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Dr. Duru

 
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  • Go Where It Is Darkest: When Company, Country, Currency And Commodity Risk Collide! [View article]
    You should have compared VALE to RIO, not BHP which is a much better diversified miner. I am also surprised that you didn't take into account competition in your analysis. With global supplies ramping a doomsday scenario should include the possibility that the "big three" succeed in driving iron ore down to marginal cost of production before the bottom finally hits. In the rosy scenario, Chinese monetary policy loosens sufficiently to facilitate several more years of over-building and infrastructure spending and sending iron ore sky-high again...
    Nov 22 01:35 PM | Likes Like |Link to Comment
  • Buy The Dip On LGI Homes [View article]
    Thanks for the kudos. I almost missed this one. Hang in there though. As I mentioned, stabilization after this kind of selling on a low-volume stock could take a while. For example, LGIH is not participating in today's nice breakout for ITB. Regardless, I am in now and will look to accumulate shares over time. 2015 guidance will be extremely important.
    Nov 20 03:07 PM | Likes Like |Link to Comment
  • A Closer Look At First-Time Home Buyers: Trends And Prospects [View article]
    I meant to add one other point on saving. The problem with renting in many areas of the country is that it has become so expensive relative to incomes that saving for that first home has become more difficult in many cases. I covered the numbers on this in an earlier post. Existing homebuyers of course do not have this problem and have a relative purchasing advantage if they can bring equity from a previous home to the table. The price recovery in many markets has allowed existing owners to do just that.
    Nov 19 09:17 PM | Likes Like |Link to Comment
  • A Closer Look At First-Time Home Buyers: Trends And Prospects [View article]
    On a year-over-year basis that is an improvement. Cancellation rate was 31% in the year-ago quarter. That is a better comparison. Also note that cancellations can move up and down for many reasons, including the aggressiveness of the salesforce, the amount of and quality of the foot traffic a builder is getting, and the relative attractiveness of homes from other builders.
    Nov 19 09:12 PM | 2 Likes Like |Link to Comment
  • A Closer Look At First-Time Home Buyers: Trends And Prospects [View article]
    I think these kinds of problems occur throughout the economy at different times and different locations. It definitely makes sense to rent housing when employers are renting you... The bigger problem is if these same workers cannot save enough in their jobs to buy a house when they do move on to the next job in a place they feel comfortable and secure settling down.
    Nov 19 09:08 PM | Likes Like |Link to Comment
  • A Trader's Perspective On The 'Save Our Swiss Gold' Initiative [View article]
    I think that is a poor reason to load up on euros and gold. I would fade the euro on that (I have been fading the euro for a while anyway). As I stated in the piece, I am definitely not interested in shorting gold....
    Nov 18 11:32 AM | Likes Like |Link to Comment
  • A Trader's Perspective On The 'Save Our Swiss Gold' Initiative [View article]
    Interesting. I am not familiar with the ins and outs of Swiss law, so I am wondering what legal ground the SNB would have to reject the referendum if it passes by vote and then the Cantons.
    Nov 18 11:31 AM | Likes Like |Link to Comment
  • Why The Aussie/Yen Currency Pair Presents An Interesting Opportunity [View article]
    I agree that this is a great long opportunity. I would reduce the reasons to simply the yen is getting shredded by its central bank, the yield on the Aussie remains relatively high, and the RBA has yet to figure out how to push the currency any lower.
    Nov 14 12:24 PM | Likes Like |Link to Comment
  • A Minor Intervention Scare For The Australian Dollar [View article]
    Excellent point!

    I always find it educational to see when central bankers reveal they are keeping tabs on what traders are doing, planning, and thinking.
    Nov 13 09:23 AM | Likes Like |Link to Comment
  • The Bad And The Good News In The Housing Market's Worsening Labor Shortage [View article]
    I understand the skepticism if you consider construction labor low-skilled, but it contains a mix. The Associated General Contractors of America is specifically saying that the wages in other professions are high enough to keep otherwise qualified workers away from the industry for those jobs that require training and higher skills. The issue for them is that margins in the industry in general are so thin that builders currently cannot afford to use wages to attract more workers. We know this is not the case for most of the public homebuilders (from their earnings reports), but they are acting like margins are extremely thin because they have aggressive margin targets to hit as promises to shareholders. They are using healthy margins to demonstrate financial acumen.

    So, the AGCA's solution is the correct one. Take otherwise untrained and unqualified workers and get them the skills needed. Putting all the cynicism and skepticism aside, this is a job opportunity waiting for those willing to put in the time.

    Finally, the main point of discussing the AGCA's survey is to demonstrate that the homebuilders are not blowing smoke on this issue. The rapid drop in the unemployment rate even as the number of employees is well below the lows from the last cycle demonstrates that a lot fewer people are looking for work in the industry - and this makes sense given the housing industry is still a shadow of its former self; it is not nearly as attractive as a place to work as it used to be. Ignoring the difficulties faced by builders in finding qualified labor is to ignore the great economic implications of an overall economy that is strong enough to create these shortages in the first place.

    And note that some of the builders are NOT blaming financial results on this shortage. For example, in the quote above, KBH specifically reassures the street that these shortages and higher costs are NOT impacting their margin. The impact is going to vary from builder to builder. There is not some uniform cry to "blame the rain" for poor results. (Not to mention so many builders continue to generate relatively good earnings results despite all the existing headwinds).
    Nov 13 02:12 AM | 1 Like Like |Link to Comment
  • A Second Extremely Strong Month For Canadian Jobs Chases Away My Bearish Bias [View article]
    And that is how opportunities are born....
    Nov 10 09:13 AM | Likes Like |Link to Comment
  • Finally Stepping In To Start Buying iShares MSCI Brazil Capped ETF [View article]
    Will do. I have gulped hard. Very hard.
    Nov 10 05:13 AM | Likes Like |Link to Comment
  • Here's The Real Story Of Why Oil Plunged This Year [View article]
    So are you suggesting oil is about to bounce from these levels?
    Nov 9 08:19 PM | Likes Like |Link to Comment
  • Trading The Breakdown Of The Australian Dollar [View article]
    I rarely ever see currencies "behave" and settle into a stable equilibrium around PPP. I think it is a decent guide sometimes directionally, but it doesn't seem to be useful for trading purposes.
    Nov 6 09:57 AM | Likes Like |Link to Comment
  • Quietly The Swiss Franc Presses The Swiss National Bank's Nerves Again [View article]
    Thanks for mentioning that. In writing this article, I stumbled upon the SNB's position statement against the referendum. I have an outstanding to-do to read through that.

    The reason for shorting is the assumption that the SNB might pro-actively make a move to defend the 1.20 floor. Of course, their hands could indeed be tied by the referendum and in that case AUD/CHF will go lower, all else being equal. Note that at the time I also assumed the Australian dollar would start to strengthen again. I no longer think that is in the cards for the short-term.
    Nov 6 01:52 AM | Likes Like |Link to Comment
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