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Bachar Samawi  

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  • Gold And Silver Prices Have Further To Fall [View article]
    Please note that 30,40,50, xx years ago, hedge funds did not exist. Yet equities outperformed.

    Also please note that despite equity outperformance, gold may still go up, but just not as much as equities.

    At the end of the day, desirable equities represent companies. Companies produce goods and services. When inflation goes higher, their products increase in price. For a period, an increase in price may result in a drop of demand, but once wages adjust, then demand picks up again... Defensive stocks do even better in times of inflation, because goods being produced are a necessity....

    Having said all that, relative to the money printed so far, gold is actually cheap.... Equities for companies that do not carry a debt burden may even be cheaper in the long run...
    Mar 15, 2012. 01:12 AM | 3 Likes Like |Link to Comment
  • Research In Motion: Buyers Beware [View article]
    Once again,

    Consider the following:

    RIMM has about $1.5 Billion in cash, cash equivalent, short term & long term investment

    In addition, Account Receivables plus Payables plus other current assets convertible into cash plus other cash defferrals (on the asset & liability side) add up to an additional over $1.1Billion

    Hence, that is a total of $2.6 Billion which translates to about $5.13 per share (excluding inventories, goodwill, property, etc....)

    Given your short price of $13.78, if we subtract the above, it will become $8.65

    Now, after revised lowered earning expectations for the next 5 quarters, assume RIMM earns $3/share only in total for the 5 quarters (an extremely pessimistic scenario)

    Subtract that again, and you are left with a short price of about $5.65

    Now consider 75 Million subscribers that RIMM has. Forget all the other assets, property, equipment, goodwill, brand, inventories, etc.... The above price of $5.65/share translates to about $39.50 per subscriber.

    Do you really want to short a company with 75 Million subscribers for an adjusted price of about $39.5 per subscriber, that is still generating positive cash flow, and still has some additional recoverable value in property, inventory, goodwill, etc...

    Just to give you an idea, many companies trade at a value of $300 to several thousand dollars per subscriber....
    Dec 22, 2011. 10:03 AM | 3 Likes Like |Link to Comment
  • On a Quiet Day, European Storm Clouds Gather [View article]
    The U.S. markets are probably going to start dissociating themselves from European markets soon; Europe drops, U.S. markets follow during European trading hours, and then U.S. markets grind higher throughout the day.

    Why did Google pay 60% premium for Motorola? Because it could not get the deal done by paying 55% premium. What does that tell us? With massive corporate cash hoards, low interest rates, and no longer risk-free U.S. treasuries, equities are a very compelling case....
    Aug 16, 2011. 03:54 AM | 3 Likes Like |Link to Comment
  • Choosing Between Gold and Stocks and Deciding Whether Economy or Inflation Are Key [View article]
    Indeed that would be worrisome.. However, please note that as the British Pound lost its "reserve like" stature throughout the 20th century, where it was worth $4.86 prior to 1940, to its current value of about $1.62, equities still out-performed. A depreciating dollar will increase international dollar denominated sales and will make U.S. goods competitive globally.... Meanwhile, the U.S. is the world's sole Superpower....
    Aug 13, 2011. 12:24 AM | 3 Likes Like |Link to Comment
  • Choosing Between Gold and Stocks and Deciding Whether Economy or Inflation Are Key [View article]
    You are right in the sense that this analysis targets investors rather than traders. However, please note that the length of the data examined was merely to further solidify the findings. Such findings also apply to much shorter periods than the period over which the data was examined. If one believes he/she can time the market perfectly, then rotating between assets would be the answer...
    Aug 12, 2011. 11:01 PM | 3 Likes Like |Link to Comment
  • Apple: $800 Done, $1,000 Pre-Split Next? [View article]
    Thank you for your comment Zipper0. You provide some good points.

    From a longer term perspective, you are right, as provided in the article we published and referenced in the reply to .

    As a technology company, while in the past I do not believe Apple shares carried a "differentiation" PE adder, that is no longer the case today; an expansion in its forward PE ratio as well as in its free cash flow multiple have already occurred; although they may still have a little more room to go...

    Nevertheless, there are still some short term headwinds. Investors and traders often get carried away; when Apple had retreated in 2013 by over 45% from its previous high, dropping form over $100 in Sep 2012 to about $55 in April 2013, many were expecting it to drop even further... Yet now that it has appreciated by over 116% from its April 2013 low, many now are expecting Apple to possibly increase by over 20% to 50% in a relatively short period...

    There is one top, and one bottom, and thousands of trades, estimates and predictions. For such reason, I do not necessarily try to pick the top or bottom, but mainly evaluate based on risk/reward scenario. In the near term, current headwinds make a 10% drop more likely than a 10% appreciation. Furthermore, in case Apple does appreciate by 10% or more from current levels prior to dropping by such amount, I do believe that investors would still have the opportunity to purchase Apple at current levels, as any such appreciation would also raise the likelihood of a subsequent drop to current levels...

    Once again, from a longer term perspective, I agree with you, and I do believe that Apple is the best candidate out there to breach $1 Trillion market cap.
    Nov 27, 2014. 05:40 AM | 2 Likes Like |Link to Comment
  • Time To Sell Google And Buy Facebook [View article]
    Facebook valuation metrics have already incorporated increased display ad monetization by FB. Yet, despite such expectations, FB is still trading at a forward P/E ratio of about 44 for 12/2014 and 35 for 12/2015. Such ratios are too high, despite FB's expected growth rate, given the current macro environment, as well as FB's accumulation of substantial goodwill on its balance sheets due to its acquisitions (which can easily be written off at least partly in the future). Furthermore, FB can also be easily disrupted, while with a market cap of over $162 billion, it can easily lose half its market cap in a heartbeat.

    In summary, given macro risks, disruptive risks, excessive forward P/E ratio risks, future goodwill write-off risks, additional use of FB stock as currency for future acquisitions risks, Facebook is overpriced at these levels and can easily drop between 20% to over 40% in a heartbeat if any such risks materialize....
    Jun 4, 2014. 11:45 AM | 2 Likes Like |Link to Comment
  • Should You Sell 3 Stocks That Spiked, Boosted By Massive Short Interest? [View article]
    Yes short ratio is high again, even higher than before, as stated in the article, and hence I cautioned against shorting Tesla. On the other hand, the macro environment can provide headwinds, which was not the case in October 2013. Hence, the high valuations along with the negative macro environment along with the dilutive nature of the convertible notes somewhat offset the allure of the potential for another short squeeze to develop. If Tesla shares drop further from these levels, then there will come a point where there may be a favorable entry point again....
    Mar 31, 2014. 06:07 PM | 2 Likes Like |Link to Comment
  • Should You Sell 3 Stocks That Spiked, Boosted By Massive Short Interest? [View article]
    The article is very specific to its purpose, as is stated in its title. TSLA was previously recommended whereby several bullish factors, accompanied by a sizable short ratio, increased the likelihood that in case of any unexpected additional bullish news, a short squeeze would develop and shares would trade higher. That is exactly what happened, and as a follow-up, as such event has materialized, and given resulting gains and rising risks, from a risk/reward perspective, the current article recommends being flat again.
    Mar 31, 2014. 05:59 PM | 2 Likes Like |Link to Comment
  • Green Mountain Coffee Roasters: 9 Different Insiders Have Sold Shares This Month [View article]
    More important than insider selling, GMCR has substantial headwinds:

    A- consumers have been making coffee at home for over 1000 years, and hence GMCR's original coffee products were naturally in demand; on the other hand, demand for home made 'coke' related products is yet to be tested, and hence the value proposition is nothing but an experiment at this stage;

    B- with Fed tapering, high p/e ratio stocks are at substantial risk for extreme correction to the downside which can often exceed 50% to 70%;

    C- GMCR rallied not necessarily because of pending new Coke products, but possibly because of the possibility of being ultimately bought out by Coke. What many Bulls do not realize is that Coke's entry price for 10% stake is about 40% below current price. First, if demand for home made Coke related products proves limited, it is unlikely Coke will proceed with buying out GMCR, and Second, it is unlikely they would make such purchase at a price of 40% higher than original purchase - otherwise, they would have purchased a much larger stake to start with... But Coke itself knows the associated risks, and hence was simply buying an insurance, and was not interested in a larger stake until the concept of home coke-related products is proven....

    In essence, it is not surprising that insiders are selling, and GMCR can easily drop over 30% in the blink of an eye....
    Feb 14, 2014. 08:22 AM | 2 Likes Like |Link to Comment
  • Twitter - Valuation Per User In Line With Facebook [View article]
    Facebook is under-priced relative to Twitter. Facebook revenues for year ending Dec 2014 are expected at $10.35 billion while for Twitter revenues are expected to be $1.14 billion (10% of Facebook). Meanwhile, FB EPS are expected at $1.12/share for year ending Dec 2014 for Facebook, while for Twitter they are expected to come in at a loss of 2 cents.

    As it is unlikely that Twitter shares will fall down substantially due to limited Float, and given the above metrics, then there is a substantial likelihood that Facebook shares can actually gap higher by no less than 30% to 50%.

    Remember, prior to Twitter's IPO, many analysts were claiming how Twitter would be fairly priced at about $23 relative to FB. Now that Twitter is priced at over $41, what does that say about Facebook?
    Nov 11, 2013. 05:13 AM | 2 Likes Like |Link to Comment
  • Wrong About Gold Again? [View article]
    No one is bigger than the markets. So in the long term, I do not believe anyone is capable of manipulation as the markets always catch up with you....

    In the short terms is it possible that traders may try to play psychology driven games to affect liquidity? Possibly.... but it can always backfire and is not sustainable long term...
    Oct 17, 2013. 07:58 PM | 2 Likes Like |Link to Comment
  • Shutdown Impact On Buffett Top Holding IBM [View article]
    It is highly unlikely that a $12.2 billion investment does not have his nod....
    Oct 10, 2013. 11:55 AM | 2 Likes Like |Link to Comment
  • Consider Apple Supplier ARM And Hedge [View article]
    Thank you Michael for your comment.

    As in the previous article I published discussing exuberance, I do agree that based on valuations, there seems to be exuberance in ARM . On the other hand, whether it is irrational or not can only be determined in hindsight, and such exuberance may build further on itself. Meanwhile, the Macro and seasonal environment is constructive...
    Oct 8, 2013. 09:37 AM | 2 Likes Like |Link to Comment
  • What Has Changed For Apple? [View article]
    Thank you for your comment davidovich. Great companies will always be challenged; there is no shame in that. Greatest companies will always overcome such challenges, and Apple has indeed proven it on more than one occasion.
    Nov 8, 2012. 04:54 PM | 2 Likes Like |Link to Comment