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David at Imperial Beach  

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  • Why A Stock Market Crash Is Imminent [View article]
    How about acknowledge that the Crimean people really do want to rejoin Russia and stay out of the way?
    Mar 17, 2014. 09:42 AM | 59 Likes Like |Link to Comment
  • Major Stock Market Selloff Looms As The Fed's QE3 Ends [View article]
    Simple. Your "almost all indicators" are basically lying. You will find contrary indicators if you look hard enough. With the high dollar, we will be lucky to maintain a positive GDP this quarter.

    You really can't have expansion without increasing your use of commodities. All commodities are currently tanking, and many are trading below their cost to produce. If you aren't putting people to work as fast as your population is growing, and you aren't using any more commodities, and in fact are using less and have excess capacity, then you are falling behind. You aren't growing at all. Any statistics pointing to expansion in such a case are entirely unreliable.
    Sep 27, 2014. 02:09 PM | 48 Likes Like |Link to Comment
  • Dividends Don't Matter In Retirement Either [View article]
    It's stupid to argue that dividends don't matter. If you're investing for income, of course they matter. And if you're not investing for income, they're a nuisance. Taxes matter, and transaction costs matter. Your taxman may treat dividends differently from capital gains, and may distinguish between short term gains and long term gains. Most investors don't have to be argued with to accept that you should pay attention to the differences as well. Your broker would like you to believe that dividends don't matter, and you can sell shares any time you need cash for monthly bills, but the truth of the matter is that he wants to collect his toll every time you use his road. Better to have some dividends coming in on a regular basis that avoids that toll road.
    Jul 17, 2014. 01:00 PM | 38 Likes Like |Link to Comment
  • Short Sellers And Seeking Alpha [View article]
    There isn't any problem with short sellers stating their (negative) views on Seeking Alpha. But there is a problem with Seeking Alpha publishing articles that don't stand up to critical scrutiny and make egregious errors in fact, logic, or math. This becomes even more of a problem when biased authors are allowed to essentially republish their articles over and over with only minor changes. Admittedly it is easier to get upset with such biased articles when they go against your long investment.

    I do think that authors that contribute regularly on the same stocks should be held to a higher standard of fairness. Errors repeated tend to get accepted as fact. Authors should not be submitting articles on the same theme over and over again without substantial new information.
    Aug 1, 2014. 03:02 PM | 36 Likes Like |Link to Comment
  • What Did Tesla Tell Its Analysts And Largest Shareholders? [View article]
    The linked Bloomberg video makes clear that no new disclosure was ever intended. What Musk said should have been no surprise to anybody since it was entirely in line with everything the company has said on more formal occasions. The company cannot control the fact that analysts have their own ideas and prefer to publish those ideas rather than what the company has actually said.

    What has the company consistently said that is equally consistently being ignored? Tesla says it master plan is to minimize capital requirements by reinvesting the earnings from the Roadster to grow the company and develop and bring to market the Model S and X. (They did just that.) In turn, the earnings from the Model S and X will be reinvested in the Model 3. Along the way, of course, the global Tesla organization must grow significantly to support the more mass market vehicles. Thus, it should come as no surprise if there are no reportable returns to investors (GAAP or otherwise) until after the Model 3 is established in the market. Elon Musk's remarks and clarifications are entirely consistent with that context. (It should be noted that the gigafactory is an explicit exception to this strategy in that it required an additional debt issuance in order to be in production in time for the Model 3.)

    The author makes a mountain out of a molehill. If he (or any investor) has genuine questions he or she should avail themselves of Tesla Investor Relations and find out the answers to their questions instead of writing accusatory articles in Seeking Alpha.
    Jan 20, 2015. 12:26 PM | 34 Likes Like |Link to Comment
  • The Implosion Is Near: Signs Of The Bubble's Last Days [View article]
    His bio:

    David Stockman is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.

    At the podium, Stockman’s expertise and experience cannot be matched, and he has a reputation for zesty financial straight talk. Defying right- and left-wing boxes, his latest book catalogues both the corrupters and defenders of sound money, fiscal rectitude, and free markets. Stockman discusses the forces that have left the public sector teetering on the edge of political dysfunction and fiscal collapse and have caused America’s financial system to morph into an unstable, bubble-prone gambling arena that undermines capitalist prosperity and showers speculators with vast windfall gains.

    Stockman’s career in Washington began in 1970, when he served as a special assistant to U.S. Representative, John Anderson of Illinois. From 1972 to 1975, he was executive director of the U.S. House of Representatives Republican Conference. Stockman was elected as a Michigan Congressman in 1976 and held the position until his resignation in January 1981.

    He then became Director of the Office of Management and Budget under President Ronald Reagan, serving from 1981 until August 1985. Stockman was the youngest cabinet member in the 20th century. Although only in his early 30s, Stockman became well known to the public during this time concerning the role of the federal government in American society.

    After resigning from his position as Director of the OMB, Stockman wrote a best-selling book, The Triumph of Politics: Why the Reagan Revolution Failed (1986). The book was Stockman’s frontline report of the miscalculations, manipulations, and political intrigues that led to the failure of the Reagan Revolution. A major publishing event and New York Times bestseller in its day, The Triumph of Politics is still startlingly relevant to the conduct of Washington politics today.

    After leaving government, Stockman joined Wall Street investment bank Salomon Bros. He later became one of the original partners at New York-based private equity firm, The Blackstone Group. Stockman left Blackstone in 1999 to start his own private equity fund based in Greenwich, Connecticut.

    In his newest New York Times best-seller, The Great Deformation: The Corruption of Capitalism in America (2013), Stockman lays out how the U.S. has devolved from a free market economy into one fatally deformed by Washington’s endless fiscal largesse, K-street lobbies and Fed sponsored bailouts and printing press money.

    Stockman was born in Ft. Hood, Texas. He received his B.A. from Michigan State University and pursued graduate studies at Harvard Divinity School.
    Jul 19, 2014. 07:59 PM | 34 Likes Like |Link to Comment
  • How Much Does Seeking Alpha Pay Its Contributors? [View article]
    In general, I prefer wonky articles where authors have real numbers to back up what they are saying. Too many articles, in my opinion, are short on numbers and long on hand-waving. I also don't think it's very helpful to see repeated articles on the same exact thesis week after week or month after month. How many articles do we need saying that Ford is going to beat the pants off of the competition suddenly? How many Paul Santos articles conflating supply figures with demand figures and then claiming a demand problem with Tesla do we need?
    Apr 10, 2014. 10:50 AM | 33 Likes Like |Link to Comment
  • Gigafactory talk gets dreamy [View news story]
    I'm getting tired of the spurious accusation that Musk's companies exist only to suck up government largess. Government funding is not expected to be involved in the gigafactory. Tesla has paid back their government loan, with interest. SpaceX saves the US government huge sums of money. If you are complaining about a few EV subsidies here and there, then why aren't you even more loudly complaining about the massive income tax breaks given to all levels of the oil and gas industry?
    May 15, 2014. 09:55 AM | 31 Likes Like |Link to Comment
  • Maybe I'm Wrong - Justifying $2,000+ Gold [View article]
    Not so great.

    The author does not prove either a correlation or a cause and effect relationship between the price of gold and any of the alternative inflation measures that he explores. He simply assumes that there must be one because gold has "no other unique intrinsic utility" than its use as a store of value.

    But in fact gold does have intrinsic utility other than a store of value. Beauty, malleability, non-tarnishing, electrically conductive, non-reactive. All these are intrinsic properties of gold of great utility. In the current market, these very values are outweighing gold's utility as a store of value as investors have temporarily abandoned it.

    But non-investors have not abandoned it. Jewelry fabrication used 570.7 tonnes in 2014Q1. Electronics industry used 67.7 tonnes. Other industrial uses amounted to 22.7 tonnes. Dentistry accounted for 8.6 tonnes. Official coins minted for beauty as well as value used 52.1 tonnes. Commemorative medals used another 14.0 tonnes. Altogether, that's 735.8 tonnes, or 68.48% of total demand tonnage of 1074.4 in 2014Q1.

    Of course, there continued to be some use of gold as a store of value. 216.4 tonnes were minted into bars, and central banks bought 122.4 tonnes. ETFs and the like sold 0.2 tonnes. Altogether, 338.6 tonnes, or 31.51% of the total demand. It should be noted that total supply from miners and recyclers was only 1048 tonnes, or 26.4 tonnes shortfall that had to be supplied by speculators.

    My point is that gold's lack of utility has been greatly exaggerated, and this article perpetuates and accentuates the error by valuing it only based on its utility as a store of value, ignoring all other properties of this valuable metal.

    The price of gold has never had a high correlation to inflation, and the author ought to know that. Despite its current (unreasonable) lack of popularity among investors, there is nothing that says gold cannot rise even in the face of falling inflation expectations. In fact, if shortfalls continue that may well be the case. However, with inflation at such historically low levels, regression toward the mean is the more wise assumption for the next decade.
    Jun 2, 2014. 07:27 PM | 29 Likes Like |Link to Comment
  • Get Out Of Bitcoin Now [View article]
    Why would you buy into a Ponzi scheme after there's already been a run on the bank? I've been saying it's a Ponzi scheme and now I've been proven right. You won if you got out early enough. You end up holding worthless bits if you didn't.
    Feb 25, 2014. 11:09 AM | 29 Likes Like |Link to Comment
  • Tesla, Fairest Welfare Queen Of All, Cracks The Whip [View article]
    Not fair points at all. A more biased hit piece I have never read, even from Paulo Santos. The linked article entitled "The Wall Street Hype Machine Suddenly Breaks Down" isn't about Tesla and doesn't even mention it.
    Aug 13, 2014. 03:11 PM | 28 Likes Like |Link to Comment
  • Is Tesla Model S Really A Quality Green Car? [View article]
    Author is clearly heavily biased against Tesla and has written a hit piece designed to delight all shorts. However, very few of the so called facts cited stand up to critical scrutiny.

    Model S is a low maintenance car. Most owners have reported very few problems with their Model S, and what few problems they have are quickly and efficiently addressed by Tesla service staff. Edmunds car is clearly an outlier and not the experience of most owners. Tire wear is not a problem for most owners. Warranty costs are not in fact, 9-10 times that of Ford (F) and GM (GM), especially after recent revelations at GM. The Model S's annual maintenance package is optional. If you do not take it, the warranty is NOT voided.

    A small list of issues, most of which are reported by just a single owner do not indicate an unreliable and unsafe car. On the contrary, the low numbers indicate just the opposite. It should be noted that the one issue that had more than 2 reports was in fact addressed by Tesla with a service action not involving a vehicle recall.

    Used Model Ss have sold for more than new ones. But they come up so rarely that no price can be reliably established.

    Nobody advocating Model S as a green car "forgets" that "major portion of electricity today comes from burning fossil fuel such as natural gas and coal." The company has very ably addressed the issue. Model S emits less CO2 than a comparable ICE vehicle even if coal is used to generate 100% of the electricity.

    Chinese graphite pollution is only linked to Tesla in the fact that Tesla batteries contain graphite. Not all graphite is mined. It can also be created artificially. Tesla has made clear that it expect all its suppliers to adhere to proper state-of-the-art environmental practices for their industry. In particular, he has stated that he wants to source graphite from US sources, not Chinese.

    The author has not validated the argument that the Model S emits more CO2 than a Jeep Grand Cherokee. Of course not! Why validate when you can so easily spread slander and innuendo and libel without validation?

    Recycling of battery packs "poses yet another environmental challenge"? Only in the author's mind! Contrary to his assertion and his source, lithium ion batteries are already being recycled and the gigafactory will specifically have this capability too. It should be noted that Tesla batteries do, in fact, contain cobalt, which invalidates the whole argument that there is nothing of value to recycle.

    Fuel cells have several strikes against them. First, there is no hydrogen occurring naturally in concentrations to be mined or harvested. It must be generated at great cost, either from water and electricity, or from natural gas. Second, in order to fit into a reasonably sized vehicle fuel tank it must be greatly compressed, again at high cost. Third, hydrogen is dangerously flammable, and not easily contained because of its small molecule size. Fourth, fuel cells require either platinum or palladium and silver, costly precious metals in short supply.

    For all these reasons, the author's bias is extremely evident.
    Jun 20, 2014. 07:08 PM | 27 Likes Like |Link to Comment
  • Here's Why Gold Prices Have Been Declining [View article]
    It's not all so cut-and-dried as the author pretends. For instance, the dollar didn't stop at 80 in 2007. The DXY fell all the way to 79 as recently as this May. Today, of course, it stands at 88.10 and it was this recent rise in the space of only a few months that has pinned gold to the mat. That "rise" in the dollar isn't really a rise at all. It's really weakness in the euro and the yen, (and a few less important currencies) against which the dollar is measured in the FX markets.

    GLD, the first bullion ETF, had its inception in Oct 2004, and the bull market in gold was already underway at that time (it started about 2001, in the aftermath of the dot com crash). The main thing that bullion ETFs have done is to shift precious metals investment away from miners to a certain extent and into holding the metals themselves. Given investors' propensity for selling into weakness (as they demonstrated in 2013) it has been a decidedly mixed blessing, and I'll bet many of the members of the WGC wish now that they had not sponsored GLD.

    In the crash of 2008, gold was not crushed. Unlike stocks, it recovered during the year and ended the year to the upside.

    The rise of gold from 2001 to 2011 was actually a fairly continuous upward movement after many years of price suppression due to sustained central bank selling. Truthfully, the manipulative bullion banks and central banks could no longer hold the price down.

    In addition to the factors cited by the author, I can add the following:

    1. Increased demand in China. A new middle class (and increasing rich class) has arisen in China and they want to own gold. This force is ongoing. India and other Asians also want to own gold, as do their central banks.

    2. Increasing US government deficit, which is temporarily under control due to extremely low interest rates that cannot be counted on to remain so low in future years. This deficit adds yearly to a debt that is the largest ever accumulated in absolute terms, and it now exceeds our GDP. Whenever a sovereign debt get this large it can only result in inflation. It is now too large to pay off via taxation alone.

    3. Increasing sovereign debt around the world, most worrisomely in Japan and southern Europe. At the moment this is working against gold since it strengthens the dollar to compare it to weak foreign currencies. However, a financial emergency reverberates throughout the global economy and will stress all fiat currencies, including the dollar.

    4. Increased mining costs. It should be noted in particular that during the gold bull market, miners costs were rising in tandem with the price of gold and their margin wasn't improving much at all. They were using the higher price to open up new mines in lesser ore fields. They have since had to cut back. If they cut back any more, they will have to cut production, and indeed, we have probably already seen the peak production in 2013Q4 when miners produced 815 tonnes and withheld 17 from the market.

    5. Rising commodity prices (especially oil) since 2001. More recently, wildcat fracking has resulted in a temporary glut of oil (and also natural gas). The low price of oil (and gas) should bring an end to some of the more precariously financed operations. This sudden disruption will likely result in a shortage and a price spike.

    6. Consumer price inflation. CPI figures have been declining since 2001, but they started out quite high. The US economy still is sitting on a time bomb in the form of excess bank reserves that would cause inflation if released into the economy, unless deflation reduces credit commensurately.

    7. Since the crisis of 2008, there has been an increasing movement of central banks to diversify away from the dollar and into gold and other currencies. They are no longer net sellers of gold as they were before the crisis. Instead, they are net buyers. Their intake, however, was not enough to absorb all of the gold released from GLD and other ETFs in 2013. That honor went to China.

    8. Rising central bank balance sheets. Some investors start to worry about the trustworthiness of a fiat currency when they see the central bank adding substantially to its balance sheet. This works against gold (temporarily) when the central bank is foreign, it works for gold when it's the Fed.

    9. Many investors genuinely believe that the US economy has improved substantially and is ready to not only get off of life support, but to go out and start jumping hurdles of the interest rate kind, albeit small ones. In my opinion this is mostly Fed-induced illusion, but the market doesn't care what I think.
    Nov 6, 2014. 06:26 PM | 26 Likes Like |Link to Comment
  • Tesla's Cost Advantage Destined To Disappear [View article]
    Tesla obviously sees advantage in the small format beyond merely the commoditization of 18650 cells. They get better heat control by using small cells, therefore they are planning to continue to use a relatively small cell size even when the GF goes into production. They have carefully weighed the alternatives and know that they are bucking the industry trend.
    Feb 5, 2015. 02:50 PM | 25 Likes Like |Link to Comment
  • Tesla's Q2 Goes Down To The Wire As Well [View article]
    Santos lives in a la-la land all his own where deliveries=demand for Tesla.
    Jun 16, 2014. 05:21 PM | 24 Likes Like |Link to Comment