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Christopher Wallace

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  • The Optimal Portfolio: Short Gold Miners, Long Gold, Long Equities [View article]
    @Author: Gold miners have also suffered with all miners in facing rapidly increasing costs. As a result, GDX is down 50% in 2013 alone, and down almost 70% from its peak. But those mining costs appear to have stabilized and many miners actually have made progress in reducing their costs. Congrats on your excellent call on shorting the miners and spectacular returns. But I would caution you that your analysis is a bit like driving with your eyes in the rear view mirror. The cost factors which have caused the miners miserable under performance (and your over performance) may just not be as prevalent going forward. And the gold miners valuation today is not what it was a year ago or three years ago. It is a much different dynamic today.

    They say the definition of insanity is doing the same things over again and expecting a different result. Perhaps a definition of foolishness would be to expect the same result from doing things differently.
    Jan 9 04:02 PM | 6 Likes Like |Link to Comment
  • Uranium Miners To Benefit From Short- And Long-Term Catalysts [View article]
    That is only true if you believe the US govt will allow their above-ground inventories to reduce. They are strategic in nature, just like the strategic oil reserve. I cannot see that happening. Energy independence, of all forms, is a US goal.
    Dec 26 07:44 PM | 6 Likes Like |Link to Comment
  • BlackBerry Is Far From Dead. Right Sized, It Will Have A Profitable Future [View article]
    Michael, a good cogent analysis of BBRY's potential. The simplified earnings model was particularly helpful.

    As to the whole American thing, I don't think that Blackberry-bashing is a uniquely American pastime, it occurs here in Canada and I expect across the world as well. BBRY has fallen from the top of the heap and is now attempting to resurrect itself. When high-fliers swoon, they get trashed by the press, regardless of where they may hail from. BBRY, in attempting to come back, will either silence its critics or it won't. Take NFLX: it was pounded by the press around the world after its fall, but much less was said by those same critics as it clawed its way back. BBRY can expect a similar treatment from the press: punishment while it is down, relative silence about any recovery, if it comes. I mean that about the press globally, not just the American press.
    Sep 20 10:15 AM | 6 Likes Like |Link to Comment
  • 3 Indicators That Signaled The 2007 Top: They're Back [View article]
    Dividend: look a little closer at the article. The point being made is not that stocks and copper are long term correlates, but that divergence in their action signals a pending trend change. Again, not infallible, but right often enough to have earned its moniker. We'll see if it is right again this time.
    Sep 10 03:29 PM | 6 Likes Like |Link to Comment
  • Natural Gas: The Buy Of The Decade [View article]
    A well reasoned article. But the long GAZ is a real mystery to me. The premium has shrank from 100% to 43% and will eventually hit 0%. ETFs should, and almost always do, trade within a few percent of their NAV. Look at GAZ' history, it is very illiquid and that is what allowed the enormous premium to build. Since TVIX (a very similar premium to NAV and subsequent crash) the premium on GAZ has been coming in. And unless you can think of any reason contrary, it will continue to come in. UNG fights a hefty contango premium which limits it's use to short term or swing trades. But GAZ is just foolish for any duration. You have the right thesis in going long gas but I am afraid you may miss the whole party if you stay in GAZ.
    Jun 15 05:09 PM | 6 Likes Like |Link to Comment
  • BlackBerry's Foxconn Partnership - A Match Made In Heaven Or Hell? [View article]
    I think that it is very difficult to say that the new Foxconn JV phones will be a success. We just don't know enough about them. What is encouraging, to me at least, is that Foxconn manages the inventory, reducing financial strain on BBRY. It should also become a lower cost proposition than BBRY making them, given BBRY's results with handsets. Going after lower-end users in Indonesia and India seems a reasonable strategy, one that does not put them toe to toe against AAPL, nor cannibalize existing BB sales. I think it is probably the best strategy for them to stay in the handset business, I just don't know if it will work. Time will tell. What seems to be driving the stock right now are the shorts calling in their profits. There may not be much reason for BBRY to go up from here, but more importantly, there no longer remain the compelling reasons for it to go down from here. And with that new landscape, I think the shorts will leave this name for other more obvious targets, and the short covering rally should continue for a bit longer.
    Jan 2 03:56 PM | 5 Likes Like |Link to Comment
  • An Apple Bear Makes The Case For Apple At $1,000 By 2017 [View article]
    "The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function." - F. Scott Fitzgerald

    Well done, Michael.
    Dec 24 10:08 AM | 5 Likes Like |Link to Comment
  • It May Be Time To Short The Twitter Bubble [View article]
    If selling ads to generate revenue is the ultimate end-game, then engagement has to be the right metric for appraising this stock. The 144 character limitation says that engagement is likely to be similarly limited. Just because a site is useful or is used, does not make it necessarily valuable. That distinction seems to be lost on the mania participants.
    Dec 16 01:45 PM | 5 Likes Like |Link to Comment
  • Memorandum To The BlackBerry Board Of Directors: Stop The Charade And Manage The Company [View article]
    Further consider the gross unfairness of cancelling the conference call: the great unwashed and public shareholders are treated to contradictory and confusing financials and now without the benefit of a conference call to get some much-needed explanations. While Fairfax and their consortium, and any other possible bidders, have access to a large and robust data room, management presentations and interviews. And then the time will come to vote on if the poor, uninformed shareholders should sell out to the bidder who has a massive information advantage.

    The best way to play this game is to stay mile away from it.
    Sep 25 11:58 PM | 5 Likes Like |Link to Comment
  • Memorandum To The BlackBerry Board Of Directors: Stop The Charade And Manage The Company [View article]
    After a series of blunders, the length and seriousness of which that has to make some form of corporate history, the BBRY Board and management have actually managed to out-do themselves and top all previous management blunders: they are cancelling the Q2 earnings conference call! This board has utterly sh*t the bed over the past month, and now they will not man-up enough to face those shareholders who pay them millions in salary, bonus and options (and new corporate jets). If accusations of lack of transparency needed bolstering, this move has pushed them into complete opacity.

    Thorstein Heins is the man in charge and will wear these blunders for the rest of his life. He is the Bill Buckner of the corporate world. (Sorry Bill, I don't mean to insult you...)
    Sep 25 11:44 PM | 5 Likes Like |Link to Comment
  • Galena Biopharma Now Offers Considerable Long-Term Potential [View article]
    It is pretty pathetic when someone trys to pump a stock as has occurred here on SeekingAlpha with respect to Galena: http://bit.ly/X6SuhS It is also pathetic when someone does what he can to dump on the stock. I think readers are served only when the information is presented in an objective format. Objectivity comes from looking at the positives and the negatives. There is now so much bias, both positive and negative, that I don't feel I am getting the real goods from either side. Too bad.
    Jan 29 07:28 PM | 5 Likes Like |Link to Comment
  • What If They Come After Fracking? [View article]
    @Red Raider: your comment is very far from the truth. Hydraulic frac'ing can use up to 750 different additives, many of which are extremely toxic.http://1.usa.gov/SVkfxU Frac'ing fluid is by no means benign. The question is not whether frac'ing fluid is toxic, it most certainly is; the question is can it be used in such a way as to be contained and not affect the aquifers and local drinking water. BTW, not all frac'ing fluid has to be toxic. Offshore oil rigs use a frac'ing fluid that is much "greener" than currently being used in shale formations.

    @Paulo: "This is the first time that water contamination is officially linked with hydraulic fracturing." Absolutely not so. The most sensational, among others, is the case in Dimmock PA which resulted in COG having to provide trucked in clean water to local residents, pay fines, etc. The movie Gaslands is a good exposee on the subject. Hydraulic fracrturing has been accused of polluting ground water for years. There are numerous previous examples.
    Oct 12 12:17 AM | 5 Likes Like |Link to Comment
  • Stockpile Drawdown Signals Strong Coal Rebound [View article]
    Mark,

    Just for clarity, 1) the nat gas bottom was $1.902, not $1.80; 2) I have been a vocal proponent of nat gas for a couple of months and have not missed its rally (I wrote 3 articles on SA expressing my views). I would be delighted if you would go to my profile and check them out.

    As to looking at the move of anything in exponential terms, well, if that is what floats your boat, fly at it. I am just here to make money.

    And actually I did not say the fundamentals had not changed yet, I merely applauded papayamon for his astute observation about a single data point.

    But sending this reply reminds me of my tendency to reason with irrational people and how futile it is. You have your thesis about coal stocks. I truly hope that it works out for you. At this moment in time I do not see it exactly the same as you do. I don't think that you are wrong, I am not mad at you, I don't necessarily think you are making a colossal blunder. I just choose to do something else with my money.

    Good luck and good trading.
    Aug 24 12:13 AM | 5 Likes Like |Link to Comment
  • Natural Gas Production Could Be Curtailed By Drought [View article]
    I think that articles on SA, to be really valuable to the readers, need to be somewhat early on the subject. That is to say, how much value do SA readers get from an article published a month from now that simply looks backwards at what has happened? The effects on fracking from the drought are just starting to be noticed. Drilling continues, water is being trucked in to the most stricken areas. Some fracks are being curtailed in the most affected areas, and others are going ahead. But that does not mean the whole issue is benign. It just means that it is a developing issue, in its relatively early days. Alerting readers to it at this time creates the most value, I think. It is also a situation that could escalate very quickly. We are now in what should be the hottest month of the year. If the drought continues, or worsens, then production curtailments could escalate substantially. It is a situation worthy of being watched.
    Aug 2 10:31 AM | 5 Likes Like |Link to Comment
  • Why I Am Sticking With Patriot Coal [View article]
    Mark, just a couple of points. Banks do not look favorably upon working capital deficits. One of the most common banking covenants is a positive working capital ratio. Contrary to your view, I think their working capital deficit is a major risk that if not resolved will force a bankruptcy. What could resolve that deficit? Some form of long term financing (which could include assets sales as a form of) or a return to operating profits. I do not know what PCX' chance of making either event happen is, but it seems pretty clear that any continued drop in the price of coal would minimize their chances. PCX is a very high beta bet on the rebound of coal prices. I wish you and the other dozen PCX longs luck with this. This link may also be of some assistance. http://bit.ly/NNxWdN
    Jun 27 01:08 PM | 5 Likes Like |Link to Comment
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