to be flipping something that I am passionate about, baseball cards, so I am able to enjoy this and see a lot of neat cards along the way. In that spirit I have decided to begin keeping some cards for my personal collection as I go along. I read somewhere an interesting method of collecting, reducing your collection to 25 cards. I wanted to give it a shot with a bit of a twist, I want to keep a collection of 25 cards, but still make a profit along the way. So a couple ground rules I set for myself: * The collection is limited to vintage baseball cards (generally 1980’s and older). This was my first collecting passion and I’d like to try to keep to it.
The cards need to come from a set/lot that I turned a profit on. You won’t find me buying a single card for the sake of it and I won’t lose money on a lot because I kept the best card.
I will max out the collection at 25 cards. This doesn’t mean I won’t swap out or sell cards along the way, but I won’t ever eclipse 25 cards.
So, without further ado, here are the first four cards in this project. The 1949 Berra came from the Yogi Berra lot I bought from SCP in January. The grades finally came back last week and I did very well on a few cards, so I felt that I deserved to spoil myself a bit. The 1949 Bowman set holds a special spot in my heart for me, my best flip ever was a group of 1949 Bowman cards I purchased for $300 which included a Jackie Robinson rookie that graded PSA 8! I sold it for over $10k. This Yogi Berra card is well centered, nice registration and a great mid-grade example of a baseball icon. I love it. The Ted Williams card and the Willie Mays both came from the December Heritage lot that I had purchased. PSA took FOREVER on this order. I was a little disappointed in the overall grades, but am confident I will turn a profit. The 1956 Topps Ted Williams is such a cool card and a staple in post-war collecting. The Mays I always liked – it’s a little beat up, but the centering is near perfect and the color looks sharp. Finally, I nabbed the 1969 Yaz. This was mostly done because I love the set. 1969 Topps was the last set to feature Mickey Mantle, something that I think goes underappreciated. The set design has always been pretty crisp, it has a couple great rookies and great all-star rookie cards. I’m a fan. Anyways! None of these cards are permanent, I can sell them at any time, but I’d imagine they will be in the collection a while. Purchased
First up was something completely new to me, I purchased an entire PSA graded set to sell each card individually! At the end of May I bought this beautiful 1961 Topps Set for $5,791.60 after fees. I took a major risk on this because the auction house only showed 12 of 589 cards in the set, with the remaining essentially sight unseen. Usually, when an auction house sell a complete PSA graded set, they provide an excel sheet or link to the grades of each card. It makes a HUGE difference. For example, this set, with every card graded PSA 6 is worth approximately $8,000 the same set graded entirely PSA 7 is worth $13,000. I was hoping that this set was somewhere in the middle. Luckily it was! I sold each and every card individually (less 7-8 that they originally forgot to send and one I sent to PWCC) for $11,445.51, after fees I am going to make a little over $4k, my largest flip in this project to date. This was a ton of work. There are 589 cards in the set; scanning and listing each individually took close to 20 hours over the course of a week. Packaging the cards took another 4-6 here is a picture of the cards packaged. Luckily, with selling a set, plenty of buyers purchase multiple cards (one guy bought over 80). Overall I would definitely try it again, but probably not any time soon.
In July I bought this Aaron Judge rookie card for $1,940 after taxes and fees. The two most common questions I get are whether I ever buy single cards and whether I buy modern cards. The answer is yes, but when the price is right. This card was a steal! I am expecting to easily double my investment on this one, it has already been sent to PWCC.
Finally, I bought this group of signed cards at Lelands for $1,364.40. Many of these signatures are tough to get since the players died young. Lyman Bostock died at the age of 27 in a shooting, Nellie Fox (a Baseball Hall of Famer) died at the age of 47 from cancer and Steve Macko also at the age of 27. It’s kind of a strange and morbid auction offering. I bought the group and quickly sold the the Macko for $700, the 1965 Stengel for $225 and the 1965 Howie Reed for $195. I think the only card I would be interested in keeping from here would’ve been the Stengel, but I may hold on to one for my collection.
I FINALLY decided to list the rest of the wrappers at $.99 auction. They sold, bringing in around $1,500, led by the 1962 Fleer football wrapper. Overall, I was a little disappointed in the auction, but very happy with clearing out the inventory. Between the two wrapper lots, I made close to $2k.
I listed the last of the Huggins multi-sport group that I bought in November. Those cards came back with pretty decent grades, I consigned a few cards to PWCC, led by the Dick Butkus rookie, which sold for $1,125. With that sold, it leaves me left with just the 1951 Topps wax pack which is still with PSA. Hopefully that comes back authentic.
The B14 blankets still aren’t really moving that quickly. I sold four over the past two months. I may try to list these at auction, I’m in no rush.
I sold another one of the 1947 Bond Bread Jackie Robinson cards for $900. I sent the rest to PWCC.
The grades came back surprisingly quick for the 1954 Topps cards I purchased. I sold off the ungraded cards for $182.50 and the 1954 Topps Ted Williams Gray Back for $525. I essentially have broke even and still have the Hank Aaron rookie and Ernie Banks rookie to sell. Both are with PWCC.
PWCC also sold the 1973 Topps cards that I had sent them, bringing in an astonishing $4,340! It was led by the 1973 Joe Morgan, which sold for $1,185. I have cleared $3,483 on this group and still have 83 cards with PSA! This will be a great flip.
PSA Update Here is a link to the Google Doc with the status of all of my PSA cards. The spreadsheet also includes a summary of where the project is. PSA is still extremely backlogged. For this project, I have 276 items with them. Luckily I was able to get quite a few cards back from them recently! As I previously mentioned, I received back the Yogi Berra cards I sent them in January and the Heritage cards I sent in December. Overall I am happy enough with the grades. I think they were fair on the Berra cards and they were rough on the Heritage cards (they were separate orders). I already listed or consigned these cards, so I will have updates next month on these. Below is an updated summary: For items purchased in 2019 (denoted with a “*”), the “cost” column represents the ending 2019 inventory valuation. For items purchased in 2020, the cost column is the cost. In the Google Sheet I included an in-depth P&L with full results and 2019 details.
1936 Goudey Lot (8)
Hank Aaron "Odd-Ball" Collection
(16) Pre-WWII card lot w/ Cobb
(23) Sandy Koufax 1950's and 1960's lot
1977-1979 Topps Baseball Rack & Cello Packs (6)
1957 Swift Meats Game Complete Set (18)
(36) 1950s-2000s Multi-Sports Collection
1933-1989 Wax Pack Wrapper Hoard (650+)
1941-2004 Multi-Sport Group (33)
1912 B18 Blanket Find (100)
1962-63 Parkhurst Hockey Lot (45+)
1953 to 1969 Mickey Mantle Group (16)
1956-1959 Baseball Star Collection (48)
1961-1969 Baseball Star Collection (61)
1948-1965 Yogi Berra Collection (26)
Lot of (4) Signed Perez-Steele Postcards
1950's-1980's Football Wrapper Lot (42)
1953 Topps Partial Set (208)
1953-55 Dormand Postcard Set (47/52)
1959 & 1960 Venezuela Topps Lot (34)
1959 Topps Baseball High Grade Set
1970 Topps Super Proofs Lot (12)
1887 Allen & Ginter Boxing Lot (14)
1954 Topps Starter Set (119/250)
1947 Bond Bread Jackie Robinson Lot (6)
1934 R310 Butterfinger Ruth & Gehrig Lot (2)
1959 Topps Baseball Near Set (571/572)
1973 Topps Complete Set
1961 Topps PSA Graded Set
2013 Bowman Chrome Judge Black Wave Auto
1961-1982 Signed Card Lot (19)
*-denotes inventory purchased in 2019 valued at 2019 y/e figures. ^ -inventory on hand is valued at a conservative estimate of fair market value for remaining items. `-grading fees are expensed when the card is sent to PSA, fees are not paid until PSA has completed the order. Fees that are expensed, but not paid are sitting in Accounts Payable below. 2020 Grading Fees`: $2,944.79 Current On Hand Cash: $5,588.15 InventorySee the Google sheet ALSO! If anyone is interested in what the financials for this project would look like, see below. With 2019 officially in the book, I moved the final 2019 financial statement over for a year-over-year comparison:
As of 8/25/2020
Cost of Goods Sold
Fees (15% of Rev.)
FORECAST My goal is $20,000 profit for the year. Right now I’m $15,307.75 – PSA has dramatically slowed turnover, but I am definitely on pace to hit my goal, gross margins are up in 2020 compared to 2019 (56.1% vs. 43.8%) and net margins are also up (34.5% vs 23.1%). Sales more than doubled since the last installment and with orders finally coming back from PSA, I should continue to see steady sales. I look forward to continuing to update everyone on this. Hope you enjoy as much as I do. Jason
Not claiming to be an expert on anything. My opinion: Rey Rivera did not commit suicide, foul play was involved, and his note may be a code trying to implicate those who may be involved. I believe there is much more circumstantial and direct evidence that points towards a homicide rather than a suicide. I try to give credit where it is due and if I am repeating things that have already been posted, I apologize. Please, since it has already been discussed so much in many other posts, if you are going to insist on speculating about his mental state on this post too, include a diagnostic criteria for the condition/diagnosis you are claiming and evidence of how Rey fits each criteria. You cannot make conclusions on anyone's mental state simply based off reading a book, articles and Netflix. Either Stansberry’s crisis management team has people on Reddit, or a very large amount of people believe they became overnight experts in mental health. Neither of these will hold up in court. Unless you are a psychiatrist or psychologist, you are not qualified to make assumptions about his mental health that would be permissible as evidence in a court of law so let's leave that to them. I believe there were real reasons behind Rey’s paranoia, and I believe the note is code for the corruption he was dragged into. The note has been hypothesized to be a coded message or a tone reel for a movie, there is no evidence to prove it was or wasn't that, vs. being considered ramblings during a psychotic break as others have speculated (there is no direct evidence to support this). There is also no evidence to prove that it wasn’t planted there, considering he had two attempted break-ins at his house right before his death and the house was left vacant for hours after his death until Allison returned back to Baltimore. My opinion is that Rey wrote it as a coded message in the form of a tone reel since he was a writer and filmmaker first and I’ll state what I believe to be proof of this below. Facts :
He had 2 recent alarms triggered at his house the days before his death which could have been possible break-in attempts
Someone form the Stansberry & Associates building was the last person reported to talk to him before his death. He worked for a very shady company (some evidence at the bottom of this post), that placed a call to him around 6:30pm the night he went missing, causing him to run out of his house.
Both of the facts above warranted a better investigation by the Baltimore Police Department that did not happen. The last reported person to talk to a victim is often the first POI to investigative authorities. to him was someone that called him around 6:30 from the Stansberry and Associates building.
Stansberry and Associates either put a gag order on the company (and a recent memo released stating they didnt is a lie) OR all Stansberry and Agora employees were instructed to not talk to anyone about Rey’s death as proven and reported by law enforcement, many reporters, family members, and the author of the book An Unexplained Death when they received that answer while attempting to reach out to the company and to Porter.
Stansberry & Associates hired a Crisis management team for the firm 6 months ago after their cease and desist letter aimed at stopping the airing of the Netflix documentary regarding Rey's death did not work.
There were 0 witnesses that saw Rey enter or in the building previously known as the Belvedere that night, which law enforcement reported he frequented. You would have thought at least one employee or concierge for the condominium would have seen him come in if he did jump from there, considering it is part of their job to greet and provide assistance to those entering.
? looking to confirm: There were no signs of Rey's shirt being torn when his body was found.
The coroner also reported the cause of death as undetermined and could not conclude it was a suicide. We should start another post to discuss the autopsy results in detail.
The FBI report on the note states that overall themes and language are “consistent with someone who suffers from a delusional disorder” It describes delusional disorders, how they are relatively rare affecting 24-30 out of every 100,000 people and that the onset is relatively late with average age being 40-49. It does not appear that they looked into connections it had to any code, or that they knew what a tone reel was.
The report also states “BAU is unable to confirm the identity of the author of the letter without further analysis.” There is then a full page of “Investigative Suggestions" for the BPD to investigate: (There is also question as to what, if any, from that list of suggestions was actually investigated after the report.) * BAU suggests [redacted] several meetings/interviews. [full sentence redacted]. The purpose of these interviews to develop additional leads…[>2 lines redacted]. As mentioned by BPD, [redacted]. These interviews should take place in a non-threatening environment. [2 lines redacted] In an effort to generate further leads, investigators should carefully review [2 lines redacted]. Rivera’s family members (brothers, sisters, parents) should also be re-interviewed regarding his health. (per the Netflix documentary, we know the family does not believe he was suffering from mental delusions.) * BAU recommends [>3 lines redacted]. FBI Baltimore may be able to assist BPD…[>3 lines redacted].* BAU recommends determining [redacted].* BAU recommends requesting forensic testing [redacted]. BAU understands that [redacted] during the investigation [> 2 lines redacted]. BPD should also determine [redacted]. * BAU recommends requesting forensic analysis of the computer printer where the letter was found. [>3 lines redacted]. FBI Baltimore’s Computer Analysis Response Team can assist with the analysis of Rivera’s computer [>3 lines redacted]. * BAU offered to [redacted]. It is recommended that BPD provide BAU with [redacted]. * BAU recommends that BPD [>2lines redacted]. ------------- Things being used to defend this deteriorating mental health theory are:
his wife noticed him paranoid and stressed the weeks leading up to his death.
The note that he allegedly left - more details below at 2a
The FBI said it was NOT a suicide note, discusses it could be characteristic of someone with Bipolar Disorder BUT Rey did not exhibit these characteristics.
There is no evidence to prove the note was placed by him or that it wasn’t planted.
This note has as much evidence proving it was a code as it does that it was "rambling"
Some valid connections have already been made on this note by Reddit posters in the google doc by TrueCrime Pyrex and others
The only name repeated over and over again in the note is Porter’s name
Recent Researching of Freemasons
1a. paranoia - Rey had real reasons behind his paranoia. Rey Rivera was working for a shady financial firm and making millions of dollars. These firms are notorious for having connections to powerful underground criminals. He was hired by this firm to “clean up their image” and write the Rebound Report one year after the SEC had filed a complaint against Stansberry & Associates for giving false advice on stocks that later tanked. So, a filmmaker with no finance experience was hired to write about suggesting cheap stocks that were supposedly going to make a quick turnaround. People were angry and had lost millions of dollars after the SEC filing. There is an article about the exact details below. Additionally, Rey's friend who also worked for Agora - Hickling- had died just a couple months before Rey’s death allegedly in a car accident in Zambia. Rey had two tripped alarms in his house (suggesting attempted break-ins) in the nights leading up to his death. He had valid reasons to be paranoid. There were valid reasons for people to be after him, and there were valid reasons for him to be concerned and protective of his wife as many times these criminals will come after the person closest to them instead of the individual themself. 2a. The note- Many film creators have said the note looks not similar, but exactly like a tone reel. Also hypothesized are that it could have been a code for something or that it could have also been planted there, since there were 2 tripped alarms at his house. Many who have attempted to piece together the note from screenshots also point out that there are multiple versions of it, suggesting that if he did write it, it was written over a longer period of time than a day. In my opinion, all these theories have the same validity/amount of evidence as the delusional theory. Some theories and opinions on the note: many made by Reddit users under the google doc that TrueCrime Pyrex started (https://docs.google.com/document/d/1CUynVxK37ReWqJ2r3jyue0hUMh36GfiRAzYXG-Q8IE8/edit#)
“Along with myself, these players would be made 5 years younger by the council”
5 years before 2006 was 2001 and the devastating year the WTC was attacked (9/11). It was one of the world’s most active stock trading buildings; The SEC complaint against Agora for defrauding investors was in 2003.
A poster on the Google Docs note (lmk if you want your name mentioned here) stated:
Porter Stansberry works for Agora which is the newsletter company that provided the alibi for the 9/11 put options.
The treasurer of Agora was found dead (ruled suicide) in the woods behind his home. He was good friend with Buzzy Krongard, exec dir of the CIA on 9/11.
Porter got married on 9/11/04 and had his first child (induced) on 9/11/07.
" Again, well done to all who participated. I expect the council has invited all the players who gave their lives to this pursuit back so they may join us here: Thom Hickling a, Rayburn b, Batchelder c, Joan Tellini d, Stanley Kubrick.
All these people are deceased. Thom Hickling worked at Agora and allegedly died in a car crash in Zambia a couple of months before Rey’s Death. Thom Hickling had signs of trauma to the back of his lower head. Other connections made in the Google Doc.
In an Unexplained Death, Mikita Brottman writes:
"Some have suggested to me that Rey's death was connected to the death of a gentleman named Thom Hickling who worked at Agora. Rey had become especially close to Hickling, who was killed in a car accident while visiting his daughter in Africa. His death is often mentioned as a turning point for Rey, who apparently found it suspicious. Rey's mother told me that Rey and Hickling were good friends. "Rey liked him very much," she said. "He talked to me about him. He said he was a real person. Honest. And this guy died somewhere overseas- I don't remember where. All I remember is that it was a very weird situation in which he died And Rey got very concerned."
"To arrange for future transactions you should visit me at of any of the properties that I will resume control of: My primary residence which includes a beautiful piece of property in Northern Argentina , and I'm told, (has) biggest mansion in Buenos Aires. Well done, Porter. (Referring to Porter Stansberry)In Europe you can wait at the flat in Nice or in Madrid . Although if I'm in Spain I'll probably be at the (cadiz). In Asia you will be able to find me in Thailand. Another job well done, Porter." (Referring to Porter Stansberry)
Bill Bonner, founder of Agora, the umbrella company of Stansberry & Associates owns two chateaux in France and is a large landholder in Argentina, and Agora International has offices in Madrid and in Thailand.
Searching this book, Where in the World Should I invest: An Insider’s Guide to Making Money… the author says,” He’s been around much longer than me and has been investing in places like Thailand long before it showed up on any…the person who hired me to do what I do more than 20 years ago, Bill Bonner, is also a large landholder in Argentina”
Bill Bonner also wrote a book titled Financial Reckoning Day:Fallout
One line simply states: "Porter Stansberry, if he didn’t do it himself." I believe this to be a very important line. Porter’s name was also the only name repeated over and over in the note.
"Brothers and sisters, our land of attachments has seen many ideas become new innovations since my game began:
Digital music players (portables and otherwise)
Computer Operating Systems
Portable Data Assistants
Horizontal Drilling for (word) (word)
(Fracking?) gas to drill in shale In both versions
[----The are more listed (discrepancies in Netflix shot of note versus older versions of note) and then...] "The rights, patents *, and proceeds for all of (them) (should) have been transferred to me by now. I know that our friend, Porter Stansberry has (caused) a way for you to do so."
Whats listed above was a lot of up and coming technologies for the first decade of 2000. Rey was writing a financial newsletter recommending stocks that should make investors a large amount of money. I wonder if in him listing these there is an association with their parent companies for the above listed technologies, and their patents, profits, and possibly insider information/insider trading that had to do with the corruption going on within the company. This is a theory does anyone have any thoughts/know more about this stuff?
3a. Freemasons. The act alone of researching Freemasons does not indicate a psychotic state. In the book, An Unexplained Death, Mikita Brottman writes: "Stein learns from a Master Mason that Fred Bealefield, who was the chief of detectives during the Rivera case and later police commissioner, is also a Master Mason. This news does not surprise me. Many policemen are members of the Freemasons; it does not make either the police of the Freemasons especially sinister. I often invite Master Masons to speak to my classes about the history of their organization, which I have come to see as a benevolent fraternal charity with an archaic structure and hierarchy, not a malevolent force running the universe, or even the city. In other words, I think the Masonic angle is a red herring. I believe Rey's interest in the group was part of his research for something new he was writing." ---- Per those close to Rey, their theory is that has something to do with the Rebound Report, and the fact that the company had just come out of being fined 1.x millions dollars for misleading investors. (Also The Rebound Report may not have been accurate?) I believe looking into these reports would provide further information. Also mentioned, If Rey were to go meet someone at the condominium he allegedly jumped from, he would not have worn flip-flops and track pants. He was going to go see someone he knew. ---- Circumstantial and direct indicators of foul play/cover-up: - In An Unexplained Death, Mikita Brottman writes: 'An anonymous comment on an article about the case by Stephen Janis posted at the Baltimore Examiner website puts this theory in a nutshell. "Rey was a very inquisitive man, a truth-seeker. He had information that threatened something larger than himself and was murdered for it." ' 'Others have suggested that Rey's death may have been connected to developments in Nicaragua, where Agora owns a large stretch of coastline. Those who have studied the case often refer to "Nicaragua" in cryptic terms.'
does anyone know what this cryptic term is?
currently, one of The Oxford Club member options in the "Oxfordian Hotel Collection" is Rancho Santana in Rivas, Nicaragua.
Oxford Club was originally called The Royal Society of Lichtenstein which was promoting a business called Goldcor, which turned out to scam investors with their gold-extraction methods in Costa Rica. Goldcor President Brown was found with a bullet in his head in November 1991.
Options Hotline and 9/11: In the investigations following 9/11, the SEC determined that an unusual number of investors had purchased put options on American Airlines immediately prior to September 11, 2001. Further investigation found Agora'sOptions Hotlinenewsletter and its editor Steve Sarnoff as responsible for faxing some 2,000 subscribers the recommendation to buy put options on American Airlines on September 9, 2001.Sarnoff was investigated for insider trading with the SEC eventually concluding “all suspicious trades were checked out, and the SEC satisfied itself that the traders had no advance knowledge of 9/ll.”
The more I google this case, the more I see old articles and blog posts referencing Baltimore news sites or Stansberry’s website, only to click on these links and find that the pages are no longer available - why?
Even if you defend that Stansberry was simply trying to defend his shady activities, why have websites like CBS Baltimore, WBAL TV , and others remove their articles about Rey Rivera’s death?
Why was the main LE nvestigator removed from the case when he started suspecting murder?
Why didn’t police follow up on many suspected leads, as suggested in the final FBI report investigation into Rey’s letter?
Why are so many names and people listed in the FBI report as possible follow-ups for leads redacted from the report but Ray's family members and Allison listed ?
articles / blogposts with links that have since been deleted. One example: https://invanddis.proboards.com/thread/5923 where it discusses more about the cameras than what I have read anywhere else- it wasn't simply a malfunction:
cover-up: “the cameras malfunctioned”. An article since deleted but referenced in the linked blogpost states:
"Bizarre is also how Allison Rivera describe the obstacles she encountered trying to help police search for clues. Confident that her husband’s death was foul play, she hired a private detective who accompanied her to The Belvedere to review the video surveillance. But Allison soon discovered that the surveillance system malfunctioned on the day her husband disappeared. “Somebody put 'protect' on the day of the 15th that consumed about 85 percent of the hard drive,” she recalled learning. “Somebody hit 'protect' on the system; there is button on the key board in the concierge areas, and there is a computer in the back.” The timing of the erasure is troubling, Allison said.“If it was on May 1, that's an accident but if it's on May 15, that is a totally different story.”An employee of the former hotel who has knowledge of the camera system but asked to remain anonymous could not confirm Allison's allegations. The employee said that police had confiscated the hard drives." ------------------------------------------------------- Below here are a few news article links and old posts from disgruntled investors regarding the shady practices of Agora and possible motives for killing. Many article links have since been removed from the internet. Please bear in mind I am not citing below things as facts, although many have since proven to be. I find it interesting and possibly relevant to Rey Rivera's death
The complaint alleges that Frank Porter Stansberry, the company?s owner, sent an e-mail in 2002 that said investors could "Double Your Money" by investing in a company that was alleged to be on the verge of signing a contract to dismantle "nuclear warheads" for Russia. The newsletter offered the name of the company for$1,000, the complaint said. The complaint alleges that "the information was false." Karen Martinez, one of the SEC attorneys who filed the complaint against Stansberry, said **investors who paid for the tip are angry. "**Many investors testified in discovery that they lost substantial amounts of money based on the investment advice of the company," Martinez said. "Investors said they were very unhappy," she added.
From the desk of Porter Stansberry: When my best friend, Rey Rivera, disappeared last year, we had to find his car (and then his .... Porter Stansberry Baltimore, Maryland December 21, 2006 ... Porter Comments:'The Baltimore sheriff is after me…'-Porter Stansberry
Other Poster's comments:
And Porter Stansberry was by his very admission,a suspect in the murder of his own friend and employee Rey Rivera.The U.S.SEC itself has admitted that his and Agora Inc.'s CIA connected Agora Inc.'s Rebound Report that Mr.Rey Rivera was editor of before his mysterious death was a fraud and I know from personal experience that James Dale Davidson's,Porter Stansberry's and Agora Inc.'s illegal pumps and dumps were covered up and in fact removed from SEC litigation against Agora by corrupt Utah SEC attorneys Brent Baker and Karen Martinez - thus guaranteeing that Stansberry and Davidson would go free yet again after decades of gold,oil,real estate and myriad stock fraud scams against American investors,all of which sent and continue to send dollars out of the U.S.economy to offshore accounts of international criminals,albeit elite criminals.
On this page is also a letter by Tony Ryals to Alex Jones of all people (Alex Jones has some youtube videos with STansberry and Associates- look them up).
I found the letter interesting(included relevant parts only but you can read the whole thing at the above indy link) :
Dear Alex Jones,
If I ever had any doubts whatsoever about your corruption and cover up and disinformation propaganda re 9/11…your promotion of Agora Inc.'s stock fraudster and murder suspect,(in the case of his 'friend' Rey Rivera of Agora Inc Rebound Report fraud,etc.),has ended all that. Fannie Mae and Freddie Mac were also part of Agora Inc.'s fraud that helped send the housing market and government subsidized housing loans crashing as well.Also when it did ex SEC Chairman Christopher 'WMDS' Cox lied about Fannie Mae and Freddie Mac shares being 'naked shorted',a term that can be tracked back to Agora Inc.'s and National Taxpayers Union founder James Dale Davidson himself. Both Stansberry, Davidson and Agora scumbag Bill Bonner have a UK connection and their association with with the U.K.'s Lord or Lard William Rees-Mogg guarantees a Rothschild connection…I no longer have any doubt even an idiot such as yourself, with your far right women's rights denier Ron Paul connections, that you know you are in cahoots with the CIA because his and your pals at Agora Inc have CIA and George Tenet connections…Sincerely, Tony Ryals Corrupt SEC attorney Karen Martinez who along with SEC attorney Brent Baker removed all charges against Stansberry and James Dale Davidson regarding their illegal pumps and dumps of biotech penny stock frauds **Endovasc and Genemax in 2003 tries to blame or insinuate the probable murder of Rey Rivera was done by defrauded investors such as myself mno doubt.**And I myself suspect that Stansberry's and Lila Rajiva's invitation to me to visit his office in 2005 was either as a set up or to murder me as well .Shortly after removal of all charges against James Dale Davidson and Porter Stansberry regarding their promotion of worthless Endovasc and Genmax shares Brent Baker 'retired' from his SEC job and was rewarded or bribed by Patrick Byrne of Overstock.com and himself began to openly promote the lie that Overstock shares were like the other penny stocks a victim of 'naked shorting' or naked short selling by some unknown entity. Byrne even claimed it was a or the 'Sith Lord' ! Davidson's NAANSS or National Association Against Naked Short Selling' was disapeared from the internet in 2005 and replaced with NCANS or National Coalition Against Naked Shorting with a number of lieing websites claiming a huge amount of stock frauds were really victims of 'naked shorting' ! In 2008 even the ex SEC Chairman lied on the sec.goc website about Fannie Mae,Freddie Mac,AIG,UBS and even Goldman Sachs shares collpsed in value due to 'naked short selling' ! -Tony Ryals Missing Baltimore Man Getting National Attention - wjz.com23 May 2006 ... It's been a week since a Northeast Baltimore man was last seen, and police say there is still no sign of 32-year old Rey Rivera. http://www.wjz.com/topstories/Rey.Rivera.Missing.2.422531.html Suicide Or Murder? Evidence Reviewed - Baltimore, Maryland News ...BALTIMORE -- The mystery behind a Baltimore businessman who fell to his ... http://www.wbaltv.com/13334811/detail.html http://washingtonexaminer.com/local/man-found-dead-belvedere-worked-comp Man found dead at Belvedere worked at company that had SEC complaint By: Stephen Janis 06/01/06 2:00 AM Examiner Staff Writer Karen Martinez, one of the SEC attorneys who filed the complaint against Stansberry, said investors who paid for the tip are angry. "Many investors testified in discovery that they lost substantial amounts of money based on the investment advice of the company," Martinez said. "Investors said they were very unhappy," she added. An official speaking on behalf of Stansberry Associates said they had no comment on the SEC complaint. Martinez said Stansberry denied the allegations in court and that the case was pending, awaiting the judge?s decision, she said. Who killed Rey Rivera? | What's Inside Our Brains6 Feb 2010 ... suicide of Rey Rivera, whose body was found on a roof of the Belvedere building in Mt. Vernon in 2006. As I recall from the original ... http://www.whatsinsideourbrains.com/?p=292 LAND OF THE UNSOLVED - The last days of Rey Rivera10 Aug 2009 ... But the patch over the bituminous paving atop a second-floor office at The Belvedere hides a secret the widow of filmaker Rey Rivera thinks ... http://www.investigativevoice.com/index.php?option=com_content&view=article&id=:the-land-of-the-unsolved-the-last-days-of-rey-rivera&catid=25:the-project&Itemid=44 Working links: Baltimore Crime: Rey Rivera10 Aug 2009 ... can see Rey Rivera's 'friend' and employer Porter Stansberry invited me to visit Agora Inc. and Baltimore in 2005. ... http://www.baltimorecrime.blogspot.com/2009/08/rey-rivera.html “I briefly quote and provide link from Bill Bonner's Baltimore co-author Lila Rajiva herself who wrote an article about her employers' Goldcor connection and the strange 'suicide' of Goldcor President Richard Brown who was found with a bullet in his head in November 1991 as Goldcor began to unravel.” http://baltimore.indymedia.org/newswire/display/11382/index.php …link no longer works either http://neworleans.indymedia.org/news/2010/03/14797.phpDeath In Baltimore:Agora Inc.,Rey Rivera,Porter Stansberry,James Dale Davidson,Bill Bonner “This post has to do with the mysterious death of Agora Inc employee Rey Rivera in 2006 who was committing stock fraud for his own personal gain and more so for the profits of his bosses at Agora Inc that included his evil 'friend' of years past,Porter Stansberry, as well as Bill Bonner,James Dale Davidson and the evil Lord William Rees-Mogg of UK who founded or who have been behind Agora Inc stock fraud and money laundering operation for decades. .”
*NOTE\* The goal of this DD was to provide a cohesive and whole picture of Chegg as a company, taking into account the booming growth they’ve been experiencing during this past quarter. There’s been a lot of talk of Chegg on this subreddit lately but I want to explain why I think it’s about to be the last, best time to buy in before earnings. If you disagree then I urge you to tell me how I’m being autistic and which crucial elements I’m overlooking. In my personal opinion, I believe that Chegg is a solid play in the short term based off both the technicals and the environment in which Chegg exists. As we lead up to Chegg’s earnings on 8/3/2020 and as more people realize Chegg’s continued demand throughout 2020, I believe there will be a substantial run up to play off of (or maybe even multiple as we’ve seen over the past month). OVERVIEW: Chegg is the leading student-first interconnected learning platform, which is on-demand, adaptive, personalized, and backed up by a network of human help. They provide textbooks, 24/7 tutoring, and solutions for a multitude of subjects. Key notes: · Leading direct-to-student connected learning platform · Large addressable market with compelling market trends · High growth and high margin model · Competitive moat given brand, reach, data, and propriety content Chegg is focused on an online, on-demand approach to providing education to students. This has become especially useful with COVID which is going to affect students through the rest of 2020. Chegg’s earnings report is supposed to be on 8/3/2020. I plan on playing off of this run up which I don’t believe is fully factored into the pricing of this stock. Let’s dive in! RELEVANT NEWS: Mass Arbitration: Source If you are/were a student like I was during these years, you may remember the huge Chegg data breach that occurred in 2018. The fallout of this data breach is still affecting Chegg. In April 2020, Z Law filed a class action lawsuit for more than 15,000 individuals asserting a claim of $25,000 for each Chegg customer. Reportedly in June, the American Arbitration Association (AAA) instructed Chegg to pay about $7.5M in fees to launch the arbitrations. Rather than pay these fees, Chegg argued that the customers included in the lawsuit had ‘breached their user agreements by asserting frivolous or improper demands for arbitration.’ Now I don’t have a law degree but this just sounds like a Catch 22 that won’t necessarily hold up in court, and it doesn’t look like it will. It should be noted that all of this information is from a principal at Z Law since Chegg has not responded to requests for information on this issue as of yet. It is likely that this situation will come to a head soon with these latest updates being in the past couple of months. Schools Closing: We are seeing a number of states, or at least counties, mandate that children not go back to school yet this Fall. I believe that this will be a catalyst for increased demand of Chegg’s services. Between their online classrooms, tutoring, and problem solutions, Chegg is in a perfect spot to take advantage of what’s happening for continued growth throughout 2020. FINANCIALS: Market Cap growth vs. Revenue Growth Source · Chegg revenue growth for quarter ending 3/31/2020 was $0.132B, a 35.09% increase from 2019 · Market cap during this period went from $4.4B to $4.19B, a -4% decrease from 2019* * It should be noted that while it’s a great sign that Chegg’s revenue growth is outpacing it’s market cap growth, since last quarter’s earnings were so good, market cap blew out to $8.69B as of this past week, which results in a 67% increase from last year’s 7/15/2019 market cap of $5.20B · Chegg’s annual EPS has been slowly growing by around 30% per year, with the earnings in March 2020 representing a 25% increase since the previous year to $-0.05 EPS. · Chegg’s current P/E ratio is 75.26 TECHNICALS: Source Chegg currently has a resistance of $79.48 with its nearest two supports at $70.15 and $66.76. With the downward trend of the stock market this past week, we saw the share price kiss the first support Tuesday morning when the price dropped but then it slowing gained back throughout the rest of the week. RSI Analysis: Current RSI Level: 63.34 We’ve seen the RSI stay around this level ever since Chegg’s earnings report in March, only breaking out to overbought occasionally before coming back down to near neutral levels (as we saw this past week). In fact, the correction that occurred last week offers a perfect, and quite possibly the last, best set up as we head towards earnings a few weeks from now. *Note: Stochastic oscillator is closer to 50 currently but I’m choosing to evaluate Chegg based on RSI since this stock has been booming all year and strongly trending upwards. MACD Analysis: As of market close this past week, the MACD is currently just barely below its signal line. This is inherently a bearish signal, but the signal line and MACD have been dancing on either side of each other since last earnings, providing lots of opportunities to play these short run ups. The only reason the MACD is below the signal line is because of the correction that occurred last week, meaning that we’re in a perfect spot to take advantage of the next run up. The current signs that I’m seeing that tell me that the train is on its way to tendie town: 1) As of Friday, the stock is trading in an upwards direction above both the EMA and SMA lines indicating very solid price strength 2) The MACD is on the verge of crossing back over its signal line which is a bullish sign to buy and 3) the RSI doesn’t yet indicate that the stock is overbought (but it is heading in that direction). That being said, current resistance levels are set at $79.48. Over the past month, Chegg has been reaching its resistance, falling back, then shooting up past its resistance again – just look at the past month’s chart for Chegg. Past resistance was $75 so I feel confident that this’ll climb to at least $80 but likely higher once the earnings run up starts getting priced in. Once the MACD gives the signal, I will be looking to buy call options at $5 above its last peak of $75.02. This is purely based on my own risk tolerance, I’m sure that higher options would be profitable too though. I’m choosing $5 above since that’s the pattern I’ve been seeing with resistance lines since the last earnings report, but I won’t be selling until I see a downtrend. This could easily go $5-$10 past resistance in anticipation of earnings. It’s also worth noting that the stock has already climbed $3-$4 in the past few days after dropping. That’s a few dollars of growth that we’re missing out on, but that’s the price we pay for confidence. The price strength is finally looking strong enough to buy in which is why I’m sending out this DD. EMA: The current 20 day EMA is $69.06 which it fell below earlier this week but quickly rebounded back on top of it and has been growing steadily ever since. tldr: Long term investors: Hard to tell if the pump this year will continue as COVID inevitably dies down. Past this year I highly doubt that Chegg can continue this growth. But honestly what do I know. Mid term investors: Chegg looks to be strong and growing. The school year will offer a surge of revenue in Q3 but at the same time it’s hard to tell if this same level of growth will continue. You should also be on the lookout for negative catalysts such as this arbitration lawsuit. Short term investors: All systems are a go for some 8/21 $80c. Once we’re locked in, I’m expecting slow and steady gains for the next couple of weeks. If you buy in then I urge you to monitor RSI levels and be on the lookout for a sell off, especially as it approaches $80. If anything, at least set a trailing stop loss. But on the likelihood that this puppy shoots past resistance, we’re looking at a share price of anywhere from $80-$90. Conservatively estimating 50-120% profit depending on how fast it climbs and when it starts to sell off, ideally hold till right before earnings though.
Although AEF uniquely benefits from the structural tailwinds of both superannuation and ethical investing, we believe it remains misunderstood as an expensive traditional fund manager. The Opportunity Australian Ethical Funds (ASX.AEF) is a public market superannuation fund manager. The perception of the company itself vs. the industry is nicely summarised by the two figures below. Herein lies the opportunity. https://preview.redd.it/jhvvua1t5oj51.png?width=680&format=png&auto=webp&s=e511deb4411e81840ffcf8b635e1d8f7b78eeb6e AEF is a renowned Australian fund manager that fits within the ESG trend. It represents one of the only pure play superannuation investments in the Australian public market, with 67% of funds under management (FUM) coming from superannuation. The stock bounced exceptionally from a low of $2 in March, reaching a high of $9 in June, and has since retraced towards the low $4s. Previously, the business traded at $6+ following its announcement of end of year FUM and expected earnings figures. On 8th August IOOF Holdings (ASX.IFL) – 19.9% shareholder – announced it was divesting 15% of its stake in AEF. IOOF is a peer and platform provider which offers AEF products to its clients. The investment was sold at $5.24 vs. market price of $5.90. IOOF disclosed it was selling its AEF investment (at a gain) to raise much needed liquidity. The block trade was viewed negatively by the market, with AEF immediately re-rating to below $5.24 and trending downwards (towards low $4s) ever since. The current share price of $4.17 (24 August close) implies the stock is trading at ~51x FY20 earnings guidance, which is slightly above historical levels despite substantially improved performance and outlook. We suspect that the FY20 results will be aligned with guidance (as demonstrated historically) provided in the quarterly FUM update and guided earnings figures. Results have also been positive across its peers throughout mid to late August (see ‘Roadmap’). https://preview.redd.it/t4oy3ksu5oj51.png?width=478&format=png&auto=webp&s=e2a88ef0bf70fba2e85d36bc71a1df2994217dcf Company History AEF began as Australian Ethical Investments (AEI) in 1986 and was owned by 600 insider shareholders before listing. It is a superannuation fund – so revenue is derived from fees on managing invested funds. By 2005, the business managed four unit trusts and a superannuation fund: · Australian Ethical Balanced Trust (est. 1989) · Australian Ethical Equities Trust (est. 1994) · Australian Ethical Income Trust (est. 1997) · Australian Ethical Large Companies Share Trust (est. 1997) · Parent of Australian Ethical Superannuation (est. 1998) The investments of the trust and super fund are guided by ‘The Charter’ – a series of positive and negative investment screens that must be taken into account when selecting securities for inclusion. https://preview.redd.it/cye711106oj51.png?width=680&format=png&auto=webp&s=60c149549d7d752c26108c662ec319b56ebf371a In July 2005, the government enacted policy that afforded more choice to individual employees with regards to their superannuation provider (marking the beginning of a positive era for the superannuation industry). In that same year, AEF registered for a superannuation license which it was granted in 2006. Back in 2005/06 the company did not split out superannuation FUM, but FUM increased from $311m in Jun-05 to $380m in September-05 following this policy shift – suggesting there was an existing demand for ethical investment products in superannuation. From 2005 to 2011, AEF grew total FUM from $311m to $644m, despite muted FUM growth through the GFC-era. In 2012, the business began separating out its superannuation FUM-growth to improve its visibility. This era saw FUM increasing from $617m in 2012 to $4.05bn as at 30 June 2020. From 2016-19 reduction in FUM-based fees has seen suppressed revenue growth vs. FUM growth. This has resulted in several step changes in FUM-based revenue margins (revenue / FUM) as a result of lower overall fees earned on products. We view this shift as a positive in the long-run since AEF has competitively priced its funds, entrenching their competitive advantages (discussed below) and reducing the temptation that fee-conscious members switch funds. Since AEF has ratcheted the cost of their funds downwards (often ahead of their peers and industry averages), we believe fee compression improves the durability of AEFs revenue compared to peers who are yet to compress their margins. https://preview.redd.it/fcq5jog26oj51.png?width=453&format=png&auto=webp&s=d194c8778727e9adf1ebc162e6b181d8207cc292 Business Model AEF has a relatively simple business model – revenue is derived from fees on managing invested funds. The funds it manages includes retail, institutional and wholesale (non-super) funds, as well as superannuation funds. We are most interested in the superannuation business although the direct and indirect benefits associated with the funds management business are a noteworthy component to the brand and investment management infrastructure (i.e. ideation / performance fee generating / high performing ESG). Until 2012, AEF did not explicitly separate its super vs. non-super FUM. We believe this contributed to its (mis)perception as a traditional fund manager rather than a superannuation fund. Thankfully, since 2012 AEF has provided details relating to the composition of its FUM (below), and noticeably the growth in its superannuation FUM has been the driving force of the business. https://preview.redd.it/6ccbtqm36oj51.png?width=680&format=png&auto=webp&s=6fb4e11064313ca9ab7b57186b2eddc6be62b928 Competitive Advantage 1.Superannuation Exposure: Superannuation FUM is higher growth and lower risk than traditional managed funds. Superannuation funds are regulated to grow at 9.5% due to the Superannuation Guarantee (the Australian Government mandated superannuation contribution). The regulatory framework could see this increase up to 12% in the medium-term and 14% in the long-term. For the purpose of our analysis, we have assumed a constant 9.5% contribution – so any increase would be additional upside. More importantly, excluding fulfilling conditions of release (i.e. death) an individual's superannuation cannot be withdrawn until retirement. Much like the Superannuation Guarantee, withdrawals are also mandated on a schedule that increases as a percentage of FUM with age (beginning at 4% and increasing to 14%). Consequently, the minimum inflows and withdrawals are predictable (and we note the vast majority of individuals do not deviate from these minimum levels due to inertia). Because of this mandated growth, Australia has the fourth largest pension sector in absolute terms and second largest relative to GDP (below). In 2020, the total superannuation pool is ~$2.1trn and growing. It is estimated that by 2040 superannuation assets could be as much as $9trn according to the Australian Treasury. https://preview.redd.it/wenevil56oj51.png?width=680&format=png&auto=webp&s=c2210a8e26816af1ebf798d82c414c61760c5d5e Alternatively, traditional managed funds are subject to redemption risk, caused (typically) by performance and myopic investor behaviour associated with general market movements. Therefore, FUM growth for traditional managed funds must be attracted through marketing and distribution channels. This inextricably links fund inflows and outflows to performance and marketing efforts, which in turn causes a clientele that is more expensive to acquire and retain, and a more volatile pool of assets. Alternatively, traditional managed funds may access capital through secondary capital raisings and the reinvestment of distributions; both of which are a country mile from a 9.5% government mandated contribution. Logically, we wondered which (listed) asset could provide us with exposure to the exceptionally robust superannuation tailwind. We will not spend too much time detailing the industry dynamics and public market players as there is a lot of information to be found in various prospectus’ (see Raiz or OneVue prospectus). The main thing to understand is that superannuation funds can be separated into five buckets: https://preview.redd.it/jyykix976oj51.png?width=680&format=png&auto=webp&s=07e96ebc246a565546e400ef87018d3d3360cd48 After screening for diversified financials and financials businesses on the ASX there were 53 players with at least some revenue linked to superannuation. The revenue exposure desired is revenue linked to superannuation FUM (explained further in the ‘Valuation’). However, it is important to understand that gaining access to this lucrative industry is difficult for several reasons: · Private industry funds – the gems of the industry have been private superannuation funds such as CBUS, Hostplus, and ESTA. We cannot access them as public market investors. · Conglomerate financials – it is possible to gain some retail superannuation exposure within the banking majors such as CBA, WBC, ANZ and NAB. However, they represent insignificant exposure by revenue and profit and the stocks are driven by other risk and growth factors. · Fund managers – fund managers may directly manage retail superfunds or SMSF funds such as Magellan, Platinum and Perpetual. However, there is limited visibility over superannuation FUM exposure. · Superannuation adjacency businesses – superannuation exposure can also be housed within wealth / platform advisers such as like HUB24, Netwealth and OneVue. However, to varying degrees, these businesses are not purely exposed to superannuation-FUM linked revenue. · Pure play sub-scale – the final example can be found in Raiz, which is a sub-scale business that has ~$450m in FUM of which 85% is funds management. It is possible to envisage this business as an AEF in 10-15 years with larger superannuation FUM exposure. Although the superannuation exposure representing $70m in FUM currently (vs. AEF $2.72bn) is vastly inferior to AEF. For this reason, AEF is the closest to a pure play (at scale) superannuation player. Putting this together, we believe AEF is likely to continue to grow its FUM at 20% p.a. YoY. This is principally due to AEF's ability to acquire new members and retain existing members. Therefore, to monitor this continued FUM growth going forward we encourage readers to look out of the number of superannuation members added in these upcoming results and beyond. AEF has grown its member base YoY consistently in an industry which has, on average, been relatively flat in terms of member growth. In 2019 AEF was the highest growing superannuation business in Australia across the previous 5-years. https://preview.redd.it/c4t7jx596oj51.png?width=226&format=png&auto=webp&s=51e47aa607470ce6482ed30352183a6cf6043bff 1.Ethical, Social and Governance (ESG): Beyond the obvious tailwinds in superannuation, AEF is also exposed to another important trend: ESG. Needless to say, ESG investing is becoming not only popular but almost mandatory for corporate money managers. Younger demographic investors are increasingly concerned with the ethical and social impacts of corporate activity. This report by Harvard and another by State Street provide some interesting commentary on the issue. ESG ETFs have been growing at a CAGR of >30%, and State Street forecasts that the global ESG ETF market will increase from US$170bn in 2020 to US$1.3trn in 2030. Momentum for ESG ETFs has been building specifically in Australia, where AUM surged almost 300% — from A$554.1m in 2017 to A$2.2bn in 2019. Whilst the ESG-shift has been occurring since the 2010s, State Street argue that COVID-19 will only further catalyse this shift by highlighting the inherent inequalities in society and health care systems, in turn, spurring social conscience. We note the following data points as indicators of this more recent catalyst: · Perpetual’s recent acquisition of Trillium, a US-based ESG fund, shows the desire of traditional asset managers to become exposed to this space. · BlackRock has started publishing more frequently and consistently on ESG trends and continued rolling out ESG products. · Forager’s investment blog received frequent commentary from investors talking about negative screening on their gambling holdings which has never been the case in the past. The key insight is that a growing proportion of the investment community through time is becoming concerned with ESG issues and this will drive fund flow. Industry data is pointing to the fact that this is a prolonged structural shift rather than a short-term trend. 2.Performance: AEF has improved upon their exposure to structural industry trends in superannuation and ESG through excellent fund performance. AEF's performance (below) has been consistently strong across all of their strategies (we highly recommend reading page 4 of Sequoia's June 15, 2020 "Investor Day Transcript" to highlight how governance and performance are complimentary). Such strong performance not only disincentivises members from switching to competitors and assists member acquisition, but also significantly enhances earnings at the group level. For instance, FY20 guidance provided on 7 July 2020 vs. 22 June had a midpoint difference of ~$2m. Given the long track record of the managers it is expected performance will remain strong. https://preview.redd.it/p6shg5nc6oj51.png?width=680&format=png&auto=webp&s=e65acb553371c6bc7c1f70ddfdf153e9e625117a https://preview.redd.it/mtn23k7d6oj51.png?width=680&format=png&auto=webp&s=9a7ba471248070f9f05216cdf5bbcab2a1f9102b Valuation Key: · FUM = funds under management · FUA = funds under administration · MA = managed accounts · FU\ = total funds (FUM + FUA + MA)* Valuing a Superannuation Member: Our valuation technique here will be somewhat unconventional. We will attempt to value the lifetime revenue per member (LRM) for AEF and for a traditional fund and then highlight the incongruity of their relative valuations. The long-term nature of lifecycle retirement saving (and by virtue the true value of a superannuation fund) demands a long term perspective. Fortunately, the mandated nature of AEFs cash flows facilitates evaluating the lifetime value of a superannuation member. To estimate the LRM we consider the following: (i) life cycle expectations (i.e. retirement age and life expectancy); (ii) salary expectations; (iii) superannuation contribution rate; (iv) investment returns; (v) member "type;" (vi) fee structure; and (vii) a discount rate. We begin by assuming a member makes $5,000p.a. at age 20, which grows to $130,000p.a. through the middle of their working life (35-50) and then declines to $90,000p.a. at 65 (noting these are gross values not inflation adjusted). Since the average member account balance for AEF is ~$60,000 (FUM of $4.05bn ($2.72bn of which is superannuation) / 43,000 members = $60,000 as at 30 June 2019), we can roughly assume that the average age of their member is between 30-35, which places them at the profitable end of this member acquisition cycle. Further, this member regularly contribute 9.5% of their earnings to their superannuation, which compounds at a rate of 6% p.a. Moreover, the prototypical member starts working / paying superannuation into AEF at age 20, retires at age 65, and redeems according to the minimum withdrawal schedule until age 85. However, how many members live according to this prescribed lifecycle; supported by an uninterrupted working life? What about people that take time off to raise children, either returning to part-time work or full-time work? We can model these archetypes also, which assumes much lower income growth and some years of earning no income. If we assume that society is roughly split into thirds by these archetypes (i.e. 1/3 uninterrupted, 1/3 interrupted and return part time, 1/3 interrupted and return full time), then we can calculate a weighted average LRM for the average member. Compressing fees by more than half to 50bps and assuming a 7% discount rate we arrive a weighted average discounted LRM of ~$18,000. Whilst comparing this to the average member in another non-super fund is difficult for an array of reasons (i.e. average acquisition age, average income, average balance, average contribution, redemption allowance etc.), we can loosely estimate what this looks. Adopting the same framework as above, to estimate the LRM of an average managed fund member we must first define the managed fund member "archetype." First, we assume the average traditional fund member has a higher income profile (as lower income earners typically do not invest in managed funds). We tweak the income profile to peak at $180,000 between 35-50 and taper down to $120,000 by age 65. Second, we assume the acquisition age is 30 years rather than 20 to reflect that most individuals do not invest in traditional managed funds until later in life. Thirdly, we account for the non-compulsory nature of managed fund contributions. If we start with the marginal savings rate (10-year average of ~7%) as a proxy for available funds for investment and increase this to align with our ‘managed funds’ archetype who has higher income to 15%. We then assume that from this 15%, about 1/3 will be invested into a managed fun (or ~5%). Therefore, for our individual earning $180,000 during peak working years, this is an annual contribution of $7,200. Finally, we increase the discount rate to 9% since because redemptions are more likely in a traditional fund. Using these alternative assumptions, we arrive at a LRM of ~$5,000. The significant difference in LRM helps explain why a superannuation business can command a much higher multiple of FUM or earnings. Further, we believe our estimate of LRM for a traditional fund manager is quite bullish (i.e. overstated) due to the following: (i) it assumes the individual works full-time for their entire life; and (ii) it assumes the individual stays with the fund from age 30 to 65 and makes uninterrupted and stable contributions. Although dollar cost averaging is touted as an eighth wonder of the world, we are doubtful it is applied as often as it is spoken. Trading Multiples Valuation: Valuing AEF on a relative basis is difficult given the lack of peers. Against traditional fund managers (i.e. Magellan, Perpetual and Platinum), which trade between 5-20x earnings, and superannuation exposed platforms (i.e. Netwealth and Hub24), which trade between 25-40x earnings, AEF looks relatively expensive. We are acutely aware that AEF is currently (at ~$4.2) trading at 12.6% of FUM and ~51x earnings; and at its peak (~$9) was trading at 25% of FUM and 120x earnings. We believe the valuation difference is driven by the quality of the FUM managed and, therefore, the quality of the earnings growth. Given their high alignment to superannuation, NWL and HUB are the two most comparable firms to AEF. As the trailing figures show, AEF appears to be trading on par with its peers. However, an important nuance is the trailing figure for AEF is based on 2019 earnings, whilst for NWL and HUB it is based on FY20 earnings given they have already reported. As such, on a like-for-like basis AEF’s ‘trailing’ earnings multiple (based on the mid-point of management’s guidance) is actually ~51x. This means it is trading below NWL and HUB, despite the fact that the majority of those businesses’ FU* is linked to FUA rather than FUM, which has a lower monetisation rate. Not to mention, the split between superannuation and managed funds is not as clearly delineated as is the case with AEF. What is also evident is limited analyst coverage of AEF and lack of forecast guidance assisting the market to predict growth (as is the case with NWL and HUB). Relative to traditional fund managers (i.e. PPT, PTM and MFG), we note the substantial difference in FUM and business quality. AEF hosts the highest monetization rate (Rev/FUM), even whilst facing fee compression, with the highest FUM growth among its investment management peers. Furthermore, we expect EBIT margins will improve from ~30% toward its larger traditional fund managers peers due to economies of scale over time that we believe will more than offset any fee compression. AEF has also supported a very high ROE due to its sticky clientele and service-based business model. The combination of: (i) best in class monetization; (ii) high LTM and increasing membership base; (iii) improving margins; and (iv) high ROE will make for an incredible growth engine on earnings in the long term. Thus, AEF is a higher quality business with ~4x+ the LCM of a traditional fund trading at only a 2-3x premium using current ratios... https://preview.redd.it/nffeuvef6oj51.png?width=680&format=png&auto=webp&s=e0aed3fcb4464355aa965ed151d6dc2e484ff4b8 Risks We note the following investment risks with AEF:
Fee Compression – The funds management industry is subject to fee compression across both funds and superannuation funds. There has already been a lot of restructuring of AEF’s fees since 2016. The investment product(s) they advocate is also one that serves an ethical / moral dimension and can arguably be charged at a premium above market. Notwithstanding fee compression beyond that which we have considered would place downward pressure on margins.
Member Attrition – The stickiness of AEF's membership base is a hallmark of their competitive advantage although this could be reversed over time due to poor performance or corporate mismanagement. We encourage the reader to keep an eye on member growth and net inflows over time.
Product Reproduction – There is no official IP upon ESG investing and new products are increasingly being promoted to capture market share of this growing market. We believe AEF's early mover and strong brand serve to mitigate this risk.
Regulatory Risks – Changes in the superannuation regulatory environment can be material. This has long been debated within the public domain although it has been viewed as politically unfavourable to change the superannuation system without a reasonably long lead time and grandfathering provisions, which we hope would make any changes unlikely and less meaningful.
Investment Roadmap Peers’ Earnings Updates: In summary, the FY20 results of peers indicate that businesses with revenues dependent on investment funds have performed quite strongly during this period. https://preview.redd.it/np04rasg6oj51.png?width=680&format=png&auto=webp&s=0de02bee60036e9bd71068815e618c2f3711db24 Earnings Announcement: Earnings release on 26 August 2020 should provide for the first catalyst to remind the market of the AEF's fundamental performance. The key figures here will be superannuation FUM, superannuation members and FY20 earnings. AEF will also provide ongoing quarterly FUM announcements, with the following update due in early October. We may also see a mid-August FUM figure in the most recent announcement. Finally, AEF has historically provided updated FUM in back-dated results announcements. Evidence of this occurring can also be found in HUB's most recent announcement: https://preview.redd.it/jz8frxfi6oj51.png?width=680&format=png&auto=webp&s=325d7973e1eb6c98e714dea69306b1ebf8ab0cc7 Private Market Activity: Whilst we think that a private equity buyout is unlikely for AEF, further media exposure and transaction data points should help the public value these assets. There have been some recently executed and rumoured deal activity in the space through 2020. Notably, KKR – one of the largest US-based global private equity funds – bought a 55% stake in Colonial First State valued at ~$3bn from CBA. The implied valuation was ~16x EBITDA, despite the quality of business model and LTM of members being substantially weaker than AEF. There is similar PE interest in NAB’s MLC Wealth, with US funds CC Capital and FC Flowers on second round bids for the asset. NAB's MLC Wealth business caught the attention of Carlyle, BlackRock, and KKR earlier in the year although deals were not executed. The interest from KKR in Colonial is particularly notable, given Scott Bookmyer (KKR partner) who refers to Australian superannuation as the ‘the envy of the western world’. We believe AEF may benefit indirectly from private equity interest, which will confirm both the long-term value and viability of their business model.
Intro: Bought into M1 Plus from a $60/yr Promotion 2 months ago. I had an investment account already, and even one of the first spend accounts. I had declined the offer for M1 Plus at $125/yr. This is a first review of M1 Plus after two months of use and a bit of a dive into the value of its features from a financial and user experience point of view. Value: This is a pretty simple one. Do the math. The interest vs. your other checking account multiplied by the amount of cash you’d be keeping in there for M1 Spend. If you’re borrowing from M1 too, the 1.5% difference (or whatever difference there is between M1 Borrow and your next best offer) multiplied by the amount of money you’d like to borrow. If all these add up to greater than whatever annual fee is offered, go for it. Otherwise, it’d be a very expensive metal card. But if 4 waived ATM fees go a long way to save you money, that should be worth considering too, however, there are tons of cards and products that’ll waive said fees, some even for unlimited transactions and no upfront cost. Just because M1 is offering this benefit as part of a premium package doesn’t mean it’s impossible to find for free somewhere else. XP: It is a great experience. I constantly invest lumps of $500 into my portfolio all the time. It’s quick, easy, and immediately fulfilling. Not that other brokerages don’t do this. But M1 is clearly focused on showing you your long term progress on your investment goals. It uses a money weighted return formula so that you know how much your capital has been making you to easily compare to the return of bank accounts and investments. There’s a reason their product is called “Invest” and not “Trade”, more on that later. But this means it’s primarily suited for this purpose. During the Covid crash, I took to Robinhood to place my Put Options on the S&P because high frequency derivatives trading and M1 basically speak different languages. All this to say, it feels amazing to watch your investments accounts slowly creep up as you continue to dollar cost average into the market, but this has some drawbacks. Pies. While fun and easy to build, mix and match, they are not a very common mechanic to implement on amateur portfolios. Selling stocks can be quite the process on M1, and the platform will try its darnest to discourage you from making any but the most basic adjustments to your portfolio. Its really only suited for the “set it and forget it” mindset, which is not to say you can’t mess around with your money as you please, but it’s just so perfect for investing and watching your money grow with a long time horizon. The plots will show you your progress and encourage you to keep a regular deposit schedule. But try trading into and out of a stock, or a set amount of shares, or even thinking about playing with derivatives and other financial instruments: slim pickings. The numbers make a lot of sense, too. I’ve been investing for about 5 years now, and my latest craze has been leverage. I’ve read about how the optimal leverage ratio for the S&P on average was 2.0 or 100% levered up, and looked up the historical comparisons to corroborate. Shopping around for margin accounts and available capital, it’s tough to beat the 2% rates at the moment. I’ve been slowly levering up during the latest market rally to great effect and the low interest really pumps up those numbers. Having this much cheap capital, not just for leverage, but also for life is worth more than just the time value of money. I would make the point that this is made even more valuable by having all your financial services on the same platform, as you really get to do with your money as you please and move it around to withdraw it to your hearts content. My real issue was with Spend. Not a problem with the product but myself, in trying to justify the annual fee. I weighed how much money it would make sense to keep in Spend as opposed to an online savings account. To keep cash a couple of months ago, it made more sense to opt for ally or marcus as they were offering close to 1.55% on cash. But as their rates have plummeted, getting 1.0% on a CHECKING account has been an absolute godsend in this crazy economy. This account works for just about anything with the notable exception of checks... in a checking account which I suspect is the reason for the “Spend” branding the product was marketed with. When it’s hard to even find 1% on a savings account, a 1% APY on checking is no-worries approach to cash investment. Ultimately, having all of these balances displayed together on the Transfers tab is huge in terms of consumer experience. This, however, should not be a replacement for true “Dashboard” that could show an overview of all your money moves and account balances. Ideas: M1 Trade. Admittedly, I do see how this can be very contrary to the philosophy, product and experience that M1 has worked to create. That being said, thinking that your customer will always prefer to have their money invested into automatically allocated pies is a little short-sighted. Opening a much more DIY Trading product on M1 would of course have them incur tons of costs in handling and verifying transactions of all the individual financial, but many places already offer such services for free, some are even profitable at it. An M1 Trade product would also need integrating the Invest product because regardless of what you’re doing on the platform, you still consider your money your investments and want to see it all together. Pies and individual Buys would have to play nice together, and that does sound like a difficult endeavor. I keep a couple of accounts with different mixtures of my pies for all my purposes. I also handle the investments for a few of my family members, which will become relevant shortly. You can obviously set up as many accounts as you wish and move money into them as you desire, but this can get you into some warmer water. If two of your pies hold most the same securities and you just want to have a different pie for a different account, you’ll have to call up to pause trading so that your pies have a chance to get to know each other and not force you to sell and buy right back into the same assets just to incur the taxes. It’s a bit of a hassle, and I would argue, on purpose. For Pies themselves, I often find myself wanting to make small tweaks to pies but then quickly let it go as removing slices would automatically trigger a massive sell off that incurs taxes. From a conversation with tech support, I gathered that the best way to do this was simply pause trading on your account, and change the pie you want all your money to go into. Editing pies is fine and easy, but completely swapping a pie for another one led me to believe that it would sell put of all my holdings even if the old and new pie had many of those same holdings. If this is me being stupid, good, if it’s a gap in features, I hope M1 lets you simply swap a pie for any other and gives you the option either sell everything, sell only what is 0 in the second pie, or sell nothing and simply continue aiming for the allocation of the new pie without touching your previous investments. Lastly, an iPad app. I’m a big fan of the iPad and the iPad Pro in particular. I’ve found myself using it far more than my laptop which is now strictly reserved for long work sessions (I write and edit for a YouTube Channel) and watching content in groups of people (15” MBP Speakers are the stuff of legend). But for anything else, I subconsciously grab the iPad. It’s annoying to have the website be the best M1 experience on the iPad. I understand that making a compelling iPad investing app is its own mountain to climb, but a lot of the Mobile app’s functionality can be ported over without too much of a hassle. Charles Schwab has an iPad app based 99% on the iPhone app that still performs all the same functions, just on the bigger screen, which is the whole point of the iPad in the first place. While it’s not a top shelf iPad app (there are only a select few) the Schwab app is lovely and I’m begging M1 for anything that doesn’t force me to use my iPad in portrait mode to use a blown up iPhone app. Again, this app doesn’t have to be a world beater, just a decent looking and bigger version of the iPhone app that would go a long way to boost the M1 customer experience. Closing Remarks: Obligatory YMMV disclosure: it’s about the math, I won’t bore you with my own, but I was just over the line when it made sense for me to opt into the $60/yr promo. That being said, M1’s value has been a lot about the experience. The future of finance is free. No brokerage should be making money on transaction commissions or administrative fees, it’s a relic from the before times when you needed people who knew people on wall street to do your trading. At this point its not even worth any perceived convenience. The clever ones reading this will point out that, while true, many brokerages already offer a wide variety of free services. Many of them, even, that M1 doesn’t offer. The true spirit of this review is to express my personal opinion on the value of M1 Plus and how the customer experience is its edge in the ebrokerage market. Rates are competitive, but it is a brand new way to consider finance and its role in your life and society. TL;DR Spend is pretty competitive for a checking account, and as long as you’re not using checks too often, its a no brainer for anyone with close to $10,000 in cash just sitting somewhere. Invest is beautiful, but the free version is exactly as good, more windows means very little with the limited trading you’re allowed to do anyway. Borrow is brilliant, hella flexible and competitive rates. 8/10 Would recommend to a friend.
I bought six PRPL mattresses today. You should buy PRPL too (it's undervalued).
tl;dr: Buy PRPL stock, warrants (PRPLW) or calls based upon your preference. They are closing out a killer quarter and are undervalued. PRPL 22.5c 8/21 if you really need a strike. I decided to appeal to both WSB audiences today with two different types of DD:
A completely irrelevant story with some pictures and a position
Numbers and Other Stuff
I bought six Purple Mattresses today.
Yep. I moved to Utah a few weeks ago (absolutely true) in order to do better DD for you in Purple's hometown (not true at all), so I decided to trek down to the Purple Factory Outlet to scope out the scene. Purple Factory Outlet in a crappy part of Salt Lake - Sign on the door says \"NO CASH INSIDE\" Family informed me they were coming to visit in three days (who does that to someone when they just moved!?!). My wife said we needed sleeping arrangements, so I said Purple mattresses. After speaking with my Mattress Firm friend, he told me that Mattress Firm is entirely out of stock of twin mattresses in the Salt Lake City market (Purple's hometown). Worse, the mattresses aren't coming back as the original (the only mattress to come in twin) is being discontinued. https://preview.redd.it/qd4u5bo3oy751.png?width=1242&format=png&auto=webp&s=3417ffb0eca481dbd797b67be2cb9c06c7a58a65 This is a screenshot of an internal Mattress Firm memo on the discontinuance of the Original Purple Mattress (the cheapest one by far) What can I say? He isn't a photographer.
The original is going away
Floor models are NOT to be sold as they are traffic drivers
https://preview.redd.it/tsevapzpoy751.jpg?width=3024&format=pjpg&auto=webp&s=04399eff4e38e98ad17fa55d6db0e511f799bc67 I figured the Purple branded store would have stock, if it existed. And because they are being discontinued, I didn't want to be left short-handed in the future. So, I walked out of the store with six Purple mattresses. And some pillows. And sheets. And mattress protectors. Aaaaaand because I took delivery, it counts towards Q2 revenue (the best part). For all of those who will inevitably accuse me of pumping the stock, I admit that purchasing six mattresses will pump revenue and therefore pump the stock after earnings. Now, where are all of those people who asked me for a free mattress? This was a sign. Most importantly, when I pulled out of the parking lot, a purple Dodge Challenger zoomed right by me. I was barely able to get this zoomed in picture of it. This means PRPL stock is going to zoom up. PRPL 22.5c 8/21. I bought ten of those contracts today too. It was cheaper than the mattresses.
Numbers and Other Stuff
I put forward that because Purple is a high revenue growth company, the best valuation metrics are revenue multiples (as opposed to EBITDA multiples or P/E ratios). You're welcome to debate this, but frankly, the forward looking EBITDA and Earnings look beautiful as well. Additionally, I put forward that Enterprise Value / Revenue is superior to Market Cap / Revenue, but I'll let you do that research yourself. From Yahoo Finance: Enterprice Value / Revenue
As of 6/28/20
Yes, COVID has happened, but unlike TPX, SNBR or Serta Simmons Bedding (which just completed a pseudo-bankruptcy), Purple has actually benefited from COVID and its prospects have never looked better with a shift to higher revenue- and margin-per-unit DTC as well as insatiable demand from its wholesale partners. PRPL is currently trading well below its own previous EV / Rev multiple range, despite accelerating revenue growth into Q2 with a healthy long-term outlook of holding an increase. Additionally, PRPL is trading well below the pre-COVID norm for industry EV / Rev mutliples. What about CSPR? CSPR is a total dumpster fire that is now drowning in IPO lawsuits. Its revenue growth has materially slowed, was awful in April forward looking (15% YoY growth vs 170% for PRPL), on declining margins. The cash burn rate for CSPR was high before COVID. They likely only have a few quarters left to live. I think they are overpriced as a result. CSPR is a bad comp even though there are similarities to the businesses at the 30,000 ft level. Revenue Growth & Estimates (Q2 Estimates via Yahoo Finance)
Q2 Low-Mid-High Estimates
A few items of note here:
CSPR disclosed the Last Twelve Months YoY growth as of 3/31 was 24.3% (which sucks for a revenue growth company that is burning cash)
PRPL accelerated its growth over the past year. It is massively accelerating again in Q2.
PRPL disclosed in an 8k that is has already booked about $145M in revenue for Q2, so the analysts' consensus estimates are WAY under. I gave my math and estimate for Q2 sales here. I still stand by the estimate that PRPL will beat $200M in revenue this quarter, especially since I just bought six mattresses.
Now compare the barely double digit growth numbers of TPX & SNBR over the past year to PRPL. Now compare the EV / R multiples. Something is off.
PRPL may very well beat SNBR in revenue for Q2 (due to SNBR's high reliance on wholesale sales).
Summary: PRPL's EV / R multiple is under where is should be, even in this market, whether you compare it to its own previous multiples or its competitors before they were affected by COVID. If you look at COVID EV / R multiples, it is in-line with companies who are materially struggling with cash flow and growth... this couldn't be further from the truth. PRPL is undervalued.
PRPL has generated $70M in cash during April and May, which is insane for a stock that has generated Adjusted EBITDA in the 6.2-15.3M range over the last four quarters. The quarter isn't even done yet. I'm not putting an EPS estimate on this because the amazing cash generation is going to be partially offset by a fairly large warrant liability expense adjustment. It will likely be one of the final expense adjustments we see as the secondary offering triggered a strike price drop to zero, which is one of key things the liability expense was modelling. Regardless, warrant liability expense doesn't deserve to be an expense as the warrants themselves are already built into fully diluted EPS, which is what everyone reports. The FASB done messed up on this one.
Technical Astrology & PRPL Patterns
IMO, most technical analysis is confirmation bias at best. Here's some confirmation bias. https://preview.redd.it/5kviazrs0z751.png?width=1166&format=png&auto=webp&s=56c8daaa52c4af31c66c9821e57e40b9362b1bcd If you are into this type of thing, PRPL has been a series of Bull Flags since the bottom of COVID. We are now ending our fourth bull flag (which likely ended today). At least this is what stocktwits and a few other areas are raving about. Intraday Patterns The intraday patterns are more interesting to me. I've been watching this security fairly closely over the last 3 months since the COVID bottom, and on most days, you'll see a spike in the morning that fades away into the afternoon. It is almost like clockwork and seems to be irrespective of volume. While I don't trade this pattern because I don't want to exit my long-term capital gains positions yet, some of PRPL gang makes money by buying in the morning (or afternoon before), selling/shorting at the peak, and then closing/buying late afternoon. Good on them! Also, PRPLW warrants tend to lag the stock on the way up if you want to play that too.
What is your next play after PRPL?
I've already mentioned several times that I will fully exit my warrants (and rotate into some PRPL stock / long dated options) when the stock price reaches about $24. My inbox has been bombarded with questions about what my next play is. https://preview.redd.it/t56ziwe42z751.png?width=1161&format=png&auto=webp&s=4ccef0051c2f1740d1c8059f1cb2a16188f7435c The above chart is a comparison between CSPR and PRPL. CSPR, even though it is a total dog, has been riding up with PRPL on sympathy plays. CSPR spikes on PRPL news, conference presentations, and any other movement. PRPL has reasons to be up. CSPR shouldn't be any higher than where it was after its last earnings release. The only new things that have occurred are dozens of IPO lawsuits. I'll be shorting CSPR for somewhere between $100k-$500k if I end up exiting my PRPL positions before CSPR earnings and if this stupid pattern holds. It's free money.
I've got tons of warrants (closing in on $2M worth) and now 10x PRPL 22.5c 8/21. Do your own due diligence. This is not investment advice of any kind.
Short Market Value: The market value of securities sold short through an individual's brokerage account. The short market value is calculated as the security price multiplied by the number of Margin and Selling Short. Margin borrowing lets you leverage securities you already own to purchase additional securities, sell securities short, protect your account from overdraft, or access a convenient line of credit. Interactive Brokers ranks as the best online brokerage for short selling and offers the lowest margin rates in the business. In addition to offering low commissions on stock, options, futures Here’s a quick recap of the pros and cons of trading with a margin account: The Pros: You get more purchasing power to boost your returns. You can take advantage of stock prices today, even if you don’t have enough cash on hand. You can short stocks with a margin account; The Cons: You can lose more money than you invested. Among these methods, margin trading and short selling are commonly utilised by experienced traders to gain an advantage in equity trading. But it could be equally useful for new investors to learn and understand both, especially for intraday trading, knowing margin trading vs short selling will give you mileage.
Long purchase, Short selling and margin trading. Which one is the best? (FIN327) muiz addin. ... 08-A, Cost + Margin = Selling Price - Duration: 14:13. intubeman1 595,167 views. Example of how short selling on margin works. Example of how short selling on margin works. Skip navigation Sign in. Search. ... 9 Tips for Trading on Margin 👊 - Duration: 10:18. Go to: https://satoshismines.com scroll down to find the video on how that can help you grow your bitcoins. Plus if you want to find out more about the tools... Why You Need a Home Based Business and How to Start! with Dr. Lynn Richardson - Duration: 54:48. His And Her Money 358,878 views Do you have a margin account or a cash account? Tim Bohen is covering the pros and cons of each kind to help you decide which is best for you. 🔴 Subscribe fo...