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Jake Huneycutt

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  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    Great article, Chuck.

    IBM is one of my favorites right now, as well. The way I see it, even if the "growth story" doesn't pan out, it still looks reasonably priced. The growth from their moves into BI, cloud computing, etc, provide a significantly upside, too, if things start to improve significantly.

    Most of the concerns seem overblown or short-sighted to me. Debt levels are reasonable, the share buybacks aren't at excessive valuations, the near term earnings growth problems are coming largely from areas they are shifting away from. Can't say I know whether the upside will pan out, but a high-upside investment that has low-downside risk is my favorite type of play.
    Aug 8 07:41 PM | Likes Like |Link to Comment
  • Genworth Financial: A Great Buy Amid Uncertainty [View article]
    I hadn't even noticed GNW had plunged so much till I spotted this article.

    I had gotten completely out of it by early July, as I thought it was fairly valued around $18, and had some fears on the macro level (I'm a bit contrarian in expecting interest rates to stay subdued). It's a stock that I've been slowly selling out of for most of the past six months. Certainly more attractive now that it's quickly fallen back to $13.
    Aug 8 05:06 PM | Likes Like |Link to Comment
  • Bank Of America Is My Best Subversive Dividend Idea [View article]

    I'm interested in specific examples. "Toxic derivatives" seems to have become a catch-all buzzword to scare uninformed investors.
    Jul 11 11:26 AM | 2 Likes Like |Link to Comment
  • Bank Of America Is My Best Subversive Dividend Idea [View article]

    What sort of "toxic derivatives" are on BofA's books? Do you have any specific examples?
    Jul 11 08:48 AM | 3 Likes Like |Link to Comment
  • Bank Of America Is My Best Subversive Dividend Idea [View article]
    Great article, Tim. Last inflated market (2007 -8), the big banks were some of the worst investments. This inflated market, the big banks actually appear to be one of the few classes with a reasonable "margin of safety." BAC and C, in particular, still look cheap.
    Jul 11 07:56 AM | 3 Likes Like |Link to Comment
  • Seeking Alpha Strikes A Victory For Free Speech [View article]
    Great news! Thanks for sharing this, Eli.
    Jul 7 06:57 PM | 1 Like Like |Link to Comment
  • What Would Benjamin Graham And John Neff Pay For Realty Income? [View article]
    Great article, Tim. In this market, don't think there are many stocks that fit Ben Graham's strict criteria, unfortunately. But I like O --- agree it's probably about fairly valued.
    Jun 15 03:55 PM | Likes Like |Link to Comment
  • Washington State's Minimum Wage Experience [View article]
    This article has major issues.

    First off, Washington state's real minimum wage hasn't even changed in the past 12 months. It was increased from $9.19 per hour to $9.32 per hour, a 1.4% increase, that is based off of an inflation index. Therefore, posting a chart showing that Washington state's unemployment rate has fallen is kind of irrelevant.

    Even if Wash state had raised the real minimum wage, you'd have to look further than the unemployment rate over a 12-month period to reach any conclusions. For starters, the unemployment rate does not factor into account labor force participation. Likewise, the headline unemployment number examines people of all skill levels. You wouldn't expect an accountant making $50 / hour or an engineer making $75 / hour to be affected by a minimum wage of $9.32 / hour.

    In order to even begin to quantify the effects, you'd need to look at unemployment on a group of unskilled laborers. Unfortunately, there's no perfect measure but the employment to population ratio for individuals aged 16 - 19 years old is probably the best proxy.

    Since a series of Federal minimum wage hikes from 2007 - 2009, the employment ratio has dropped from around 35% to 26%, a very significant decline.

    There's also a bit research showing that European nations with minimum wages have higher unemployment than European nations without minimum wages.

    So far as I know, there are no major studies that look at the long-term impact of minimum wage laws on long-term income. My guess is that it results in reduced income over the long-term, since many younger individuals would prefer to accept lower wages, in exchange for experience and skills that would lead to higher income growth in the future. In fact, it's sort of silly that we make kids take out tens of thousands of dollars in loans to acquire technical skills that a century ago, they would've been able to acquire while earning a small wage (apprenticeship).

    Minimum wage's biggest legacy is the death of apprenticeship and the rise of student debt.
    Jun 3 07:25 PM | 19 Likes Like |Link to Comment
  • Dumb Investment Of The Week: Chinese Companies With Weak VIEs [View article]
    Excellent article, Ben. Thanks for this!
    Jun 3 01:28 AM | Likes Like |Link to Comment
  • My Top 10 Stock Valuation Ratios And How To Use Them [View article]

    Admittedly, I use a lot of ad hoc measures. I dig through the financials and search for things that stick out, and then start creating customized metrics based on what I think needs further examination.

    There are a few consistent ones I use. Price to Tangible Common Equity is a good one for banks and asset-heavy businesses, for instance. But for a "cash cow" type of business, I'd focus much more on cash flow related metrics.
    May 27 09:31 PM | Likes Like |Link to Comment
  • My Top 10 Stock Valuation Ratios And How To Use Them [View article]
    Great article, Jae. Love the depth and detailed explanations. I utilize some of these myself, but all of them produce useful information.
    May 27 08:03 AM | Likes Like |Link to Comment
  • The Central Bank Boom Is Creating Huge Risks For Investors [View article]

    Nearly all the data in this article is compiled directly from either the Federal Reserve Bank of St. Louis or the Treasury Department. It is publicly available. It is not "exaggerated." It is not "incorrect" or compiled in a "misleading" way. It is merely data. If you believe there are any 'inaccuracies', feel free to point them out.

    The only other advice I can give you comes from J.M. Keynes:
    "When the facts change, I change my mind"

    This article presents the facts. I made some conclusions that seemed fairly obvious based on that.
    May 19 09:40 PM | 5 Likes Like |Link to Comment
  • The Central Bank Boom Is Creating Huge Risks For Investors [View article]

    Thanks for the comment, but there's a lot of emotion in it, and very little data. You've also ascribed to me several positions which I don't hold.

    For instance, you assume that I would have advocated "tight monetary policy" in the Great Depression. Yet, I've long argued that the US ran too tight policies. However, the situation in 1930 was very different from the situation in 2008 or 2010 or 2013. For one, the US was still on the gold standard in 1930, making it extremely difficult to loosen policy. Likewise, there was a significant liquidity crunch in the Great Depression. You can make the argument that there was a liquidity crunch in 2008/2009, but by 2010 and certainly by 2012 / 2013, there was an abundance of liquidity. The situations are simply not analogous.

    Likewise, I have not argued that these issues will lead to high inflation. Rather, I take the opposite position that disinflation is more likely. The loose monetary policies by the Fed have led to interest rate suppression, which has pushed up prices and driven down long-term returns. Tight regulatory policies have tied up lending, as well, particularly in the housing market, further suppressing rates. As long-term returns get driven down, pension funds suffer, which will force state governments to enact more austerity policies (higher taxes, lower spending), which will then further drive demand destruction and disinflation.

    My main critique of the Fed is that they believe reckless monetary policies will somehow make up for the demand destruction created by flawed government policies (e.g. Dodd-Frank). Instead, it will simply result in "loose money" in other spheres (emerging markets, corporate debt, etc) and drive down long-term returns, exacerbating problems for savers (pension funds, retirees, Social Security, etc).
    May 19 03:13 PM | 5 Likes Like |Link to Comment
  • Implications Of All-Time-High Median Valuations (Backtest 1999 To Date) [View article]
    Interesting data and article. Thanks for this one, Greenbackd.
    May 5 08:51 PM | Likes Like |Link to Comment
  • The Polish Markets Are Cheap [View article]
    Good article, SU.

    Though, not sure about the 9x P/E. Where is the source for that? iShares MSCI Poland (EPOL) has a listed P/E of 20.14 (as of 3/31/14):

    I've found the P/E ratios on the ETFs can vary a bit from the underlying market, but that seems like a very large discrepancy if it's accurate. Then again, the iShares ETF has a very high concentration in the two top bank holdings (almost 25%), which might make it differ from the broader Polish market.

    The Market Vectors ETF is listed with a lower P/E at 14.6, but not sure when that was last updated.
    May 5 06:31 AM | Likes Like |Link to Comment