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Dr. Duru  

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  • While Cliffs Natural Resources Lashes Out, Rio Tinto Coolly Maintains The Pressure [View article]
    You can see the over-supply in the massive inventories built up in China. If the market were not over-supplied, no mine would need to shut down because buyers would be scrambling to find iron ore anywhere they could get it for whatever it cost.
    Feb 23, 2015. 12:12 PM | 2 Likes Like |Link to Comment
  • While Cliffs Natural Resources Lashes Out, Rio Tinto Coolly Maintains The Pressure [View article]
    As I noted in the article, CLF's lone mine in Australia can continue to operate for tis remaining life because CLF has cut costs to the bare bones. However, it is interesting that CLF's is claiming it is the majors in Australia who will ultimately fail. I think it says plenty that CLF's has explicitly stated that once it closes its lone mine in Australia, it is done with the seaborne trade from Australia. So are they then going to out-compete from outside Australia?
    Feb 23, 2015. 12:10 PM | Likes Like |Link to Comment
  • While Cliffs Natural Resources Lashes Out, Rio Tinto Coolly Maintains The Pressure [View article]
    Good point. I did not make it clear enough that the U.S. dollar was in weakening cycle during the big commodities run-up going into 2007/2008. The U.S. dollar was also weakening sharply off post-crisis (and 2010) highs going into the 2011 top. I am just not clear to what extent CLF's iron ore business in North America relies on exports versus the domestic markets.
    Feb 23, 2015. 12:05 PM | Likes Like |Link to Comment
  • Another Try At A Bottom For The Teucrium Corn ETF [View article]
    Sure. But CORN, the ETF, is trading around the same place it was back in mid-August (thank goodness).
    Feb 18, 2015. 12:14 AM | Likes Like |Link to Comment
  • Another Try At A Bottom For The Teucrium Corn ETF [View article]
    CORN is actively managed to limit the impact of contango. Without playing futures yourself or buying a farm, CORN is pretty much the best way to go. The nature of most commodities is that they are bought and sold as promises of future delivery if you are not willing to hold the physical commodity yourself.

    Teucrium also has an ETF for wheat managed in the same way: WEAT.
    Feb 18, 2015. 12:13 AM | Likes Like |Link to Comment
  • Hard To Blame The Weather For The Drop In Home Builder Sentiment [View article]
    When I first started writing about it, I noted the HMI seems to only be meaningful in that trends seem to have staying power and that trending lines up with momentum in the housing market. I still watch it in case some anomaly in the components signals something... but I hear you.
    Feb 17, 2015. 08:31 PM | Likes Like |Link to Comment
  • Yet Another Reason To Like CORN: A Low Valuation Relative To Gold [View article]
    The reasons for gold's up and downs are definitely complex. I have covered some of the mechanics in posts over the past year or so. I was only willing to believe there MIGHT be a relationship here after seeing that corn indeed bounced after that 40-year low in valuation. I will be watching how this develops over time. I hope to have time to look at the ratios with other agricultural commodities. In the meantime, just consider this measure another supporting indicator that suggests corn is selling at historically low levels.

    The ETF CORN has of course only recently bottomed, so it will take patience to wait out the next rally...(churn in futures positions notwithstanding).

    Thanks for reading!
    Feb 17, 2015. 11:49 AM | Likes Like |Link to Comment
  • The Australian Dollar Holds Recent Bottom Despite Surge In Rate Cut Expectations [View article]
    Thanks for throwing Scotland in the mix on that. I have been trying to find time to dig into the data on the impact of oil's plunge on Scotland/UK. I know Scotland was counting on those revenues to make them a prosperous country on their own. Independence probably does not feel as good with $40-50 oil versus $100+

    I am surprised at how hard it has been to find the specifics....
    Feb 15, 2015. 06:28 PM | Likes Like |Link to Comment
  • KB Home: Waiting On Margin News Despite Strong Preliminary Report [View article]
    We will see on first-timers. I think it was three earnings reports ago KBH noted that it thought it saw first-time homebuying picking up. I was excited about it because I have been looking for first-timers to spring to life to really push the bullish thesis on home builders to the next level. KBH had nothing to say about it on the next call. I am assuming it was a false signal and the macro numbers still show first-timers are still under-represented relative to past housing recoveries.
    Feb 15, 2015. 06:26 PM | Likes Like |Link to Comment
  • KB Home: Waiting On Margin News Despite Strong Preliminary Report [View article]
    Any specifics? I am assuming you have a similar critique as the other comments?
    Feb 15, 2015. 06:24 PM | Likes Like |Link to Comment
  • KB Home: Waiting On Margin News Despite Strong Preliminary Report [View article]
    The way I look at is this: if my orders go from 100 to 125 and my order value goes from $100 to $126, then I have gone from $1 per order to $1.008 per order. I am assuming any margin improvement is coming from that $.008. KBH's release did not say anything about cost reductions or that these communities that have sold like hot cakes are part of the communities built on lower cost than previous communities. I am just more skeptical than Prati is on this score. If margins are looking better, I would have expected a direct mention of it in the preliminary financial release.
    Feb 15, 2015. 06:23 PM | Likes Like |Link to Comment
  • KB Home: Waiting On Margin News Despite Strong Preliminary Report [View article]
    Looking at the record, short interest tends to soar at local bottoms for KBH. Good catch. I wish though I had your confidence in more orders = higher margins. I am fine waiting on the actual numbers given I am already overweight homebuilders right now.

    And thanks for pointing out the valuation. I had missed noting KBH is already well under 1.0 in price/book. That gives a decent amount of buffer.
    Feb 15, 2015. 06:18 PM | Likes Like |Link to Comment
  • Australia's Heating Housing Market Pressures Monetary Policy [View article]
    It is an awful dichotomy to have a worsening labor market alongside soaring housing prices. Not sustainable...!
    Feb 12, 2015. 10:32 AM | Likes Like |Link to Comment
  • Still A Good Time To Avoid Shorting The Euro [View article]
    I am leaning toward upside as well given history. Now even Chambers from Cisco is talking about a good outlook for Europe. But I am definitely not willing to bet on it until the market does first!
    Feb 12, 2015. 10:25 AM | Likes Like |Link to Comment
  • The High Stakes Ahead For Tightening Monetary Policy [View article]
    If Greenspan's rate hikes were behind the inflation curve, it means that the decline in long-term rates was even more confounding. The market should have penalized the Fed for increasing inflation risks by sending long-term rates higher, not lower, right?
    Feb 10, 2015. 09:53 AM | Likes Like |Link to Comment
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