Did 16.3% Dividend Payer American Capital Agency Corp.'s Hedging Fail In Q1? [View article]
Jack Rice: I think you need to reread the article. Some of the losses were simply due to the "irrationally exuberant" buying in 2H 2012, which pushed Agency premiums up too far. In other words people bought as if the Fed was not even there; but the Fed was there. This led to too high premiums on Agency securities. This price situation corrected itself in Q1 2013.
Specifically you need to reread from the "Several factors" paragraph through the "Third" paragraph.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
nestor7: The old saying, "there's a sucker born every minute", is applicable to what you say. What you say could happen. However, the analysts are going to have an increasingly difficult time continuing to pump this one. The EU situation looks to be deteriorating measurably. AMZN sells there. Those sales will get hurt. People in the US ignored the payroll tax hike for the first two months of the year. When the sequester was put into effect, they started taking some of the austerity talk more seriously. March Retail Sales shrank. I expect more to come. I expect AMZN to start suffering from competition from GOOG, WMT, and EBay. When margins shrink further, few will want the stock. When revenue growth (the peg the analysts hang their recommendations on) wanes more, the analysts will either have to resort to outright lies (illegal); or they will have to tell the truth that the stock is hugely overvalued. In other words, shrinking margins and slwoing growth spell disaster for AMZN's stock price in the near future.
The company might still be a good company, but it is far over priced. Did you look at the discounts EBay is offering 3rd party vendors to sell on its site? EBay is only one of AMZN's competitors.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
Guidance for Q2 was for revenue of $14.5B-$16.2B (the midpoint is $15.35B) vs. $15.9B consensus. Expects Q2 operating income of -$340M to +$10M (the midpoint is -$165 million). This sounds like weak guidance to me.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
Vick13: I also did not discuss the fact that AMZN has in recent years been expanding into much more highly technical areas such as the Kindle, perhaps its own phone, etc. It is generally not as expert as tech companies in these areas; and they should continue to be margin drains on the company. Yet AMZN seems to want to continue to expand into them. Some might say this does not make sense. They might say it is bad management. Perhaps it is. For instance, good relations with a tablet producer might have saved costs on the Kindle. AMZN could have let someone else take the margin hit.
AMZN has also started to produce media itself. Recently it has been touting the success of these recent films/shows. However, I haven't seen the total numbers for this; and it may be that AMZN has found another low or negative margin business. It helps to have long expertise in a business. There are often pot holes in the road that an experienced driver will see and avoid.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
Vick13: AWS -- Amazon Web Services is growing so far. It has also been touted as being worth as much as $50B. I don't see this at all. I also see it as having few if any barriers to entry. It is only a matter of time before the competition kills this one. This is one of the big reasons Warren Buffet stays away from technology.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
mike8599: This is not my first negative article on AMZN's valuation. In many other cases i was not short the stock.
I only have a small short position so far. I am very wary of the pension for the HFT/momentum brokerages/hedge funds to put out completely outrageous expectations of the stock, so they can drive it up quickly (for huge HFT profits).
If such a move upward does occur, it will not invalidate what I have written. It will only mean the HFT players with their spin doctors have succeeded again in pulling a fast one on the market.
Dramatic Drop In April CPR Makes 10.4% Dividend Payer CYS Investments A Buy [View article]
no-eyes: The current price is a decent entry point given current circumstances. However, there could be a US recession this year. Therefore it is wise to average into a position in CYS. You would also get to see any new developments in the Fed policies before much of your investment.
Far Oversold No. 1 Bakken Oil Producer Continental Resources May Bounce Soon [View article]
BaysideDave888: I noticed you called my rational false without even bothering to check at what point CLR become profitable. You also ignored the extensive hedging that CLR has that means it will be able to glean some roughly $96/barrel oil and some Brent priced oil for well over $100 no matter what the market price of oil is for most of 2013. It had hedged roughly 24 million barrels for 2013 out of end of Q4 2012 total oil production of approximately 27 million barrels. Where is it you think it is going to lose all of this money.
I too won't bother to look up CLR's profit point for Bakken production. However, I am relatively sure it is far below $90/barrel. What you say may be true for some Bakken E & P companies. It is not for CLR.
You slur my work, which presented many facts. Yet you provide exactly no facts about CLR's profitability. You just "proclaim" your opinion as fact. I won't tell you how low an opinion that gives me of you.
Far Oversold No. 1 Bakken Oil Producer Continental Resources May Bounce Soon [View article]
fbscout1: Thank you for your contribution. You probably have a point about the rail capacity. However, longer term more pipeline capacity, especially in 2013, is coming to the Bakken. This should let producers garner higher prices for their oil.
As for the divorce, it is unsettling to the market; but it should not affect the stock price over the long term. If one or both of them are forced to sell some of their stake to raise money, the market should be able to absorb it. The stock is not overpriced, and it should be able to find buyers. Compared to many other companies it is a huge bargain.
Top Performing 15.6% Dividend Payer American Capital Agency Is A Good Safe Haven Choice [View article]
ChrisTesta: I am not sure your comment was addressed to me. I also have not gone over all of your numbers. Plus you do not specify them clearly. However, you cited AGNC selling some of its Agency MBS. Then it buys more later.
1) It effectively does this in the Dollar Roll market. There is no doubt that this is proving to be very profitable for AGNC.
2) When mortgage interest rates go down, it is more likely that loans will be refinanced. Hence it makes some sense to sell higher yielding Agency fixed rate RMBS, so they do not lead to increases in the CPR. Since fixed rate Agency RMBS are currently selling at a premium to face value, the company loses the premium when loans are prepaid. When AGNC buys new fixed rate Agency RMBS, these usually have a lower mortgage rate and lower premium. Therefore they represent less risk of loss through prepayments. AGNC then tries to control the risk of its own book value losses through hedges. Generally they seem to be successful at this. On top of this AGNC is harvesting premium by this process (taking profits).
3) With the latest lowering of mortgage rates in the fall, there was a spate of refinancing. Mortgage rates have since rebounded a bit; and it is hard to believe they will go much lower than they are. This means that both CPRs and net interest rate spreads should be better going forward.
I am not sure what you are modelling, but any model is only as good as its designer. If you believe there was no purpose to AGNC's selling some RMBS and buying new ones, I find it hard to believe that your modelling is very accurate.
Far Oversold No. 1 Bakken Oil Producer Continental Resources May Bounce Soon [View article]
Michael Bryant:
I know at least 2 billionaires. I think both are experts in their fields of expertise. However, I would not necessarily consider either an expert in other fields, although both are very smart guys. I think you can see how not knowing more is a problem.
Top Performing 15.6% Dividend Payer American Capital Agency Is A Good Safe Haven Choice [View article]
wnadarzynski: As with most stocks, you simply cannot tell until you get much closer to that time. You may even want to sell before then. I will say that the management team looks solid. They seem likely to find a way to make money in almost any market.
They list the risks in their 10-K. Two of the most important ones at that time will be rising interest rates (rising mortgage rates). Hedges help with this. Second there is the possibility that some will succeed in their efforts to stop these companies from being able to borrow via repos (very cheaply).
Did 16.3% Dividend Payer American Capital Agency Corp.'s Hedging Fail In Q1? [View article]
I think you need to reread the article. Some of the losses were simply due to the "irrationally exuberant" buying in 2H 2012, which pushed Agency premiums up too far. In other words people bought as if the Fed was not even there; but the Fed was there. This led to too high premiums on Agency securities. This price situation corrected itself in Q1 2013.
Specifically you need to reread from the "Several factors" paragraph through the "Third" paragraph.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
The old saying, "there's a sucker born every minute", is applicable to what you say. What you say could happen. However, the analysts are going to have an increasingly difficult time continuing to pump this one. The EU situation looks to be deteriorating measurably. AMZN sells there. Those sales will get hurt. People in the US ignored the payroll tax hike for the first two months of the year. When the sequester was put into effect, they started taking some of the austerity talk more seriously. March Retail Sales shrank. I expect more to come. I expect AMZN to start suffering from competition from GOOG, WMT, and EBay. When margins shrink further, few will want the stock. When revenue growth (the peg the analysts hang their recommendations on) wanes more, the analysts will either have to resort to outright lies (illegal); or they will have to tell the truth that the stock is hugely overvalued. In other words, shrinking margins and slwoing growth spell disaster for AMZN's stock price in the near future.
The company might still be a good company, but it is far over priced. Did you look at the discounts EBay is offering 3rd party vendors to sell on its site? EBay is only one of AMZN's competitors.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
Dramatic Drop In April CPR Makes 10.4% Dividend Payer CYS Investments A Buy [View article]
It's not a bad pick. I wrote a brief article on a few of the mortgage REIT ETFs.
http://seekingalpha.co...
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
I also did not discuss the fact that AMZN has in recent years been expanding into much more highly technical areas such as the Kindle, perhaps its own phone, etc. It is generally not as expert as tech companies in these areas; and they should continue to be margin drains on the company. Yet AMZN seems to want to continue to expand into them. Some might say this does not make sense. They might say it is bad management. Perhaps it is. For instance, good relations with a tablet producer might have saved costs on the Kindle. AMZN could have let someone else take the margin hit.
AMZN has also started to produce media itself. Recently it has been touting the success of these recent films/shows. However, I haven't seen the total numbers for this; and it may be that AMZN has found another low or negative margin business. It helps to have long expertise in a business. There are often pot holes in the road that an experienced driver will see and avoid.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
AWS -- Amazon Web Services is growing so far. It has also been touted as being worth as much as $50B. I don't see this at all. I also see it as having few if any barriers to entry. It is only a matter of time before the competition kills this one. This is one of the big reasons Warren Buffet stays away from technology.
Amazon's A Momentum Darling; Here's 12 Reasons That Momentum May End [View article]
This is not my first negative article on AMZN's valuation. In many other cases i was not short the stock.
I only have a small short position so far. I am very wary of the pension for the HFT/momentum brokerages/hedge funds to put out completely outrageous expectations of the stock, so they can drive it up quickly (for huge HFT profits).
If such a move upward does occur, it will not invalidate what I have written. It will only mean the HFT players with their spin doctors have succeeded again in pulling a fast one on the market.
Dramatic Drop In April CPR Makes 10.4% Dividend Payer CYS Investments A Buy [View article]
The current price is a decent entry point given current circumstances. However, there could be a US recession this year. Therefore it is wise to average into a position in CYS. You would also get to see any new developments in the Fed policies before much of your investment.
Far Oversold No. 1 Bakken Oil Producer Continental Resources May Bounce Soon [View article]
I noticed you called my rational false without even bothering to check at what point CLR become profitable. You also ignored the extensive hedging that CLR has that means it will be able to glean some roughly $96/barrel oil and some Brent priced oil for well over $100 no matter what the market price of oil is for most of 2013. It had hedged roughly 24 million barrels for 2013 out of end of Q4 2012 total oil production of approximately 27 million barrels. Where is it you think it is going to lose all of this money.
I too won't bother to look up CLR's profit point for Bakken production. However, I am relatively sure it is far below $90/barrel. What you say may be true for some Bakken E & P companies. It is not for CLR.
You slur my work, which presented many facts. Yet you provide exactly no facts about CLR's profitability. You just "proclaim" your opinion as fact. I won't tell you how low an opinion that gives me of you.
Far Oversold No. 1 Bakken Oil Producer Continental Resources May Bounce Soon [View article]
Thank you for your contribution. You probably have a point about the rail capacity. However, longer term more pipeline capacity, especially in 2013, is coming to the Bakken. This should let producers garner higher prices for their oil.
As for the divorce, it is unsettling to the market; but it should not affect the stock price over the long term. If one or both of them are forced to sell some of their stake to raise money, the market should be able to absorb it. The stock is not overpriced, and it should be able to find buyers. Compared to many other companies it is a huge bargain.
Top Performing 15.6% Dividend Payer American Capital Agency Is A Good Safe Haven Choice [View article]
I am not sure your comment was addressed to me. I also have not gone over all of your numbers. Plus you do not specify them clearly. However, you cited AGNC selling some of its Agency MBS. Then it buys more later.
1) It effectively does this in the Dollar Roll market. There is no doubt that this is proving to be very profitable for AGNC.
2) When mortgage interest rates go down, it is more likely that loans will be refinanced. Hence it makes some sense to sell higher yielding Agency fixed rate RMBS, so they do not lead to increases in the CPR. Since fixed rate Agency RMBS are currently selling at a premium to face value, the company loses the premium when loans are prepaid. When AGNC buys new fixed rate Agency RMBS, these usually have a lower mortgage rate and lower premium. Therefore they represent less risk of loss through prepayments. AGNC then tries to control the risk of its own book value losses through hedges. Generally they seem to be successful at this. On top of this AGNC is harvesting premium by this process (taking profits).
3) With the latest lowering of mortgage rates in the fall, there was a spate of refinancing. Mortgage rates have since rebounded a bit; and it is hard to believe they will go much lower than they are. This means that both CPRs and net interest rate spreads should be better going forward.
I am not sure what you are modelling, but any model is only as good as its designer. If you believe there was no purpose to AGNC's selling some RMBS and buying new ones, I find it hard to believe that your modelling is very accurate.
Far Oversold No. 1 Bakken Oil Producer Continental Resources May Bounce Soon [View article]
Good setups usually do pay off. CLR is up 3% today. OAS is up 1.29%, and KOG is up 1.37%. I guess people are following the "SMART MONEY".
Don't you think you were a bit hypocritical with your comment, since you (an analysts of sorts) are asserting people should follow your advice?
Far Oversold No. 1 Bakken Oil Producer Continental Resources May Bounce Soon [View article]
I know at least 2 billionaires. I think both are experts in their fields of expertise. However, I would not necessarily consider either an expert in other fields, although both are very smart guys. I think you can see how not knowing more is a problem.
Top Performing 15.6% Dividend Payer American Capital Agency Is A Good Safe Haven Choice [View article]
As with most stocks, you simply cannot tell until you get much closer to that time. You may even want to sell before then. I will say that the management team looks solid. They seem likely to find a way to make money in almost any market.
They list the risks in their 10-K. Two of the most important ones at that time will be rising interest rates (rising mortgage rates). Hedges help with this. Second there is the possibility that some will succeed in their efforts to stop these companies from being able to borrow via repos (very cheaply).