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    (Original post by leavingthecity)
    Aaaahhh I see why you asked about tech now, but I have to disappoint you...I meant I have worked WITHIN trading technology, as in the electronic trading arm of an IDB. The plan is...learn to code whilst at uni.

    Yes as long as you can find those investors that are willing to look past the very short term, in my experience fund managers have a much lower pain threshold in recent years, but my perspective on this could be entirely related to the particular market I've been in.

    You're in NY? I thought you were in London?
    How has that been? Working within trading technology? A while back I was actually offered a job in a very big North American bank working on the trading platform. Even though I didn't take it then, it's a very interesting area. You get to code, learn about the inner workings of the current systems and depending on the bank even work on upcoming things like the blockchain.

    I am back and forth between London and NYC. I really just have to go to London to take tests. It would be cool to stay in London for a while, but I'd need to get a job over there for that.
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    Update No. 18: On Capital Allocation

    Having a capital allocation strategy allows the investor to have room to maneuver and make a lot of money.

    By having a capital allocation “template” the investor decides on what asset classes he/she will invest and how much, how much cash he/she should have in the war chest, in what locations he/she will invest, etc.

    Talking about making such a plan is particularly important during these times. Although the markets haven’t gotten cheaper than they were a few months ago, they are still cheap. There is also a very real possibility of them getting cheaper in the near future. What is an investor to do? Here is when the capital allocation strategy comes into play.

    If your strategy involves always holding 20% in cash and cash equivalents (for example), you would have enough dry powder to invest as more bargains appear. You would be able to average down and/or enter new positions without the fear of losing out. Compare that to someone who hasn’t decided how much cash he will hold, and always waits for things to get cheaper. That person could lose the chance of his lifetime waiting for hell to come. By the same token, someone who invests it all could lose future opportunities because he doesn’t have any cash left.

    Let’s look at an example of a flexible yet simple capital allocation strategy:
    • Value Investments – 50%
    • Growth Investments – 20%
    • Special Situations – 10%
    • Cash – 20%

    The above strategy means you will have separated 50% of your funds for undervalued securities, be they equities, bonds, or whatever. You will have 20% of funds for growth stocks, 10% of funds for special situations (such as mergers & acquisitions, spin offs and liquidations) and 20% in cash.

    This strategy allows you to make money in different market conditions and leaves you with enough cash to never miss an opportunity. You have a portion of your funds dedicated to the short-term, to situations with a clear catalyst and a set date for profit (special situations), and you also have a portion of your funds dedicated to the long-term, to situations where a lot of money is to be made (value and growth).

    I was reviewing my portfolio today, which was what triggered this blog post. Because I have a capital allocation strategy, I can coolly average down while knowing I have enough dry powder for future opportunities. No matter what the future brings, I will always be able to deploy capital when opportunity comes knocking at my door, and I will be able to make money in all market conditions.

    Interesting Links:
    Singer Makes 369% of Principal on Argentine Bonds in Debt Offer
    In Japan, the Government Gets Paid to Borrow Money
    Sony Global Education Develops Technology Using Blockchain
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    Update No. 19: Phoenix Website

    Two days ago I started working on a personal project – a fictitious cyber security website.

    I developed the website using responsive design – meaning that the contents will adapt to whatever screen size you are using. In other words, the content will look the same no matter whether you’re looking at the website on a laptop, a desktop, tablet or phone.

    On the Destroyer II page I incorporated a video utilizing modals. Since this is a fictitious organization, when you play the video you will watch a SpaceX Dragon vid.

    Angular really makes it easy to develop. I’ve really enjoyed using it – saves a lot of time and makes things simple.

    Below you can see screenshots of what I’ve developed so far.













    You can find the code here: Phoenix repository

    Interesting Links:
    China Is Spending Nearly $1 Trillion To Rebuild The Silk Road
    North Korea: Kim Jong Un Orders Country To Be Ready To Use Nuclear Weapons At Any Time
    Bitcoin Transactions Get Stranded As Cryptocurrency Maxes Out
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    Has anyone been following any specific sectors? Have you seen any interesting developments, outside of the energy space?
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    (Original post by jcarlo)
    Hey guys,

    I'm Jean. I'm an American doing an MSc in Finance and Financial Law in the University of London.

    Feel free to follow and comment, whether you're an investor, interested in investing or simply want to know more about finance and the world.
    Hey I am currently running a trading account (focusing mainly on oil and gas, Gold, S&P500) Looking into investing into UK equities atm - So looking forward to reading more of your articles

    Could you possibly quote / like this comment so i can read your links later (busy atm and don't want to lose the thread)
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    (Original post by tazza ma razza)
    Hey I am currently running a trading account (focusing mainly on oil and gas, Gold, S&P500) Looking into investing into UK equities atm - So looking forward to reading more of your articles

    Could you possibly quote / like this comment so i can read your links later (busy atm and don't want to lose the thread)
    Cool. Thanks for following.

    Looking forward to your comments.
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    Update No. 20: Pipeline Contracts and Bankruptcy

    The following text quotes this article, which is an important read for investors in oil and gas. It relates to pipeline contracts and their vulnerability in bankruptcy.

    From the article:

    March 8 (Reuters) - Sabine Oil & Gas Corp won an important court ruling on Tuesday that will allow the bankrupt energy producer to shed certain pipeline contracts, potentially exposing companies that transport and process gas to the crisis in the energy industry.

    The ruling by New York's influential bankruptcy court is the first major test of whether Chapter 11 can be used to end a contract with companies in what is known as the midstream sector of the energy industry.

    Her decision can be appealed and is not binding. But it may encourage other struggling producers to follow suit at a time when scores of oil and gas companies are teetering on the brink of bankruptcy.

    Advocates for the $500 billion midstream sector have argued that pipeline contracts are bankruptcy-proof because the energy producers have agreed to convey property rights over their natural gas to midstream operators.

    The pipeline operators considered the contracts to contain covenants that "run with the land," and the operators compared them to a deed restriction that might limit the height of a building, and which binds future owners.

    Chapman rejected that argument, although she said her finding on the covenants was non-binding for procedural reasons. Sabine's attorney said his client would follow her suggestions and put the issue back before the court.

    The contracts often require energy producers to pay for pipeline capacity even if they do not use it. The contracts provided a way for pipeline operators to ensure they could recoup the $30 billion spent annually building infrastructure for the boom in shale energy.

    Thanks in part to the contracts, investors have viewed the midstream operators as toll takers insulated from the volatility of energy prices. That stability has allowed the midstream operators to raise billions of dollars by organizing as high-yielding master limited partnerships, or MLPs.

    But with energy prices down more than 60 percent from their 2014 peak, producers have cut their drilling and no longer need the pipeline capacity.

    "These are the canaries in the coal mine for the MLP players," said a client note from Brean Capital LLC following the ruling. "This case will provide case law that can be used in other cases and will push MLPs to re-strike contracts ... setting up a very negative precedent, to state the obvious."

    Interesting Links:
    Bankruptcy Court Ruling Stings Operators of Energy Pipelines
    Car Tech That Watches How You Drive
    Chinese Shipping Majors Splash $2.5 Billion for 30 Giant Valemax Vessels
    Free Trade Loses Political Favor
    Investing in Vietnam: Open for Business
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    Update No. 21: On Value Investing and Leverage

    Leverage is a two-edged sword that sooner or later bites into your skin.

    Value investing commonly refers to the guidelines set forth by Benjamin Graham in his popular books “Security Analysis” and “The Intelligent Investor”. This investing philosophy emphasizes on having a margin of safety, a wide gap between price and value, and on focusing on quantitatively cheap stocks. Proponents of this philosophy include many successful investors such as Warren Buffett, Carl Icahn, Seth Klarman, Howard Marks and so on. My investing philosophy also has a value base.

    Having some value characteristics, and living in New York, there are many ways for me to stay connected with other investors who follow similar guidelines. I attend meet-ups (events), chat on online forums and groups, etc.

    During the past few months I have seen many self-titled value investors plunge into some companies that would make Graham cringe. Many people with a value base mix it with other subsets of investing, such as growth, distressed, and so on. This is not a problem. The problem comes when inexperienced people enter into businesses that they do not understand simply because they look like “value”. Recently I have seen many, otherwise wise investors, get slaughtered because they bought into oil and gas companies and coal companies where the capital structure was a bit too complex for them to understand.

    A stock that sells well below tangible book value but has over 200% in debt to equity is not your typical value stock. From first glance you could already tell – it has way too much leverage. Companies with this much debt should be let alone by most. Only people who understand how to analyze the capital structure, where debt is, by whom it was issued, to whom it is owned, and all the legal verbose that goes into credit agreements should consider such companies. An investor who doesn’t understand any of this and yet still ventures into the business is simply speculating, gambling with his money, and his chances of getting burned are very real. This is what is happening to my fellow investors.

    Just because a stock is selling at a low P/E ratio or considerably below tangible book value does not mean it is a safe investment. It could indeed be a Graham type stock or “cigar butt”, but if you don’t look beyond the initial numbers, you can wake up to a nasty reality. During the last few months we have seen several bankruptcies and restructurings in the oil and gas and coal sectors, with many more companies in the brink of bankruptcy. I have seen many fellow investors’ investments go down to almost zero, and as tragic as this all seems, it was avoidable. A quick look at the capital structure would have shown that even the unsecured debt was in danger. Only a madman would have put his money into the equity. Yet, so it was.

    Here is a tip to all my fellow investors out there, whether they invest in over-leveraged companies or steer clear of them – do your credit analysis, do your due diligence. Creditors are structurally first in line and if they get burned, equity holders get decimated. Don’t go into businesses you don’t understand, much less into over-leveraged ones. By all means, explore opportunities and learn more, but when it comes down to laying the money – stick to what you understand. Your significant other and your wallet will thank you for it.


    Question to readers:
    Have any of you ventured into Southeast Asia? Whether it’s through investment or direct business dealing, I am interested in talking with you.


    Interesting Links:
    Peabody Energy Warns It May File For Bankruptcy Protection
    Linn Energy Says Bankruptcy May Be “Unavoidable”
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    Update No. 23: On Net Operating Losses

    Net operating losses (NOLs) occur when a company’s allowable tax deductions exceed its taxable income for the taxable year, resulting in negative taxable income. The value of NOLs is in that, with certain limitations, the Internal Revenue Code (IRC) allows companies to apply these losses against future profits. This effectively shields the company’s future profits from taxation. NOLs can be carried back for two years (carrybacks) and they can also be carried forward for 20 years (carry-forwards).

    Distressed companies are likely to have multiple years of NOLs, making a review of these important for potential buyers. Investors should take NOLs into consideration when valuing distressed businesses, as these can be a source of hidden value.

    Important to note is that the IRC limits the ability of companies to preserve NOLs when a change of ownership occurs under Section 382 of the Internal Revenue Code, and that this is in fact very common in Chapter 11 reorganizations. There is, however, a way for the debtor to get around this limitation.

    Under the following circumstances, a change of ownership may occur without any limitations on the NOLs:

    • Creditors and shareholders own a minimum of 50% of the post-reorganization stock by both value and vote and this ownership is received in exchange for the previous claims against the debtor.
    • Business continues uninterrupted for the following two years after acceptance of the plan of reorganization.
    If operations are discontinued any time during this two-year period or if a second change of ownership occurs, then the company forfeits its exception and a limitation on NOL use is set.

    Another important factor for the exception to take place is that the creditors who receive post-reorganization stock must have been creditors for at least 18 months prior to the company filing for bankruptcy.

    Information on a company’s net operating losses can be found on their public filings. Investors looking to invest in distressed securities or simply looking for alternative sources of value would be wise to take these into consideration when valuing businesses.
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    Hi!
    My focus is rather on undervaluation - exploring for sectors and businesses that are undervalued relative to their intrinsic worth. I look across all sectors for opportunities, also including alternative assets such as real estate.
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    (Original post by jenifferhomes)
    Hi!
    My focus is rather on undervaluation - exploring for sectors and businesses that are undervalued relative to their intrinsic worth. I look across all sectors for opportunities, also including alternative assets such as real estate.
    Hey! Thanks for following.
    Do you invest or have an interest in investing?
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    Hey guys,

    I'm going to be taking questions and publishing them, along with the answers, on my WordPress blog.
    So, if you have any questions regarding investing, shoot!
    You can ask about anything - beginning questions, value investing, distressed, certain sectors and/or countries, opinions, etc.

    I'll be posting up the answers on either Monday or Wednesday. So until then, ask away.
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    Portfolio performance so far:


    I will be updating my website soon and showing some of my holdings. I will also be posting answers to questions either later today or on Wednesday.
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    (Original post by jcarlo)
    Hey guys,

    I'm Jean. I'm an American doing an MSc in Finance and Financial Law in the University of London. I manage an investment partnership focused on undervalued equities and distressed debt. I look worldwide, across all asset classes, for opportunities.

    In this blog I'll be talking about my investments, the global investing landscape, thoughts on investing and finance, and more.

    Here is a link to my Wordpress blog.

    Feel free to follow and comment, whether you're an investor, interested in investing or simply want to know more about finance and the world.
    lmao front-running on TSR, brill.
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    Update No. 24: How To Start Investing

    This past weekend I received questions from multiple readers from all over the world. The bulk of the questions came from readers from mainly three countries: United States, United Kingdom and China. The questions ranged from simple to complex.

    Some of the questions:

    Carlos from Puerto Rico asked: Hey, great blog! I am very interested in starting to invest in stocks, but I am clueless of where to start, where to learn and research, etc. Do you have any tips of where to start and with how much money?

    John from London asked: Can you point me in the direction to buy good equities given the current economic climate? I am concerned that a Brexit will probably result in a UK market crash and they [equities] are already suffering.

    Ellen from Tianjin asked: Hi. I am currently working as an intern for a value firm here in China. How do you invest and what do you invest in? Do you go long and short or just long? Do you invest in stocks or in other asset classes too? Finally, could you provide tips on risk management? Thank you.

    I will be answering the questions in a series of three blog posts. The first question, by Carlos from Puerto Rico, will be answered in this post.


    Question: I am very interested in starting to invest in stocks, but I am clueless of where to start, where to learn and research, etc. Do you have any tips of where to start and with how much money?

    Answer:
    Hey, Carlos! Thanks for following!

    If you are a total beginner to investing, I recommend that you first watch this video by Bill Ackman. He is a renowned value investor and the video will get your “investor mind” started. It is a very basic introduction and it introduces important concepts.

    Your reading list will depend on what kind of investor you want to be. Your investment style will depend on your risk tolerance and patience levels. Having said that, the following four books contain knowledge that is applicable everywhere.

    1) Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports. This is a must read if you have never read a financial statement before and even if you have, it is a great refresher. This book will equip you with the tools you need to understand financial statements and the meaning behind the numbers.

    2) The Intelligent Investor, by Ben Graham. This is considered a legendary book on value investing. The author, Benjamin Graham, inspired countless of successful investors such as Warren Buffett, Carl Icahn, Bill Ackman, Seth Klarman, among others. You will learn about the value investing philosophy, which stresses buying a security for less than its intrinsic value (for less than what it’s worth) and having a wide margin of safety.

    The book might be a bit of tough read due to the style the author chose to take. So for any questions you might have on what a word means (whether it’s a word you found on the book or you heard somewhere) I would look it up on investopedia.com
    It’s a great website to look up financial terms.

    3) Alternatively, you may want to start with ‘The Investment Checklist: The Art of In-Depth Research”. This is a great book on doing due diligence and covers a lot of ground. It is a much easier read than ‘The Intelligent Investor’. However, keep in mind that this book is focused on how you should do research, whereas ‘The Intelligent Investor’ focuses more on investor mindset. You will learn on what things to look at when assessing a business.

    4) Finally, I would read ‘One Up On Wall Street’ by Peter Lynch. It is also a must-read, no matter what kind of investor you decide to be. It is also the easiest read out of all three. Peter Lynch is considered one of the greats in investing and his track record as the manager of the Magellan Fund easily shows why.

    After reading the books, I would open an account in a stock-investing simulator, such as the Investopedia Stock Simulator. A simulator account will not only allow you to learn the dynamics of how to buy and sell on a platform, but it will also allow you to experience the psychological side of investing without actually putting any money on the line.

    After a couple of months of investing simulator money, you could go ahead and open a real account. Of course, if you want to start with real money right off the bat, you could skip the simulator. It’s important to note though that psychology plays a big role in investing. Greed and fear move the markets. In order to make a lot of money in the world of investing, just as in life, you must be objective and not emotional. A simulator would theoretically allow you to experience what you would feel when your stock goes down south or when it goes over your pre-established sell price. You will be able to see if you stick to your pre-established limits and buy and sell when you decided, or if you sell too soon because of panic or too late because of greed.

    As for research, there are many news websites, screeners and resources that you may use. You may consider Wall Street Journal, GuruFocus, MorningStar, Seeking Alpha, FINRA, among others. My best advice regarding research is to do your own. You will learn a lot and develop your own philosophy and strategies.

    With regards to how much money you should start with, start with money that you don’t need. Only invest surplus money, money that you can afford to lose. Of course, you don’t plan on losing it when you invest; you plan for it to multiply, but only invest the money that if you lost it all the next day, you wouldn’t be left starving and without a house. My best advice in this area is to create a money management system that divides your incoming capital into several sections, with one of them being investments. Think along the lines of what I wrote in the post “On Capital Allocation”.

    You can always ask me any questions you have. I’ll be glad to answer. Watching that video, reading those books and following my other advice will provide you with a great base to start in the world of investing.

    I will be answering the other questions in future blog posts.
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    (Original post by jcarlo)
    Portfolio performance so far:


    I will be updating my website soon and showing some of my holdings. I will also be posting answers to questions either later today or on Wednesday.
    Is this a paper portfolio or one you've actually put money in?
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    (Original post by The Financier)
    Is this a paper portfolio or one you've actually put money in?
    Hey, thanks for following. It's my personal portfolio - real money.
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    Update No. 25: Atwood Oceanics

    I was looking at the whole Atwood Oceanics capital structure and found it to be an interesting company. Below you can read my summary analysis with focus on the 2020 senior notes. This was done after reading filings, listening to earnings reports and looking over the prospectuses and agreements.

    Note: The following does not constitute professional legal advice. I am not a financial advisor. I am an individual investor and the following is merely me sharing the information I have collected for my own use. The purpose of the publication is to share my findings and not to advice on the buying or selling of securities.

    2020 Atwood Oceanics 6.5% Senior Notes
    Headquarters: Texas, USA
    Industry/Sector: Oil & Gas Drilling

    Proposal:

    Buy 2020 Atwood Oceanics 6.5% Senior Notes at 51 or lower.

    Reason of Brief:

    The market is inefficiently pricing the 2020 Atwood notes despite these receiving full recovery in multiple scenarios. This brief will explain why you will benefit from the proposal even if the company were to undergo a reorganization or liquidation. Under a liquidation scenario the notes would receive a 95.29 recovery even with a 20% haircut applied. Under a going-concern valuation based on EBITDA multiples, bondholders would receive full recovery, even with the haircut applied.

    Company Background:

    Atwood Oceanics Inc. (NYSE: ATW) is a global offshore drilling contractor engaged in the drilling and completion of exploratory and developmental oil and gas wells. The company currently owns a diversified fleet of 11 mobile offshore drilling units located in the United States Gulf of Mexico, the Mediterranean Sea, offshore West Africa, offshore Southeast Asia and offshore Australia.

    Atwood’s various types of drilling rigs are Ultra Deepwater Drillships, Semisubmersible Rigs, Semisubmersible Tender Assist Rigs and Jackup Drilling Rigs. The mobile offshore drilling units and related equipment comprising their offshore rig fleet operate in a single, global market for contract drilling services and are often redeployed globally due to changing demands of customers, which consist largely of major integrated oil and natural gas companies and independent oil and natural gas companies.

    Company’s Current Standing:

    A. The current price of ATW notes has been pounded by rapidly falling oil prices.

    Reasons of Negative Pressure:
    1. Oversupply of both oil and natural gas.
    2. Absence of subsidiary guarantees
    3. Subordination to substantial amount of priority claim debt
    4. Increasing idle rig count
    5. Credit downgrades by the major rating agencies
    6. Forced selling
    7. The possibility of bankruptcy
    8. Amendments to agreements due to industry conditions

    B. Maintenance covenants on the credit agreement stand as follows:
    1. Debt/EBITDA < 4.50 (Until December 2017) | < 4 (After December 2017)
    2. Senior Secured Debt/EBITDA < 3
    3. Interest Expense Coverage > 1.75

    As of the first quarter of 2016, Atwood Oceanic is in satisfaction of its covenants. Debt/EBITDA stands at 2.28, Senior Secured Debt/EBITDA stands at 1.53 and Interest Expense Coverage stands at 13.84.

    Obligations under the revolver are secured by first preferred mortgages on eight of the drilling units, as well as liens on the equity interests of the subsidiaries that own, directly or indirectly, the aforementioned drilling units.

    Covenants, particularly the leverage covenant, could be challenged in late 2017 as more rigs are either idled or roll into contracts at current market rates. However, the company has communicated that the leading banks signal flexibility regarding covenant modification.

    For liquidity the company has $115.7M in cash, $199M in free cash flow, $587M available under the revolver as well as substantial alternate liquidity in that four of its drillships and one of its jackups are not pledged to bank lenders. Amendments to production agreements also allowed the company to defer $200M that would have been due in the first two quarters of this year to be due upon delivery of the rigs. This results in increased liquidity and a reduction in near term debt.

    Liquidity Ratios Company
    Operating Cash Flow/Debt 39%
    Debt/Adjusted EBITDA 2.28
    Senior Secured Debt/EBITDA 1.53
    Adjusted EBITDA/Interest 13.84
    Adjusted EBITDA – Capex / Interest 5.39
    Quick Ratio 3.44
    Current Ratio 4.46
    Debt/Equity 0.54
    Cash & Cash Equivalents $115.7 million
    Revolver $587 million

    Analysis:

    The following two scenarios assume the worst. The first being a reorganization and the second being a liquidation.

    Scenario 1: Under a going-concern valuation utilizing comparable company EBITDA multiples, the notes would receive full recovery. The comparables chosen are Ensco (ESV), Seadrill (SDRL) and GulfMark Offshore (GLF). Even if a 50% haircut were to be applied for other reorganization-related expenses and other unforeseen factors, the notes still receive full recovery.

    Scenario 2: Under a liquidation scenario the notes receive full recovery. Were a 20% haircut be applied due to unforeseen priority expenses, the notes would still receive a 95.29% recovery. Applying an extreme haircut of 50% the notes receive a 57.92% recovery.

    Important to note for investors willing to take more risk, the equity would be worth $11.10 under the going-concern valuation with the 20% haircut applied. Even with a 40% haircut, the equity would still be worth $8.32, which is within the trading range we have seen these days.

    Conclusion:

    Seeing as how there is more than enough asset coverage for the secured debt under every scenario, it is possible that if a technical default were to occur, the creditors would be willing to renegotiate terms instead of forcing a bankruptcy. Either way, whether the company undergoes an out-of-court reorganization or a formal Chapter 11 procedure, the 2020 Atwood Oceanics 6.5% senior notes are a bargain at the moment, and even under a liquidation scenario they offer great potential returns.

    See the original post with better formatting here: Update No. 25: Atwood Oceanics
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    Update No. 26: What To Do In Bad Economic Climates

    Today I’m answering the second question from the batch selected on Update No. 24: How To Start Investing.

    Question: Can you point me in the direction to buy good equities given the current economic climate? I am concerned that a Brexit will probably result in a UK market crash and they [equities] are already suffering.
    ~ John from London

    Answer:

    Hey, John. Do you have access to an international broker (e.g., Interactive Brokers)? If so, an option would be to invest overseas. Having said that, if you believe a crash is imminent, then holding some cash to buy in the crash would be ideal. The time to buy is when there's blood on the streets. Buy when things are cheap. If they get cheaper, don't sell; buy more. Your biggest winners will appear in times of chaos.

    You are right in a way. The financial outlook isn't as pretty as in the recent past. You most likely already do it, but something many people do, including myself, is to value and track companies. No company is worth an infinite price. I won't buy a company, even if it's good, if the price is not right. A couple of years back there were a handful of companies that were great but too expensive. I didn't buy then. Now they're quite cheap and I bought them all.

    Sometimes there's just nothing to do. During such times, you have several options:
    1) Build up your war chest: Put your money in short-term cash alternatives.
    2) Look overseas: Just because there aren’t any bargains in one country doesn’t mean there aren’t many in others.
    3) Look at other asset classes such as discount bonds and real estate.

    If you haven’t done so already, I would encourage you to learn more about other asset classes and other markets to the point that you are comfortable investing in them. In this way, if there’s nothing to do in your main area, you can just look elsewhere. There’s bound to be something worth looking at.

    Always keep searching. You’re bound to find something.

    I will be answering the third question next week.

    Related links:
    Warren Buffett: Why He Likes Down Days
    Stanley Druckenmiller: Unconventional Investing
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    (Original post by jcarlo)
    ...Having said that, if you believe a crash is imminent, then holding some cash to buy in the crash would be ideal. The time to buy is when there's blood on the streets. Buy when things are cheap. If they get cheaper, don't sell; buy more. Your biggest winners will appear in times of chaos.

    You are right in a way. The financial outlook isn't as pretty as in the recent past. You most likely already do it, but something many people do, including myself, is to value and track companies. No company is worth an infinite price. I won't buy a company, even if it's good, if the price is not right. A couple of years back there were a handful of companies that were great but too expensive. I didn't buy then. Now they're quite cheap and I bought them all.
    Just to add to this, I think it's important to stress that "cheap" has to be looked at in context as to why they have become cheap. If companies are cheaper because they are highly exposed to FX movement or general trade (import of components, exports of products etc.) then Brexit clearly impacts their fundamentals significantly and a fall in the price isn't necessarily an overreaction by the market. When there's blood on the streets, it's usually a good time to buy but won't always end well (dead cat bounces etc.) if looked at purely from a price movement perspective without consideration of the long term implications.

    What are your thoughts on whether US equities are too expensive relative to Eurozone equities?
 
 
 
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Updated: September 30, 2016
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