Alex Filonov

Growth, value, special situations, portfolio strategy
Alex Filonov
Growth, value, special situations, portfolio strategy
Contributor since: 2008
Have been stretched for years. I don't care, if I make money when P/E is 6 or 60 or 600.
There are always concerns. As for lockup expiration, it might play either way. I'm sure there is a lot of related arbitration activity, the question is whether arbitrators guessed right.
What I really like about Twitter: this is a company with huge name and penetration and just at the beginning of monetization.
Side note: stay away from Yandex, Putin last week reduced capitalization of company by more than 10%, just by saying several words. Russia is a money black hole, you can make quick buck by speculation, long term risk is huge. Baidu risk is lower, just because Chinese powers that be are saner than Putin. But I'd like to see how current financial crisis in China plays out.
Sure, but Internet companies don't have much presence in Ukraine and Russia. Industrials, financials (especially Visa and Mastercard), consumer goods (Coke, Pepsi, McDonalds, Nestle), all have big presence. They didn't get trashed.
Good research, but not related to reality. The right question now is "What happens when deflation hits?". You don't want to know the answer, it's ugly.
My last comment on this article:
People, you are all wrong! Both gold bugs and gold haters. The main factor defining price of gold is India. Country imports between 25 and 35% of gold production. Every year. Last year, gold crashed after Indian government sharply increased gold import duties.
That's the main reason I stay away from gold market. I have no idea how Indian gold market is going to change in future and what government policy would be. Everything else doesn't matter much. Yes, China imports a lot of gold. Much less than India though. Yes, ETFs (especially GLD) affect gold market a lot. Yes, rumors of hyperinflation were factored in. But long term, nothing can compete with India's appetite (or lack thereof) for gold.
In short, gold is a commodity. It's main value is presumed value, in fact, value assigned by people, as "real" money. Industrial and jewellery use of gold is way below half of production (don't kid yourself, what they call gold jewellery in most of Asia, including India, is in reality slightly decorated gold bullion, used to store capital). And as any commodity, gold can experience sharp changes in price either way. Influenced in this case by factors beyond our knowledge.
One thing is what IRS thinks, quite another is what you really have. Doesn't matter what is the status of account, your current capital is worth of your holdings minus liquidation costs. That's money you can have right now. Nobody cares what was the buying price. Nobody knows what would be price in the future. Your capital standing is what you have NOW. BTW, your brokerage thinks the same way, they calculate margin based on current prices.
To Interesting Times:
> If you haven't sold then you haven't lost anything !!
That's the biggest fallacy in investment/trading. It doesn't matter if you sold or not. Your portfolio worth is current market worth of positions minus possible selling expenses (slippage, fees etc.). Your losses are never "paper losses", they are real. Your gains are not "paper gains" either, they are real. You may hope your position will go up, but hope is never investment strategy.
Good, thoughtful article. There is only one problem with it: Airbus gets most of money from A320 family, and Boeing, from 737. Both companies have orders for at least 8 years of production, so both are probably good investments. Valuations are high, but look justified.
Disclaimer: I am planning to buy Airbus and possibly Boeing shares.
To John Wilson.
I usually stay away from religious disputes. And yes, gold is a religion, at least for those who keeps big part of their money in it.
Just couple of points.
1. Gold is a metal. As such it's a standard. Of itself. The price of gold is defined by people. Market is a place of people relationships. Today people decided, through multiple interactions, that gold cost 1200+ dollars. What they would decide tomorrow, nobody knows. Don't kid yourself, you don't know either. Comes 2015, gold price might be 2500, or 500. I don't care, I don't own any.
2. Vladimir Putin is not my leader. I am US citizen. And, BTW, Russia keeps most of foreign reserves in US Treasuries (are you surprised? I'm not).
How do you know what SAE used in algorithms? And how? You are repeating what they are telling, not what really there. Quants are too big on the market as it is, and if they get an advantage (even 5%) over everybody else, we lose.
Ritholtz is hands-on money manager, Salmon is a journalist. Who do you trust on the market?
P.6. There is no difference between trade and investment beside time horizon. Anybody who thinks otherwise is an idiot and is going to lose a lot of money.
P.7. Yes, Barry is right. You should reduce your biggest holding at many points. Especially if it exceeds 20% of holdings.
P.8. It's not market timing. It's common sense. You don't buy a commodity after several years bull run. And yes, gold is a commodity, nothing else.
P.9. Ritholtz, hedge fund manager, doesn't understand concept of a hedge? Come on!
Yes, of course I will buy back if it goes low enough.
Well, it's your money, your risk. I wouldn't go to Brazil, or any emerging market. And I would never buy Gazprom, because it's not a private company, in reality it's a part of Russian government.
There is a full fledged rival: Amazon (AMZN). More movies, also quality is just a little bit worse than Netflix. And top movies are available couple of weeks after box office release.
Author forgot about money velocity. Which makes the whole article complete and utter nonsense. If money mass is growing and velocity is falling proportionally, no inflation. I know, Austrian school dismisses money velocity, that's why it doesn't make any sense. Five years of money mass growth with little or no inflation, how much more proof do you want? OK, Japan: 23 years.
IBM might reinvent itself. Again. Maybe. But so far, the future doesn't look good. Free cash flow is down. What does it mean? Oh yeah, dividend growth can't continue if free cash flow is not growing.
Most of IBM revenue comes from services. In short, IBM manages (completely or partially) IT infrastructure of companies. There is some competition here, like Microsoft, Oracle, etc. Not many companies are happy with IBM services, but competition is usually worse (in case of MSFT, it's just awful). So companies are moving to clouds. Would they trust IBM in cloud space if they didn't trust much in their own IT center? I doubt it. And competition in cloud is much stronger: first of all, it's Amazon and Google.
As for big data, don't know. But it's not a big source of revenue and doesn't look like replacing losses in services any time soon.
Disclosure: I am long GOOG and don't have any positions in other stocks mentioned.
My respect. We all are getting something wrong, the main thing is to recognize it.
Disclosure: long $ARMH
Nothing new for me, unfortunately. There are two reasons for current state of events in developed world. Both are political.
1. A lot of people, most of all retirees, are living on fixed income. They are interested in deflation, which increases their real income and don't care (or don't want to know) that deflation destroys economy.
2. Total ignorance of population, politicians and business people in how economy really works. You get such idiots like Paul Ryan prescribing austerity and high interest rates, which are great tools for creating total disaster right now. Sure, such prescriptions, if implemented, would result in Ryan and his comrades voted out in tar and feathers, but first they would return us to Great Depression 2.0.
In short, Japanese type stagnation is not the worst kind of outcome. Let's get ready to live with it for a while.
Well, we'll find out in 5 years. So far, only Fed policy fights deflation, Congress and President are not (sequester, budget cuts etc. are all deflationary). Don't forget, retirees and people close to retirement are the most powerful political force right now. And they are interested in deflation, as any person on fixed income would be. They are not interested in where this income comes from and in the fact that during protracted deflation sources of fixed income might disappear.
One big problem with this analysis: Japan. 20+ years of ultralow rates and counting. And last 5 years developed world (US included) follows Japan.
AAPL is not a growth company either. Not anymore.
Might be an antitrust issue. There aren't many players in this area.
Felix, why don't you use some accounting software?
I am sure banks can do just fine with free checking accounts. After all, this is money they can use to give loans and earn some interest. Servicing is expensive? Come on, it's all done by computers.
Shorting a profitable and growing company is a recipe for disaster. I am long DSW and, after reading your article, I am sure that long way is the right way.
> Anyone who studied the history of trade knows that for 400 years trade settled in gold.
Anyone who really studied history of trade knows that for 2400 years trade settled in silver. Gold Standard started in UK in 1844 and in US in 1890. There were short periods in other countries when gold was declared primary money, but gold never was primary world money until 1844.
Interesting. Especially after we saw Blackberry results for the latest quarter. Blackberry is on a death bed, never mind it taking share from Android.
As for Microsoft... People (and I mean, almost all people) are so fed up with Microsoft products, that given a choice, they'd never buy another product from this company.
Good luck with your thesis, I hope you don't invest in it.
> let bankruptcies and 'creative destruction' revive the economy
There are two problems with this idea:
1. The scale. If you have too many bankruptcies, economy tanks. No revival, depression.
2. Deflation. No matter what you do, in modern economy deflation = depression.
So instead of "creative destrution" you get just plain destruction.
Looking at recent Japan's history, I don't think QE era is over. Far from it. We have at least 10 more years of QE ahead.
1994, how about US 1937.
Sure. I just took example which is close in time.
> Fed is buying open orders out in the market in addition to the new issues
Wrong! Fed doesn't buy new issues.
We are following Japan's path. Our 2013 is Japan's 1994. Just look at what happened next there.
There is no need for Fed to taper. There is no need to think about exit.
Our generation is scared of inflation (not me, but common mindset). We are used to see inflation as an evil. In reality, some inflation is necessary in modern economy. Unfortunately it's useless to try to explain it. So we are doomed to repeat Japan's path, until new generation comes to power.
Whatever Fed does, it's not enough. We also need more government spending (quite opposite to what's really happening).
Bubbles? What bubbles? What's more dangerous: bubbles or depression?