Seeking Alpha

Derastone

 
View as an RSS Feed
View Derastone's Comments BY TICKER:
Latest comments  |  Highest rated
  • Time to Short Netflix [View article]
    Do you have the guts to short it with real money?
    May 19 11:58 AM | 7 Likes Like |Link to Comment
  • Why Investors Should Avoid Hedge Funds [View article]
    That is why you should own/run a hedge fund but never invest in one. I recommend my clients never to invest in HFs but for other reasons. (Risk of a HF blowing up, liquidity, etc.)

    However, just to give you an 20,000 ft comparison. If you sit down and compare XOM vs. any other HF that focuses on energy you will realize how much better an investment in XOM is rather than a HF.

    a) Liquidity - XOM wins
    b) Capacity and Resources to Invest - XOM wins
    c) Oversight & Business Risk - XOM wins (you have multiple "agencies" trying to cover your back, board of directors, SEC, other investors, a government protecting its oil interests, and the list can goes on...)

    It just doesn't make sense to give your money to some guy, pay 2% annually, get locked up for a year and pray for the best.

    On the other hand, if you purchase XOM, the company will pay you ~2.5% annually (in dividends) and you can unload the stock whenever you want.

    Just doesn't make sense to invest in HFs.
    Aug 9 02:00 PM | 5 Likes Like |Link to Comment
  • Linn Energy: A Risky Bet [View article]
    tc1,
    I think MLPs are quite popular these days given their out-performance in the past 3 months relative to the S&P 500. On our part, since LINN up more than we expected, we are reviewing it, maybe worth selling.

    As of the tax law changes, I'm hesitant to spend research time right now until there is more clarity. It will affect the MLPs in some way. It could turn out counter-intuitively positive for MLPs given the tax deferral one gets from investing in MLPs. Obviously, this is useless if your in a tax-sheltered account.

    It is something to have in mind and I will def. call up my accountant to talk about tax efficient strategies going forward. However, I don't think he could give me good answers until he sees what will happen in Washington.

    If you happen to see a good article on this issue, please send along!

    Thanks for the feedback.
    Aug 17 06:27 PM | 5 Likes Like |Link to Comment
  • What is Research in Motion Worth? [View article]
    You should source your estimates. Where did they come from? where is the underlying earnings model? Where did you pull out the numbers from?

    If you did calculate the 2011E revenue, how did you get to that number? what are the underlying assumptions? How do you get to the Earnings?
    Aug 10 12:14 AM | 5 Likes Like |Link to Comment
  • Seeking Alpha Celebrates 500,000 Registered Users! [View article]
    I got my T-Shirt!
    I'm a medium size but I got XL, which is good because thanksgiving is coming up.
    Nov 9 09:41 AM | 3 Likes Like |Link to Comment
  • Linn Energy: A Risky Bet [View article]
    Community,
    Given my continued coverage of this MLP, I wanted to give you an update.

    Citi raised the target price on its latest research note (9/15/2010) from $34.5 to $35.00.

    On 09/07/10, the company signed three purchase agreements to acquire oil and natural gas properties in the Permian Basin’s Wolfberry trend for a combined $352.2 million. Year to date, Linn has completed six acquisitions for total consideration of $1.33 billion.

    Citi also said that according to their research, the company could generate approximately $67.0 million in EBITDA from the acquired assets in 2011 (i.e. a purchase multiple of approximately 5.3x cash flows). Notably, given the development opportunities provided by the acquired assets, it is possible that accretion could prove larger than we are currently estimating.

    Disclosure: I sold my position already.
    Sep 24 01:44 PM | 3 Likes Like |Link to Comment
  • Netflix: Defying the Laws of Gravity [View article]
    Thanks Dabigbear,
    My article was missing the catalysts for this stock and you just wrote them. I really enjoy reading the comments when they add value!
    Sep 3 01:31 PM | 3 Likes Like |Link to Comment
  • Is The EUR/USD Heading Toward 1? [View article]
    It is what I call a free lunch:
    a) Sell fixed income securities to all the foreigners. (Better if they are long-term bonds at low yields)
    b) Then, devalue the US Dollar by 20-25%, inflation eventually picks up at a moderately high pace. Interest rates rise, economy is by then doing better.
    c) Fed buys back the long-dated bonds (30 yr bonds) at a discount.
    d) Return to part (a) when another financial crisis hits

    Result: US earns a free lunch.
    Jul 10 04:36 PM | 2 Likes Like |Link to Comment
  • Alaska's North Slope shales may hold as much as 80T cubic feet of gas and 2B barrels of oil, the U.S. Geological Survey reports. The assessment, the first made of North Slope shale resources, is based on success in extracting oil and gas from similar formations, such as the Marcellus Shale. The USGS last year estimated Marcellus may hold as much as 144T cubic feet of gas.  [View news story]
    That is animal cruelty. That dog probably thought of pooping on your lawn all day and then you just come and extract it to feed your energy needs.
    Feb 25 03:59 AM | 2 Likes Like |Link to Comment
  • CF Industries: Here's A Beanstalk That's Going To Sprout [View article]
    Love the company, just explaining my concerns/fears as well. However, there is always the right price for a stock.
    Nov 15 09:45 AM | 2 Likes Like |Link to Comment
  • 8 Dividend Stocks to Transform Your Portfolio: Part 1 [View article]
    I agree with ABV (seekingalpha.com/artic...)

    Long term thesis is still valid, but pricing estimates have gone up.

    Hope this helps
    Jul 9 10:34 PM | 2 Likes Like |Link to Comment
  • Time to Short Netflix [View article]
    The problem with most articles I read about Netflix is that they speak in generalities. I find it difficult to be convinced when I see the words "Netflix is expensive" without any substantial evidence.

    So far, the best one you have published is the interview with Len Brecken but other than that, information is limited.

    I've read your article and I think it is a good beginning for your thesis. It shows that you can smell something going bad going on but other than that you don't have much fundamental data, if you do, you aren't showing it in your article. You outlined a trading strategy and gave reasons why you prefer puts over shorting the stock.

    There are some hard questions still to be answered:
    a) What is Netflix going to earn going forward? How do you get to that number? What is their cash flow going to be in the next year? How do you get to that number? think about the scenarios?
    b) How is the price for acquiring customers and revenue per customer evolving? --> How are margins going to look? Can you model it out? What are the scenarios?
    c) What is the catalyst that will bring the price down? When do you expect it to happen? (given that you will buy leaps, I obviously assume that you expect a re-pricing of the stock for the duration of the LEAP but it isn't clear)
    d) What are the risks that your thesis might go wrong?
    f) Finally, and the most important question of all, what is the breakeven number of subscribers Netflix needs to have in order to sustain its business. Len talks about bankruptcy in 2012. The problem I have with that is I believe they have paid a large portion of their distribution rights upfront, which makes it hard for a company to not meet their obligations. Maybe I'm wrong, I'm not an expert in this stock.

    Going short requires lots of testosterone and I am really happy to see people writing about the companies they believe is worth less than what the market is pricing them at, however, I would encourage you to go deeper and build a stronger case.

    I also want to apologize if my previous comment was too brash.
    May 19 11:02 PM | 2 Likes Like |Link to Comment
  • Three Reasons to Bet on Europe [View article]
    I agree partially with this article, there are some countries in Europe that are in better shape than others.

    I explain it in my articles below:
    seekingalpha.com/insta...

    seekingalpha.com/artic...

    There are inherent risks in Europe but I think they will come out stronger...
    Sep 16 03:16 PM | 2 Likes Like |Link to Comment
  • Banco Santander Brasil: Declining Asset Quality And Growing Headwinds Hamper Profitability [View article]
    Awesome article! Keep up the good work.
    Aug 23 08:27 PM | 1 Like Like |Link to Comment
  • Netflix CEO Reed Hastings Responds to Whitney Tilson: Cover Your Short Position. Now. [View article]
    I wonder what will happen in a month (Earnings release Oct 19, 2011) "60% rise in fees" vs. xyz% turnover rate

    It seems unrealistic that Netflix will lose > 30% of subscribers.
    In the long run Netflix will continue to gain customers on a global basis.
    Sep 21 01:34 AM | 1 Like Like |Link to Comment
COMMENTS STATS
55 Comments
57 Likes