In the wake of numerous scandals involving Chinese companies listed on Western stock exchanges, Chinese authorities are cracking down on ... those who raise the questions. Huang Kun - part of the team which put together a negative report on Silvercorp (SVM) - was arrested in Beijing at year's end and expects to soon face criminal charges. Documents suggest Silvercorp worked with officials on the investigation of Mr. Huang and even helped pay for it. [View news story]
China isn't going to win the war against economics, I don't think. But they will try.
Chronically Criminal: Shielding The Public From Medical Marijuana [View article]
@ Sean Nolan
I write articles for "personal gain" but also because I just want to share my research -- but that is basically that is what everyone does. Including you: http://bit.ly/Xc0odP
For instance, you wrote last week:
"Going long on MJNA is a great bet to increase your portfolio 10+ times. MJNA fluctuates daily and that provides a great opportunity to not only go long, but to also day trade and short. Some days in the past months have seen gains over 65%. Timing is key as this stock is extremely volatile, so do your research and buy when it's low, preferably below 30 cents, but it's not going to stay low forever; don't miss out on the green rush!"
Those are pretty fraudulent statements frankly. I mean, I have found good companies, but never ones which promised to increase my portfolio by ten times. (No ten baggers yet! But guess what? If I find a ten bagger I will share it on SA for "personal gain" and if I am right people won't say "oh you are just writing this for personal gain" they will, instead, say "thanks! coat tail riding sure is a good practice!")
Windows 8 And The Microsoft Constituency: A Unified Theory Of Everything [View article]
Ouch. Well, I don't mean Microsoft's engineers "in-house," I mean the armies upon armies of software companies which write software for the Windows operating system. The world of development for Windows applications is still larger than, say, Apple's environment. The article was meant to emphasize the productivity increase that software engineers gain from the new architecture. Looks like I missed my point.
51.3 means that most manufactures are expanding production. It doesn't make sense to talk about *expectations* with the ISM number because of how it is calculated. Therefore there is no "miss" and besides, if you want to complain about the economy just look at the 40,000,000+ persons on foodstamps. Keep in mind that if this were the 1930's, those people would be in-line outside of soup kitchens. As it is, we get to hide their poverty by sending people on food stamps discrete little visa cards which contain tax payer funds. While the grocers know, to some extent, the social appearance of poverty is effectively concealed from our eyes. Welcome to psychological economic management. Its an interesting system.
But the point still remains, ISM numbers are not the sort of numbers where "expectations" make any sense what-so-ever. It is like trying to predict the price of gold -- it is merely human caprice and subjective psychological anchoring.
Paying It All Out: Breitburn's 9.4% Dividend [View article]
Hey rlp2451,
I thought I'd address your concerns if I could.
"Answer: Untrue. Some distributions may be tax-deferred, but they are not tax free."
Since MLPs are partnerships, I am pretty sure that certain types of distributions are considered returns of capital -- which would not be taxed, although they change your cost basis (for instance, you can read about it here: http://onforb.es/WpjAmw) What you say about "tax deferred" is true but there are situations where weird tax accounting can apply, I thought the investor ought to be prepared.
"2.) To use the crisis of 2008-09 in distribution calculations is ludicrous."
I don't believe I used them in calculations, I simply use it as an example of why high dividend could be considered precarious.. Besides, I pointed out that management handled the situation very well. So... I am not sure I understand your point here.
"3.) "Since MLPs are supposed to pay off all their profits as dividends" Answer: There is no such requirement."
That is true, I should have said "...in practice many MLPs..."
"4.) Just because BBEP doesn't use the term "distributable cash flow" in its SEC filings doesn't mean they don't use them. In a September 2012 presentation, they estimate 2012 DCF coverage to be between 1.2-1.3 times distributions. "
I read that too. The fact that management states it there doesn't really change anything I noted above, I believe.
"5.) He doesn't understand hedges. And to compare SD with BBEP is apples/oranges."
How is that, exactly? I am simply talking about the accounting treatment of hedges, and specifically mark-to-market. To provided evidence of my point: Sandridge has a PE of 4.39 ONLY because of an GAAP accounting gain for its hedge portfolio. And it had a GAAP loss in the previous quarter ONLY because of the accounting treatment of its hedges.
"6.) I'ts debt is close to $1 Billion- so what? Most short term credit lines for MLPs expire Ocotber 1. In order to maintain approximately 60-40 equity-debt ratio, BBEP moved short term debt to long term. No problem there."
Yelp is up 9.5% today, putting its market capitalization at $1.45 billion--Not sure whether this is a continuation of the short squeeze, or whether people just are not reading the publicly available material. Regardless, the higher it climbs, the further down it will need to correct.
Chronically Criminal: Shielding The Public From Medical Marijuana [View article]
Everyone who thinks Infitialis is a liar is missing an important point that: the company is simply way overvalued. BUT in addition to that, if it were following the laws other companies have to follow much of what it has done would be illegal.
It's pretty simple. Why buy an overvalued company? -- Especially one which is owned by someone who is so suspect?
If, instead, you double down or buy more shares you are effectively doing two things. One, you are psychologically increasing your commitment to MJNA.PK at the exact moment you ought to be questioning it. And secondly, you are continuing to believe that this company will **make enough money in the future to make a purchase at today's prices worth it.**
The intelligent and conservative thing to do is to sell, if you own the shares, and watch.
Why Hyperinflation Is A Myth (And What It Means For Gold Prices) [View article]
We are assuming fishers quantity theory of money is correct, at least in terms of the mathematics used. That might be a problematic assumption. And I shouldn't say it, but economists cannot even agree on what counts as money (and if you can't count it, you can't put it into an equation -- garbage-in, garbage-out). So... making claims about reality *because* of a mathematical theory is a problematic approach. Human beings are not particles and therefore economics is not physics and must be treated with different methods.
If we were rational and always had all the relevant information, mathematics in economics, such as the quantity theory of money or the "equation of exchange," would be a way of describing economic phenomenon. As it is, mathematics has corrupted the entire discipline.
Norfolk Southern: Not A Buying Opportunity [View article]
Well, there is no margin of safety *for me* -- especially relative to other opportunities. I would love to own some Norfolk Southern, I just wouldn't invest my marginal capital in it at the present time (it is a relative judgment).
Our Evaluation Of Verizon's Ability To Pay Its Dividend [View article]
"Verizon generates an average of $12.5B-$15B annually in free cash flows."
That is the FCF figure if you ignore that they consolidate the 45% of Verizon Wireless owned by Vodafone. The article ignores the consolidation calculation when it comes to FCF--specifically, FCF out of the Cellco Partnership. By my estimate, their claim of FCF is somewhere around $9.2 billion, making the dividend a significantly greater portion of their FCF (See: http://seekingalpha.co...)
Vodafone: Get Paid 5% To Wade Through The Euro Crisis [View article]
Hey everyone,
The dividend range was somewhere near 5.0%.
Their recurring dividend 4638 million pounds. The average exchange rate was near $0.649 per pound (the correct exchange rate to use would be the one on the day obviously, I will look that up).
The dividend be near $7,100 million in U.S. Which would make the yield about 5.04%.
Sorry for the pretty major mishap, somewhere in the converting back and forth from pounds to dollars I didn't check the figures.
Also thanks rw1270 for the timely criticism. I'll put in a correction to the SA editors.
Windows 8 And The Microsoft Constituency: A Unified Theory Of Everything [View article]
So some fool paid $58 a share (or a market cap of about $286 billion) for Microsoft when it had free-cash-flow of $3.5 billion. That trade was made with MSFT at 81 times FCF.
MSFT has about $23 billion in FCF now. Its market cap is $250 billion. That is a multiple of 10.9. So... while I agree that we won't see MSFT trading at 81 times FCF, there remains a possibility it will trade at 20 times FCF... or about its high of 1999. So I don't know whether I would say "odd are overwhelming" that it won't happen.
Anyways, I think they are innovating. Windows 8 is innovative.
Aspen Insurance Holdings: Discounted And Shareholder Friendly [View article]
Good question alaskapnp and thanks for the nice words. I wrote about that question in my article on Everest Re (RE)**. As you might guess, it is mostly due to regulation and taxation. Here is what I wrote then:
"Why does Bermuda host so many insurance companies? How is it the second-largest reinsurance market, second only to New York? First, the country doesn't levy a corporate income tax on insurers, so that is quite a perk. Another reason is the regulatory environment which:
"…fosters innovation and creativity by responding to the emerging needs of the insurance and reinsurance markets…from the development of mechanisms such as captives in the 1960's, through the formation of excess liability carriers ACE and XL and the development of finite risk reinsurer Centre Solution in the 1980's, and though the formation of property catastrophe companies Mid-Ocean Re, PartnerRe, Endurance Re and many other over the last two decades, Bermuda has been and continues to be, a centre for innovation in the insurance market." [1]
Also, there is a tax incentive for American insurers to purchase reinsurance from a foreign firm, e.g., firms from Bermuda. This tax incentive, which takes the form of allowing premiums paid to foreign insurers as tax deductions, would be eliminated in the most recent White House budget***. This elimination will make having Bermudian reinsurance less advantageous if you are an American insurer seeking reinsurance. Losing this advantage would make the Bermudian insurers less attractive."
I hope that answers your question. We could always go deeper and talk about specific laws (for instance, I think Bermuda recently promised in a law not to tax insurers until at least 2035 or thereabouts). But that is the gist. Thanks for reading.
Norfolk Southern: Not A Buying Opportunity [View article]
I agree that the fears around coal might be overblown. Hopefully the near term headwinds open opportunities for better purchases. I noted in a comment above that I really wouldn't mind owning the shares, but that my "not a buying opportunity" is more of the statement "relative to specific other things, I would prefer them to Norfolk."
From that perspective we can both be right: my alternatives might perform better, and Norfolk might, itself, perform more than satisfactory.
The new owners of the DJIA are considering changes to the way the iconic index is calculated in order to be able to include [[take a guess]] without it holding too much sway on the price-weighted gauge. "Most institutional investors have moved on from the index," says UBS' Mark Haefele. YTD, the (Apple-free) DJIA +11.6% vs. the S&P 500 +16.1%. [View news story]
It is already unuseful since it doesn't take into account share count. Changing the way it is calculated would make it incomparable to historical periods. Loss-loss.
In the wake of numerous scandals involving Chinese companies listed on Western stock exchanges, Chinese authorities are cracking down on ... those who raise the questions. Huang Kun - part of the team which put together a negative report on Silvercorp (SVM) - was arrested in Beijing at year's end and expects to soon face criminal charges. Documents suggest Silvercorp worked with officials on the investigation of Mr. Huang and even helped pay for it. [View news story]
Chronically Criminal: Shielding The Public From Medical Marijuana [View article]
I write articles for "personal gain" but also because I just want to share my research -- but that is basically that is what everyone does. Including you: http://bit.ly/Xc0odP
For instance, you wrote last week:
"Going long on MJNA is a great bet to increase your portfolio 10+ times. MJNA fluctuates daily and that provides a great opportunity to not only go long, but to also day trade and short. Some days in the past months have seen gains over 65%. Timing is key as this stock is extremely volatile, so do your research and buy when it's low, preferably below 30 cents, but it's not going to stay low forever; don't miss out on the green rush!"
Those are pretty fraudulent statements frankly. I mean, I have found good companies, but never ones which promised to increase my portfolio by ten times. (No ten baggers yet! But guess what? If I find a ten bagger I will share it on SA for "personal gain" and if I am right people won't say "oh you are just writing this for personal gain" they will, instead, say "thanks! coat tail riding sure is a good practice!")
Windows 8 And The Microsoft Constituency: A Unified Theory Of Everything [View article]
Thanks for the star though, that was generous.
Mar. ISM Manufacturing Index: 51.3 vs. 54.0 consensus and 54.2 prior. [View news story]
But the point still remains, ISM numbers are not the sort of numbers where "expectations" make any sense what-so-ever. It is like trying to predict the price of gold -- it is merely human caprice and subjective psychological anchoring.
Paying It All Out: Breitburn's 9.4% Dividend [View article]
I thought I'd address your concerns if I could.
"Answer: Untrue. Some distributions may be tax-deferred, but they are not tax free."
Since MLPs are partnerships, I am pretty sure that certain types of distributions are considered returns of capital -- which would not be taxed, although they change your cost basis (for instance, you can read about it here: http://onforb.es/WpjAmw) What you say about "tax deferred" is true but there are situations where weird tax accounting can apply, I thought the investor ought to be prepared.
"2.) To use the crisis of 2008-09 in distribution calculations is ludicrous."
I don't believe I used them in calculations, I simply use it as an example of why high dividend could be considered precarious.. Besides, I pointed out that management handled the situation very well. So... I am not sure I understand your point here.
"3.) "Since MLPs are supposed to pay off all their profits as dividends"
Answer: There is no such requirement."
That is true, I should have said "...in practice many MLPs..."
"4.) Just because BBEP doesn't use the term "distributable cash flow" in its SEC filings doesn't mean they don't use them. In a September 2012 presentation, they estimate 2012 DCF coverage to be between 1.2-1.3 times distributions. "
I read that too. The fact that management states it there doesn't really change anything I noted above, I believe.
"5.) He doesn't understand hedges. And to compare SD with BBEP is apples/oranges."
How is that, exactly? I am simply talking about the accounting treatment of hedges, and specifically mark-to-market. To provided evidence of my point: Sandridge has a PE of 4.39 ONLY because of an GAAP accounting gain for its hedge portfolio. And it had a GAAP loss in the previous quarter ONLY because of the accounting treatment of its hedges.
"6.) I'ts debt is close to $1 Billion- so what? Most short term credit lines for MLPs expire Ocotber 1. In order to maintain approximately 60-40 equity-debt ratio, BBEP moved short term debt to long term. No problem there."
I don't believe I said it was a "problem" (?)
Thanks for the comments.
Yelp Is Not Worth $1.35 Billion [View article]
Chronically Criminal: Shielding The Public From Medical Marijuana [View article]
It's pretty simple. Why buy an overvalued company? -- Especially one which is owned by someone who is so suspect?
If, instead, you double down or buy more shares you are effectively doing two things. One, you are psychologically increasing your commitment to MJNA.PK at the exact moment you ought to be questioning it. And secondly, you are continuing to believe that this company will **make enough money in the future to make a purchase at today's prices worth it.**
The intelligent and conservative thing to do is to sell, if you own the shares, and watch.
Why Hyperinflation Is A Myth (And What It Means For Gold Prices) [View article]
If we were rational and always had all the relevant information, mathematics in economics, such as the quantity theory of money or the "equation of exchange," would be a way of describing economic phenomenon. As it is, mathematics has corrupted the entire discipline.
Just my two cents.
Norfolk Southern: Not A Buying Opportunity [View article]
Our Evaluation Of Verizon's Ability To Pay Its Dividend [View article]
That is the FCF figure if you ignore that they consolidate the 45% of Verizon Wireless owned by Vodafone. The article ignores the consolidation calculation when it comes to FCF--specifically, FCF out of the Cellco Partnership. By my estimate, their claim of FCF is somewhere around $9.2 billion, making the dividend a significantly greater portion of their FCF (See: http://seekingalpha.co...)
Vodafone: Get Paid 5% To Wade Through The Euro Crisis [View article]
The dividend range was somewhere near 5.0%.
Their recurring dividend 4638 million pounds.
The average exchange rate was near $0.649 per pound (the correct exchange rate to use would be the one on the day obviously, I will look that up).
The dividend be near $7,100 million in U.S. Which would make the yield about 5.04%.
Sorry for the pretty major mishap, somewhere in the converting back and forth from pounds to dollars I didn't check the figures.
Also thanks rw1270 for the timely criticism. I'll put in a correction to the SA editors.
Lastly, I still quite like VOD at these levels.
Windows 8 And The Microsoft Constituency: A Unified Theory Of Everything [View article]
MSFT has about $23 billion in FCF now. Its market cap is $250 billion. That is a multiple of 10.9. So... while I agree that we won't see MSFT trading at 81 times FCF, there remains a possibility it will trade at 20 times FCF... or about its high of 1999. So I don't know whether I would say "odd are overwhelming" that it won't happen.
Anyways, I think they are innovating. Windows 8 is innovative.
Cheers!
Aspen Insurance Holdings: Discounted And Shareholder Friendly [View article]
"Why does Bermuda host so many insurance companies? How is it the second-largest reinsurance market, second only to New York? First, the country doesn't levy a corporate income tax on insurers, so that is quite a perk. Another reason is the regulatory environment which:
"…fosters innovation and creativity by responding to the emerging needs of the insurance and reinsurance markets…from the development of mechanisms such as captives in the 1960's, through the formation of excess liability carriers ACE and XL and the development of finite risk reinsurer Centre Solution in the 1980's, and though the formation of property catastrophe companies Mid-Ocean Re, PartnerRe, Endurance Re and many other over the last two decades, Bermuda has been and continues to be, a centre for innovation in the insurance market." [1]
Also, there is a tax incentive for American insurers to purchase reinsurance from a foreign firm, e.g., firms from Bermuda. This tax incentive, which takes the form of allowing premiums paid to foreign insurers as tax deductions, would be eliminated in the most recent White House budget***. This elimination will make having Bermudian reinsurance less advantageous if you are an American insurer seeking reinsurance. Losing this advantage would make the Bermudian insurers less attractive."
I hope that answers your question. We could always go deeper and talk about specific laws (for instance, I think Bermuda recently promised in a law not to tax insurers until at least 2035 or thereabouts). But that is the gist. Thanks for reading.
** On Everest RE: http://bit.ly/13k2POt
***http://bit.ly/174koVK
Norfolk Southern: Not A Buying Opportunity [View article]
From that perspective we can both be right: my alternatives might perform better, and Norfolk might, itself, perform more than satisfactory.
The new owners of the DJIA are considering changes to the way the iconic index is calculated in order to be able to include [[take a guess]] without it holding too much sway on the price-weighted gauge. "Most institutional investors have moved on from the index," says UBS' Mark Haefele. YTD, the (Apple-free) DJIA +11.6% vs. the S&P 500 +16.1%. [View news story]