Trembling Hand
Can be found on the bid
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Oh you know. complete lack of understanding. There was 1.2 mill short as of yesterday. So that would make all of todays trades short sells.......
MMS - McMillan Shakespeare
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Oh you know. complete lack of understanding. There was 1.2 mill short as of yesterday. So that would make all of todays trades short sells.......
skc
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Shorts were not easy to come by this morning... I don't think too many people would have shorted this on open given the $7 open price and the balance of probability.
Made decent money on a trade but still left quite a few $k on the table. Oh well...
skc
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Bought the low and sold the high.
(but missed about $1.50 in between :bad
At least its better than holders that left money and then some on the table
Sort of similar here. My lowest parcel buy was $6.95. My highest sell was $8.95. So that's pretty good... But over the full size I only averaged ~80c, against the day's range of $2.25.
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Bought the low and sold the high.
(but missed about $1.50 in between :bad
At least its better than holders that left money and then some on the table
Ok, well for the rest of us fools who decided to buy and hold instead of flipping on the day for a quick but small profit I provide the following commentary from RM at http://rogermontgomery.com/fbt-fairly-badly-trampled/...
"Prior to the market opening, and based on the information contained in the MMS announcement, we had calculated a revised estimate of MMS’s intrinsic value in the event that the proposed changes are implemented. Our assessment was that the likely impact would be devastating to MMS’s business, with most of its after tax profits destroyed.
Note, however, that this calculation assumed the changes were implemented. We separately estimated the probability that the changes would not be implemented, noting that the Coalition has said it does not support them, and that Labor may not have the numbers to implement the changes even if it did gain power. Our best guess at the probability of the changes being implemented was somewhere below 20 per cent. The framework we used for this is shown in the attached diagram. Using a <20 per cent probability of devastation and a >80 per cent probability that the business would suffer only relatively minor damage, we estimated a probability-weighted fair value for MMS shares.
Based on that estimate, we were at the head of the queue this morning to buy additional MMS shares at $7.00 and grateful for the ‘McMillan get smashed’ sentiment. Clearly there is some risk in doing this, and the fact that we are underwater on the initial investment makes us acutely aware of this risk. However, a critical part of our job is being able to put emotion to one side and take decisions based on a considered assessment of the facts, keeping in mind one does not pick up bargains when there is a cheery consensus.
In this case the assessment was clear. At $7.00 per share, the upside considerably outweighs the downside, and our investment team was unanimous in its recommendation: a meaningful increase in our holdings in MMS."
Time will tell who made the best decision on the day, the day traders or B&H investors. My goal is to make $8 a share instead of 80 cents and I think probabilities may be on my side.
Liberals might only be in for 3 years. There will be a lot of people that don't want to risk signing up to a multi-year lease only to have the rules changed.
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There is a short 1-2 month disruption of lease orders. That is it. NPAT is affected for 1-2 months.,,not permanently unless there is legislation. There is not. Actually there is
No Govt Policy
No Legislation
Off the Rudd/Bowen cuff comments only.
Full coalition support given in full.
Coalition miles ahead in polls and betting
No likely majority for Rudd
NO chance of legislation being enacted this term and tiny chance next term and no chance with Coalition.
Rudd would need 5+ seat majority....no chance of that at next election
This is actually a screaming buy. Stock is down $10 from $18 since last Tuesday for an "off the cuff Rudd/Bowen comment" only no legal reason for MMS to change anything actually.
Market has jumped at a shadow....that doesnt even exist !! I expect a $4-7 buying and short covering retracement within days. It was strong buying all day if anyone noticed.
Shorts that entered today simply do not understand this stock. It fell $7 in mins it can rise $7 in a couple of days easily.
There is 4-6m shares short after today. If the company announces the dividend will just be delayed if coalition wins this gaps up $3-4 easily. and then shorts have to cover...
This was near $20 before the Bowen comment last week. Ironically the business actually has more certainty now than ever given the coalition unequivocal full support. This was key.
The Market has got this wrong today and the shorts will pay a severe penalty IMHO, the shares to buy were evaporating all afternoon and will evaporate tomorrow as there was a lot of shorts trying to short more (were on both sides)...and now have to cover the margin call dump of shares after a week in trading halt was at the open leaving only blue sky ahead for the stock.
Dont be suprised to see this at $11-12 tomorrow. If it gaps up a > $1.50 watch out.
Its safer being on the long side.
You sound like one of the goldbugs talking up gold as it falls like a knife.
GuruofGurus good business up until now but the game has changed, it may still be a good
business going forward but this is a question that will takes a while to answer because no one
know exactly what will happen in the next couple of years.
Labor fire the first shot that tax concession like these cant be sustained, doesn't matter if Lib or some other government come into power, they have to balance the budget at some stage ....Now the Lib if come to power
they may stop it for a while but at some stage if they are short of revenue, this will be in the spot light along with all other tax concessions and GST rate etc.
when you in opposition you can promise a lot of things that as a government you cant delivered, because Opposition don't run the country and don't balance the book...
Lib cant promise ripped out carbon tax, ripped out mining tax, paid maternity leave and then don't look at other saving measures...where the hell do they get the money from? tree?
so going forward this business will be impacted by whoever in power because of its uncertain future..and market don't price well
for business that has uncertain future
"When the facts change, I change my mind. What do you do, sir?"
-- John Maynard Keynes
business going forward but this is a question that will takes a while to answer because no one
know exactly what will happen in the next couple of years.
Labor fire the first shot that tax concession like these cant be sustained, doesn't matter if Lib or some other government come into power, they have to balance the budget at some stage ....Now the Lib if come to power
they may stop it for a while but at some stage if they are short of revenue, this will be in the spot light along with all other tax concessions and GST rate etc.
when you in opposition you can promise a lot of things that as a government you cant delivered, because Opposition don't run the country and don't balance the book...
Lib cant promise ripped out carbon tax, ripped out mining tax, paid maternity leave and then don't look at other saving measures...where the hell do they get the money from? tree?
so going forward this business will be impacted by whoever in power because of its uncertain future..and market don't price well
for business that has uncertain future
"When the facts change, I change my mind. What do you do, sir?"
-- John Maynard Keynes
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Buying Volume was 2 times the selling volume on depth most of the day...indicating pent up buying
and Highlighting the lack of available stock to short cover with. This is usually an illiquid stock. Shorts are actually in a real bind tonight, betting against Coalition at $1.20...dumb dumb dumb. and aggressively shorting the open....dumb dumb dumb.
MMS could feasibly do the opposite tomorrow and i expect less shares around to buy and no selling as its done. MMS will fight back. They have a great balance sheet, plenty of debt headroom, 15 % earnings lift for FY13, Dividend will be ok and will be an increase is my feel in line with earnings +15%, competition is also falling away giving them near monopoly status. Smaller competitors panicked but MMS did not.
The market just overreacted to some media stories of the week not based on fact and forced the open down now all the bad news is out there but the sky is not falling its actually pretty blue. The stock rose nearly every minute of the day from 10.10am onwards. Look at the chart.
The aggressive short seller at $7 open and $8 (resistance) is now in very big trouble IMHO whoever you are. Good luck getting those few million shares back, The fundies were clearly buying today. Shorts dont want fundies buying and there were big buy orders after $7.50 especially
Smart money bought today.
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Gap up tomorrow is a much higher probability. Massively oversold and snap back covering is already underway. Screaming buy under $12.....and if shares evaporate like I expect big volume buying could make this rise very fast.
and Highlighting the lack of available stock to short cover with. This is usually an illiquid stock. Shorts are actually in a real bind tonight, betting against Coalition at $1.20...dumb dumb dumb. and aggressively shorting the open....dumb dumb dumb.
MMS could feasibly do the opposite tomorrow and i expect less shares around to buy and no selling as its done. MMS will fight back. They have a great balance sheet, plenty of debt headroom, 15 % earnings lift for FY13, Dividend will be ok and will be an increase is my feel in line with earnings +15%, competition is also falling away giving them near monopoly status. Smaller competitors panicked but MMS did not.
The market just overreacted to some media stories of the week not based on fact and forced the open down now all the bad news is out there but the sky is not falling its actually pretty blue. The stock rose nearly every minute of the day from 10.10am onwards. Look at the chart.
The aggressive short seller at $7 open and $8 (resistance) is now in very big trouble IMHO whoever you are. Good luck getting those few million shares back, The fundies were clearly buying today. Shorts dont want fundies buying and there were big buy orders after $7.50 especially
Smart money bought today.
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Gap up tomorrow is a much higher probability. Massively oversold and snap back covering is already underway. Screaming buy under $12.....and if shares evaporate like I expect big volume buying could make this rise very fast.
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I kind of agree on where you're coming from, except the short sell at open bit.
Apart from the directors/founders, NAB aggregate holds 7.4m, Asia Pac technology holds 4m, Fidelty holds 2.3m
The shares under fidelty are under many different funds so lending would be difficult. Asia pac have been selling down from 4.6m, so I doubt they'll lend out much to sell.
NAB is the only real lender here. Assuming they are allowed to lend out 1/2 by clients, thats 3.7m. 1.3m is currently shorted.
Leaving a total of 2.4m available for shorting, assuming 1 entity gets all of it.
Yes a whole heap got done in the morning today, and I could just as easily say most of the volume is long selling by holders who got scared.
Also, both parties atm are pretty focused on returning to surplus. Therefore it isnt a given that a Coalition victory will restore everything (which is being priced in I believe)
Apart from the directors/founders, NAB aggregate holds 7.4m, Asia Pac technology holds 4m, Fidelty holds 2.3m
The shares under fidelty are under many different funds so lending would be difficult. Asia pac have been selling down from 4.6m, so I doubt they'll lend out much to sell.
NAB is the only real lender here. Assuming they are allowed to lend out 1/2 by clients, thats 3.7m. 1.3m is currently shorted.
Leaving a total of 2.4m available for shorting, assuming 1 entity gets all of it.
Yes a whole heap got done in the morning today, and I could just as easily say most of the volume is long selling by holders who got scared.
Also, both parties atm are pretty focused on returning to surplus. Therefore it isnt a given that a Coalition victory will restore everything (which is being priced in I believe)
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Sorry man You underestimated. Many brokers "naked" short sell and there was tons of naked short selling at the open. Naked Short selling is when the shares were not owned or borrowed they were basically flash orders on screen, (daytrades and t+3 sell orders) (essentially no stock owned and no stock borrowed)...my estimate was 1-2 m real shorts plus 1-2m naked. Either way I am right...they forgot to look at the betting markets nor read the bit about MMS having full coalition support. Now they are on the wrong side.
The company also has ASIC compliance restriction (ie Newcrest) as the reason for not briefing analysts. Not because it doesnt want to. It will be speak to the market analysts and journos etc when legally cleared to do so.
I expect more Fundie buying + Shortcovering + Naked Short covering+ existing shareholders picking up a few + arbitrage traders going long the Coalition @ $1.20 in MMS + illiquid stock = Big movement/Retracement to $12-14 by Monday....who knows maybe even tomorrow.
Be careful relying on RM marketing propaganda - It’s always hindsight and he's always infallible. If you had the debate I had with him a few years ago on his blog about MMS this article would have you laughing your **** off.
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Err, naked shorting is illegal. Nobody is gonna risk jail time for that sort of thing.
Oh and selling 50x avg daily vol? Who in their right minds would do that? Esp as 3 days later the world would know.
Country Lad
Off into the sunset
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Not quite, the price weighted volume buying was 1.49 times the sell. Not that much different to BXB which had about the same $ turnover.
Cheers
Country Lad
Robert Gottliebsen didn’t think we should have this fun today.
http://www.businessspectator.com.au/article/2013/7/25/automotive/bet-election-trade-mcmillan
I’m happy for it to trade – opens up more options.
Until I get more clarity I’m trading my new found election bet. [twice my investment exposure when the price action is up and the price is below my best guess probabilities too potentially fully hedged]
How come shorting is so easy for everybody else? I had to spend ages on the phone earlier this week setting up the potential ability to just hedge this out for a while.
A really good day today lets see what tomorrow brings.
Nearly 20% of the company turned over today
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Naked short selling is sadly everywhere on big news day or what appeared a short (prima facie). ASIC simply does not police it properly.
Oh and if someone can manipulate/move it from $15.36 to $7.00 on a few hundred thousand shares only at the open today.....who ever that was may find that a few fundies and shareholders + the shortcovering + naked shortcovering the market can move it right back at the open tomorrow and coming days get this back to its highs
Recall Volumes dry up on day 2 and in an illiquid the big stock covering had to be done today and I reckon 3-4m shares were not.... leaving a massive gap (4m is about 4 days full regular trading and to cover would that would take about 8-12 days of regular buying) and your right NAB wont lend all theirs. No shareholder will lend.
This therefore could bounce very hard. Stocks that halve in a day can double in day. Especially when the market got this plain wrong as they refused to read the important bits i,e...Coalition support and Coalition miles ahead in betting/polls and bookies have got every election correct for near 20 years. The earnings were excellent and the dividend was not cancelled and that is a falsehood. If anything it is only delayed.
and MMS is illiquid in both directions .....not just one. Being caught short in this earnings machine with coalition supporting it fully is very dangerous. Alot of people now on the wrong side of this. Recall It had already fallen from $18.64 to $15.36 so a lot was already factored in last Tuesday fall. It is way overdone now.
if it had opened at 12 and steadily sold all day different story. But it gapped down hard in secoonds and with only 0.5m shares and now MMS can gap up just as hard.
The formula for a massive pop is now in play. We shall see If I am right....did you see the very strong buying all day anyone right up to the close....look at the chart.
I think it will settle in the $12-15 range and creep up to $20 as the election result solidifies and rudd goes back to the hole in which he came out of.
Just my read based on facts. DYOR
skc
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Stephen Bartomoleum has a more sensible opinion.
How do you know there's naked short selling? If you are just assuming then you should perhaps not call such guesses as facts.
As background - my last purchase was 1/10/08 average holding cost is low $2. It has repaid itself and more in dividends and I have sold some down at higher prices because of portfolio diversity rules.
Removal of FBT concessions was always envisioned but not so much the farcical way that it has occurred.
At the moment, given the uncertainty I’m not looking to add beyond short term trades. Not adding on an investment basis and may hedge at any second but don’t want to realise the investment here either as there are as many upside risks as down at the moment.
Nothing like a botched concession withdrawal to embed it for a while longer – Just look at negative gearing. Under a no change regime MMS competitive advantages would be meaningfully strengthened due to the demise of competition. Its earnings multiple may take longer to recover.
I fully support the retaining of staff until more certainty prevails. It may not work out but I think it’s a justifiable business risk. Cash position is certainly strong enough. Debt properly understood is well under control with possible upside risks to the used vehicle market.
The company update was vague and I thought a lot less informative then it could have been (political?) They split out the whole novated lease streams and indicated they are all at risk – I don’t think it’s that bad, the FBT capped enterprises can put the cars under those caps if they are not already fully utilised. Even with no income tax advantage the ease, finance, fleet buying and GST savings will still see some novated leases written. Some vehicles may even have legit business use and others will simply transfer to fully maintained company vehicles still managed by MMS. The Assets management business is largely not affected. Then there is still the non vehicle lease side of the business. The hit to revenue and margin longer term may not be as bad as the picture painted.
The numeration services business should have always been transitioning towards something like Paychex in USA. Nothing on that front changes.
Ps don’t listen to me I’m the idiot that didn’t sell everything at $18.00
