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David at Imperial Beach

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  • Mobileye: Love The Company, Hate The Valuation; Significant Downside Ahead [View article]
    Well, obviously it was the existing shareholders that took the bulk of the money. That feels like a red flag to me. The instigators took 80% of the $1B that was raised, and only left less than a fifth ($193.7M) to run the company with. Most of us wouldn't even consider buying into an established company where insiders were bailing out to the tune of $800M in the last quarter. Plus they left the company with a loss for the quarter. What's up with that?

    Like you say, it looks like an excellent company with an excellent product idea and they even have customers lined up at the door. But the price stinks to the point that it's questionable how much upside is left. And it looks to me like the management cares more about getting their venture money back instead of actually running the company. If I buy into it, I'd like to think that the founders still have plenty of skin in the game and are interested in more than just moving on to the next great venture on the horizon. I'd also like to think that they have more in mind for their visual recognition algorithms than just an automotive application. I'd like to think that I'm buying more than just a one product company. I want a pony, not just a pony ride.
    Aug 21 02:29 AM | 1 Like Like |Link to Comment
  • Mobileye Shares Rally After Obama Administration Announces New ADAS Initiatives [View article]
    Adoption rate probably depends on how enthusiastic insurance companies are about this technology. If they're willing to give a discount on liability insurance for cars equipped with an aftermarket ADAS warning system the adoption rate will be much quicker than otherwise.
    Aug 20 04:32 PM | Likes Like |Link to Comment
  • Silver Prices Will Remain Rangebound [View article]
    It's not really any mystery why silver prices have remained range bound. Industrial activity hasn't really picked up nearly as much as the Fed would like everybody to believe. Last year there was record physical demand for such discretionary categories as jewelry and coins as the prices fell. This year, that demand has fallen off. Silver also doesn't have any central banks buying silver, like they do gold. Prices fell because short term traders/investors decided to sell and move their money into stocks, which were skyrocketing at the time. In order to get those investors back, stocks are going to have to fall, and that will most likely happen when interest rates rise. (I know, higher interest rates are supposed to be bad for metals, but once the rise has been priced in and all the investors have left, then the metals can't go any lower. It's yet another case where the market moves on the rumor, and corrects on the fact.)
    Aug 20 03:04 PM | 1 Like Like |Link to Comment
  • Silver Prices Will Remain Rangebound [View article]
    The headline CPI does include consumer level energy prices (gasoline, heating oil, and natural gas). Energy and food is excluded from the "core CPI" number. The Fed actually uses the PCE, not the CPI. That index is even less sensitive to the more volatile components of inflation. No measure of inflation includes non-consumer level prices such as processing and wages.
    Aug 20 02:36 PM | Likes Like |Link to Comment
  • Disney Might Go To $100 As Quickly As You Can Blink Your Eyelids [View article]
    Any news on the Amazon boycott of Disney products?
    Aug 20 02:21 PM | Likes Like |Link to Comment
  • Markel Corp. Willing To Go Places Berkshire Hathaway Is Not? [View article]
    The company doesn't appear to be going too far out on a limb with Google. The main thing though, is that Google doesn't pay a dividend. The Buffett strategy at Berkshire was/is to buy companies with dividends in preference to bonds for the income that an insurance company needs to pay out on future claims. If they had bought Apple, they would have gotten a dividend, with a yield of 2.10%. Holding BRK.A or BRK.B has the same drawback, no dividends.

    I notice that Google is not the only high tech company they have bought. They also hold (NASDAQ:INTC) (NYSE:ORCL) and (NASDAQ:CSCO).
    Aug 20 02:10 PM | 1 Like Like |Link to Comment
  • Tesla Announces 'Infinite Warranty'... Pros And Cons [View article]
    I'm actually in and out of TSLA more based upon how I think the market will support such a high flyer. If the Nasdaq is doing less well than the Dow, that's not a good sign and I usually pull out until the market starts looking more normal.
    Aug 20 01:33 PM | 1 Like Like |Link to Comment
  • Tesla Announces 'Infinite Warranty'... Pros And Cons [View article]
    We have no numbers to judge on just yet. I'm not a Musk mind-reader (wish I were) but I'm guessing that the current reserve is looking a bit thin by now. They have been pretty aggressive with warranty work. I also know Musk likes to be proactive in addressing any media issues.
    Aug 20 01:30 PM | 4 Likes Like |Link to Comment
  • Warren Buffett Hates Bonds, Loves Cash [View article]
    It doesn't "have to" any more than a coin that's landed on its head 10 times in a row has to land on its tail on the 11th toss. What we can say with certainty is that no bull market ever lasts forever, and that the Fed is changing the rules of the game, so it's reasonable to bet that a market crash is imminent, or at least more likely. But the Fed could always change its mind tomorrow and send the market flying yet higher.
    Aug 20 01:09 PM | 6 Likes Like |Link to Comment
  • Warren Buffett Hates Bonds, Loves Cash [View article]
    Calling Buffett senile is going a bit too far. He still does what he does very well. It's just that his bargain hunting for value companies and harvesting dividend pennies is guaranteed to underperform in growth-oriented stock markets, and he also doesn't hedge sufficiently against inflation by holding a reasonable gold reserve. And his methods are less effective with the large size of the portfolio he is now managing because he can no longer concentrate on small cap stocks where the most growth is. If we ever get back to high interest rates he would also underperform because he should be buying bonds when interest rates are high.
    Aug 20 01:01 PM | 1 Like Like |Link to Comment
  • Warren Buffett Hates Bonds, Loves Cash [View article]
    "If we could all go back 20 years or more, we'd go back and cash in our portfolios and invest it all in Berkshire Hathaway."

    I too, am a non-communicant at the Church of Warren. (NASDAQ:QQQ) has beaten (NYSE:BRK.B) since 2002. (NYSEARCA:GLD) has beaten it since its inception in 2004. Since the crash of 2009, Berkshire Hathaway is not demonstrably better than (NYSEARCA:SPY), and sometimes SPY wins. (Unfortunately QQQ wasn't available until 2002 and GLD wasn't available until 2004). In 1994 I hope I would have been a good enough investor to put my money in (NASDAQ:MSFT), not Berkshire Hathaway. Even if I had held Microsoft to this day, I would still have beaten Berkshire Hathaway by a mile.
    Aug 20 12:45 PM | 1 Like Like |Link to Comment
  • Solar + Storage Is Close To An Inflection Point [View article]
    That isn't too big a flaw. Only lithium ion technology is far enough along to be building a gigafactory for. Investors should realize that even the gigafactory will provide only a token amount of storage capacity compared to the vast amount that would be required to, say, balance the German grid. It will be enough to set a few houses and factories free from the grid, but it won't have near enough weight to provide adequate balance to the grid itself. The real promise comes when Tesla decides to branch out from automobiles and start building gigafactories specifically for stationary storage.

    In the meantime, look to non-battery storage solutions too. Compressed air and water pumping schemes have the most promise, but they require specific landscape features.
    Aug 20 11:56 AM | 1 Like Like |Link to Comment
  • Solar + Storage Is Close To An Inflection Point [View article]
    (NASDAQ:TSLA) is executing significantly better than (NASDAQ:SCTY). Solarcity is important in shifting the energy world away from a utility-centric strategy to a more distributed strategy. That said, I don't think it's a good enough investment that most investors should be piling into it. The residual value is very questionable. They are counting on pretty much all lease customers renewing at the end of the lease, but they are leaving most of them with very little, if any, financial incentive to do so. The salesmen also seem to be of the fast-talking variety, and the installation talent is sometimes not up to the job, if yelp feedback is to be believed.

    Tesla is executing much better. Customers report almost universal satisfaction with the Model S and any service they receive. This bodes well. But all depends on the timely construction of the gigafactory and the cost savings that have been projected. My feeling is that they will successfully execute, but a significant number of investors are betting against the company.
    Aug 20 11:43 AM | 2 Likes Like |Link to Comment
  • Solar + Storage Is Close To An Inflection Point [View article]
    [Batteries can provide an individual house, say in San Diego, with night time power, but the real problem even there is a very large difference between summer and winter sun:

    Even there you only get ~37% as much sun in the depths of winter as in the summer, although that is mitigated by winter demand being lower.]

    Here in San Diego there's no problem with solar. Most likely you will size your system for the summertime peak since air conditioning load is larger than heat load in winter. The table giving average temperatures is a bit misleading. Converting from Celsius, it lists 48.686 as the lowest winter reading and 82.274 as the highest summer reading. The winter reading is about right, but the peak reading in the summer is considerably higher in inland areas than that and you should probably plan for 100 degree weather. Those of us who live within easy reach of the sea breezes from the Pacific can do without A/C though.
    Aug 20 11:28 AM | Likes Like |Link to Comment
  • Solar + Storage Is Close To An Inflection Point [View article]
    Far more important than inefficient hydrogen is wind power. Rarely is weather so perverse as to not provide either sunlight or wind. A grid that is balanced with plenty of distributed solar power combined with an equally large commitment to wind farms would tend to produce usable levels of power all the time and minimize the need for storage. Of course adding storage will help too, don't get me wrong. But for the next decade or two, storage is probably going to be the most expensive option of the three.
    Aug 20 11:03 AM | 2 Likes Like |Link to Comment