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Christopher Wallace

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  • The Coal Stock Bottom Has Passed [View article]
    With their revenues being linked so heavily to met coal prices, a brutal winter won't do them much good; what you want is an exconomic recovery in China.
    Sep 25 07:07 PM | Likes Like |Link to Comment
  • Why Natural Gas Has Not Lifted Coal Stocks [View article]

    Perhaps correlation between coal stocks and NG will become + after NG and coal both restore profitability to those companies that extract them. That would seem logical. But one still cannot ignore the significant negative correlation between CAPP and NG that has occurred since April.
    Sep 25 10:05 AM | 2 Likes Like |Link to Comment
  • Buy Signal: Pessimism Among Gold Miners Hits Extreme [View article]
    Full disclosure: I have sold my senior gold producers and now own only a few micro caps which I have partially hedged with inverse gold and silver etfs. I have not gone bearish on gold long term. However, the move off the bottom has now become substantial. Sentiment has turned decidedly bullish since Bernanke's QE4ever announcement. The trade looks crowded and interim toppy to me right now. I expect a pause in the action and will probably return long in a week or two, depending on how things play out. For the record, the bullish % index remains bullish at a level of 72.41, and has not turned down.
    Sep 24 11:06 PM | Likes Like |Link to Comment
  • Why Natural Gas Has Not Lifted Coal Stocks [View article]
    The whole point of this article was to disabuse investors of the notion of any direct linear relationship between NG prices and coal stocks. If NG goes to $10 and China goes into a recession, I would not want to be long JRCC. The best way to play rising NG prices is through UNG (not withstanding the contango issues). At some point the NG producers will catch up, but as many commenters here have noted, NG still sells well below cost for most plays. Coal stocks are influenced by so much more than NG prices that, as the last 5 months experience has shown, that they make a poor way of capturing any further gain in NG.
    Sep 24 10:39 PM | 2 Likes Like |Link to Comment
  • Mellanox: End Of Romley Upgrade Signals Steep Downside [View article]
    Isn't customer concentration an important issue for MLNX? How susceptible are they to losing a major customer to Intel, now that has its own Infinband product?
    Sep 24 08:32 PM | Likes Like |Link to Comment
  • Mellanox Bubble To Burst With Intel Foray Possibly Threatening Existence [View article]
    I think the author has put forward a compelling case to sell or short MLNX. However I agree with Dialectic's point above that you cannot hold the TAM constant if it is a growing market. But the rest of the article is on point and well presented.

    In terms of upcoming catalysts, earnings and/or guidance showing diminishing growth would certainly begin to unravel the stock price. But a potentially greater catalyst would be for Intel to woo over one of their two big customers that together account for 50% of revenue. Such an event would be devastating to the stock price. And it should not be considered an outlier event, but a probable one. Unless MLNX has a moat that somehow locks in those customers, one should expect Intel to make a serious run at gathering that business. For MLNX to lose that business or drop price significantly to save that business would create plenty of market drama. Impossible to predict when that will happen; easy to predict that it will happen.
    Sep 24 07:46 PM | Likes Like |Link to Comment
  • Why Natural Gas Has Not Lifted Coal Stocks [View article]
    No worries Alex, thank you. Intuitively, it has much more appeal than the 25% number I had read (and I also cannot place where). I am going to accept your and Mark's similar numbers of 5-6% for now and I will post a link if I find anything to substantiate a number.
    Sep 24 07:06 PM | Likes Like |Link to Comment
  • Why Natural Gas Has Not Lifted Coal Stocks [View article]
    Mark and Alex,

    Thank you both for your comments. Mark, while it was a while ago that I read that particular stat, what you say seems to make more sense than my earlier interpretation. And comes closer to Alex' 6bcf/day number. Alex, can you provide a link to where you found that info? TIA.
    Sep 24 05:21 PM | Likes Like |Link to Comment
  • Amazon's Imminent Liquidity Crunch And Share Price Collapse [View article]
    I think the author has presented a good fundamental analysis of AMZN and has handled some of the more caustic comments with style. With $2.6B of working capital and positive (though meager) free cash flow that covers capex, I don't really see the imminent liquidity issue. However, I do see the imminent valuation issue if growth expectations are not maintained in the Q3 earnings release and guidance. AMZN is wildly over-valued and looking for a reason to fall, IMHO. I think the author has capably outlined that potential reason in this article.
    Sep 24 04:30 PM | 3 Likes Like |Link to Comment
  • Why Natural Gas Has Not Lifted Coal Stocks [View article]

    I agree with you that both supply and demand need to be considered. I, and probably other readers here too, would be grateful to see any analysis as to how the supply factors contributed to the failure of the thesis.

    Patience is a relative concept. I think that 5 months is an adequate time frame in which to form a judgment. During that time frame gas rose 52% while CAPP coal fell 14%, a delta of 66%. 66% is not a relative concept, it absolutely says the thesis failed! As Dennis Gartman has said, there is nothing wrong with being wrong; there is something very wrong with staying wrong. When the evidence showed the thesis was not playing out as I expected, I changed my investment.

    Perhaps thermal coal will one day rise again. I hope so. I would like to see a credible thesis that would indicate that was about to happen. But it would have to be more than the simple passage of time.
    Sep 24 02:48 PM | 1 Like Like |Link to Comment
  • Why Natural Gas Has Not Lifted Coal Stocks [View article]
    Yes it is. To be more clear, 25% of dry gas production comes from wells labeled as drilling for oil or for nat gas liquids. I read that stat sometime this spring. Since then, the dry gas rig count has fallen by 100 or so rigs. And production has stayed close to flat. So that percentage today is probably even a bit higher, maybe 25-30%.
    Sep 24 02:10 PM | Likes Like |Link to Comment
  • A $400 Million Company Run By A CEO With Undisclosed Criminal Convictions [View article]
    A terrific expose into the inner workings of stock promotions. Unfortunately, these ideas are not actionable for most of us due to an inability to get stock to borrow and short. Btw, google Gordon Roots, their recently hired or acquired COO. An iteresting past of bankruptcy, tax liens and a myriad of unrelated jobs.
    Sep 24 11:30 AM | Likes Like |Link to Comment
  • Why Natural Gas Has Not Lifted Coal Stocks [View article]
    I have read that currently about 25% of NG production is associated gas; that is gas that is produced from rigs not specifically labeled as dry gas rigs.
    Sep 24 10:41 AM | 1 Like Like |Link to Comment
  • A Bullish Thesis For Dry Bulkers [View article]
    I think that QE4ever should be a boost for shipping stocks in general. China's stimulus program is pointed at infrastructure and that should include a fair amount of steel which in turn will require increased shipments of iron ore, met coal and other materials. or so my theory goes. While I am not uber-high conviction on this I have taken small punts on BALT and DSX. Why those two? I like thier modern fleets, I like BALT's focus on the spot mkt and I like DSX cap structure and very conservative/smart management.
    Sep 21 10:02 AM | Likes Like |Link to Comment
  • Natural Gas: Is The Injection Season Already In The Rear View Mirror? [View article]
    Yes, but Robry is forecasting for the next two weeks injections that are still 26% below the 5 yr avg for those weeks. He also forecasts storage peaking at 3789 bcf, which is well below capacity and in fact only 100 bcf above the 5 year average. In reviewing his injection forecasts for this year since June, he has had an amazing track record for accuracy.
    Sep 18 07:56 PM | Likes Like |Link to Comment