Global Macro Trading Journal

Daal said:
if you look at the ackman presentation, the media has gottan VRX all wrong. the strategy the depends on price hikes is not a sigificant part of the business. going forward the company is not even planning to use that much more. furthermore, the stock, at $93, is a buy even with no growth. it trades at 6-7 times cashflows. and health care cash flows tend to be more durable than other stuff. They are also planning to use their cashflows to delever the balance sheet and turn themselves into investment grade
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The best trades I've done have been buying when everyone has been selling, but the trick is to not be too hasty, and to scale in because we really can't tell where the bottom will be.

Do you have a view of how much lower this might go? Citron has been talking $50, but a lot of that hinged on Philidor and I've seen news that Valeant has cut business ties with Philidor.

I really haven't paid any attention to this, so I'm thinking what is the base line business value we should be looking at as a trigger to buy?
 
I just think the perception is reality, and it has all of the wrong momentum right now.

I think California is going to go after them. The SEC is going to go after them. The insurance companies going after them. Shareholders are going to go after them. And I don't think these can be dismissed so easily.

If you were a judge, does paying a $100M option to buy Philidor for ZERO dollars mean that you don't own Philidor?

All I know is that the lawyers are going to be the one making out like a bandit on this.
 
justrading said:
The best trades I've done have been buying when everyone has been selling, but the trick is to not be too hasty, and to scale in because we really can't tell where the bottom will be.

Do you have a view of how much lower this might go? Citron has been talking $50, but a lot of that hinged on Philidor and I've seen news that Valeant has cut business ties with Philidor.

I really haven't paid any attention to this, so I'm thinking what is the base line business value we should be looking at as a trigger to buy?
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Check out Ackman's presentation. at $93 there is already a lot of value
I don't know how low it will drop. People are dumping because of fear, career risk (you don't want to be caught holding something that people are calling an enron), momentum etc. It probably won't go bellow $80 for very long but you can't know for sure. Tomorrow I will be doing some more reading and unless the shorts got something new, I will start getting in (in addition to my PSH exposure)
 
Citron is backing out of his BS according to the WSJ. I started in pre-market here on VRX. Will go all the way to a 5% position
 
I looked at the slides. Makes sense, only thing I'm uncomfortable with is he expects the investigation and related stuff to drag on for 4 years, though he does not think that will be a drag on price.
 
justrading said:
I looked at the slides. Makes sense, only thing I'm uncomfortable with is he expects the investigation and related stuff to drag on for 4 years, though he does not think that will be a drag on price.
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There are some risks. I'm not 100% sure the stock is a great buy but I'm 70-80% sure. I certainly not seeing anything the shorts are putting out as relevant. I exchange some emails with Hempton over the weekend and everything he put out was weak. He changed this thesis (because Ackman burried his main one). Now he is talking about the effects of the settlement on future growth due the terms of a settlement. This is a weak thesis because any settlement will take years. And VRX has a diversifited business mix, unlike the example he gave me (Kyphon, a one trick phony). the settlement would only affect a small part of VRX
 
So i got in with a 4% position between VRX and PSH. Will save the last 1% until there is a flush or some kind of positive catalyst. I wouldn't recommend people to get in, unless they do their homework and due dilligence. The company is very unpopular and this leads to a media frenzy that doesn't seem to end. I just think people are getting emotional and this leads to a distorted view of the company. I know I have suffered the same when I was short things. When things are down huge you want to believe its going to $0, then you start to look for evidence of that. Next thing you know you are getting squeezed. This squeeze part is taking longer with VRX and maybe even will take months but I for what I have been, its a good risk-reward to me. So I'm comfortable getting in
 
newwurldmn said:
And Munger reiterated that he doesn't like Valeant's business practices. He called them immoral.
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I question how much work has had done analysing the company. I bet he is making the mistake of confusing gross price increase with net price increase. Net price increases were much lower than gross
 
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