Regular readers of this blog know that I seldom talk about actual trades, I mentioned the reason for that in this post. Ironically the trade on Leucadia I spoke about ended up being my dumb trade of the month, talk about confirmation. So to invite disaster I thought I’d discuss what I’m currently up to, in case it’s not clear from my other musing.

A quick note to close out my adventures with Facet Biotech. Abbott purchased Facet today for $27 a share. I sold out last year at $17 for just under a three bagger. I thought Biogen had their tendrils in so deep with their partnering that no other offers would come.

Seth Klarman cleaned up, that extra $10 translates to an extra $35M for Baupost. Though on a percentage return basis I believe I did considerably better. It’s just a shame that percent returns don’t buy ski holidays to NZ! While I made over $10 a share, $20 would have been even nicer.

What have David Rosenberg and Seth Klarman got in common? Diddly squat as far as I know, except they wrote the best two things I’ve read in the last few days.

I have subscribed to dozens of investment newsletters and sites over the years and used to read newspapers. What follows are my opinions based on past experience, the publications mentioned may have changed since I subscribed.

Jeremy Cooper, the superannuation reviewer not the brewer, has released A Conversation About SMSFs. This document is as refreshing Cooper’s Pale Ale, Cooper even leads off with a Coopers joke.
I encourage all SMSF trustees to read the document, though in summary Cooper says SMSFs are doing well and despite concentrated asset allocations* are performing as good as if not better than other investment vehicles.
SMSFs might be able to aspire to this [excellent performance] because:

SMSFs can pursue asset allocations that would be difficult to implement in an APRA-regulated fund;
SMSFs can have longer-term investment …

One of the good aspects of blogging and discussion boards is they help overcome revisionist history. Here’s what I was thinking a year ago.
Despite not knowing the answer I clicked four, At/near bottom and things will start gradually improving soon. [77% of respondents had a considerably more pessimistic view...no surprise there!]
When my kids are tired and hungry (in recession) I have a few options besides ignoring them.

I can give them sugar (consumer stimulus package) and the results are almost immediate. Full of energy off they go at full speed. Only to crash again …

Here’s my investometer for the end of January showing actual percent invested in equities.

My only purchase of note was in January was Catch The Wind. I continued to accumulate cash in our SMSF and am busy investigating opportunities. Nothing tickles my fancy at the moment.

I think you should be looking at buying LEAP Calls on some of them! Or bull spreads on a group of them.
Take MMM 2011 Calls. Picking one at random without calculating the best strategy:
50 – 70 call spread will cost around $5.50 with profit of $14.50, that’s almost a 1:3 risk reward for a return of SP to $10 less than the -2 line! MMM 25 Year Chart
Heck sell the $40 2011 Put and you’ll get a small credit and the entire upside for the risk of owning MMM at $39.
me …

Today I linked in with a past colleague, boss, inspiration and guy to whom I at least once undelivered during my SAP days. This is for him, hopefully it’s a starting point for discussion.
Here’s my starting point for funds management (FM) in Australia. There are a few other excellent slides in the presentation. Three of the FM segments are ripe for disruption. Savy asset managers should be aiming to eliminate the middle man and increase their personal stickiness preferably with performance.

Smart consumers should be making this so for themselves right now. Eliminate …

“With small companies, you’re better off to wait until they turn a profit before you invest.” Peter Lynch – 20 Golden Rules
Investing without profits is playing with fire.