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Gregory M. Wetherall

 
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  • Ackman's Secret Herbalife Grand Slam That The World Didn't Notice [View article]
    From past performances, I knew Ackman was capable of saying or doing anything to make a buck. Still, even I wasn't prepared for the crocodile tears he shed during today's performance. I don't think I'm alone admitting I almost vomited watching him choke up. Then, adding insult to injury, the references to his immigrant grandparents, as the impetus for his short position in Herbalife, transformed a gag reflex into full blown dry heaves and convulsions. This man is truly revolting. Someone tell the makes of ipecac they can stop making it. If you need to induce vomiting, just let the patient watch one of Ackman's shows.
    Jul 23, 2014. 01:37 AM | 10 Likes Like |Link to Comment
  • Positives Are Mounting For Apple [View article]
    I agree with you assessment of Apple. Today's earnings release was like the opening barrage of artillery at the start of a great battle. The release of the iPhone 6, later this year, should serve as something similar to what Napoleon called a coup de main. I think an iPhone, with a larger screen, will result in an explosion in sales both domestically and abroad. With all of the other wonderful news released today, I would not be surprised if Apple trades near $800.00 before the earnings release in January of 2015.

    Disclosure: I maintain a long call options position in Apple and intend to add to it in the near-term.
    Apr 24, 2014. 11:21 PM | 1 Like Like |Link to Comment
  • Fannie Mae: Gold Mine Or Death Trap? [View article]
    I am pleased to hear that. Thank you for your time.
    Apr 4, 2014. 11:01 AM | Likes Like |Link to Comment
  • Fannie Mae: Gold Mine Or Death Trap? [View article]
    You are right. I was confused and thought Silicon Valley was a geographical recess in the Montagnes Noires. Perhaps, you should move to Haiti and create your own business. In the meantime, I think most people here would be very appreciative if you move your comments to a more appropriate website.
    Apr 4, 2014. 10:51 AM | Likes Like |Link to Comment
  • Fannie Mae: Gold Mine Or Death Trap? [View article]
    KBrown83:

    Sorry for the delay in responding. I was out of town shortly after this article was published, returned to a hectic schedule and, last week, succumbed to the flu.

    My article was not meant to give a precise value for FNMA but merely to point out there is a great deal more value here than the market is giving credit. As you point out, of the $80 billion in profit, about $50 billion represents deferred tax benefits. I agree completely with your assessment.

    My point is: that still leaves $30 billion after the non-cash items. And, from my perspective at least, that is nothing at which to sneeze. Moreover, you can't act as if the tax savings of $50 billion don't count. Even on a fully diluted basis, before the dividend sweep, the price to book valuation is astronomical. It isn't bad even after the dividend.

    There are articles with great valuations of this company out there. The consensus among them seems to be about $40.00 per share. I won't attempt my own valuation but, suffice it to say, I won't complain if I only see half of that?

    You are a very astute commentator. Thank you for taking time to read my article.

    Greg
    Apr 4, 2014. 10:38 AM | Likes Like |Link to Comment
  • Fannie Mae: Gold Mine Or Death Trap? [View article]
    More than just off topic, your comment is one of the most ridiculous I have ever read. Demand creates jobs? There is plenty of pent-up demand in Haiti and other poverty-stricken areas of the world. According to your logic, these places should be overflowing with jobs.

    Jobs are created by people who create businesses that produce goods and services. You can't have customers until you have the means to produce the products or services they consume. That is why free market capitalism creates wealthy nations. It rewards those who start businesses which, in turn, create the goods and services that raise the standard of living.
    Apr 4, 2014. 10:15 AM | Likes Like |Link to Comment
  • Oil Prices Are Predictable During Cycles Of Fear And War [View article]
    With the government shutdown tonight, it looks like the market is ripe for an even bigger decline in oil prices: Easing tensions in the Middle East, increased domestic production, the end of the peak Summer driving season, a slowing economy and now this. Oil could come crashing down while we sleep when European markets open. Even if a shutdown is averted tonight, the debt limit will be reached in two weeks. I am short crude oil futures overnight. Short at $102.30 a barrel with a stop at $103.91.
    Sep 30, 2013. 10:08 PM | Likes Like |Link to Comment
  • Silver: Is This The 'Last' Decline? [View article]
    I have never read a more useless article. You could say "sentiment" is what moves all markets up or down. Let me get even more scientific and predict Supply and Demand will determine whether the metals markets move up or down. With this article, and my contribution, everyone is now armed with everything they need to manhandle the silver trade. I give this advise without any expectation of renumeration because I'm Good Enough, I'm Smart Enough, and Doggone It, People Like Me!
    May 30, 2013. 09:20 PM | 3 Likes Like |Link to Comment
  • Herbalife: Carl Icahn Delivered Bill Ackman A Valentine He'll Never Forget [View article]
    That is where it closed on Friday. Let's revisit this in a few of months.
    Feb 16, 2013. 05:28 PM | Likes Like |Link to Comment
  • Herbalife: Carl Icahn Delivered Bill Ackman A Valentine He'll Never Forget [View article]
    Correction: My position is 1,800 shares, not 2,000.
    Feb 16, 2013. 12:10 AM | Likes Like |Link to Comment
  • Herbalife: Carl Icahn Delivered Bill Ackman A Valentine He'll Never Forget [View article]
    You hope Ackman takes Icahn to the "cleaners?" How is that possible? Icahn is worth over $16 billion. That is four times the market cap of Herbalife. He could literally buy Herbalife the way most people buy Nutritional Shakes.

    More important, however, is the fact that Ackman is short virtually the entire supply of HLF shares available to be shorted. Due to the size of Ackman's short position, Icahn doesn't need to buy Herbalife. He can make even more money by continuing to buy the stock until Ackman is forced to cover. Then, Icahn can basically name his price for his shares and Ackman will have no choice but to pony up. Its called cornering the market.

    Today, I bought 2,000 shares near the close of the market at an average price of about $41.00.
    Feb 15, 2013. 11:54 PM | 1 Like Like |Link to Comment
  • What's Ackman's Herbalife Game? [View article]
    Wrong again Pinocchio. Short selling is available in most markets. For example, farmers sell produce to grocers before crops have even been planted. Petroleum refiners sell gasoline to transports before the refiners even take delivery of the underlying crude. Airplane manufacturers take orders from airlines years in advance of delvery.

    Only in markets, which trade items that have a finite supply or are one of a kind, is short selling limited or nonexistent. For example, it would be extremely difficult to short sell Leonardo da Vinci's original Mona Lisa because only one exists and it isn't traded on a regular basis. However, even then, short selling could exist if, for example, somone simultaneously had the opportunity to buy and sell the Mona Lisa.

    Lets say Bill Gates knows the owner of the Mona Lisa who offers to sell it to him for $50mil. Gates knows that Warren Buffett wants to buy the Mona Lisa so he contacts Buffett and negotiates a contract to sell the painting to him for $100mil. Gates then goes back to the current owner and buys the Mona Lisa which he subsequently delivers to Buffett.

    At its essence, short selling in stocks is nothing more than a contract between the buyer and a short seller whereby the short seller agrees to deliver the underlying stock to the buyer at a later time. Contrary to your usual babble, short selling exists and occurs on a regular basis in the vast majority of markets. Banning short selling in equity markets would be catastrophic.

    Finally, your useless banter contained another error. As far as your posts are concerned, late isn't better than never.
    Jan 19, 2013. 02:56 AM | Likes Like |Link to Comment
  • What's Ackman's Herbalife Game? [View article]
    Sally:

    If you don't like "greed," you can substitute self-interested, ambitious, driven or any other word of similar meaning. In the end, this is what motivates people to be productive.

    As for short selling, it needs no more regulation than buying. I haven't seen any complaints from you about Hedge Funds who maintain large long positions in a given equity. Remember, no one can go buy unless someone is selling. Moreover, short selling is self-regulating because of the inherent dangers it presents (i.e. unlimited losses, margin calls, shares called away, etc.).
    Jan 13, 2013. 06:50 PM | Likes Like |Link to Comment
  • What's Ackman's Herbalife Game? [View article]
    I hope you will reconsider what I said. In certain markets (e.g. equities, real estate, etc.) there is a fixed supply. This is not the case with the examples you give for automobiles, food, gas, etc. When demand goes up for cars, prices and, in turn, profits go up. As a result suppliers build more cars because they can make more money.

    With stocks, on the other hand, in the absence of short sellers, the only people who could sell would be those that own the stock. So, without short sellers, demand for a given equity could, theoretically, be unlimited, while supply would be limited to those who own the stock.

    You accurately point out that, even with short sellers, equity markets still experience bubbles. However, that is hardly justification for banning short selling. Only if we want even bigger bubbles would that make sense.

    You characterize short sellers as manipulators and greedy people who want to hurt the people on the other sides of their trades. You go so far as saying they are profiting from the stupidity of the buyers. How are the motives of a short seller any different than those of a buyer? Certainly, the buyer thinks the stock is worth more than he is paying or he wouldn't be buying.

    While I don't like Bill Ackman, or what he did with respect to Herbalife, that dislike isn't because he sold Herbalife short. It is because he made misrepresentations, about a perfectly legitimate company, to line his own wallet. I am a frequent short seller but I don't build my position and then make false statements to bolster the trade.

    As for your disdain for what you consider human frailties, especially greed, such emotions are what make the world go round. For lack of a better word, greed is good. I know, its been used before, but it is true. Greed is what motivates people to, among other things, go to college, build businesses and, for that matter, trade markets. There are, of course, bad people who are willing to achieve the objectives of their greed through nefarious tactics. That, however, is a result of a character flaw, not a flaw in the emotion itself.

    In the end, short selling serves a very good purpose.
    Jan 12, 2013. 04:13 PM | Likes Like |Link to Comment
  • What's Ackman's Herbalife Game? [View article]
    Short selling is vital to all financial markets but especially equities. Most equities are owned by institutions and are held for the long term. In the absence of short selling, the demand for most equities would far outweigh supply. As a result, the equity markets would frequently experience extreme overvaluations followed by crashes.

    Short selling is practiced mostly by traders who, for the most part, are contrarians. They tend to sell when others are buying and buy when others are selling. This trading, whether it is done on the buy side or the sell side, helps moderate markets and prevents extreme over-valuations and under-valuations. Therefore, contrary to what most people believe, traders on both sides of a transaction, including short sellers, provide liquidity that reduces market volatility.

    Traders are even more important during market extremes. During these periods, they provide liquidity to the market when, in their absence, there might very well be none. They buy during crashes when no one else will buy and sell into bubbles when no one else will sell. For example, during a market crash short sellers cover shorts and some even begin going long putting a bottom in the market. Without them, there literally might be no buyers in the market at all.

    The recent bubble in real estate markets illustrates what happens without short sellers. Everyone believed that real estate values would never go down so demand for real estate far outstripped supply. In turn, real estate values climbed to the point of absurdity. This bubble was sustained for an unprecedented period of time by the government which pumped money into real estate through low interest rates, tax breaks and government subsidized and guaranteed loans. There was literally no check on the demand for real estate. In the end, the massive bubble burst, as all bubbles do, and almost brought down the entire global financial system.

    Similarly, the next bubble to burst will be the global sovereign debt bubble. In the United States, the Fed is keeping interest rates low by purchasing massive amounts of treasuries. They are aided in their efforts by countries such as a China that enjoy large trade surpluses with the U.S. and are willing to hold their massive reserve of dollars in treasuries. As a result, the demand for these securities far outweighs supply.

    The Bond Bubble will burst when China and others begin to demand a larger risk premium on their treasury holdings. When that happens, the massive government debt and budget deficit will render the Fed incapable of allowing rates to rise. If they did allow such a rise, the debt service paid by the government would grow exponentially to an unsustainable level.

    When the Fed fails to provide an adequate return to these investors, they will begin pulling their money out of treasuries and transfer those dollars to higher yielding assets. At that point, the Fed will, in essence, become the lender of last resort to the government and will be forced to expand its balance sheet in a never-ending stream of quantitative easing. In the final analysis, the Feds ever-expanding balance sheet will result in massive inflation that will bring an ugly end to the monetary and fiscal orgy in which Washington has been engaged for so long.
    Jan 11, 2013. 02:44 PM | 2 Likes Like |Link to Comment
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