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Christopher Wallace

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  • 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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: 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, 2013. 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. 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, 2012. 12:17 AM | 5 Likes Like |Link to Comment
  • Stockpile Drawdown Signals Strong Coal Rebound [View article]

    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, 2012. 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, 2012. 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.
    Jun 27, 2012. 01:08 PM | 5 Likes Like |Link to Comment
  • Coal Stocks Killed, But Survivors Not Hard To Find [View article]
    As an adjunct to my previous comment on % of float short, to give that 17.93% number some context, I quickly ran the numbers on 3 other industries that are out of favor to see what their percent of float was short. I selected just 5 of the larger, representative names from each. Financial stocks averaged 1.9% short; nat gas stocks averaged 8.9% short; and shipping 4.4% short. I think this helps to highlight just how out of favor coal stocks presently are.
    Jun 24, 2012. 12:28 PM | 5 Likes Like |Link to Comment
  • Coal Stocks Killed, But Survivors Not Hard To Find [View article]
    Peter, thank you for publishing this lucid overview of the coal sector, I have found it very helpful. When you see the 8 pure plays down an average of 78% from their highs, that is something to make you sit up and take notice. I can get my head around a 78% drop in a new technology sector, such as solar, or internet stocks back in the day, as these new businesses try to find their way and get established. But coal, which is a fundamental basic energy source, should not have the entire sector trade like the industry is headed to bankruptcy. There is not much I can say with certainty in the investment world, but I think it safe to say the entire US coal industry is not going BK. And therein the opportunity lies. The market for coal stocks is not behaving rationally. Of course now is the time to insert Keynes' famous quote that the market can remain irrational longer than we can remain solvent. So with that in mind, I am looking for more signs of a sustained upturn before committing more money to this sector (I have very small positions in WLT, ANR, JRCC and ACI). I believe that if coal prices do begin to rally there will be plenty of remaining upside for cautious late-comers. I would like to increase my weighting in the sector upon price confirmation.

    BTW, an additional data point to consider, I just ran the short interest on the 8 stocks covered in the article. As at May 31 (source: Yahoo Finance) the group had an average 17.93% of their float short (range: 3.1% - 49.7%). Given the further price declines so far in June I would guess that % has probably increased a bit. Such a large amount of short selling often occurs near market bottoms.
    Jun 24, 2012. 11:50 AM | 5 Likes Like |Link to Comment
  • The Impact Of A Looming Natural Gas Supply Problem [View article]
    The problem with book value calculations is the same for the coal industry as it is for the natural gas industry: severe declines in the underlying commodity price have cast doubt upon historically recorded asset values. This is a value trap that I have seen numerous value investors fall into over the years. Perhaps the best recent example is in the drybulk shipping industry. Many names are trading at a fraction of their stated book value. This is because they continue to carry their shipping fleet at historical cost. The current market for ships is far below that. Investors are looking at what recent comparable ship sales are yielding and applying that to the fleet and coming up with an adjusted book value. Market prices are much closer to this adjusted book value.

    I believe the same may be true for both natural gas and coal producers. Shale assets may very well get written down to their NPV based upon current low gas prices. Similarly, coal mines could/should also get written down. P/BV is just one indicator of value, but those assets are ultimately worth the cash flow they generate and so that also needs to be considered. I believe that P/BV is misleading when looked at through an historical lens given today's low coal and gas prices. Coal, natural gas and shippers all "appear" to offer extreme value relative to their book. But they all did at the beginning of the year as well, and look at what has happened since. I guess what I am saying is that how low P/BV will go is a function of how low their product or service they sell can go, not a function of historic values.
    Jun 11, 2012. 02:39 PM | 5 Likes Like |Link to Comment
  • BlackBerry Recovery Not Assured But Definitely Possible [View article]
    Michael, a good review of their recent device offering; the tables you have compiled are most helpful.

    As to their "long term solvency" I would offer that there is no worry on that front in next year. With $2.7 billion in cash and investments and with the stock price now above the conversion price on their debentures, it would take a substantial and enduring negative turn in ops to threaten their solvency.

    While the clear intent of your article was to focus on the Passport, I would also add that there is a decent chance that the new strategic focus on software and services could also be an earnings driver. I have been long since the beginning of August in anticipation of another good report on the 26th. Your article provides further support for my thesis.
    Sep 3, 2014. 11:41 AM | 4 Likes Like |Link to Comment
  • Kandi Technologies' 10-Q Reveals Phantom Sales Growth And Other Serious Concerns [View article]
    @Author: your assertion seems to be that the reported increase in revenues is bogus because they were effectively selling to themselves (selling to subsidiaries). But the notes to their financial statements state they follow the common practice of eliminating inter-company transactions upon consolidation. So I would think, given that note disclosure, given that accounting convention and given that they reported these numbers to NASDAQ (unaudited, however) that one could rely on that increase in revenue. I have long felt this is a highly promoted stock, and have written critically in the past about its bubble-like characteristics, but in the interest of fairness, whatever other criticisms I may have of their stock, I would not include inaccurate reporting of revenue among them. I note that in the quarter revenue increased $22 million while inventories increased only $4 million. Is my understanding in error?
    Jul 23, 2014. 11:44 PM | 4 Likes Like |Link to Comment
  • OncoGenex: Phase III Trial In First Line Metastatic Prostate Cancer Fails, Now What? [View article]
    While yesterday's results were no doubt disappointing, one has to accept that risk with biotech. I was caught offside by how early they announced; I was thinking H2. But what remains is a company with one drug in phase III and one drug in phase II and $39 mil of cash. That gives a less than $20 mil value for the two drugs. That is a very cheap valuation for two drugs at that stage. Sentiment will rule the day in the short term, and that sentiment will continue to be negative, for several weeks I would think. A trade into the low 3s could certainly prove possible and a good entry point. I would expect the announcement of a financing sooner rather than later, as it is now inevitable and best to get these things done as quickly as possible to remove uncertainty. I am looking for an opportunity to re-enter on the long side.
    Apr 29, 2014. 02:59 PM | 4 Likes Like |Link to Comment