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Jake Huneycutt  

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  • 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
  • Natural Gas Is The Only Commodity I Want To Own Right Now [View article]
    Great article, but I disagree with the conclusions.

    Natural gas is the only commodity I find myself interested in, as well. Except, I would not invest in UNG; I'd focus more on producers. The problem IMO with investing in the underlying commodity is that there is a long-term trend towards innovation and lower-pricing. If you buy a high-quality gas E&P, you can still benefit if the price goes down or stays flat, so long as costs are falling as well.
    Jun 8, 2015. 11:40 AM | Likes Like |Link to Comment
  • PepsiCo No Longer Cheap, But Still A Solid Retirement Stock [View article]
    Rebel,

    Thanks for the comment.

    I mostly agree. $75 could happen in a recessionary scenario, but at that point, a lot of other stocks would become significantly more attractive as well. Another possible downside scenario would be one where interest rates rise and make dividend stocks look less attractive comparatively. Once again, though, that would mean many other investments would become more attractive, as well.

    Outside of those two scenarios, I don't see it as likely that PEP will fall to $75, but it's at least in the realm of possibility in a lagging growth scenario.
    Jun 3, 2015. 09:07 AM | 1 Like Like |Link to Comment
  • Banco Santander: One Of The Best Banks In The World Sells At A Discount [View article]
    ArtfulDodger,

    Excellent comment above.

    You hit many of the points I wish I had further elaborated on in my article. Santander has a great track record of scooping up cheap assets. They did it in Spain with the Eurozone Crisis. They might even be doing it in Brazil right now.
    May 31, 2015. 05:14 AM | 3 Likes Like |Link to Comment
  • Banco Santander: One Of The Best Banks In The World Sells At A Discount [View article]
    By the way, from Dec 1996 to Dec 2001, CIB lost 95% of its value. Going by your own standards of evaluation, you would've been arguing it was a horrendous investment in 2001 based on backwards-looking information.
    May 31, 2015. 05:06 AM | Likes Like |Link to Comment
  • Banco Santander: One Of The Best Banks In The World Sells At A Discount [View article]
    Ian,

    In 2001, you would've been talking about how Colombia was one of the "awful" Latin American countries. From 1994 to 1999, Colombia's GDP actually declined. It devalued its currency twice. It still had major problems with drug cartels at the time and was mostly known for its cocaine and a Marxist-Leninist guerrilla movement, FARC.

    You can point out how great jumping onto CIB in 2001 would've been, but in reality, you'd be making the same backwards-looking arguments you are now against SAN.
    May 31, 2015. 04:39 AM | 1 Like Like |Link to Comment
  • Banco Santander: One Of The Best Banks In The World Sells At A Discount [View article]
    Quant,

    There's one odd theme I've noticed in my 7 years of writing articles: the best investment theses are often the ones that encounter the most hostility. I got the same reaction to buying homebuilders in 2011, buying REITs in 2009, and with several individual stocks that were hated.

    Obviously, this doesn't mean every time an investment is dissed, it's a good one, but it does suggest a truism: the best investment ideas are often the ones that go against the grain. If everyone else is buying something, it's probably not a good deal. (I've also noted that my articles on stocks that received almost universal agreement have rarely ended up being my best investments.)

    I do have some fears about Santander, but IMO the worst of the macro stuff is largely priced in and there is considerable upside potential.
    May 27, 2015. 09:24 PM | 2 Likes Like |Link to Comment
  • Banco Santander: One Of The Best Banks In The World Sells At A Discount [View article]
    Ian,

    I'm not crazy about the valuations on the Chilean banks. Haven't looked into the Colombian ones. I'm not necessarily against those ideas, though.

    Regardless, you're taking on country-specific risks with those banks. Nothing wrong with this, but buying a "pure-play" in banking is different than buying a pure-play in another sector. You're betting on a country more than a bank in many cases.

    The rationale for buying Santander: it's one of the strongest Latin American growth plays and you're diversifying nation-specifc risks. You're also getting it at a price that assumes depressed results well into the future.
    May 27, 2015. 06:47 PM | 1 Like Like |Link to Comment
  • Silver Is Shaping Up To Be The Best Precious Metal Play Of The Decade [View article]
    Excellent and balanced article. Thanks for this, Caiman.
    May 26, 2015. 10:36 PM | Likes Like |Link to Comment
  • Compass Diversified: 8.5% Dividend Yield, 10%-20% Undervalued [View article]
    link,

    I had no idea you meant before the Financial Crisis. Pretty much all investments in that entire sphere got hammered back then.

    CODI has done pretty well since March 2009. The stock has been overvalued at a few times, such as early 2011 and early 2014, but has been a pretty good bargain for most of that timeframe.
    May 22, 2015. 01:14 PM | 1 Like Like |Link to Comment
  • Compass Diversified: 8.5% Dividend Yield, 10%-20% Undervalued [View article]
    Sorry link, but going to have to call BS here.

    Even if you bought CODI at the absolute most inflated price it's sold at in the past 3 years ($19.70 in January 2014), you'd still have no more than a 5% loss once you account for the distributions, if you had continued holding till today.

    The phrase "further under water" seems like extreme hyperbole. From peak to trough, you couldn't have possibly lost more than 15% unless you were day-trading or engaging in some sort of short-term speculation.

    If you're unwilling to risk a 15% short-term loss, you shouldn't be investing in stocks PERIOD! Even companies like Microsoft (MSFT) and Coca-Cola (KO) have more volatility than that.
    May 21, 2015. 04:47 PM | Likes Like |Link to Comment
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