Chris Fernandez

Shorting Treasuries with Inverse ETFs

Radicall,

Awesome points!

I have not officially started my position yet in TBT or TMV, and don't intend to yet either till I see some stabilization in the bonds, or other compelling reasons.

Today's drop in price puts the TBT technically right around resistance/support, so it could be a nice entry position either way, but I like your play of shorting TBT, or going long TBT, regardless and making money both ways.

Although I think the longer term trend is for yields to move sharply higher, I didn't mean to suggest I would be utterly opposed to shorting and going against my own trade for a short term profit boost.

Chris

Shorting Treasuries with Inverse ETFs

Hey guys,

I am not a timing or chartist expert, so my article was not designed to time the move or pretend that there was no risk.

However, for the reasons that I outlined, I believe that although the vehicle for playing this might be volatile, and yes, the compounding and volatility issues might erode your return, I still think that we are headed for something major here in the next few months, and I want to be ahead of that.

True that the spike in interest rates a few days back was too much too fast, thus why I am waiting for a pull back, but the mega trend is in place, and I think we'll reap the benefits soon enough.

Chris

Strayer Education Suffers from Market Contradictions

Hey Chris,

I agree with your assessment, and might add a few more:

- The CEO virtually liquidated his entire stake in the company not too long ago, why? He never explained, at least where I've looked.

- STRA is on the wrong side of being a defensive play, and will be the first place that institutions rotate out of as soon as other sectors roar back

- Valuation is already top heavy, meaning any "miss" whether real or perceived will crush the stock.

I'm with your short analysis here, but for me it's all a matter of timing, and of that I have no idea.

Chris

GeoEye: Sell Alert on Satellite Troubles

Hey Userxxx,

I completely disagree with your assessment that the risk/reward was worse before the satellite was launched.

You see, back then, the stock was LOWER than where it trades at today, and let's say for the sake of argument, that it was trading for about the same price.

Well, even at the same price, with what we know today, the risk/reward has changed and is no longer in our favor based on the knowledge that we possess right now.

I won't back down from my sell of GEOY, and from the looks of the market, DGI is getting a higher valuation right now, with both properties undervalued if you ask me, while at the same time factoring in the higher risk premium on GeoEye.

China: I understand where you are coming from, but within the boom and bust times of the satellite construction cycle, there is a sweet spot in there (the government subsidies notwithstanding), where the company would generate huge amounts of free cash flow sufficient for continuing operations and satellite build out.

With the government subsidies, we can see that things look much brighter, especially within the context of future deals as the US looks to continue to outsource their satellite imagery needs to commercial players.

Chris

Netflix: Cover Alert on Short Position

Hey Tangle,

My appreciation for streaming costs are NOT related to the actual bandwidth being purchased and used by NFLX, but rather by the renegotiations that they are going to have to go through with the studios, thus raising their cost to deliver streamed content.

If you already look Netflix does not offer all of their available movies for streaming to everyone.

I'll give you an example: I subscribe to the cheapest plan, 2 DVD's per month, 1 out at a time.

I am able to stream a bunch of TV shows and movies to my computer (not TV since I need at least the $9.99 plan I believe for that), but some of the movies that it says I am able to stream, I actually can't because my plan "does not allow for that movie to be streamed" as Netflix puts it.

Think about it this way: If NFLX is already curtailing "unlimited" streaming because of higher costs for certain movies forced upon them by the studios, what's going to happen when those are raised further in the future for better movies, or even for older titles?

Yep, costs will rise, margins will fall, and NFLX will look much less appealing not only to us as investors, but more so to the actual customers who are going to get tired of being nickle and dimed to death for higher programing costs, and less content.

Chris

GeoEye: Sell Alert on Satellite Troubles

I agree with Jim,

Until I see something official, not some CEO interview on the internet somewhere, I maintain that my sell was warranted for all the reasons that I mentioned, today's stock price rise notwithstanding.

I can always reenter the position later, so selling the entire position now and hanging back isn't the worst thing in the world, considering I was still able to get out with a gain in the face of such risk and uncertainty.

I'll put it this way:

GeoEye's risk/reward proposition no longer favors the investor.

That's when I tend to exit a position as I have.

Chris

GeoEye: Back on Track?

Hey Jim,

Very valid points, but in the grand scheme of things, the government contracts will be the same regardless, and GeoEye and DGI's revenues will virtually match eachother, so in the end, the points are moot as far as the pure numbers go.

Also, you are failing to take into account that satellite launches are very fragile things, and not only is DGI's satellite likely to be pushed back as they always tend to be, but something can go catastrophically wrong with the launch, check out, calibration, and orbit, all real risks right now as the satellite is not a sure thing, as GEOY's already is.

Now as for the dynamics of imagery collection, as well as how much land mass can be scanned, that is true that DGI has superior capabilities, but here again you failed to address GeoEye's imagery processing capabilities which blow DGI out of the water.

They are image agnostic, and are able to parse and format imagery from any vendor/source not just their own, and are expanding this unit by 120 staff members.

Lastly, I addressed the MJ Harden division that also expanded on purchased a new aircraft and camera that you failed to address as well.

Admittedly, this division is a small portion of sales, but if you add up the increased imagery parsing capabilities as well as increased MJ Harden order flow, and you get a nicely diversified business.

I just actually sold my GeoEye position today as a result of uncertainty with the imagery problems with GeoEye-1, as well as falling stock price, and will look to get in at a later time.

Chris

Netflix: Cover Alert on Short Position

Didn't lose anything on the trade, that's the whole point.

With the market the way it is, it's just not the right time to short, unless you are super willing to give the stock 10% or so run on the downside and be able to hang on with the vacilations.

I was not, and took my money off the table even.

Longer term, as I already expressed, I think we'll see more downside.

Chris

Netflix: Short Opportunity

Methos,

We'll see...if you notice today, NFLX was weak in a strong upward market...overall market gains were 3-4%, NFLX was flat in low volume...on the downside, it has been down on huge volume, plus the breakdown through key technical levels.

This is merely a trade, for a few days or weeks, but nonetheless, I like my risk/reward, and have a nice tight stop on the order to break even, as the stock has already fallen enough for me to do so.

We'll see how this plays out.

Chris

GeoEye: Back on Track?

Jim H,

I would like to point out a few errors in your own assessments of GEOY vs. DGI.

First off, if you look closely, you will notice that DGI's satellites that are currently on par with GeoEye are for Black and White imagery only.

Their newest one will make them on par with GEOY in terms of color vs. color resolution, but until that happens, GeoEye has the advantage.

It is true that IKONOS is on its last legs, but until it dies, it provides free revenue, as GeoEye can service all of their customers via GeoEye-1, so anything IKONOS delivers is bonus, and free cash flow.

As for the faulty equipment, it is what it is at this point, and now we have to look at the investment thesis from this point forward.

As I have stated multiple times on my blog, and Twitter feed, GeoEye is looking shaky from a technical perspective, with news to back up the weakness, and I am ready to sell the shares if it breaks below certain key areas.

Risk is one thing, but unwarranted risk is quite another. I plan on protecting my gains in GEOY and letting the satellite malfunction play itself out from the sidelines if it comes to that.

Chris

Netflix: Short Opportunity

Nettigent,

Thanks for the tickers...it looks like my Netflix short might be coming to an end, since I moved my stop to break even, and it's about to trigger.

I still believe lower days are ahead, but timing is critical....

Stay tuned to my Twitter feed for real time trades.

twitter.com/PeakStocks

Chris

Things Turning Around at Rick’s Cabaret: Time to Buy?

Hey Vegas,

It's a dog eat dog world out there, and Rick's just stepped up their game to compete with the others doing the same.

As long as the bottom line stays fresh, meaning the company keeps throwing off gobs of free cash flow, I could care less how they manufacture their revenues.

You can't lie about your cash flow, that's the bottom line...advertise too much, and spend too much on it and you'll get crushed in your quarterly results.

I'm keeping an eye on things, but it was time for Rick's to compete on a level playing field with the other "marketing" that was being done out there.

Chris

The Risk Is Back in GeoEye

Hey Collins,

Thanks for the feedback, I appreciate it.

I have since rethought some of my GeoEye investment thesis:

peakstocks.com/digital...

as the stock continues to sell off...I am very leary of holding on here and watching it go down to the mid teens again.

Stay tuned to my Twitter feed for real time updates if I do decide to sell, as GEOY is approaching its 50 day, and then 200 day SMA, and it's looking like we might have a technical breakdown here.

In light of the camera malfunction, this is not good news.

Stay tuned,
Chris

twitter.com/PeakStocks

Restaurant Stocks: More Downside to Come

Oops! Thanks for pointing that out!

chris

Rick's and Netflix: A Time to Buy, A Time to Short?

Missing_Link,

I agree 100%...I shorted NFLX today as well, and in fact since SA posts my stuff a day later, if you are interested in following my picks live, you can get real time updates by subscribing to my Twitter Feed here:

twitter.com/PeakStocks

Thanks for reading, and happy trading!

Chris