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Glenn Abrett  

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  • Are We On The Precipice Of Another 2008? [View article]
    LOL -- I'm pretty much a perma bull. But I realize that anything, and I mean anything can happen. We are in the midst of a most wonderful period of human history -- a period which some have called the accelerando, which is why the stock market has risen, on average, for well over a hundred years and risen more rapidly for the past thirty-five or so. But my friend, that can easily end. One never knows. The entire human race can enter a prolonged period of decline -- remember Athens? Remember the eighteen hundred year decline between Periclean Athens and the Renaissance? The worst thing going on right now -- far worse than china or the fed or isis or russia is the seeming pause in the accelerando. Personal computers in the 80's. The internet in the nineties. Smart phones and social networks in the aughts -- four of the most powerful tech advances in human history bang, bang, bang, bang. But since apple debuted the iPhone in 2007 its been 8 quiet years. Perhaps it is over. Far as I can tell the most significant tech advance in the past few years has been gilead's absolute cure of hepC -- the first time a major viral disease has actually been cured. Hopeful. But no iPhone. Things don't rise to the sky. Perhaps we are at the peak of the accelerando and thus of the stock market. Perhaps the market will crash and will never recover. I don't think so. But it certainly can happen.
    Sep 12, 2015. 09:21 PM | 11 Likes Like |Link to Comment
  • Tesla Signature Model X Pricing: Why It's Good News For Investors [View article]
    Thanks Mark for a very rare Tesla bull article. But I have to disagree with the premise as I am not exactly sure why Tesla needs to turn a profit right now. Hey. Amazon didn't turn much of a profit for twenty years and kept growing and becoming more valuable. Tesla is in a very, very early phase of development. As long as Wall Street (and us investors) are willing to keep the stock price high, tesla can raise the money it needs in the capital markets. Look at their recent secondary -- didn't nudge the stock price one bit.

    And whether it makes a few hundred million or loses a few hundred million over the next two years is really noise. What matters is the mass market car and the energy/cost efficiency of the batteries. Having slightly positive or slightly negative cash flow makes very little difference.

    And to repeat what have said a thousand times. If tesla can get the cost of its batteries down to the point where they can make a bmw3M equivalent for 25-30k and sell it for 35-40k they would probably take orders for so many of these things that every bank in the world would be willing to finance their expansion. And us investors would reap huge rewards.

    If they can't make a viable mass market car. Well. I somehow don't think the company is worth anywhere near its current market cap as a boutique manufacturer of toys for the wealthy.
    Sep 2, 2015. 04:57 PM | 3 Likes Like |Link to Comment
  • This Is Not A Game The Federal Reserve Wants [View article]
    I also so agree. It is time for the Fed to be quiet. They've said all they needed to say -- change in interest rates will be data dependent. It is also time for no one but Yellen to ever say anything about this subject in public. Maybe it is even time for Obama to call them all and tell (ask) them to tone it down.
    Aug 30, 2015. 05:16 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: What Are The Lessons From The Market Turmoil? [View article]
    Thanks Jeff for yet another terrific information filled article.

    What a week. Am seriously inclined to go 100% to cash, go off hiking in the woods without my phone and return some time in October. If only, LOL. I am not a pro. Have another life entirely. But damn if I wasn't glued to the screen every second. Waking up in the middle of the night to check and see how China and US futures were doing. That is craziness. My wife was ready to pack her bags and go stay in a hotel for the duration. For awhile I was totally on the dark side, way net short which was great monday hair raising Tuesday and not so good Weds.

    I think this past week illustrated, at least to me, that it is simply impossible to time the market. Even when momentum seems to guarantee a result it is still random. When I went net short previous Friday was I being brilliant? Not likely, more like lucky or scared. My brilliance evaporated Tuesday night when I became certain that we were going to have the big collapse on Weds which of course went the other way totally flatlining my spx puts.

    The really hilarious thing is that over the past two weeks I wound up net even, almost to the dollar -- after putting in more trades in two weeks than I had in the entire previous year. I guess the outcome was somewhat better than if I had done nothing, but the damage to my mind and body probably were not worth it.

    Aug 30, 2015. 02:35 PM | 2 Likes Like |Link to Comment
  • Understanding Fair Valuation: A Common Sense Approach To Long-Term Investing Success [View article]
    Sorry Chuck but fair value is not a mathematical concept. If it were then everyone would have a program to calculate it and all stocks would be fairly valued and this whole game would be entirely useless.

    Determining fair value is incredibly complex. Again, if it weren't, every tom dick and harry would know how to do it and all stocks would be fairly valued.

    The first thing missing is prospect for future growth. Which itself is incredibly complex. Understanding the global societal trends is critical. Knowing that, say PG, is likely the victim of the seemingly unstoppable trend away from global consumer brands to generics. Or the trend towards eating healthier. Or a million things. Projecting out the possibilities of what a company might look like five or ten or twenty years down the road is absolutely central to giving it a fair value today.

    Not understanding the above leads folks to invest in companies like PG, MCD and Xom which look pretty good with a static snapshot, but once you imagine what they might look like in 2035, or understand that some possibilities of what they might look like in 2035 are pretty bleak indeed, then you might be better armed to make investment decisions.
    Aug 30, 2015. 02:05 PM | 2 Likes Like |Link to Comment
  • Tesla: Actually, Consumer Reports Just Reiterated The Bear Case [View article]
    People like this have no place on SA. They write meaningless fact free articles. Not to get hits. But to promote a position. Most are likely paid by the oil and auto industries that understand that Tesla is significantly shortening their life expectancy. The overwhelming bear attack on tesla (as well as the completely absurd, ceaseless pumping of no-hope absurdly expensive, humanity destructive rapidly shrinking companies like PG, KO, MCD and XOM) seems to me to be nothing short of stock fraud that should be investigated by the SEC.

    Really. Now that SA is, in its own words, the single most influential stock chat site in the english speaking world, they really should be more careful or they are going to wind up in jail.
    Aug 27, 2015. 05:56 PM | 5 Likes Like |Link to Comment
  • IBM's 21st Century Transition Is Failing [View article]
    Haven't owned IBM for awhile and mostly agree. However, in today's world, a single mega-hit is all it takes. Google search, facebook, iPhone -- even twenty years ago, windows. IBM needs to axe all its twentieth century business and focus on the great technology they still own. In particular watson -- smart search -- very possibly the wave of the future -- a future which IBM might own -- google is worth north of 400 billion pretty much entirely based on their dumb search tech. IBM is world's ahead of everyone else in what might be the replacement tech. Of course they need to make watson run like 10,000 times faster.
    Aug 25, 2015. 05:00 PM | 3 Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]
    From the biggest uber-bull of the past few years.
    1] Unless the market crashes so badly that it effects the real economy we are still in goldilocks territory. The fed is never going to raise rates, or at least till after the 2016 election. There will likely be another QE in the next few months. There is no inflation and there won't be for quite some time -- and in US the nice slow growth with increasing corporate profits is the best thing there has ever been for stocks.
    2] The market was silly cheap. It is now ridiculous. Cheap? Why? If a stock has a p/e of 20 it is actually yielding 5% -- the profits are the owners money -- whether returned in dividends, invested in future growth or used to buy back shares it is the same. So at a p/e of 20 a stock yields 5% -- or 80% more than the long bond -- which is absurd.
    3] On the other hand. Don't fight the tape. The tape, especially the last fifteen minutes today (8/25) is saying get out of the way. Sometimes the short term momentum is the only variable and I think this is one of those times.
    4] Protect your portfolio. SPX or SPY put options the simplest way though imagine you could have done better buying volatility, but the whole idea of that gives me a headache -- I'm a scientist and software engineer, not a wall street guy.
    5] If you are brave, go to the dark side -- that is be net short. Tomorrow might proved to be the climatic event.
    6] Spread your puts around. The ones that expire this week are cheaper (though the time value is declining rapidly) than the ones that expire later. I would buy some that are way out of the money -- If things really collapse tomorrow which they very well might you could make a small (or even a large if you are very brave) fortune.
    7] The more dry powder you have, the more fun it will be when the market starts to turn around and you can buy great companies like apple and gilead at ridiculous bargains.
    Aug 25, 2015. 04:52 PM | 3 Likes Like |Link to Comment
  • Apple: Best Tasting Bear Ever? [View article]
    please don't put the great tesla in the category with the smoke and mirrors nflx and amzn -- companies that not only make little money but have very scant prospects of ever making much money. Tesla, on the other hand, has a real shot at dominating -- with super high margins -- the largest market on earth -- and that my friend is what gives the stock its value. What gives nflx and amzn their value is anyone's guess.

    On the other hand, apple is of course the premium stock on earth and it is now even more of a buy than it was a couple of weeks ago.
    Aug 24, 2015. 04:23 PM | Likes Like |Link to Comment
  • Apple: Best Tasting Bear Ever? [View article]
    OK -- I've been having a bad year. Most of my money is in equities which have been flat but some is always in forward bullish options which have gotten killed. My worst six months since lehman. All made right over the past few days with a few spx puts. Yikes. Woke up this am with everything I owned except those puts down a ton, but those puts up so much it was like a dream. Hoping tomorrow is similar. Yeah. There is tons of money to be made. Volatility is the traders friend. I bet some serious pros made tens of millions today, though the last little bit seemed absolutely impossible to call.
    Aug 24, 2015. 04:20 PM | 2 Likes Like |Link to Comment
  • The Case For A 300-500 Point Correction In The S&P 500 - And Still A 'Secular Bull' [View article]
    If you read my numerous comments you will note that:
    1] I am a long-term bull. I believe we live in enchanted times with long-term market prospects linked to the growth of world-wide prosperity and the continuing impact of improving technology.
    2] In the intermediate term I see a goldilocks economy with slow growth, no inflation, low interest -- lasting for a number of years.
    3] In the short-term I do not believe in market timing, in charts and especially in looking at some historical set of charts and claiming that now is just like then.

    Be that as it may, every once in awhile the momentum of the short-term irrational and impossible to figure market becomes the overwhelming factor and, for a brief moment, becomes visible or at least the murky outlines become visible.

    I believe that right now is one of those extremely rare times.
    The parallels to Black Monday, 1987 are absurdly close. In particular the no good reason slow panic of the past few days.
    Will the market tank tomorrow?
    I don't know. Nobody knows. But I think the chances of, say, a 200 point decline in the s&p are far higher tomorrow than they have been for any day in the past six or seven years. Maybe as much as one in four.

    I am temporarily out of all long positions for the first time in more than twenty years. I have taken 5% of my money and purchased spx puts. It is very, very weird to be, temporarily, on the dark side, rooting for a collapse. Rather fun as well.
    Aug 23, 2015. 08:06 PM | Likes Like |Link to Comment
  • Coca-Cola's Clock Is Ticking [View article]
    Excellent article. Thorough. Brings the strengths and weaknesses all to the front.
    I am of the opinion that, for all the reasons expressed in the article, as well as for the additional, very powerful trend towards 'commoditization' of consumer brands grows, the long term trend for Coke, the drink, is decidedly downward and may accelerate.

    Which brings the obvious question. KO is absurdly expensive. Its p/e is 24. Its forward p/e almost 20. Its peg (according to yahoo) is a completely absurd 4.81. Why invest in a company that is so expensive whose future long-term prospects are cloudy at best. It seems, at least to this observer, almost suicidal.
    Aug 18, 2015. 02:07 PM | Likes Like |Link to Comment
  • Something Is Still Ridiculously Wrong [View article]
    ahh -- someone who understands. If a stock's p/e is 20 that means it is yielding (all things taken into account) 5% regardless of whether the profits are directly returned to shareholders or invested in some way to make future profits grow. Historically this yield should be a 'little higher' than the yield on the long bond. With the long bond below 3% 20 p/e is definitely low. It should, as you say, be something like 25 or maybe a little more. Assuming a bit of growth for the e denominator and stable interest we certainly have the recipe for a rising market -- just as we have had over the last six or seven years.
    Aug 16, 2015. 11:41 PM | Likes Like |Link to Comment
  • Something Is Still Ridiculously Wrong [View article]
    It is so, so very strange to me. Or maybe it isn't. There seems to be, literally thousands of people who seem very, very smart. Who all have theories about why the present situation is rife with danger. Who present nice charts and grand theories. Author award winning papers. And ignore what is obvious to any child.

    The combined effects of Lehman, the loose money US fed,The absurdly tight money Europeans, the rationalist Chinese, the tight fisted US Congress, the destruction of effective unions in the US and a host of other factors have somehow locked the US into this weird goldilocks situation where we have slow growth, stable prices, rising corporate profits and a very slowly and very orderly rising stock market. It is almost as if the business cycle has been repealed. Everyone knows this.

    Yet over and over and over we see doom and gloom articles like this. What is weird is they all come at the doom and gloom from different perspectives. This guy thinks deflation will kill us. The bond king, whatever his name, thinks all the money printing has somehow, invisible to ordinary folks, stored this tightly coiled spring of inflation to destroy us all.

    Guys. Hello. We have stability. Neither too hot nor too cold. Enjoy it. It might last another six months, a year, five years or a hundred years. But it is just the greatest environment ever for investors.

    And yes, it is silly to talk about the fed raising rates. Not, in all likelihood till after the election. Maybe not in our lifetimes, who knows.
    Aug 16, 2015. 08:55 PM | 2 Likes Like |Link to Comment
  • Stop Panicking, Especially About The Wrong Things [View article]
    Thanks Michael

    For sure we live in remarkable times. We are actually in danger of having peace and prosperity break out all over the world. Global warming is perhaps the scariest thing in front of us but I have every faith that solutions will be found, may already have been found, to keep the seas from rising twenty feet and causing untold havoc.
    Aug 7, 2015. 04:26 PM | 4 Likes Like |Link to Comment