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David Pinsen  

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  • SunEdison: The Market Has Got The Earnings Wrong [View article]
    SUNE is down about 75% year to date. Which means you only need about a 400% return from here to get back to even.
    Nov 12, 2015. 05:14 PM | 2 Likes Like |Link to Comment
  • Rolls-Royce warns of weaker earnings, shares plunge [View news story]
    Another example of blue chips becoming black-and-blue chips. No stock is safe from the risk of these sorts of drops, or worse. Consider diversifying or hedging. We discuss both approaches here:
    Nov 12, 2015. 05:33 AM | Likes Like |Link to Comment
  • Adding Downside Protection To Exxon Mobil [View article]
    The NY AG's action represents a legitimate risk to the company, as the Financial Times article points out. You don't have to agree with the merits of the probe to acknowledge the risk.
    Nov 11, 2015. 12:10 AM | 3 Likes Like |Link to Comment
  • Adding Downside Protection To Exxon Mobil [View article]
    Hi 45Cal,

    Thanks for your comment.
    I agree Exxon is a great company (I praised it as an "anti-GE", a true blue chip, in an article a few years ago: ). And I agree with your skepticism about the motives behind the probe. I'm just not as confident that any judgment against Exxon would automatically get thrown out. It depends on the judges, many of whom have been appointed by a Democratic administration.
    Nov 11, 2015. 12:08 AM | 5 Likes Like |Link to Comment
  • Adding Downside Protection To Exxon Mobil [View article]
    Thanks for the comment, Phenom1.

    If memory serves, the cigarette companies argued that the science wasn't settled.

    You are right that I am trying to showcase a handy tool to limit risk though, and XOM offers a timely example.
    Nov 10, 2015. 11:59 PM | 2 Likes Like |Link to Comment
  • Adding Downside Protection To Exxon Mobil [View article]
    Hi burnedb4,

    Thanks for the comment. To clarify, I wasn't the one who likened the Exxon Mobil probe to the tobacco litigation and the Volkswagen fraud. I quoted the FT on the tobacco analogy, and I quoted Andrew Behar on the Volkswagen one.

    Re diversification versus hedging: I agree that both approaches can be used to limit idiosyncratic risk (exemplified in Exxon's case by the NY AG's probe). One advantage of hedging is that it also can limit systemic risk (I went into more detail on diversification versus hedging in a previous article: )

    You're right about Exxon Mobil learning from the Exxon Valdez disaster. Steve Coll's book, "Private Empire: Exxon Mobil and American Power" goes into detail on some of the steps Exxon took - for example, employees with substance abuse problems are encouraged to come forward now by being assured they won't get fired, just sent to rehab on Exxon's dime. Even though Coll has a jaundiced eye, it's hard not to come away from reading his book without respecting how well Exxon has been run in recent years. But I'm not sure how relevant the Exxon Valdez spill is to the current probe. I agree with you that it looks political in nature but that may make it more risky than the Valdez fallout, not less.
    Nov 10, 2015. 11:57 PM | 2 Likes Like |Link to Comment
  • Our No. 1 Mid-Cap Stock: Hawaiian Holdings [View article]
    I don't know. I can tell you Portfolio Armor's updated potential return for the stock, as of today's close, is 7%.
    Nov 6, 2015. 05:17 PM | Likes Like |Link to Comment
  • Our No. 1 Mid-Cap Stock: Hawaiian Holdings [View article]
    In the time between when this article was written and when it was published (today), Hawaiian Airlines has dropped a bit on our ranking system. It's currently the 28th highest-ranked security overall, down from 7th, and it's no longer the #1 mid-cap. Our current #1 mid-cap (#6 overall) is Manhattan Associates (MANH).
    Nov 4, 2015. 08:40 PM | Likes Like |Link to Comment
  • To Diversify Or Not To Diversify? [View article]
    Worth remembering too, re Enron, that it was the 7th largest stock, by market cap, in the S&P 500 before it blew up. I made a similar point about stock-specific risk in a recent article, "There Is No Margin Of Safety" ( ).
    Oct 30, 2015. 08:48 PM | 2 Likes Like |Link to Comment
  • A Lower-Risk Way To Invest In The Dow [View article]
    There's a quip that the energy needed to refute b.s. online is an order of magnitude larger than the energy required to spout it. I think this article of mine, published today on Long Term Capital Management and the hedged portfolio method, exemplifies that:
    Oct 29, 2015. 09:14 PM | Likes Like |Link to Comment
  • Lessons From Long-Term Capital Management [View article]
    If you're interested in absolute returns, then you'd be better off not limiting your universe to the top holdings in DIA, and instead considering every optionable security available. That's what Portfolio Armor does if you don't enter your own securities.

    If you scroll about two-thirds of the way down this page (depending on your screen resolution), you can see what the performance was of the hedged portfolio method was in our backtests from 2003 to early 2014:

    You could potentially generate better returns than that with the hedged portfolio method if you have a better security selection method than the one the site uses.
    Oct 29, 2015. 08:56 PM | Likes Like |Link to Comment
  • Lessons From Long-Term Capital Management [View article]
    The context, elaborated on in the original article that portfolio comes from ( ), is that investors in the Dow-tracking ETF DIA had an average 6-month return of 3.98% over the last 10 years, and they had a drawdown of 38% in one of those 6-month periods.
    Oct 29, 2015. 12:31 PM | 1 Like Like |Link to Comment
  • Investing In Airlines Without Nosediving [View article]
    If you had read the article before commenting, you would have seen that I included another famous bearish quote on the industry from Buffett at the top of it.
    Oct 29, 2015. 11:18 AM | 3 Likes Like |Link to Comment
  • Thoughts On Twitter's Growth Problem, And Why It's Losing To Facebook [View article]
    Late to this, David, but the advice you quoted about how to gain followers seems a bit dated. If I follow someone who just quotes aphorisms, I will quickly unfollow them. I'm sure I'm not alone in that.

    I also generally won't follow anyone with more than 1,000 followers. If you follow more than that many, you're not really following anyone. If someone who follows 100,000 accounts (presumably, including some percentage of bots) follows me, that does nothing for me. On the other hand, being followed by someone like Lionel Barber, who follows fewer than 300 accounts, means more.

    There is more value in Twitter than is generally realized. For an example in your wheelhouse, search for NXPI and look at tweets late Wednesday night US time. Not that many tweets, but some tweeters with relevant backgrounds (e.g., a CNBC tech journalist, editors of investing newsletters, etc. Some include charts, or pictures of key excerpts from the company's release. Strong opinions. I just grabbed a few to include in a quick post.

    I didn't submit that post to SA, because I don't think it meets the site's current editorial standards, but maybe it would be worth having a separate article category (whether published by one of your staff members in-house, or by contributors) that aggregated relevant tweets and provided a little contextual commentary. Embedded tweets are aesthetically pleasing, in my view, due to the use of space and visual elements (different sized fonts, images of tweeters, etc.), and they also provide links to useful information, such as the backgrounds of the tweeters.
    Oct 29, 2015. 04:26 AM | 1 Like Like |Link to Comment
  • Upstream MLPs May Be The Best Bet To Profit From An Oil Price Recovery [View article]
    John Dizard made a similar point last weekend's FT:
    Oct 28, 2015. 11:14 PM | Likes Like |Link to Comment