Tell HN: Company returned 3X, but I (investor) may lose money • Hacker News Board

Re: Tell HN: Company returned 3X, but I (investor) may lose money

#31

Post by sorbus » Tue, Jul 12, 2011, 4:43 AM UTC

maxharris wrote: post #28

regularfry wrote: post #24

Earlier quoted context omitted.

Capitalism doesn't require a free market, and the definition of a free market allows for tax collection by the government. Your definition of both is simply wrong.

I don't agree. Here's the most definitive definition of capitalism (written by what many today acknowledge as its greatest champion): http://aynrandlexicon.com/lexicon/capitalism.html From the link: Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. Today, we don't come close to this ideal. One example of this is that the g…

> From the link: Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.

The real definition, from wikipedia: "Capitalism is an economic system structured upon the accumulation of capital in which the means of production are privately owned and operated for profit, usually in competitive markets." Ayn Rand's definition looks more like libertarianism ("a political philosophy that upholds individual liberty, especially freedom of expression and action ... minimization of the state and sharing the goal of maximizing individual liberty and freedom.").

Re: Tell HN: Company returned 3X, but I (investor) may lose money

#32

Post by kevinrpope » Tue, Jul 12, 2011, 7:32 PM UTC

teyc wrote: post #29

kevinrpope wrote: post #26

Earlier quoted context omitted.

Nit-Pick: 'Writing' == selling an option, and he would've wanted to buy puts (if it were legal).

I actually agonized over "writing" vs "selling". In the end, writing seems more natural.

Yeah, I like using 'writing' better as well.

But my nitpick is that in a position where he owns the stock, writing puts would increase his downside, whereas buying puts would protect him.

Re: Tell HN: Company returned 3X, but I (investor) may lose money

#33

Post by teyc » Wed, Jul 13, 2011, 9:24 AM UTC

kevinrpope wrote: post #32

teyc wrote: post #29

Earlier quoted context omitted.

I actually agonized over "writing" vs "selling". In the end, writing seems more natural.

Yeah, I like using 'writing' better as well. But my nitpick is that in a position where he owns the stock, writing puts would increase his downside, whereas buying puts would protect him.

you are right. I got that back to front didn't I?

Re: Tell HN: Company returned 3X, but I (investor) may lose money

#34

Post by kevinrpope » Wed, Jul 13, 2011, 8:39 PM UTC

teyc wrote: post #33

kevinrpope wrote: post #32

Earlier quoted context omitted.

Yeah, I like using 'writing' better as well. But my nitpick is that in a position where he owns the stock, writing puts would increase his downside, whereas buying puts would protect him.

you are right. I got that back to front didn't I?

Yeah. I was concerned with even making my initial comment because I didn't want to sound like an ass. But I have a lot of experience with derivatives, so hoped I'd be looked at as a benevolent expert rather than a blowhard windbag. :-)

Re: Tell HN: Company returned 3X, but I (investor) may lose money

#35

Post by teyc » Wed, Jul 13, 2011, 10:10 PM UTC

kevinrpope wrote: post #34

teyc wrote: post #33

Earlier quoted context omitted.

you are right. I got that back to front didn't I?

Yeah. I was concerned with even making my initial comment because I didn't want to sound like an ass. But I have a lot of experience with derivatives, so hoped I'd be looked at as a benevolent expert rather than a blowhard windbag. :-)

Kevin, be assured, it didn't come across like a blowhard windbag. Thanks again for the correction.

Re: Tell HN: Company returned 3X, but I (investor) may lose money

#36

Post by dpe82 » Sun, Jul 17, 2011, 4:05 AM UTC

beagle3 wrote: post #19

dpe82 wrote: post #14

Earlier quoted context omitted.

That's what I thought. How do they offer cash in that type of deal? As a fixed price purchase agreement that hits after the holding period? (I'm still learning how all of this works..)

No, there can be a cash at the beginning, no larger than 20% or 50% of the deal (depending on whether it is reverse or forward merger. Get a tax specialist if these details matter to you and you are in the driver seat)

With any luck perhaps some day I'll be in the driver's seat. For now I'm just taking advantage of whenever I see an opportunity to pick up some knowledge. :)