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Akram's Razor

 
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  • Here Come Netflix's Angry Shareholders [View article]
    "You didn’t lose any money unless you were dumb enough to sell your shares at the bottom."

    Umm, Netflix shares were 150-300 for 11 straight months. Plenty of people lost money and are still losing money that did not sell at the bottom.

    As for your assessment of NFLX management, I would argue you are completely missing the point. People shorting the stock had focused on the inherent flaws in the model. One of those flaws was the price point of the service relative to the rising cost structure. Criticism had focused on how nflx mgmt intended too offset this. One key point was that they would need to raise avg rev per subscriber which would likely signficantly impact sub growth. Yet, mr hastings argued in his blog post that they simply could pass on content, and that no piece of content was a must have. I for one think you can make a convincing argument that nflx senior management had planned to take a price increase from the start of the year(i'm sure there are emails on the matter), and just decided to delay the announcement to coincide more in line with future higher cost content deals. When you guide margins for the year you must be accounting for this, and thats were you can pick a bone with them. You could also argue that the dvd spinoff had more to do with content negotiations as it is literally the only practical explanation for why you'd cause your customers the inconvenience of needing two accounts. You do it so when you license content you are billed on the streaming only subs and not the total subs many of which may or may not use streaming. That is material business model type stuff that mr hastings was shrugging off in dec/jan of last year. So, if he is selling stock while mgmt is internally discussing these issues yet not externally disclosing or worse downplaying them only to spring them later on; i think the class of investors has a right to know.
    Jan 20 12:32 PM | Likes Like |Link to Comment
  • Dangdang: Like Rolling Back Time To Buy Amazon At $6 [View article]
    Ceo and his wife are completely out to lunch. When I saw them on tv I ran from this stock. It's no amazon, and never will be. As for renren, it's another joke copycat company with no future. The only difference is that they are sitting on so much cash thanks to all the generous fools on the planet willing to fund hype that they can literally do whatever they want. In china, the only internet play I'd buy for growth is sina and even they have issues when it comes to mgmt destroying shareholder value. But at least they demonstrate innovation when it comes to copying as well as execution. After that, the big boys of alibaba, baidu, and tencent should continue to rule.
    Jan 18 12:50 AM | 1 Like Like |Link to Comment
  • Tebowing The S&P 500 [View article]
    The author was simply having some fun with Tebow mania, and the fact that it coincided with a bottom in the market. He really didn't give much thought to who would be reading this and whether or not they have heard of the NFL, Tebow, or the Broncos.

    But I agree, it is utter nonsense. Then again so is astrology, triangles, rulers, waves, and a whole host of other nonsensical things used to explain the movement of stocks.
    Jan 17 07:34 AM | 1 Like Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    here is a place that has been estimating m3 data since 2006 largely based on the still reported component data

    http://bit.ly/aurejV
    Jan 9 09:02 PM | 2 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    'anonymous kid from Dubai'

    First, it was my anonymity. Then my anonymity with my current geographic location. Then you made me a kid. What's your problem with Dubai? And do you not like kids? Adults who lash out at kids online are a danger to society. Maybe we should start monitoring you. Why did you pick 14? Is it a special number? Are you a registered party member? Is that why you invested everything you had in RINO?

    ...see it really is easy to play your game

    And what track record do you have? Don't remember ever seeing your hedge fund's performance data released anywhere. Your track record is what you say in the press which is always bullish and focused on equities. To say anything conclusive can be drawn from it is ridiculous. You have been abysmal on the macro since i have seen you talking about it since 2007. You are on the other hand a much more prudent stock picker when you are not busy looking for pure spec which seems to be your hobby off choice. However, when you seem to be really thinking it through your picks are usually more risk/reward balanced.That being said i will always view you in a different light from now and on. You are immature and exhibit the type of behavior i have the least respect for in any facet of life. Changed my whole opinion of you and it took no more than a couple of comments.
    Jan 9 08:37 PM | 3 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Lol Of course James would agree with this. Luckily for you this is an area of expertise for me.

    1) Take a look at the M1/M2 year over year data. Ever wonder why the sharp disparity? It was the first thing that struck me earlier this summer. Demand deposits exploded in august.....why? Money is moving out of short term deposit accounts into transaction accounts ..ie...checking accounts paying nothing. This is ongoing evidence of continued disintermediation of credit. See, you should be writing the FED and asking them to publish M3 data again. Then you would understand the story better. So, what you are seeing is nothing more then people getting more liquid. That is about the economy, employment, and most likely demographics. It is not good news for stocks. Actually, it is a reason for long-term multiple compression. Now take this a step further and look at the money multiplier. M2/ monetary base. It is 38% of where it was in the peak in late 2007 early 2008. Again clear sign of that the monetary aggregates you are tracking are not capturing the story. For 30 years credit intermediation was a runaway train. Have you looked at outstanding securitized credit lately? The collapse of intermediation is like taking a $1bill that was being sliced into 1000 pieces and circulated and then putting it back together while printing another 2 bills. You will cite money supply growth of 200% while scratching your head as to why credit creation is non-existent. The rising m1 number relative to m2 is actually a bad sign. It is more about money moving to the most liquid and least risky form. Add in broader money like m3 and we come down a lot more.

    2) Japan 10 yr 2000- 1.75%
    Japan 10 yr 2012- 1%
    Why everyone ignores Japan is still beyond me. Like the perfectionist on that island were too stupid to think of the idea of printing money in the morning to fix all their problems.

    I think any person following markets is very aware of the low returns treasuries offer and the seemingly alarming risk profile. But you need to ask yourself this. What will take precedence in America when push comes to shove? State and federal finances and everyone they employ or the sp500? Effective taxes will rise, and rates could fall to 1% and allow the US to borrow another trillion without increasing debt service to revenue. Now there is an endpoint and the question is how we get there.(still us us at less than 10% vs 40% for japan) But one thing is for certain rates can't rise much or else you will see real problems. Bottom line is the US has more time to deal with de-levg than most people realize even with their external creditors. And odds are the baby boomer generation will do them a favor and start to shift more to direct treasury holdings as appears to be the case. Remember at 2% allocation they are very underweight historical norm of closer 5%. Up that allocation against household assets of just under 50 trillion and you have another 1.5 trillion. You want to pick on a bond market....go after japan...or at least the yen from here on out.
    Jan 9 04:49 PM | 2 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    James is putting on an Argumentum Ad Hominem epic display.

    1)Nobody attacked you. The article seeked to debunk a bull case you put out there. The title in my opinion was catchy and fresh considering I was disagreeing with almost every point you laid out as well as your regular uber bullish conclusions. I was not questioning whether the markets might be flat or up 5-10%. I was disagreeing with someones case that has them soaring for years to come when I still see major challenges. That to me is a fitting play on 'i was blind but now i see'.

    2)The back and forth started once you began behaving like an internet troll.

    3)You consistently seem to behave as if you are 'always right' on markets whether it is when you are on tv or writing anything. It is not a realistic or admirable quality. I have yet to see you issue a mea culpa for your summer of 2008 buy with both hands recommendations or your serious failure to understand the subprime/housing/finan... crisis etc. You talk a lot about being humble and your own personal life lessons, but that doesn't seem to carry over into your financial personality.

    4)You demonstrate almost zero ability to take criticism. Ideas or views have nothing to do with the individual unless the individual feels they define him. You seem to define yourself by always having to be more bullish than anyone else so that the media pays attention. If the debate is on whether apple is a buy, you turn it into whether its a 3trillion company. If we are discussing the risks in the economy right before the crisis, you turn the conversation into everything out there is cheap and the next bull market is starting tomorrow.

    5)Your understanding of valuation is limited to one market and one era, and that is the US market from the late 90's on. You don't seem to be interested in studying what causes valuations to compress.

    6)You make so many predictions on so many stocks with such a short term traders memory that it is impossible to really have a constructive debate with you on the matter.

    7) You put yourself out there as a carefree willing to have some fun with yourself and others type of guy when it comes to what you do. Yet, you have behaved in the exact opposite manner here. I actually was hoping you'd turn this into a constructive and fun debate. Wit, substance, and spirit. You have contributed Zero.

    8)Most smart individuals focus on process and not outcome when trying to figure out what works. An outcome approach touts INHX and nothing else today. A process approach would ask what about CPSL, RINO, and countless other chinese stocks that went to almost nothing. Are you telling me your entire approach to investing is about optionality and getting the big hit that covers for all the 90% losers, well if so lay that out there. But if that is the case, how dare you pick a bone over netflix. A process approach would look to see how well this person was at avoiding major hits in the economy and markets or minimizing damages when those hits arrive. I'd like to say I have no respect for your ideas, but i don't feel that way. Some of what you have to say about stocks is very interesting and makes sense, but I will tell you point blank your process has little appeal to me. You rarely are backing stuff in the way you should, and you spread yourself thin as far as topics you cover.

    Anyway, keep insulting, making stuff up, shifting the conversation, and every other trick in the book used to irritate and frustrate someone into losing their temper or giving up on an the prospect of debating the merits.
    Jan 9 11:08 AM | 4 Likes Like |Link to Comment
  • Iran Is Enjoying Oil's Risk Premium, But It Won't Last [View article]
    If you have nukes you have bargaining power. If you don't have nukes you don't. Should we be surprised that a country geographically situated where Iran is and with the largest population in the region would seek to assert itself? Personally, I am not surprised. Now, i wish they'd just ally up with someone with nukes and put an end to this, but it seems the russians and chinese are happy to let america and maybe europe stumble into another costly mess in the region before they really make some noise. I think nobody wants an America vs. Iran conflict more than those two countries at this point in time. Geopolitically it makes sense if you think about it. That being said, I don't really understand what iran's goals are here. They are an enigma. Why they have not pursued a regional economic domination approach to power is beyond me. That would seem to be the efficient path to get what they want.
    Jan 8 01:46 PM | 1 Like Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    btw-Please explain what helping people has to do with whether or not your analysis of the economy and bullish stance on the markets makes sense or is at least supported by some sort of compelling well reasoned argument?

    You chose to change the topic of conversation. You chose to cite roubini and mish as people who have 'been wrong' arguing with you which I think is just a blatant misrepresentation. You chose to only cite picks that worked. You have chosen to ignore your failure to see the financial crisis coming when it was staring you in the face. It's not like your buy everything irrespective calls were dated years before the crisis. They were weeks before the collapse began and after the mess in the system had become obvious to almost everyone involved. Caution would have been prudent, but that is not what you are about.
    Jan 8 01:12 PM | 2 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    I really have litte respect for people who can't engage in a spirited debate on the merits and think they can get buy with a collateral attack strategy that focuses on marginalizing the source. My age, ethnicity, present geographic location, education, title, amount of followers, website ownership or lack there of, and forecasting track record or stock picking ability are all irrelevant. What is relevant is the bull case you presented for markets and the economy, and my fact supported and well cited response. You could have taken the time to counter my points and move on, but that clearly requires too much effort on your part. Instead you continually skirt and attack even when I made a great effort to remain even handed by complementing a lot of the things you do well.

    If I recommend buying 200 different Biotechs because they might be bought out having one actually bought out is not a major accomplishment.

    As for your repeated penny stock comments, I don't get them. This is a SA published article. I am selling no ad space. Furthermore, I think the hypocrisy here borders on the surreal. You have gloated about how you initially set up stockpickr.com as a hype job, and had Cramer via thestreet.com invest and then promote it on cnbc with the intention of flipping it immediately. You celebrate how you were putting out 5-6 articles a day in a financial spam like manner to drive traffic and sell as much ad inventory as possible. Your "five chinese stocks that could double" article is a perfect example of this type of content. It's the tabloid world of financial information. The content is not designed with actual investment advice in mind. The sole focus is on generating as many clicks as possible, and accomplishing this by mining information in anyway you can. Hence, the inferior quality, and ultimately poor overall performance. A monkey could have thrown a dart at board and probably done better picking five names that might double.

    Furthermore, who cares about one or a hundred good picks out of a guy that makes thousands. Your problem is you dilute yourself. Focusing on the fact that you were as bullish as ever as the global economy and markets approached a devastating once in a lifetime crash is entirely acceptable. Dodging the iceberg that sinks the whole ship is kind of important in this game.

    Oh, it would be pretty cool if I was 14. So, I will not outright deny that accusation.

    btw- How did netflix go from -200% to -250% in a few hours?
    Jan 8 11:45 AM | 3 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."- Mark Twain

    The audience has weighed in on this matter James. I am clearly not the only one that was looking for more out of your response.

    Best of Luck
    Jan 8 06:20 AM | 1 Like Like |Link to Comment
  • Netflix: This Stock's Story Is Over [View article]
    Thanks. Send me your email and I will add you to my distribution list. And no it is not the standard for qualitative analysis which is where I like to think my edge is. But anything controversial I have learned will be a headache if you have typical industry types involved who have no desire to roll up their sleeves and get familiar with the issues. Very important to work with the right people if you are doing this type of stuff. I had the same problem with being bullish on BP after the spill mania was at its peak despite the fact that I have a legal background too. Netflix was just natural evolution for me. I was a big shorter of the movie rental chains in 2005/2006 because of them so i got familair with the model. Also, had a solid understanding of licensing deals because i got very into marvel comics stock when they released the first Spidey, which btw i was recommending as a disney takeover on yhoo message boards five years before the deal happened. So, when netflix shifted to digital streaming i started paying attention. I wanted to see how much content they would get and how the service would be priced.I then wanted to see how successful the disruption would be before the industry adopted a hostile position. Once signs of that emerged I started to outline a 1yr bear case with my focus being on the starz contract expiration date as my marker. Still think what reed hastings did in january last year with pulling annual guidance and writing that post while dumped shares was just wrong. He knew then he was going to have to make some moves to offset content cost escaltion, and he chose to postpone the bad news literally as long as humanly possible.
    Jan 7 07:40 PM | Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Market analysis is an ongoing debate. There are points, counterpoints, twists, and plenty of turns. If you really think that all those topics were addressed in what you wrote, and that everything I wrote was irrelevant there is not much for us to discuss. Note in every response you pick and choose what to reply to, and completely have avoided addressing your colossal failure in 2008 to spot the crisis or your chinese picks that all declined as much as any company filing for bankruptcy would fall. I on the other hand have responded to everything you have had to say. Btw- Again still waiting for the Iraq/Israel and India/Pakistan war risks explanation.

    As for netflix, my first article on the stock was at $156. In that article i gave a 12-16 month horizon for a 50% decline. When you go after a business model short you buy puts my friend to match your horizon to get your short exposure. But then again I can't recall when you ever came out recommending a short. Also, when I wrote that article i was bullish on opentable, which nearly quadrupled. But here is the thing. That was dead wrong as the reasons I was bullish on opentable eventually proved to be wrong even as the stock price went much higher than I expected. As I started to conclude management had failed and the model was flawed I switched my views on Opentable instead of celebrating a pick that went up four fold. Process over outcome!! Markets are fluid that is why your perma bullishness is ridiculous. You need to be able to change your views. I however, unlike whitney tilson, never backed off Netflix. Reed Hastings chose to bluff and most of the sell side was happy to promote it. But if you have ever shorted anything like a fslr, nflx, open, yoku, dang, or any other momentum stock or company where you have identified a flawed business model or super cyclicality you learn that plenty can go wrong. That's why options work better for these type of trades.

    But here is the important thing on NFLX. I was spot on in my analysis. And I held my ground not because I was stubborn, but because when you do your homework and continue to see no evidence to the contrary that your thesis is not right you have the conviction needed to stand your ground.

    I will say the only thing that has come out of this exchange is that you have disappointed me. You come off as more humble and open to criticism in your books and on tv. I was of the view that some of the stuff you throw out there on the economy is just for theatrics and that behind all that you still have the horsepower to engage in a debate on the merits. So, far no proof in this chain on that. Still you have a very interesting story and clearly have been through a lot and seem to have identified that in this day and age sharing that is just about all you need to do to get people to listen. Keep up the good work. And if you ever want to actually debate the economy and global markets, I am up for it.
    Jan 7 06:04 PM | 4 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    What planet are you on James?

    'ranty opinions not based on facts'

    That's five comments now, and you have said nothing. Not one piece of analysis out of you worthy of someone who puts himself out as person who understands markets and the economy.

    And whose backing off? I am willing to give credit were credit is due. I find some of your writing to be great, and some of your ideas to be solid. I even opened off by agreeing with you on housing. In general, this is what we call being objective. But at the same time, I have little tolerance for nonsense. Watching someone say he was spot on when it came to the economy at the end of 2010 who was telling the world that subprime and housing were contained in july of 2008 and that you should just buy and that all stocks are cheap is just sad. You don't get to say you are right when you screamed buy at the top of your lungs before everything collapsed and then needed all kinds of intervention to save you. You get to say you were wrong, and the game is over because not a single person will ever trust you with their portfolio ever again no matter what happens after that. And in this business people will be quick to remind you that when the rally came because the whole system had to be bailed out you don't get to take the credit. So, really you get the blame for the fall, but no credit for the bounce except from the press which never seems to care.

    Fact- buying financials before the crisis was a bad idea, and buying them after the crisis for anything more than a temporary short term bounce has also proved to be a bad idea. The industry is experiencing a structural shift. If you are in the space you are living through it everyday. We may be closing in on the end of the painful transition period, and that may finally spell relief for financials but that clearly not something you have given much thought to. You have just said buy pretty much every day since late 2007.

    Fact- you recommended buying 5 chinese stocks that 'might double'. All five spectacularly imploded and you washed your hands of them as you seem to wash your hands of every bad call. But then again is it a mistake when you recommend so many stocks that you know so little about or is it just reckless advising? More research and fewer picks and less headline grabbing stuff like 5 stocks that could double this year, and you might find that you will never recommend 5 stocks that all immediately lose almost all their value.

    Now as I said before you win some and lose some, and that seems to be something you embrace when it comes to giving life advice. However, when it comes to the market you don't seem to be willing to embrace this credo. And to call into question the work of guys like MIsh and Hussman is pretty sad considering the thorough nature of what they provide. And referring to every critic as 'some guy i have never heard of' is a classic dismissal move and attempt to weaken the source without having to rely on the merits of your own argument. Who cares if they were wrong to be bearish or cautious in 2010. On balance, I know they will never tell me everything is worth buying a few weeks before the entire market will begin a 60% collapse. And bottom line is no matter how wrong they were, I will always give more respect to what they have to say on markets because they take the time to flush out an argument. I'm more interested in the process than the outcome. You seem to be the opposite. You start with a conclusion like dow 20,000 or new highs by x date and work backwards from there looking for anything you think can add some credibility.

    As for giving away you book, thanks for the disclosure now. As none of your other books are free, and to my knowledge neither is booking you for an appearance or one on one consulting session. That being said, I love the title and idea behind FAQ ME and will check it out.

    Sorry, if i don't believe your only goal is to help people. Not like anyone would hold having other goals against you, but using that as a counter is a bit much James. I am sure you have other goals too that just managed to slip your mind in the two seconds before you wrote that.

    Oh, I've read The Forever portfolio. I liked the part on luxury good retailers being recession proof. I'd call them more recession resilient, but still a good point. Though I'd argue it was more emerging market organic demand growth than western market recession resilience that boosted these brands and their shares. I also liked a lot of the themes you outlined, but then again understanding demographics and societal trends is a core part of investing. However, if you ask me there is no such thing as a forever portfolio. I find it funny to hear someone so fascinated by dynamism and innovation argue that we can just buy and hold forever. You published that book in late 2008.....the title is the forever portfolio.....so i am curious what performance horizon are we talking about here? From publication date or from before the market collapsed? This is a beta rich portfolio so that is important. Also, if the portfolio is the forever portfolio, the jury is still out.

    Anyways, patiently awaiting a response to anyone of my article points or to both your geopolitical concerns. Just want to hear why India/Pakistan Iraq/israel war are concerns of yours.
    Jan 7 04:10 PM | 1 Like Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Ricard he was better of not responding. Every post just makes him look worse and worse.
    Jan 7 11:03 AM | 3 Likes Like |Link to Comment
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