RE:Thnx Krammer and Bo That's a massive amount of data to unpack Fordster.
Rebalancing over time in small amounts when you spot an opening is sensible. Just don't buy enough to give a $hit.
RATIOS
If we are specifically talking about TUD/AMK this is what it's looking like at the moment. So far the numbers say that if you can get >=12 AMK shares for 1 TUD share you're in the top range. The challenge here is can the market give you not only the RATIOS but SIZE, If there's only a $200 trade available it won't do you much good. That's where small chucks over time works best.
I found that trading TUD/AMK to be a huge pain in the A$$. Hardly means don't but in my last series of TUD/AMK (so far I've gone from TUD to AMK back to TUD then now AMK) the lots were not only "tiny" for TUD BUYS but there was an algo on TUD. First time, I thought I saw something so I decided to test it out and was able to see it change as I played around. 1 solution was to SELL THRU the ASK. Surprises work best at times. Then when I did this with TUO it was an absolute breeze. There was about a week or more when not only did the RATIOS line up but the SIZE was big enough to just slide in with the rest of the crowd. The RATIOS are the easy part, executing the trade is the challenge.
Now once back into AMK what am I looking for? About 8-10 AMK for 1 TUD. I would naturally prefer to only give up 8 AMK for 1 TUD, if that were the case the trade would look like this.
TUD 1,000 RATIO
AMK 12,000 12
TUD 1,500 8
TUD 1,000 RATIO
AMK 12,000 12
TUD 1,200 10
Now if we continue to talk about ONLY RATIOS this must be taken into consideration. Plain and simple TUD Spinout. Could many as time shortens be more inclined to buy TUD and could this push the RATIO >13? I don't see why not. What needs to happen? simple
TUD UP AMK FLAT
TUD UP AMK DOWN
TUD UP AMK UP LESS
TUD FLAT AMK DOWN
TUD DOWN AMK DOWN MORE
Simple right? Just pick one :)
On the flip side could the RATIO push lower? Again, I don't see why not. This scenario is an interesting one. As mentioned in the past I'm waiting to see how the market choses to value TC when stripped out of TUD
Right now AMK says TC is worth $16.77 per OZ and remember AMK is 100% TC which is a clear distinction with TUD with their per OZ currently worth $28.77 and "Other Assets"
This is 1 scenario. Assume Spinout just happened and now it starts trading. TUD now has Spintout for TC. Let's call it TUD_TC does it start trading closer to AMK? Their both now the same (except TUD_TC will have drilling expenses plus face dilution over time) and in theory should trade at a "discount" to AMK
Will the market look at a simple equation which is MCAP/Shares_Fully_Diluted?
Also with the TUD_TC spinout this will make current and historical RATIOS for TUD/AMK obsolete. I'm only now starting to try and figure out the best way to write a script that could make an adjustment that would keep the RATIOS in their current range. Either I ADD TUD_NEWCO to TUD_TC but that has its own set of issues or I use new RATIOS and build off that spread to re-adjust past data, again that also has it's issues but a little testing and I'm not concerned, just part of the fun.
Happy Trading Fordster and he's my theme song suggestion for you. ")
Enjoy!