What's Going On With Freeport-McMoRan? [View article]
I've been curious about the possible impact of the recent rebel incursions and instability in the Congo on the Freeport investment there. This latest acquisition news doesn't add to my confidence in FCX. My thinking is that there are numerous other companies with a much better grasp of O&G economics who haven't been tempted by PXP or MMR. I don't currently hold FCX and for the time being wonder if there isn't more here than meets the eye.
Excellent article--one of the best on the topic appearing in SA in recent times.
Alex, you make some good points, but your belief that the US will be energy independent by 2022 isn't supported by data and projections I've seen. It is something to hope for. What is overlooked in your comment is that this article is looking at crude oil economics on a worldwide basis.
While increased US production will help, the fact remains, reserve data from several OPEC nations is opaque at best. We don't know how much longer the Saudis will be the swing producer. Depletion rate issues are hitting all over the world. The fact is, governments and the oil industry are scrambling to replace the crude oil that is being pumped today.
The day we become energy independent will be a glorious one, but one still needs to understand that while their are significant variances due to transportations costs, etc.. The price of energy is set in world markets, not locally. Just as US refiners exported to take advantage of pricing anomalies off our shores, producers will sell to the highest bidder with little regard for nation of origin.
Top Computer Software Stocks Most Favored By The World's Largest Fund Managers [View article]
Favored by "World's Largest Fund Managers" is a tell that informs knowledgeable investors that the world's largest funds generally park money in the stocks with the largest market capitalizations for their fund type. Growth funds are having a difficult time finding viable candidates with a big enough market cap or a defensible business model and financial structure to invest in.
While I'm not quibbling with the quality of many of these investments, stock picks by the "largest funds" in no way should be a reason to buy for the individual investor. Study after study indicates that these funds thrive on the fees generated from their clients. Their performance is almost universally bland or suboptimal.
The fact is that these funds have become too big to operate efficiently and as long as money is parked in this or that equity it will continue to generate fees.
Corn Ethanol Producers Enter A Perfect Storm [View article]
Excellent article. We do need to continue to search for viable alternatives to burning hydrocarbons, even if its on an incremental basis. Corn ethanol is not the answer.
As H-P (HPQ -1.9%) slumps due to Lexmark's warning, JPMorgan's Mark Moskowitz suggests the time is ripe for a breakup. Moskowitz, who has an Underperform on H-P, argues holding onto the struggling printing and PC businesses makes no sense if H-P is serious about focusing on value-added IT solutions. He also doubts H-P's restructuring will lead to higher profits, given investment needs, and thinks the July and October quarters could miss the Street's depressed expectations. [View news story]
Good question. Especially since HP is in the ink business rather than the printer business. What was once a respectable product is now a disposable designed to guzzle ink and gouge customers. I don't think their ink is anymore valuable than brand X and their printers are basically generic.
Lumia Is Coming To Verizon And Sprint Along With New Features [View article]
With no malice towards iPhone, Google and others, it's good to see I have company in terms of waiting for Verizon to start marketing this phone. I once hated Microsoft's monopolistic practices, but Windows is now a fixed product. It works extremely well and has become exceptionally reliable. Being PC centric and seeing MSFT Office as the go to business app, I won't have to migrate to AAPL as I'm convinced that MSFT will do just fine keeping up with the Jones.
CRM At 40X Opertating Cash Flow, Price Target Of 101$. 40X Cash Is A Huge Multiple And Still Downside! [View instapost]
Agree with that as a good candidate. AMZN is definitely no longer a pure play and there just aren't that many spaces they can dominate outside of basic retail mail order. I definitely agree it shouldn't be priced where it is. Appears a hybrid growth/commodity/congl... valuation would be more appropriate. Wonder if it will fill the gap down to $196? There's a huge horizontal volume bar gap between about $208 and $200. Definitely a prospect worth getting educated on.
Salesforce.com: Institutional Investors Are Preventing The Short Thesis From Playing Out [View article]
It makes no sense to look to Fidelity for a cue on this stock. While a large shareholder, 15% still leaves out 85% of the ownership. Fidelity could just as well own 15% at $75. Until some committee sits down and decides to trim holdings or growth ETF investors flee, Fidelity will continue to brainlessly hold this stock. As small as the float is, when the public stops buying or small institutional owners begin scaling out, gravity will takes its toll. Even institutional holders are smart enough not to try to catch a falling knife and it looks like the biggest kid on the block has bought all the shares daddy will allow him to buy.
CRM At 40X Opertating Cash Flow, Price Target Of 101$. 40X Cash Is A Huge Multiple And Still Downside! [View instapost]
Part of the bull thesis was that revenue at any price was merely a precursor to future pricing power. My thesis included the supposition that rapidly evolving competition would eliminate future pricing power and cripple the company. I still believe this.
One possible scenario is that rather than seeing economy of scale, CRM will find itself in the position of having to meet greater than expected capex as it struggles with overload and attempting to meet customer expectations. Two notable outages in the past couple of weeks may or may not indicate a need to beef up infrastructure or design. As I'm sure you've noted, the company is grossly overpaying for acquisitions while competitors cash hoards allow them to overpay with little overall financial impact.
That said, I'm looking past CRM for my next elephant to short and haven't found any truly outstanding prospects. I've had good luck with NFLX and OPEN and expect CRM to fatten my speculative portfolio. Any promising short ideas with reasonable liquidity?
The battle for the cloud is clearly heating up. CRM, SAP, ORCL, MSFT and others are going to be fighting tooth and nail for market share and my best guess is that in the short run, these companies are going to be making extensive investments to supplement or enhance their offerings. All of them are on buying sprees, likely grossly overpaying for the companies they acquire just to make sure they don't lose ground in the battle. While the cloud, by almost all accounts is the future, wars are expensive its quite possible that the most disciplined and best financed stand the greatest chance of prospering in the cloud. I believe this will create a very difficult environment for CRM as the company's devours more and more cash. It lacks the cash cushion and cash flow created by the non-cloud businesses its rivals operate.
5 Bold Stock Market Predictions For The Rest Of 2012 [View article]
To date, OPEC has kept production numbers up, mostly to accommodate a shaky world economy. Regardless, there is a limit both inside and outside of OPEC. Replacing depleting reserves is an expensive proposition and not replacing depleting reserves is anathema to most producers.
With reported riches now being exploited in North America comes high production costs. Additionally production costs for Canada's tar sands are high. Looking at a five year price chart, barring a worldwide economic collapse, I don't see prices falling much below current levels in the near to intermediate term.
Steve Forbes: How To Bring Back America [View article]
Steve Forbes is an example of why nepotism is bad for most organizations. "Forbes" magazine is so far off my radar that the only time I run across it is when I follow a link tied to a subject I am researching. Almost invariably I find the linked article to be little more than fluff or enhanced PR.
Rather than trying to "Bring Back America" Forbes could do us a great service by bringing back respectable financial reporting.
Salesforce.com: Institutional Investors Are Preventing The Short Thesis From Playing Out [View article]
The counter-argument is that it wouldn't take much to start an avalanche. If that happens, shares to borrow will disappear, option spreads will balloon and many wannabe bears will be too nervous about a bounce to do anything.
Salesforce.com: Institutional Investors Are Preventing The Short Thesis From Playing Out [View article]
Rather than fret about institutional ownership, especially such juggernauts as Fidelity, keep your eye on the ball. If sales growth flattens out and investors finally begin to admit the emperor has no clothes the stock will come back to earth with great rapidity.
Fidelity will likely still be sitting on 15% because there are only so many companies big enough to invest in for growth. State Street, pays its average analyst just over $58k (salary and bonus per glassdoor.com). Fidelity pays its Senior Investment Analysts just over $70k in the Boston area according to the same source. Top end analyst pay for most of these behemoths is just into six figures.
In many of these firms, stockbroker and related job titles earn near equivalent salaries. Do the math, figure out how much faith investors should put in their research and come to your own conclusions.
The statement that EPS estimates have beat in the past couple quarters is a bit misleading. If I'm not mistaken, estimate trends have plunged this year.
What's Going On With Freeport-McMoRan? [View article]
The Supply Side Of Oil [View article]
Alex, you make some good points, but your belief that the US will be energy independent by 2022 isn't supported by data and projections I've seen. It is something to hope for. What is overlooked in your comment is that this article is looking at crude oil economics on a worldwide basis.
While increased US production will help, the fact remains, reserve data from several OPEC nations is opaque at best. We don't know how much longer the Saudis will be the swing producer. Depletion rate issues are hitting all over the world. The fact is, governments and the oil industry are scrambling to replace the crude oil that is being pumped today.
The day we become energy independent will be a glorious one, but one still needs to understand that while their are significant variances due to transportations costs, etc.. The price of energy is set in world markets, not locally. Just as US refiners exported to take advantage of pricing anomalies off our shores, producers will sell to the highest bidder with little regard for nation of origin.
Top Computer Software Stocks Most Favored By The World's Largest Fund Managers [View article]
While I'm not quibbling with the quality of many of these investments, stock picks by the "largest funds" in no way should be a reason to buy for the individual investor. Study after study indicates that these funds thrive on the fees generated from their clients. Their performance is almost universally bland or suboptimal.
The fact is that these funds have become too big to operate efficiently and as long as money is parked in this or that equity it will continue to generate fees.
Corn Ethanol Producers Enter A Perfect Storm [View article]
As H-P (HPQ -1.9%) slumps due to Lexmark's warning, JPMorgan's Mark Moskowitz suggests the time is ripe for a breakup. Moskowitz, who has an Underperform on H-P, argues holding onto the struggling printing and PC businesses makes no sense if H-P is serious about focusing on value-added IT solutions. He also doubts H-P's restructuring will lead to higher profits, given investment needs, and thinks the July and October quarters could miss the Street's depressed expectations. [View news story]
Lumia Is Coming To Verizon And Sprint Along With New Features [View article]
CRM At 40X Opertating Cash Flow, Price Target Of 101$. 40X Cash Is A Huge Multiple And Still Downside! [View instapost]
Thanks
Salesforce.com: Institutional Investors Are Preventing The Short Thesis From Playing Out [View article]
CRM At 40X Opertating Cash Flow, Price Target Of 101$. 40X Cash Is A Huge Multiple And Still Downside! [View instapost]
One possible scenario is that rather than seeing economy of scale, CRM will find itself in the position of having to meet greater than expected capex as it struggles with overload and attempting to meet customer expectations. Two notable outages in the past couple of weeks may or may not indicate a need to beef up infrastructure or design. As I'm sure you've noted, the company is grossly overpaying for acquisitions while competitors cash hoards allow them to overpay with little overall financial impact.
That said, I'm looking past CRM for my next elephant to short and haven't found any truly outstanding prospects. I've had good luck with NFLX and OPEN and expect CRM to fatten my speculative portfolio. Any promising short ideas with reasonable liquidity?
Oracle: 15% Gain Likely By 2013 [View article]
5 Bold Stock Market Predictions For The Rest Of 2012 [View article]
With reported riches now being exploited in North America comes high production costs. Additionally production costs for Canada's tar sands are high. Looking at a five year price chart, barring a worldwide economic collapse, I don't see prices falling much below current levels in the near to intermediate term.
Steve Forbes: How To Bring Back America [View article]
Rather than trying to "Bring Back America" Forbes could do us a great service by bringing back respectable financial reporting.
Salesforce.com: Institutional Investors Are Preventing The Short Thesis From Playing Out [View article]
Salesforce.com: Institutional Investors Are Preventing The Short Thesis From Playing Out [View article]
Fidelity will likely still be sitting on 15% because there are only so many companies big enough to invest in for growth. State Street, pays its average analyst just over $58k (salary and bonus per glassdoor.com). Fidelity pays its Senior Investment Analysts just over $70k in the Boston area according to the same source. Top end analyst pay for most of these behemoths is just into six figures.
In many of these firms, stockbroker and related job titles earn near equivalent salaries. Do the math, figure out how much faith investors should put in their research and come to your own conclusions.
Earnings Preview For Alcoa [View article]