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Jake Huneycutt  

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  • World Wrestling Entertainment: Intriguing Prospects, But Margin Of Safety Too Small [View article]
    Hey Steve,

    Thanks for the comment.

    I don't view "historical precedents" as all that relevant. WWE had a declining business model and it has radically shifted course. This is similar to what happened with the record industry and with DVDs (getting replaced by streaming). WWE's management was smart and saw the writing on the wall, launching the WWE Network. Nevertheless, it's no guarantee that they'll ever be back where they were a decade ago.

    As far as insiders exercising stock options, it's really not relevant. I'm more interested in seeing how insiders handle risk, rather than risk-free money.

    I like where management is going with the WWE Network,. I think it'll work out in the long-run, but that doesn't necessarily mean the stock is a good value at $17.
    Feb 25, 2015. 05:26 AM | Likes Like |Link to Comment
  • Jack In The Box: Great Company, Very Expensive Stock [View article]
    Michael,

    Very true in regards to "fast casual." It's getting to be insane.
    Feb 24, 2015. 09:28 AM | Likes Like |Link to Comment
  • How Cash Can Boost Long-Term Returns [View article]
    StudentOfLife,

    It's true that one critique of holding more cash is that it's "market timing." But I simply find it a weak critique. It's like saying "not buying houses at inflated prices during the Housing Bubble was market timing!" I find it a more convincing argument that when prices for an asset class are inflated, you shouldn't be buying nearly as much of it. It has little to do with "timing."
    Feb 17, 2015. 04:45 PM | 1 Like Like |Link to Comment
  • How Cash Can Boost Long-Term Returns [View article]
    neroden,

    By holding cash, you are giving yourself more liquidity to buy in if the prices fall. By selling equity puts, you are actively betting one the price of an individual security to fall. There's a pretty huge difference in terms of risk.

    Not saying that selling puts is a poor strategy. Merely that I don't see the 'selling puts' strategy as an option for anyone other than the most sophisticated investors. Whereas, I think the average individual can benefit from understanding cash management techniques.
    Feb 17, 2015. 04:38 PM | 1 Like Like |Link to Comment
  • The Most Underrated Book On Investment [View article]
    xtigerx,

    Thanks for the comment. I agree that investing is much less annoying. Poker is a good way to understand certain elements of investment strategy, but investing is such a better way to build long-term wealth. Not only is the "pie" expanding, but you have less arbitrary factors.
    Feb 16, 2015. 12:04 PM | Likes Like |Link to Comment
  • American Shale Is The New Swing Producer [View article]
    Excellent article, SU.

    Be interesting to see where prices go. I don't think oil can stay this cheap long-term, but I also don't think it's going anywhere back near $100.

    Also have to wonder if we'll see something similar to what happened with natural gas in 2008 (perhaps on a lesser scale). Many analysts thought gas prices would bounce right back, but the costs of production simply continued to fall in the long-run. There seems to be a bit of that happening with shale oil, as producers are finding ways to reduce costs.
    Feb 10, 2015. 05:50 AM | 1 Like Like |Link to Comment
  • A History Of Investment Taxes In The U.S., Part I: 1913-1921 [View article]
    mismutual,

    The "S&P" data is based off of Robert Shiller's online historical stock data:

    http://www.econ.yale.edu / ~shiller/data.htm

    I couldn't say the precise methodology used, but there's a partial explanation at that link. So in a sense, this is not technically S&P data, but it's sort of an equivalent. Perhaps I should've specified that, but rarely get asked about it.

    (Note that the URL gets messed up in the comment, so I used a space after the .edu and before the ~ symbol.)
    Feb 4, 2015. 09:18 AM | 3 Likes Like |Link to Comment
  • Taking A Look At Historical Natural Gas Prices [View article]
    Milkweed,

    I haven't looked at UPL much, but I agree it seems like one of the more interesting companies in the space.
    Jan 21, 2015. 11:12 AM | Likes Like |Link to Comment
  • Taking A Look At Historical Natural Gas Prices [View article]
    ClubFord,

    Thanks for (albeit misguided) comment.

    If you think it's a safe statement, maybe you should read up on the history of boom and bust cycles. There are periods where commodity sector companies have made poor investments for 8 - 15 years. I'm willing to wager that many of the oil service companies that look "cheap" now will continue to be poor investments for half a decade or more.

    My point in the comment is to say that I don't think the next boom cycle is right around the corner. But that natural gas has been subdued a long enough time, that it's worthwhile to keep an eye on it for the next several years.

    Being a value investor requires patience.
    Jan 20, 2015. 12:07 PM | 1 Like Like |Link to Comment
  • Taking A Look At Historical Natural Gas Prices [View article]
    aggieoilman,

    Thanks for the correction.
    Jan 20, 2015. 12:02 PM | Likes Like |Link to Comment
  • Taking A Look At Historical Natural Gas Prices [View article]
    Advance,

    Thanks for the comment.

    "Commodity cycles" might seem like voodoo, but there's an underlying logic to it. When prices are high and the industry is booming, that's when companies start making large capital expenditures to expand exploration and production. The result is a massive amount of excess capacity that eventually drives prices down to level where much of the new capacity is unprofitable.

    When prices are low and the industry is in bust stage, there's less incentive for new capital expenditures. If demand increases over time, it's not uncommon then for producers to be in catch-up mode while supply is too low and prices are going up.

    The shale boom is one thing that throws a wrench into this for natural gas, because high oil prices have also opened up more gas supply. This is one reason why I don't think the natural gas bust cycle will end in the next couple of years, as I believe oil might have to go into bust for awhile, before the conditions would become ripe for a boom in gas.

    It's true that gas can be produced economically at $3 - $4, but oil was produced economically for well under $80 per barrel and that didn't stop prices from going up over $100 for several years.
    Jan 20, 2015. 11:57 AM | 2 Likes Like |Link to Comment
  • Share Buybacks And Value Destruction [View article]
    Brucejfern,

    Great comment. I did consider writing a section on how buybacks can be used to enrich executives, but ultimately forgot to include it. But it's certainly a very valid point.
    Jan 15, 2015. 09:56 AM | Likes Like |Link to Comment
  • Share Buybacks And Value Destruction [View article]
    Sliman,

    Thanks for the comment.

    Look at the companies in PKW.

    Home Depot (HD) and Lowe's (LOW) are two of the largest holdings (comprising nearly 10% of the fund). Many other cyclical holdings such as industrials, restaurants, financial, autos, airlines, retail, etc. In other words, it's probably tracking strong companies in cyclical sectors more effectively than the "value creation" or "value destroying" attributes of share buybacks.

    Also worth noting that many of these companies were undervalued during the 2009 - 2011 period, so buybacks would've likely been beneficial. How it will fare in the future --- I don't know. Too complex to model out given that there may be 100+ companies in there.
    Jan 14, 2015. 12:12 PM | 3 Likes Like |Link to Comment
  • The Coming Euro Crash [View article]
    Excellent article, as always, SU.

    The Euro strikes me as akin to trying to fix a pothole by building 3 new highways and a $100 million streetcar system jointly managed by 18 different jurisdictions. The problems that the Euro set out to fix were relatively minor (price transparency, multiple exchange rates, etc) and probably could've been significantly improved with a much less dramatic reform.
    Jan 8, 2015. 06:29 AM | 3 Likes Like |Link to Comment
  • Denbury Resources Presents A Margin Of Safety, 50% Upside [View article]
    Good article, but I think your case is significantly undermined if it requires oil to go back above $80. I have no problem with the thesis that oil prices are too low right now; but I'm also skeptical of the idea that they are shooting back up to $80 - $100 in the next two years.

    I think a more likely scenario is that rebounds back to the $60 - $70 range and hovers there for awhile. I wouldn't even be totally shocked if it stayed around $50 for the next year (until supply starts to correct).
    Jan 6, 2015. 01:49 AM | Likes Like |Link to Comment
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