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Jake Huneycutt

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  • 5 Inexpensive Stocks In An Overheated Market [View article]

    No opinion.

    To my understanding, that investment essentially is predicated upon government action that could give the company value again. Very difficult to predict how that will all play out IMO. Not really my type of investment personally and I don't have a lot of expertise in that realm.

    I'd view General Growth in 2009 as being completely different. No real government entanglement / complications there. Its bankruptcy was due to liquidity issues rather than insolvency and its assets still had very significant value. It had to work through the legal side of things, but the odds were always in favor of it exiting bankruptcy and the equity value jumping significantly.
    Dec 22 07:57 AM | Likes Like |Link to Comment
  • 5 Inexpensive Stocks In An Overheated Market [View article]
    A portfolio equally weighted with these picks returned 15.4%, while the S&P 500 returned 11.6%. Not sure how that makes me "wrong", even using the most liberal definition of that word.

    Regardless, my stated timeframe was "the next few years", which would imply no less than 2-3 years and probably no more than 5 years.
    Dec 22 04:43 AM | Likes Like |Link to Comment
  • 5 Inexpensive Stocks In An Overheated Market [View article]
    How was I "wrong"?

    A portfolio equally weighted with these picks would be outperforming the S&P 500. This portfolio returned 15.4%, while the S&P 500 returned 11.6%. I also stated in the article that the timeframe was "the next few years" (i.e. 2-5 years), and all of my articles have a long-term orientation.

    By your own definition of "wrong", you would be the one "wrong", since you explicitly stated that you hated the GNW and BAC picks (the biggest outperformers in the group), but liked INTC (the biggest laggard).

    Eliminate Intel (the only one in the article I expressed significant reservations about; and the only one I didn't personally take a stock position in) and these picks are significantly outperforming, primarily on the strength of GNW and BAC. But even with the INTC dud, the portfolio outperforms.
    Dec 22 04:25 AM | 1 Like Like |Link to Comment
  • Top 12 Ideas For Your Portfolio In 2014 [View article]
    Excellent list, Shaun.

    While I admit I'm a bit bearish on the overall US market right now, these are great picks, and all supported very well. I will probably try to look into a few of them in the next few weeks.
    Dec 18 02:17 AM | Likes Like |Link to Comment
  • Why India And Russia Will Outperform Next Year [View article]
    Excellent article, Igor.

    However, I'd dissent a bit on commodities in regards to Russia. While it's arguable that Russia's 1999 recovery wasn't fully driven by commodities, it's tough to ignore the fact that the Russian boom very neatly coincides with rising oil prices.

    In 1998, the average oil price per barrel was $11.91. This was the lowest nominal average price since 1974. In 1999, that rose to $16.56 and by 2002, it had risen to $22.81. (Source:

    I won't downplay the other aspects of the recovery, but I will say that rising oil and commodity prices clearly removed a multi-year drag on Russian growth. Very difficult to imagine the Russian markets having a great year in an environment with falling oil prices.

    So my first question would be: what's the outlook for oil prices in 2014 - 2016? Personally, I think they may continue to fall as more North American supply comes online, and demand growth weakens in places like China. Of course, I could be wrong, but I'd be skeptical of a big Russian reversal in an environment with falling oil / commodity prices.

    I do agree with you on India. India is a very interesting play right now. My only issue is that India is difficult to play as an American investor, but I will look into your small-cap ETF.
    Dec 18 02:04 AM | 2 Likes Like |Link to Comment
  • 16% Loss Forecast For 2014 U.S. Stock Market [View article]
    Very interesting formula. Thanks for this, Ronald.

    Quick question: are the 2014 - 19 returns annualized? Or is that total return?
    Dec 17 09:52 AM | 1 Like Like |Link to Comment
  • 3 'Pure Play' Health Care REITs Worth Buying [View article]
    Excellent article, as always, Brad.

    My own outlook on property REITs has definitely improved as prices have fallen over the past year. The healthcare REITs you've highlighted certainly appear to be some of the most interesting REITs out there.
    Dec 17 03:06 AM | 1 Like Like |Link to Comment
  • Bubbles, Crashes, And Market Corrections, Part 1: 1871 - 1900 [View article]
    It was both. 1919 saw very high inflation. 1920 saw major deflation.
    Dec 12 10:08 PM | Likes Like |Link to Comment
  • Bitcoin Is The Ultimate Fiat Currency [View article]

    That's a bit of a confused analogy. Scarcity leads to higher prices. There's nothing "deflationary" about that, unless a government mandates that a scarce object be used as the nation's currency. If for some reason, the US government declared Rembrandts as the only lawful currency of the US, then that would be highly deflationary.

    If you apply this to bitcoin, let's say I loan you 100 bitcoins for one year, with a 5% interest rate. The value of 1 bitcoin is equal to $200 at the time. At the end of the next year, the value of 1 bitcoin rises to $1,000. In essence, you borrowed $20,000 and you must repay $100,500. That's an effective interest rate of 425%! That would be extremely deflationary.

    But what makes it deflationary is the rising value of the underlying currency.
    Dec 10 01:13 PM | 2 Likes Like |Link to Comment
  • What It Really Costs To Mine Gold: The Goldcorp Third Quarter Edition [View article]
    Thanks for this excellent series of articles, HI.
    Dec 2 12:05 PM | 1 Like Like |Link to Comment
  • Should You Buy Realty Income At Current Prices? [View article]

    Great article and excellent analysis on O's valuation.

    I'd only comment to say that while property REITs often do "trade" with interest rate movements, their fundamentals are not as influenced by them as mortgage REITs. Indeed, higher interest rates likely signal higher growth in underlying property values for a property REIT. This would also likely translate to higher FFO growth. In this sense, property REITs have some built in inflation / higher interest rate protection.

    I'd actually be more concerned about the reverse situation: deflation in property values, lower FFOs, and lower interest rates. Notice that O performed extremely well during the tech bust, but had its worse years during the financial crisis / housing bust. The difference was that property values were still moving upwards in the tech bust, but falling during the financial crisis.
    Dec 2 04:23 AM | Likes Like |Link to Comment
  • Why Do Troubled Companies Like BP Outperform Coca-Cola For 20+ Years? [View article]
    Excellent article, Tim. Very interesting analysis.
    Dec 2 04:09 AM | 2 Likes Like |Link to Comment
  • 2014: Stealth Tightening, Hidden Austerity, And The Potential For Recession [View article]

    Thanks for the comment.

    SSTF does earn market rates on bonds. They are not marketable to the outside public, but the rates are set based on market rates. Hence, they are definitely impacted by QE.

    Not sure how 'not' artificially lowering rates via QE would be a "subsidy." If anything, QE is a "subsidy" to banks, debtors, and the US Treasury. It's a tax on insurers, pension funds, retirees, and savers. Ultimately, there are consequences to this and economists are largely ignoring them.

    What we saw in Japan was that all the stimulative efforts resulted in subdued returns. Looking at the data, I'm starting to wonder if the same thing will happen in the US.
    Nov 22 03:22 PM | 3 Likes Like |Link to Comment
  • 2014: Stealth Tightening, Hidden Austerity, And The Potential For Recession [View article]

    You may think I'm an "idiot" and that's fine. My goal is to present data that contradicts the "consensus view" on the economy, markets, sectors, and / or particular stocks. As a result, I'm called an "idiot" by at least one person in 90% of my articles by groups ranging from highly educated economists to unemployed deadbeats. I'm used to it.

    Sometimes my data leads to dramatic conclusions, such as when I wrote about housing and the homebuilders in 2011 and bought into the sector aggressively ( Sometimes it does not, as I generally feel all this data suggests to "be cautious" rather than take dramatic action one way or another.

    My goal in this market: get through without too many wounds, and when the tide turns, have the resources to take advantage. It's boring, but when you've been dealt a mediocre hand, sometimes it's better to lay back.
    Nov 22 03:09 PM | 5 Likes Like |Link to Comment
  • Realty Income - Scared Money Never Wins [View article]

    Don't know if I agree with the "scared money never wins" thing. I've seen plenty of great investors that may be described as "scared money." Guess the difference is that they know when to be bold and when to fold.

    But I do agree on O. It's becoming one of my favorite investments in a market that I see as full of risks. Thanks for the great research and analysis, as always.
    Nov 22 02:22 PM | 2 Likes Like |Link to Comment