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Jake Huneycutt

 
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  • Projecting The Forward Returns On The S&P 500 Index
    Thu, Jun. 12 SPY 15 Comments

    Summary

    • Savvy investors focus on forward returns, rather than the past.
    • Forward returns on the S&P 500 over the next five years are likely to be in the 1% - 6% range, well below historical averages.
    • The S&P 500 appears to be moderately overvalued.
    • A 20% correction in the S&P 500 would be needed before hitting an expected 5-year forward return of 8%.
  • The Central Bank Boom Is Creating Huge Risks For Investors
    Editors' Pick • Mon, May. 19 BP, CNY, EWJ 128 Comments

    Summary

    • Flawed macroeconomic policies create significant market risks and can quickly undermine valuations.
    • China's US bond buying binge, along with loose Federal Reserve policies, helped fuel the US housing bubble from 1997 - 2005.
    • There's a significant correlation between US Federal Reserve bond buying activity and the US stock markets since 2007.
    • The market's reliance on central bank stimulus is creating significant downside risks for investors.
    • A defensive posture, focusing on attractively-priced dividend stocks and holding extra cash, can help cushion against potential downside risks.
  • Krispy Kreme: Strong Growth And Great Turnaround, But Is It Overpriced? (Value Invasion, Episode 2)
    Tue, Apr. 22 KKD 5 Comments

    Summary

    • In spite of a high P/E multiple, KKD's stock price is justified.
    • Over the past decade, KKD has transformed from a dysfunctional company with insolvency risks into a cash flow machine.
    • Strong management, attractive business model, great cash flow growth, and a reasonable valuation make KKD an OK buy.
    • KKD has some upside potential due to deleveraging, which could make an LBO offer attractive to a private equity firm.
    • High growth expectations embedded in the stock price provide KKD with less "margin of safety" than might be desirable for many value investors.
  • Un-Redeeming Greenspan: Why The Fed Was To Blame For The Housing Bubble
    Tue, Apr. 1 30 Comments

    Summary

    • Christopher Matthews' case for "Redeeming Greenspan" is based on a flawed understanding of monetary policy.
    • The Greenspan Fed aggressively lowered interest rates in the early 00's in spite of surging housing prices, strong loan growth, and high money supply growth.
    • "Cheap money" policies by the Greenspan Fed altered the economics of housing, incentivizing both banks and borrowers to engage in reckless behavior.
    • The Greenspan Fed deserves the lion's share of the blame for the housing bubble and subsequent financial crisis.
  • Bank Money Is Contracting (And Other Hidden Statistics)
    Editors' Pick • Wed, Mar. 19 NLY 61 Comments

    Summary

    • While overall money supply in the US is increasing, bank money appears to be declining, possibly due to Dodd-Frank and tighter Federal regulations.
    • Tighter regulations, coupled with loose Federal Reserve policies have created an odd combination of de-leveraging in some categories and surging debt in others.
    • The above-average spread between the Federal Funds Rate and US treasuries, alongside of weak loan demand may suggest that US treasuries are undervalued.
    • Mortgage REITs appear attractive at current prices given economic data.
  • Italy: The New 'Powder Keg' Of Europe
    Editors' Pick • Wed, Feb. 19 EWG, EWP, EWQ 188 Comments
  • The Crisis Of Modern Economics
    Thu, Feb. 6 FXI, SPY 23 Comments
  • High Margin Debt And Quantitative Easing
    Tue, Feb. 4 9 Comments
  • Don't Worry About Being 'Right'; Focus On Risk Vs. Reward
    Editors' Pick • Sun, Jan. 19 73 Comments
  • Five Major Underreported Economic Threats
    Wed, Jan. 15 DBO, ENOR, EWD 38 Comments
  • 2014: Stealth Tightening, Hidden Austerity, And The Potential For Recession
    Nov. 22, 2013 VNQ, SPY 26 Comments
  • Bubbles, Crashes, And Market Corrections, Part 2: 1900 - 1925
    Oct. 16, 2013 SPY 6 Comments
  • 3 Year M2 Money Supply Growth At Highest Level Since 2003
    Oct. 15, 2013 3 Comments
  • Bubbles, Crashes, And Market Corrections, Part 1: 1871 - 1900
    Oct. 15, 2013 SPY 15 Comments
  • Amazon: Much More Profitable Than Perceived And A Foolhardy Short
    Oct. 14, 2013 TGT, WMT, AMZN 131 Comments
  • Examining Historical Margin Debt
    Sep. 27, 2013 SPY 15 Comments
  • Now Is The Time To Be Fearful
    Editors' Pick • Sep. 19, 2013 KIE, SPY 752 Comments
  • The Budget Deficit Is Still A Huge Problem
    Aug. 8, 2013 ITB, KBE, KIE 18 Comments
  • 7 Reasons Why Zillow Is Extremely Overpriced
    Editors' Pick • Aug. 7, 2013 GOOG, TRLA, MOVE 35 Comments
  • Potash Producers Look Expensive Even After Plunge
    Editors' Pick • Aug. 6, 2013 AGU, CMP, IPI 87 Comments
  • Panic In China: Malinvestment, Deflation, And The Next Emerging Market Crisis
    Jun. 24, 2013 AZIA, ECH, EPU 221 Comments
  • 5 Inexpensive Stocks In An Overheated Market
    Jun. 19, 2013 BP, C, GNW 19 Comments
  • The Housing Rebound And Why The Fed Should Begin Tightening
    Editors' Pick • May. 23, 2013 C, GNW, TRLA 44 Comments
  • McMarket Share: How The Golden Arches Could Benefit From Obamacare
    May. 9, 2013 BKW, FCFS, JACK 11 Comments
  • Deteriorating Franchisee ROE: Why I'm Short On Sonic, Part 3
    May. 8, 2013 BKW, JACK, MCD 3 Comments
  • Carhops, Coneys, And Healthcare: Why I'm Short Sonic Drive-Ins, Part II
    Editors' Pick • May. 6, 2013 JACK, MCD, PZZA 4 Comments
  • Carhops, Coneys, And Healthcare: Why I'm Short Sonic Drive-Ins, Part I
       • May. 1, 2013 BKW, BLMN, CAKE 15 Comments
  • 3 Attractively Priced Big-Dividend Stocks
    Apr. 4, 2013 CODI, OLP, PER 62 Comments
  • Value Destruction, The Great Depression, And Market Vulnerability
    Mar. 28, 2013 BPOP, GNW, HHC 17 Comments
  • How Obamacare Could Harm Growth In 2014, Part III
    Editors' Pick • Mar. 19, 2013 CBRL, DENN, DPZ 72 Comments
  • Italy Faces Ugly Future Without Reforms, Eurozone Exit
    Mar. 5, 2013 EWI 7 Comments
  • Ranking Growth In Tier 1 Economies Since 1980
    Mar. 4, 2013 EWA, EWG, EWH 16 Comments