[HN Gopher] Everyone Loves the $100M Deli
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Everyone Loves the $100M Deli
Author : feross
Score : 109 points
Date : 2021-04-19 20:16 UTC (2 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| tw112358 wrote:
| I'd love to see this analysis of luminar
| mcculley wrote:
| What do you think is wrong with Luminar?
| ibeckermayer wrote:
| What's purportedly up with them?
| nslice wrote:
| This isn't just a deli. This is a financial engineering firm.
| carlmr wrote:
| You sound like you work for Stratton Oakmont.
| html5web wrote:
| Reminder: Joke coin became hotter than bitcoin
| html5web wrote:
| The total value of the dogecoins in circulation is nearly $50
| billion -- not bad for a digital currency that started as a
| joke.
| oh_sigh wrote:
| If I mint 50,000,000,000 OhSighCoins, give away all but one
| for free("Airdrop"), and trade one for $1, that is not really
| a good indication that there are $50B in OhSighCoins
| circulating.
| legitster wrote:
| Make sure you read down to that awesome anecdote about "mosaic
| theory" how large investors profit off of private meetings with
| executives even though sharing "material information" is illegal.
|
| > On the other hand, it is clear that the Aberdeen analyst got
| useful information out of this meeting. The analyst paid close
| attention to the discussion of the chairman's spa trip and
| charity polo match, and got a strong and accurate sell signal
| from that discussion. Surely the most useful information in the
| meeting came from the guy's tan. If you describe an executive as
| "unfeasibly tanned" in a research note, you have definitely
| decided to sell. Here, that was the right call.
| np_tedious wrote:
| Levine is so good. If you enjoy this stuff, I'd recommend
| signing up for his newsletter (picture exactly this link's
| contents in an email).
|
| Unlike most of bloomberg, it is not paywalled at all.
| mycologos wrote:
| I agree that Levine's writing is way funnier than "financial
| newsletter" would lead you to believe, but I actually
| unsubscribed this week after trying it for a couple of
| months. Problem was, I'd just read the whole week's
| newsletters every Saturday morning, and I always came away
| kind of depressed at how how much energy people devote to
| venality.
| jonny_eh wrote:
| The news that Hertz's shares are no longer expected to go to zero
| is also incredible.
| sk5t wrote:
| What flavor of fraud might this OTC malarkey be propping up?
| tyingq wrote:
| The key bit seems to be this:
|
| _" If you are a company -- particularly a Chinese company --
| that would like to be publicly traded in the U.S., but that
| would prefer to avoid the scrutiny that comes with an initial
| public offering, doing a "reverse merger" -- acquiring the
| empty shell of a near-defunct but public U.S. company -- is
| often an easy way to do it."_
| okareaman wrote:
| This can't be a new idea. Why is it making news now?
| ac29 wrote:
| Because this particular company is funnier than a typical
| shell company.
| okareaman wrote:
| I found a comapany selling "clean" shell corporations.
| Yes, they're boring:
| http://interlistcapital.com/Services/BuyAPublicShell
| tyingq wrote:
| Maybe the sort of brashness of being honest that's it's a
| tiny deli with sketchy paid wages, miniscule revenues, etc.
| bombcar wrote:
| Because talking about it made a bunch of people buy it.
|
| It's like posting about how some scamcoin is a scam and so
| people run out to buy the scamcoin.
|
| Though it's probably more like "$15 on a meme stock is
| nothing".
| gumby wrote:
| Not only is it not a new idea, its what a SPAC has been
| since time immemorial
| blueline wrote:
| from the article:
|
| > People occasionally conflate these shell-company
| reverse mergers with the current boom in special purpose
| acquisition companies, but they are really very
| different. A SPAC goes public and raises money
| specifically for the purpose of taking a private company
| public; it sells shares to the public and then has a
| public vote with a lot of disclosure to complete its
| merger. A reverse merger generally involves a public
| shell of a more or less defunct operating company (or at
| least one that pretended to have operations); the shell
| will be fairly closely held by a few insiders, and there
| will be no real money inside it. It is not a high-profile
| way to go public and raise money, the way a SPAC is; it's
| a low-profile way to sneak into the public markets.
| defen wrote:
| Maybe it's a Webistics situation.
| W-Stool wrote:
| If you call ask for Christopher.
| BucketsMcG wrote:
| Well I'm delighted to see that if their takings are anything to
| go by, our speciality grocery shop that we opened exactly six
| months ago must be worth $60-70m. Time to sell up and retire
| stinking rich!
| mycologos wrote:
| Are you writing about this specialty grocery shop anywhere? I'd
| really like to read an account of the process of opening and
| operating something like that.
| zwieback wrote:
| I get that fraudsters are defrauding suckers but how will that
| lead to a market crash, aren't normal stockholders holding stocks
| of normal companies? I could see a bubble deflating but wouldn't
| your typical stock go back to what it was a few months ago vs.
| going to be half its value?
| hogFeast wrote:
| A simple way to think about this: everyone in society has a
| portfolio of assets, they allocate to that portfolio based on
| risk/return/liquidity/etc, and the most important ratio here is
| cash to assets.
|
| At this stage in the cycle, perceived risk is very low,
| expected returns are very high (some of the stuff you read on
| this is next-level crazy, ppl saying they are guaranteed a
| double digit real return from equities), and so no-one wants to
| hold cash...any cash. They hold very low levels of cash
| relative to total assets.
|
| At some point, this will change. Cash % of assets is basically
| stationary (to some extent, the mean % has probably trended
| down this decade slightly though). Large-scale fraud will lead
| to a re-examination of the relative reward of assets, actual
| losses mean that your ratio of cash to assets drops, and people
| sell to either increase liquidity/panic/etc.
|
| Bubbles sometimes deflate slowly, most often they do not
| because people aren't rational. If you buy into a stock
| expecting to sell it someone else at a greater price, what do
| you do if you wake up one morning and it is down 20%? You get
| out. There is no reason to hold it. You can't earn fundamental
| value at that price. This is happening in multiple stocks,
| margin calls, brokers start liquidating client portfolios en
| masse...you get the picture.
| zwieback wrote:
| Ok, so I have to hope that the guys managing my 401K act more
| rationally, e.g. slower to jump on these stocks and slower to
| get out of mainstream assets. I guess that's not guaranteed
| but I would hope they know better than to invest in this
| deli.
| hogFeast wrote:
| No. If anything, they are going to be more irrational. The
| incentives for most advisers are horrible.
|
| Ymmv, if you have a good adviser then great. But I used to
| work in this area, and even in my first real job (not my
| first job in the industry though) the level of ignorance
| was brutally obvious.
|
| For example, my first employer was a single adviser firm
| that just got acquired for $5m...this guy didn't know how
| to use Excel, he didn't know how to build a financial
| forecast, he didn't understand that life expectancy at
| birth was different to expectancy at retirement, he didn't
| understand basic elements of finance (for example, why you
| can't make money buying a stock and selling after they pay
| a dividend), he didn't understand how to compute returns,
| and falsified those numbers in marketing when they showed
| bad performance...and this is a guy who has hundreds of
| clients, and $100m+ in assets. However bad you think it is,
| it is much much worse.
|
| Most of the people on here will do better if they apply a
| little time, and understand that human reasoning is flawed
| (i.e. don't get swept in the hot new thing). That is all
| that is required.
| zwieback wrote:
| Scary! I'm still 8-10 yrs from retirement but most of my
| funds are in target-retirement-date type funds with lower
| risk. This latest round of news stories and conversations
| like this motivate me to look at what actual stocks I
| own. I can totally relate to the irrational exuberance -
| I look at how well my investments have done through the
| pandemic and expect things to get "even better when the
| economy wakes up again" but that could be totally wrong.
| 002445 wrote:
| Many stocks would actually lose half their value if they go
| back to their value from a few months ago.
| sxates wrote:
| Would someone call Michael Lewis and make sure he's looking into
| this story?
| benatkin wrote:
| I keep seeing it described as "a New Jersey deli". Here in this
| article "rural New Jersey". It's a 15 minute drive from South
| Philadelphia and across the Delaware from the Philadelphia
| airport. I don't think it's as charming as people are imagining
| it. Less Garden State and more Superfund Site.
| tyingq wrote:
| Google maps entry with photos, menu, etc:
|
| https://www.google.com/maps/place/Your+Hometown+Deli/@39.839...
|
| Street view:
| https://www.google.com/maps/@39.8401111,-75.239345,3a,90y,10...
|
| No pastrami on the menu, even though it's a NJ Deli. Hmm.
| hallway_monitor wrote:
| I wonder why it has a 50 foot antenna tower.
| benatkin wrote:
| I think I'd rather eat at McDonald's than this place. Warren
| Buffet has the right idea going to the McDonald's drive thru.
| oh_sigh wrote:
| I'd associate pastrami more with NY Jewish delis than NJ
| delis. Actually, being from NJ, I didn't even know "NJ delis"
| were a thing, besides for Wawa. I'm going to just include
| delis that are in hoboken/newark/the rest of the NJ-side of
| the NY metro region as NY delis.
|
| The closet thing I think we have are hoagie shops, but those
| aren't particularly special apart from the fact that we call
| them hoagies and not subs or even just sandwiches.
| tyingq wrote:
| Maybe just me, but a place with the word "deli" in its
| name, without at least one of a Rueben/Corned Beef/Pastrami
| is weird, anywhere in the north east.
| OJFord wrote:
| I can't speak for NE USA at all (I'm from SW UK, ha) but
| for me that's not _at all_ a requirement, it 'd almost be
| exceptional. I don't even know what Rueben is.
|
| I gather it's quite different in the US though. (A 'deli'
| there being probably culturay Jewish? Whereas to me it's
| just a place that sells.. I don't know, cheese, olives,
| oily antipasti, anything it wants really just with an
| emphasis on fresh and nice and prepared or preserved in
| some way. Greek or Italian if anything, rather than
| Jewish.) Honestly the Street View photos someone posted
| look like a sandwich bar in a war zone!
| miohtama wrote:
| What Matt often misses that regulations are not there to prevent
| stupid investments, they are there to prevent fraud and insider
| trading. If you want to lose your money by buying $100m deli
| there should be nothing in the world to stop you losing money
| that way.
| throwastrike wrote:
| And still regulators will not step in. And still the Fed will
| pump money both announced and unannounced. The financial world is
| a complete joke. Makes complete sense that Elon Musk is pumping
| dogecoins.
| garmaine wrote:
| I'm a simple man: I see "Matt Levine" on the byline, and I read
| it.
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(page generated 2021-04-19 23:00 UTC)