I’m very happy to announce victory for the Medallion Financial Takedown Project as of June 30, 2015.
The project launched with the publication of our report on December 19, 2014.
The day before publication TAXI closed at $10.46 on December 18, 2014
On June 30, 2015 TAXI closed at $8.35, plummeting 20.2% from the publication of our report.
How was the project hatched?
In my Sharing Opinions blog on June 24, 2014, I recommended shorting TAXI as the best way to bet on Uber’s success.
At that time, the medallion price bubble was at its peak in New York, Chicago and Boston.
My October 20, 2014 Sharing Opinions post asked the question:
Is Oleg Uritsky the Smartest Medallion Investor in Boston by Owning No Medallions?
My answer was YES.
“In mid- 2012 Oleg Uritsky owned 45 Boston taxi medallions. By the end of 2012 he had sold ALL of his medallions.
He stated in his online bio he sold to take advantage of peak value. Why did he judge that the value of medallions had reached a peak?
How smart an investor is Uritsky compared to current medallion owners? They’re betting that the value of their investment hasn’t peaked….”
In my November 8, 2014 blog post I estimated Oleg’s robust ROI due to his prescience in:
How Good Was Oleg Uritsky’s Bet Against Boston Taxi Medallion Prices?
I ended my post with:
“…As you know, Oleg, the best way for the rest of us to have profited from anticipating a drop in New York, Boston and Cambridge taxi medallion prices was to short Medallion Financial (TAXI) a year ago at its peak price before it dropped 36% as of this month.
I wish I shorted TAXI in November 2013…Did you?”
Oleg contacted me in November 2014 to learn more. We discussed whether the strategy of shorting TAXI remained a lucrative bet on Uber’s success.
Oleg agreed it was. On November 28, 2014 I began working for Helge Capital d/b/a HVM Capital along with Jay Hickman, a very seasoned Wall Street analyst.
Over the past 38 years in software and web-related startups, I’ve worked with a lot of smart, successful and steely brave entrepreneurs.
Oleg was one of the best.
Jay’s sober and relentlessly expert analysis complemented my somewhat more informal…at times…bombastic style.
Our report on Medallion Financial (TAXI) was published on December 19, 2014 in Seeking Alpha. Jay Hickman was the author. I contributed to the report.
Our analysis was profiled in depth in a Washington Post article:
Investors Who Can’t Bet on Uber Are Betting Instead on The Death of Taxi Medallions
Our complete 23-page report is available in Seeking Alpha:
The Downside for Medallion Financial Only Just Beginning
Additional articles and hundreds of comments have appeared in Seeking Alpha, TheStreet, The Motley Fool, Yahoo Message Boards and other investment sites.
For the past six months we recommended a strong sell to existing TAXI stockholders. We urged all readers to absolutely not buy any TAXI as an addition to a position or to initiate a new position.
Along the way, I was very careful to explain our advice to the overwhelming majority of readers was to SELL, not short or trade TAXI options.
Many holders then and now are high dividend seekers who rely on dividend income to pay their monthly expenses.
I urged selling TAXI and buying stocks with high dividends, yet with much, much lower risk profiles than TAXI.
For readers who have been burned by TAXI ownership:
I hope you followed the recommendation to dump TAXI and transfer your cash into the hundreds of stocks much more appropriate for your investment goals.
Only a very, very, very small percentage of investors who depend on quality dividends invest in highly risky stocks like TAXI.
Professionals consistently warn that chasing the stocks with the highest percentage dividends is one of the deadliest investment errors.
If you STILL haven’t unloaded your TAXI, I urge you to speak with an investment professional and/or consult the many sites specializing in dividend analysis.
Get an idea how QUALITY IS DEFINED by reviewing rating systems used by the dividend experts, such as Dividend.com:
During the past six months in the professional investor world, Oleg was not the only sophisticated investor betting on TAXI’s swoon.
I certainly don’t know the specific shorting and option tactics these guys used. I’m an S&P 500 Index investor myself.
With a 20.2% drop between our report’s publication on December 19, 2014 and June 30, 2015, I assure you shrewd investors made a whole lot of money.
If any of you did make a bunch of money, feel free to give me tips (money not recommendations).
I will provide wiring instructions upon request…
I really, really don’t understand short selling or options trading, yet I understand a lot of the success is about the timing of the fluctuations, not just the magnitude.
Maybe some of you can email me some insights into how much money TAXI traders might have made during the past six months.
TAXI dropped 17.3% between our publication date and the expiration of January options a month later. The bears made some real money that month!
A 25% pump followed the initial 17% drop…then a 14% drop…then a 9% pump…followed by the 24% drop ending on June 30, 2015.
Much of the volatility was due to mainstream media commentary.
I’m also certain factually based investment chat room comments also helped to bring TAXI Back to Reality a few times. Just FYI, it wasn’t just us.
Professional traders made and lost a whole lot of money during these fluctuations. I’m sure glad I wasn’t trying to personally place bets on these waves.
It continues. I can’t imagine how much money was won and lost with the 6% pump last week on July 1, followed by the 2% dump on July 2.
I hope that some of you haven’t been doing a bunch of amateur day trading of TAXI. Just SELL it and go long something else. OK?
As recently as December 2013, TAXI COO, Andrew Murstein sold many of you 2,800,000 shares at $16 per share.
Since that stock dump, TAXI has dropped 48%, while the S&P 500 surged15%.
Even TAXI’s Total Return has dropped 41%. Total Return includes dividend income as well as stock price changes.
Even AFTER adjusting for all dividends over the past four years, the drop in TAXI’s Total Return has driven down TAXI back to 2011 levels. In comparison, the S&P 500 Total Return is up 68% over those four years.
If you are currently holding ANY TAXI stop taking this punishment from Andrew Murstein and his cronies.
Along with egregious abuse of taxi drivers, Andrew Murstein and the rest of the Big Taxi Players have made billions by abusing you and thousands of other stockholders.
Make it stop.
Don’t wait for the Uber Denier Fantasy to rescue you.
Sell all of your TAXI now.