Originally posted by madamswer
"what's the option then? Sell out and go away?"
Not sure.
And when I'm not sure, I think "do nothing" is the appropriate thing.
If I thought these guys had the ability to sink the company, I would be gone, but it is too strong a cash flow generator for that to occur.
But what they also have no ability to do is to turn the ship around, in my view.
So, here's the way I'm playing it:
If the company gets compulsorily acquired in coming months, well then there's nothing I can do about that except take my money, pay the capital gains tax (without any 50% discount because I only acquired the shares recently).
And if the would-be acquirer walks away, well then the share price falls back to $2.00/share and shareholders will have to act to bring about change in management and strategy, which is a long, drawn out process to the restoration of value to shareholders.
I will be more than happy to do my share in that process.
Market manipulation is real but not a useful thing to focus on.
@madamswer you and I have tangled on 4 investments MND, SMX, PRG and STO.
On MND at around $5 your bullishness was fully justified and my concern was not. I did not express an opinion though.
I learned from this that not buying because of the "Macro" can be a mistake. You should get a point for this but I won't give you one as errors of omission are minor in investing where errors of commission can be grevious
On SMX, PRG and STO you expressed a negative opinion on these companies where I was optimistic.
SMX and PRG where promptly taken over
at a 50% premium which doesn't mean I was "right". Making money is only a win if the process you applied was correct.
For STO at $3 market sentiment toward the company improved and I can quite definitively state your opinion there was very wrong. Although the oil price has again slumped the pessimism toward that company was to extreme, after the capital was raised and balance sheet repaired.
On outcomes it's 3-0 to me so far, we will have to see if you can come from behind for the win.
If you are a long investor then your "do nothing" above is a wise approach. Only take a positive view when something is extremely cheap.
If you can determine that something is a worthless fraud then you can take a stand from the short side although I would strongly recommend against that for most people because getting the time right in terms of when a business will collapse into insolvency is difficult.
Being an activist short to realise value means as Charlie Munger said "stepping on the oxygen hose" of fraudulent companies exposing yourself to harassment and lawsuits.
I am watching developments on TRS with interest, I do not express my views publicly long or short.
On the other hand you are like, part value investor although you haven't advanced the art like I have you have regressed like most into the Buffett huddle.
I commend your talk of shareholder activism if TRS stock declines further/takeover fails as long as the critique of management is realistic not just a reaction to business conditions.
Shareholders should be very supportive of holding their paid managers to account.
I often find myself being perhaps overly defensive of managements in cases like these, generally it's about feathering nests.
GLTA
