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Jake Huneycutt  

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  • Smith & Wesson - Great Company, Overvalued Stock [View article]
    Good points, John. I agree on #1 and #2. Though, I still think the larger point might be that the margins will probably come down in the future and in a more normalized environment, I'm not sure S&W would be raking in such huge profits. But you're right --- army contract could be big and could possibly offset margin contraction.

    #3 is a tougher issue, because it could also result in more regulations which would hurt sales. There is a certain irony though in that the "gun grabbers" are essentially creating a larger class of gun owners over time through their hysteria. The hysteria can benefit the gun makers, but only if it doesn't get coupled with UK-style gun regulations. (And I hope it doesn't.) Feel like the past few years have been the perfect storm for gun makers because we've seen gun hysteria, but there's been no chance that a Republican Congress would give in to it.
    Aug 28, 2015. 08:47 AM | Likes Like |Link to Comment
  • IBM's 21st Century Transition Is Failing [View article]
    Excellent article, Peter.

    I tend to agree. I briefly bought into IBM a few years back. Warren Buffett bought it which was a huge endorsement. It looked cheap and it was, after all, IBM! It stood to reason that it could benefit from a transformation.

    Yet, the more I dug into things, the less confident I became in that thesis. There does seem to be a culture problem at IBM and I'm not sure I really buy into the transformation strategy fully. I sold out of the stock a few months after buying in. That's something I rarely do, but I did not feel confident about where IBM was heading.

    Perhaps the biggest red flag came talking to a few friends who were IBM employees. They didn't say anything negative per se. They weren't saying a single thing positive either. I noticed a pattern that I didn't like.
    Aug 26, 2015. 01:01 AM | 2 Likes Like |Link to Comment
  • Why I'm Starting A Short Position In Cabot Oil & Gas [View article]
    Thanks for posting this comment, Richard. I have to agree.

    I'm researching COG now and this article left me extremely confused. I've only done 20 minutes of research thus far and even with that, I was extremely puzzled by the author's statements that seemed to contradict the data I'm seeing in the financial statements.
    Aug 24, 2015. 06:56 AM | Likes Like |Link to Comment
  • What Does Google And SpaceX Mean For ViaSat? [View article]
    Excellent article, Brian. Just now coming across this.
    Aug 21, 2015. 01:21 AM | Likes Like |Link to Comment
  • Chinese shares dive; Hong Kong enters bear market [View news story]
    20,000 tons of gold = $46 billion

    China's debt = $27 trillion ++++
    Aug 20, 2015. 08:16 AM | 2 Likes Like |Link to Comment
  • Report Claims Mercedes Ditches Tesla And Upgrades Electric Car To 310 Miles Of Range [View article]
    To me, this goes to show two important points:

    (1) Electric cars could be mainstream within a decade,
    (2) Tesla will still be a poor long-term investment

    If electric cars go mainstream, nearly every major automaker is going to have an electric car. Tesla is going to be in a sea of competitors, many of which will probably be more cost-competitive. Not that Tesla can't be successful, but it will expose the valuations of the past couple years as preposterous.

    If one expects electric cars to go mainstream, I tend to think that natural gas, solar, and electric utilities will make better investments than automakers.
    Aug 19, 2015. 06:04 PM | 9 Likes Like |Link to Comment
  • Eastman Chemical: Strong Management, Reasonable Valuation [View article]
    There is a video for this article, but thus far, it appears Seeking Alpha has not embedded it.

    http://bit.ly/1TUgPFz
    Aug 19, 2015. 06:51 AM | 2 Likes Like |Link to Comment
  • Will Canadian Real Estate Crash? [View article]
    Rob,

    I'd disagree a bit with that assessment. There are no good hard stats, but there are estimates. The estimates suggest that about 5% - 6% of the condos in Vancouver are owned by foreign buyers. That's not 5% - 6% of the sales, btw. If 5%+ is owned by foreign buyers, it's likely that at least 15% of the sales are to foreign buyers and that's more than enough to move the market IMO.

    I don't disagree that Canadians are also driving up the prices via low interest rates. Similar to the US housing bubble, the Canadian housing bubble is being driven by multiple classes of individuals. But I do think the foreign buyers are particularly critical, because these are investors who are not necessarily cost sensitive.
    Jul 31, 2015. 03:18 PM | 5 Likes Like |Link to Comment
  • Will Canadian Real Estate Crash? [View article]
    Great article, Michael, but I'd disagree with one key part.

    The biggest myth about the US housing crash is that it was driven by subprime borrowers. I think more accurately, high levels of subprime borrowing were merely a symptom of the inflated US housing market; not "the" cause.

    A real estate bubble can be driven by many factors. In the US, demand was inflated by loose credit that not only brought in a lot of subprime borrowers, but also created excess speculative demand from more credit-worthy borrowers.

    In Canada, the inflated demand is being created by foreign buyers, not subprime buyers. Credit status is really irrelevant here. A bubble is a bubble is a bubble. If prices are 50% beyond what the fundamentals will support, then the prices will eventually correct. When prices correct, there will be defaults because the economic incentive of many borrowers will be to default.

    We put too much stock in this concept of credit-worthiness. If prices plunge, even some of the most credit-worthy borrowers will default. If prices rise, even some of the least credit-worthy borrowers will stay solvent.
    Jul 31, 2015. 12:18 PM | 15 Likes Like |Link to Comment
  • Microsoft, Capitulation And The End Of Windows Everywhere [View article]
    Think the biggest mistake of a lot of "futurists" (since around 2011) has been assuming the PC will die off or become irrelevant. It won't. There's simply no future reality where people are running large spreadsheets on a smartphone. There's no future where people are developing e-learning or video editing on a smartphone. There's no future where journalists are writing 2,000 word articles on a smartphone.

    Smartphones are clearly a bigger market, but the PC is not disappearing. Microsoft's biggest mistake has been to assume that they had to win mobile, rather than focus on their core users. That explains the Windows 8 abomination, which basically said "screw you!" to Microsoft's core business users. But Microsoft appears to have learned from that.

    This isn't to say mobile hasn't dramatically changed things. I certainly think that Intel made a mistake by getting behind on mobile in the early stages. Blackberry killed itself by not adapting to the non-business oriented customers. But Microsoft is a different beast. It doesn't need mobile; mobile is a luxury for MSFT and it's biggest failure was not realizing that sooner.

    I can't imagine in 10 years, I'll be doing my work on anything other than a desktop PC or laptop. It's possible that Microsoft loses out to someone else on operating system or office productivity, but I'm never going to use a smartphone to research a stock, dig through data, or write articles.
    Jul 29, 2015. 04:15 PM | 6 Likes Like |Link to Comment
  • Time To Short Disney: Horrendously Expensive And Misunderstood [View article]
    J,

    Saw this today. Does seem to add credence to your hypothesis.

    http://on.wsj.com/1HSku6r

    But I will say that as someone who has done short-selling for 5 years, I can tell you that it's one of the toughest businesses in the world. Very difficult to make money. I used it more for hedging purposes, because it can provide added liquidity when the market is down.

    Even if your thesis on ESPN plays out, I still don't know that I'd want to short the stock in any form. I'd rather play the other angle: keep an eye on it and if it sees a significant decline as a result of temporary issues with ESPN and / or theme parks, go long.
    Jul 10, 2015. 01:43 PM | Likes Like |Link to Comment
  • Time To Short Disney: Horrendously Expensive And Misunderstood [View article]
    J.,

    Well written article, but can't agree with the premise that there's a great threat to Disney's cash cows. DIS might be overvalued, but I wouldn't consider it anything close to a good short target.

    I'm really not convinced that ESPN is in more danger than the cable companies, and felt like that part of the article was never elaborated on well. If anything, even if the entire cable model were upended tomorrow, ESPN would likely come out OK. In reality, ESPN could launch its own Internet-based service and charge $15 per month and still do pretty well. ESPN is really one of the best "wide moat" businesses out there.

    The other reason DIS is a poor short target is operating leverage. With many of its businesses, there are fixed costs, and everything beyond that is pure profit. A lot of short-sellers get attracted to the idea of shorting these companies because of excessive valuations, but the problem is that you only win a small profit if you're right and you can lose a lot when you're wrong.

    There's a legit case to favor other dividend stocks over DIS. I would not consider it a good short target, though.

    That said, this is probably the best overview article I've read on DIS.
    Jul 9, 2015. 03:03 PM | 3 Likes Like |Link to Comment
  • Prediction Is Difficult. Especially About The Future [View article]
    Italy is probably misleading, as well. Italian growth has been falling downwards for several decades. The Eurozone issues have hurt them, but their own awful economic policies (high taxes, onerous regulations, corruption, etc) are hurting even more. Italy, alongside of Greece, are the "first world countries" that are doing their best to fall backwards into the "developing world."

    Honestly, the big takeaway from this, to me is that we have a "Central Bank Bubble." By depressing interest rates globally, central banks have inflated stock prices nearly everywhere.

    Of the countries listed, I'd view Spain and the UK as the most attractive. Still think people are underestimating UK growth. Spain has its problems, but I feel like the fundamentals moving forward there are much better than in Italy, Greece, and France.

    Interesting how high the projected returns for Singapore are, but I suspect that this might be using prior growth rates (which were insanely high for Singapore), which are unlikely to hold into the future.
    Jul 4, 2015. 02:15 PM | Likes Like |Link to Comment
  • My Bet On Seeking Alpha's Future [View article]
    Congrats Eli! You are more than deserving.

    And thank you to David for everything you've done. You've truly built a spectacular community here.
    Jul 3, 2015. 12:04 PM | 2 Likes Like |Link to Comment
  • How A Part-Time Uber Driver Can Buy A Tesla [View article]
    Excellent article.

    There's a good case that an Uber driver would be the most ideal economic user of a Tesla. I did an article a few years ago showing how the Prius wasn't technically a "superior economic choice" for most drivers unless gas prices rose above $6 per gallon. However, taxi drivers (and other heavy users) would be the exceptions.

    The economics of electric cars will almost certainly put the internal combustion engine into decline at some point. The gas savings is part of the equation, but the bigger point (and also the more difficult to calculate part) is the savings on maintenance. With electric cars, you really only have to worry about one thing: the battery. You don't have hundreds of things that can go wrong and need repair.

    My only question is whether electric cars will ever have range high enough to eliminate the internal combustion engine. If I'm taking an 800 mile round trip to Smokey Mountains National Park on a backpacking trip, will an electric car ever be viable for that? Or will people start to own second cars for the sole purpose of these sorts of long road trips, particularly to remote places?
    Jun 20, 2015. 02:42 PM | Likes Like |Link to Comment
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