Seeking Alpha
View as an RSS Feed

David Klein  

View David Klein's Comments BY TICKER:
Latest  |  Highest rated
  • Is Eastman Chemical Close To A Long-Term Buy? [View article]
    Thank you, the kind words are appreciated.
    Apr 10, 2015. 04:25 PM | Likes Like |Link to Comment
  • Is Eastman Chemical Close To A Long-Term Buy? [View article]
    Any changes in EMN fair value going forward will be updated on this webpage:
    http://bit.ly/ABzISk
    Apr 9, 2015. 03:43 PM | 1 Like Like |Link to Comment
  • Is Eastman Chemical Close To A Long-Term Buy? [View article]
    Hi FcFrag and thanks for commenting. I think the reason it could be low is people may see it as dead money for 2015 due to the hedges and the uncertainty of how low oil may go or how strong the dollar will become. The big question is do we believe management when they say the hedge pressure will subside in 2016. I could not find details on the actual derivative contracts and my guess is they will not make them public so there is a little bit of faith here that they being straight with shareholders; also when it comes to acqusitions being accretive, if not then those old lows will become a reality pretty quick otherwise in a year the stock could provide good returns. We'll see.

    Those premiums are pretty good, I sold those puts back in Feb.
    Apr 7, 2015. 09:15 PM | Likes Like |Link to Comment
  • Is Eastman Chemical Close To A Long-Term Buy? [View article]
    Thank you xyz12.
    Apr 7, 2015. 10:05 AM | Likes Like |Link to Comment
  • Is Eastman Chemical Close To A Long-Term Buy? [View article]
    Hi Raj, if my FV is in the ballpark then you should be fine sometime in 2016, hopefully sooner but 2015 could be rough especially if the hedges turn against them more than they already have.
    Apr 7, 2015. 09:11 AM | 1 Like Like |Link to Comment
  • Is Eastman Chemical Close To A Long-Term Buy? [View article]
    Thanks for commenting TxGolfer57. My puts expire in June so if the stock trades below 67.5 I'll be long the stock, if not I'll write a few more contracts although if it hits 64 I'd probably just buy the stock.
    Apr 6, 2015. 04:21 PM | Likes Like |Link to Comment
  • Are You Making These 5 Common Investing Mistakes [View article]
    Same here, #3 was one of the toughest to overcome.
    Mar 24, 2015. 09:44 AM | Likes Like |Link to Comment
  • IIEX 1Q-2015 Newsletter [View instapost]
    Thank you DAG, your comments are always appreciated. I share your sentiments and I'm starting to think the Shiller PE will continue north of 30 before we see a correction. One thing I know for sure is there will be a correction. When? Not a clue.
    Mar 18, 2015. 02:35 PM | 1 Like Like |Link to Comment
  • Level 3 Communications: A Long Idea Still Priced At An Attractive Discount To Fair Value [View article]
    Hi Tom, you asked about two years back and I didn't have a good answer but here's the link:
    http://seekingalpha.co...

    I'll just add that with bandwidth growth growing stronger it's nice to have some empty conduits to take advantage of cheaper technology. Who knows with all the fear about hacking maybe some government agencies will find $$ to build there own secure system (probably never happen). Bottom line they are there ready for the next great idea, otherwise if never needed I think there is very little value but I suspect over time they will come in handy. When? Your guess is as good as mine. Also don't quote me on this since I could be wrong but didn't LVLT write off a few of these conduits a while back. Maybe someone else can add another perspective.
    Feb 8, 2015. 04:01 PM | 1 Like Like |Link to Comment
  • General Electric: Is GE Stock A Good Choice? [View article]
    Excellent article. After reading it is plainly obvious how much effort you put into your articles. Whether I agree or not with your valuation it's greatly appreciated you share your research. I also hold GE and have a similar valuation. Thanks for providing an independent check to my valuation :)
    Nov 18, 2014. 12:11 PM | 2 Likes Like |Link to Comment
  • A Unique Way To Use The Shiller PE As A Market Indicator [View article]
    Joe that's a great question and one I've been trying to get a handle on but in terms of both the inflation and 10 year treasury rates. I usually include these (and GDP growth) in the graphs above but left them out since they were not the focus of the article plus the graph would look cluttered. I wish SA would let me embed charts in the comments so I'll give a link to a visual regarding this. Although I should warn you as I look at more data my opinion my change but here is where I'm at today.

    If I look at a cumulative rate (Treasury + inflation) when it starts to spike above say 10% or 12% for a sustained period of time we see some dramatic downturns. This is an exception over a short time period 1988-1991 that didn't seem to have any affect although in 1988 maybe the economic forecasts looked bright, don't know or remember plus the PE was already below 17 at the time and recovering from a bottom of 7.4 in jan1982.

    We also see problems when there are wild swings from one extreme to another. When the cumulative rate turns negative we see similar results. In the range between 0 and 10% there doesn't seem to be much affect or correlation. Then again the rates may be more of a result of events than anything else.

    Anyway the link below shows two time periods 1916-1940 and 1971-1995. All the individual data is also charted so you can come to your own conclusions. Remember this is very preliminary research but it shows even with rising interests with low inflation won't have any dramatic affects outside the "grey" zone based on this limited research (what other macro disasters may be lurking out there is anyone's guess)
    http://bit.ly/1xKOquX
    Nov 17, 2014. 12:55 PM | Likes Like |Link to Comment
  • Level 3 Communications: A Long Idea At An Attractive Value [View article]
    Hi sbarbero and thank you.
    The competition table was constructed from the 10-K. As far as ATT and Verizon here is the verbage:
    Our key competitors for our IP and data services include Verizon, AT&T, …
    For transport services, our key competitors in North America are other facilities based communications companies including AT&T, Verizon, …
    For voice services our key competitors are other providers of communications services including AT&T, Verizon…
    For our colocation and datacenter services, our key competitors are other facilities based communications companies, and other colocation providers such as web hosting companies and third-party colocation companies. In North America, these companies include Equinix, Terremark (Verizon),…

    http://1.usa.gov/1tXYY2N
    Nov 16, 2014. 11:02 AM | Likes Like |Link to Comment
  • A Unique Way To Use The Shiller PE As A Market Indicator [View article]
    Hi TheWiseOwl as far as your points:
    A- I never said it did. Actually I have no idea what Shillers thoughts would be on the role of technology.
    B- Basically the way I was thinking about it was that technology increased trading and demand. The increase in technology (internet) and demand also may have had a hand in much lower transaction costs. The more demand the higher the premium paid which increases the median PE over time although I'm referring to the rise in medians over time. Maybe I inferred to much with technology but when I go back to 1995 and look at the upper limit based on the analysis the article lays out, the upper limit median is above 20 every year and remains so today and the foreseeable future vs values of 12.3 before the 1929 crash, 19 in 1975, 17 in 1985 etc. Coincidence? Possibly but it corresponds to the growing influence of the internet. That said it is an opinion no more or less valuable than yours. Either way the model results are what they are.
    C-Not sure what you are inferring but again I never said Shiller made the index to predict tops. I have no idea what he was thinking. The only reason I use his name is because the index is named after him. Yes I say what it's not good for but that is my thinking/opinion. When you say "The Shiller P/E ratio is simply a more reasonable market valuation indicator than the P/E ratio because it eliminates fluctuation of the ratio caused by the variation of profit margins during business cycles.", I agree which is why I use it in the first place.

    Maybe I should have expounded more on this in the article but that was not the main focus of the article nor would it have affected the results.
    Nov 16, 2014. 10:52 AM | 1 Like Like |Link to Comment
  • A Unique Way To Use The Shiller PE As A Market Indicator [View article]
    Hi Kevin and thanks. If I were using averages the band would drop dramatically in various years going forward which is why I used medians, i.e., I could double the values of 1999-2001 and the median would not change. That said you are correct the upper band will fall if the numbers continue lower. Focusing on the 15 year interval if next year the number drops to 26 (1999 drops off) the change is less than 2%. Depending on the size of the drop the maximum change would be 6% ( assuming the other bands remain lower than the one in question).

    While I was building this model I was pondering the same things you noted which is why I used five bands (and medians vs averages) to get a better feel as to where things might fall. Focusing on the 20 or 25 year bands may be the right choice. Your point is a valid one since the upper band could gradually drop but it starts to get a little complicated since the 15 year band starts to move past 1999 the 25 year band moves closer dropping off some very low numbers so it could move up depending on what the next 10 years hold. I'm getting a headache just thinking about it.

    Maybe my choice of the word "normal" range was a poor choice of words. I didn't intend it to infer safety. The way I thought about it the closer we get to the upper band the market is starting to look pricey. I established extreme definitions because once we pass this point history states the market will fall but to borrow your words it "doesn't determine when prices will fall - only how far they have to fall before they hit the ground."
    Nov 14, 2014. 12:28 PM | Likes Like |Link to Comment
  • A Unique Way To Use The Shiller PE As A Market Indicator [View article]
    Thank you SimpleData and your approach sounds as reasonable as any. It will be interesting to see where this market takes us. Thanks for commenting.
    Nov 13, 2014. 08:05 PM | Likes Like |Link to Comment
COMMENTS STATS
630 Comments
320 Likes