Deja Vu

Long/short equity
Deja Vu
Long/short equity
Contributor since: 2011
Facebook is doing well and will continue to do well. And the stock is priced for that. On a good pullback (I regret not jumping in @89.x a few days back) it will be a possible buy.
This is excellent news. Right along with the iFlyingCar and iColdFusion Home Reactor to charge the iFlyingCar and iPerpetualMotionMachine.
Good alternative viewpoint, taught me more about a problem I was aware of but did not know the extent of. Good article. Very enlightening.
One wonders about the exposure to the mid east airlines, whose rapid growth and huge plane orders remind me of their real estate strategy, and we know how that turned out. Not to mention these mid east carriers are wedded to the spoke and hub strategy while newer airliners like the 787 are all about direct long haul flights.
Could be some vampire squid banker is advising Saudis to buy long options on US oil producers, take the other side of oil short positions, buy oil futures long etc etc. Maybe Russia too. Then Saudis and Russians announce a 10% production cut, cash in their options, bankrupt a whole lot of banks & hedgies, and then next month go back to pumping oil as before and flood the market again...
Easily a trade that could haul in a few hundred billion, enough to fill the deficit holes in both the Saudi & Russian budgets for a couple of years, while they flood the market again with oil driving out the other producers...maybe repeat the trade before they cut production again....
I get this feeling I'm going to really regret not buying call options on FB when it was trading with a 89 handle yesterday....
Buffett is feeling the shekels slip through his fingers...Probably staring hard at the mirror in the bathroom wondering why he bought into IBM...
The 800 pound gorilla in the room is the fact that existing solar installs were not "grandfathered in". That increases the difficulty for selling these systems in the future, since if SCTY makes a 20 or 30 year projection, a customer can ask "How can you guarantee me that these rates/rebates/net metering etc will continue to be offered?" And the simple answer is SCTY can't. Which means anyone doing a solar install will face an increased financial risk.
Or theSaudis could just buy long oil futures deep out of the money, announce they are cutting production 20%, walk away with 20X profits, and a string of failed US and European investment banks and hedge funds in their wake...nick each bank for say $10 billion, there's $200 billion from the top 20 banks....
No doubt, all you longs will be relieved to learn the CEO's new $40 million, 180 foot long yacht is coming along nicely. He says not to worry, through various machinations, he sold a lot of shares before even the lockups expired last year (charitable foundation, cough, cough) when the share price was in the 80's and 90's. He also extends a sincere thanks to the talking heads on CNBC, who gazed admiringly at him and failed to ask him any serious questions, during his many appearances on that platform. Last but not the least, he extends his thanks to the many SA writers who penned uber bull articles about a one product company.
But in seriousness, I was once making a pitch to a angel investor and had worked out a deep business case for a product. He stopped me and said "forget this product. What is in your pipeline. One product doesn't make a company. Whatever you make, in six months you will have competition. Now spend the rest of the 10 minutes I'm giving you entirely on your pipeline". I had thrown in a couple of slides about the pipeline products, but not done any great work on that since as a startup I was struggling with the first product. Needless, to say, no money from the angel.
Alex,
I agree with your assessment. Good work. Do read an article posted here on SA by Aswath Damodaran on FB and the ad market a while ago. Yours seems like a logical sequel to that article.
Any extreme price point needs a good story of "why this will always be so in the future"
There was the "peak oil" narrative in the Bush years and $200/barrel predictions and even some geniuses with "$1000/barrel in five years"
$200/barrel is as realistic as $20/barrel for any sustained period of time. Supply and demand will equalize as the highest cost producers cut capex and hence production capacity. It's in the interest of almost all producers to push the price into the $70-$100 range.
Sooner or later they will co-operate and cut production as the gains in price will offset any losses in market share.
excellent example of the analysis readers want to see. While I can't decide whether BM or MB is right, both articles present the facts without emotion. BM has done a excellent job of disagreeing with MB's thesis without personal digs.
Isn't total cost of a self driving system by Mobileye about $1200? So, if true, wouldn't this be a rather small market as cars tend to be kept for 5-10 years? And as a % of the car's price, it is small %, but car prices in general can't be driven up too high esp. the mass market as they are already straining the budgets of the middle class.
The insurance companies and body shops must be trembling in fear. Where would they be without the fender benders and rear enders? Not to mention small town cops and speed trap operators, red light camera vendors.
This would be a huge boon to senior citizens.
If I had a dime for each time the AI/Neural networks/Deep learning/Machine Learning craze came along, Warren Buffet would be mowing my grass, hoping for tips.
Big data is officially passe. New buzzword is Artificial Intelligence. New herd of AI unicorns seen in the distance.
Did people learn nothing from the complete failure of the "face recognition" systems that has failed in so many manhunts and terror cases (like the Boston bombing).
@Gayle good point, its like a company buying back stock at the peak of a runup to support the stock, - yes given the chinese stock market is down quite a bit even then average PE multiple is very high....
@brillo40, spot on. I keep telling people even when the stores at the mall are selling for 80% off they are making 100% gross margin on the sales...
Chinese "National Team" propping up the stock market. When they leave the floor, the rout will resume.
Btw 3 trillion in US $ divided by 1.4 billion Chinese is $2142/Chinese
For all the stuff they exported to the world through all these years, that is all the wealth they accumulated??
Anyway, not too much money on hand for buying iPhones....they have to import oil, iron ore and a whole lot of other commodities....
Facebook is using its deep pockets to stifle low cost Indian MVNO's. When you offer "free" vs. low cost to a poor person they will go for the "free" not knowing it will cost them more down the road. When the poor person sells his produce on the FB's "free" internet getting a lower price than if he could sell it on a broader market on a low cost web platform, that's the price. When the poor person can only buy his medicine on a FB platform web store that over charges him, that is an example of the price.
FB is just dumping to drive out all rivals, build a monopoly and then drive up the prices by restricting the "free" even more than now.
King Canute had nothing on these Chinese leadership guys....
Bouncing gently and contentedly along the bottom for years...sort of like a discarded milk gallon jug along the bottom of the ocean....with still a huge market cap to boot...172 B...this isn't going anywhere any time....
The larger question is if they ever stumble, one wonders if Sandberg et all will again tip off the big boys who will exit while retail will back up the truck marvelling at "Facebook at xx. Its a steal"
Men wearing Lululemon yoga pants...I hope your thesis is wrong, sir...I remain short the name...
wow! what innovation by Timmy! my 5 year old Samsung S2 had a nice OLED screen. Amazing genius by Apple. soon they will sue Samsung for having OLED screen in Samsung phones since 2010 which Apple will invent in 2016.
telling retail investors one thing, while. privately tipping off big investors just before the IPO that revenues were slowing, how is that O.K.? retail still got the glowing S-1 while large investors in effect got material inside information from Sandberg. why she & the whales who traded in the inside info are jit in jail illustrates that in general unless you are of Asian descent, insider trading laws don't apply to you.
Facebook is the ultimate natural network effect monopoly. Need to wait for another August 24.
Wasn't the whole thesis rapid consumer adoption, leading to the death of all manufacturing and unemployed toddlers from Chinese assembly lines migrating to Salinas to pick grapes?
Not to worry about GPRO. The CEO sold a lot of shares during the lockup period "for charity" and now just placed an order for a very nice $40 million yacht, while the stock has cratered 70% from where the retail bought it post IPO.
Tried a few test purchases of low $ items from Alibaba. If the food is anything like the merchandise I got (low quality junk, fakes, and DOA), god help those who eat those deliveries...
Its hard enough to get miles of wiring and tubing to work correctly the first time without blowing up the rocket. After said miles of tubing and wiring gets subjected to several G of forces during launch, extremely high temperatures at launch, extremely low temperatures higher up, etc, to think that said rocket will keep working....
I mean if brand new rockets blow up time after time, what are the odds on used rockets...
I completely agree with Mark A. Shale is here to stay. Since shale is here and won't go away, Saudis cutting production by themselves will not be enough, not unless they almost completely cease production in the long term and cut half their production in the medium term.
The Saudis see that oil needs a 4-5 million barrel a day cut and need Russia, and other OPEC members like Iran to also cut production to offset US shale producers, who are here to stay.
The Saudis are under no illusions that they will permanently drive down US shale production. Whenever the price of oil rises, so will shale. some pure shale players will go bankrupt and sell the acreage to the integrated majors, who will ramp up and down with the price of oil.
In fact, precisely because the Saudis are so sure that shale is here to stay, they are taking a super hard line about needing others to cut production also .