Jason Tillberg

Sidelined Cash: Fuel for the Fire

How much consumer and mortgage debt is on the sidelines?

How much business debt is on the sidelines?

How much government debt is on the sidelines?

Americans are deleverageing. Cashing out their 401k's and blowing through their savings. That cash on the sidelines is going to food and energy and some of it will go to paying off debt too.

Who Is the Mystery Buyer?

"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves . . . I intend to rout you out, and by the Eternal God I will rout you out!"

That was said by Andrew Jackson... and he did indeed rout them out.

"World's Big 3 i-bankers plan record $30-bn bonus: Goldman Sachs Group, Morgan Stanley and JPMorgan Chase’s investment bank, survivors of the worst financial crisis since the Great Depression, are set to pay record bonuses this year"

Looks like they won and will be dividing the profits amongst them this year. Last year, they lost and went to the citizens of the US for a bailout. I.E. They charged losses to the treasury. Our kids will pay those losses back in the future by working for the Chinese company instead of having money to go to college.

Laszlo Birinyi's high on Goldman Sachs (GS) ("they have a great ability to make money") and down on Wal-Mart (WMT) as consumers seem to be in better shape than we think - and he declines to make a new prediction for the S&P 500, after saying in May that a beginning bull market might juice the index 88% in 2-3 years.

Did Laszlo mention it's because they have a program that allows them to manipulate the markets? Make money over 90% of the trading days.

georgewashington2.blog...

Meanwhile, an unnamed IEA whistleblower says the agency - under pressure from the U.S. - is deliberately underplaying a looming shortage for fear of triggering panic buying. In 2005, IEA predicted supplies could rise to 120M b/d by 2030, but that fell to 105M last year (where it remains), and insiders believe maintaining production of even 90-95M b/d "would be impossible." Dec. crude +0.7% at $80.

Who doesn't already know this? Seriously? I believe we peaked July of 2008 at 86.7 million barrels per day. We're around 83 million a day now.

Cap and trade is a joke. We're in an oil age.. it'll last perhaps 150 - 200 years and we are now a little over 100 years into it. Whether we burn the rest in 50 years or 100 years won't make the slightest difference in the atmosphere of a planet some 4.5 billion years old.

We're going to burn all the oil anyhow is the point.

Nassim Taleb, on a panel with IMF Deputy Managing Director Takatoshi Kato, loses his cool: "Before the discussion he gave us a PowerPoint lecture showing the IMF projections for 2010, 2011, ..., 2014. I could not control myself and got into a state of rage. I told the audience that the next time someone from the IMF shows you projections for some dates in the future, to show us what they PROJECTED for 2008 and 2009 in 2004, 2005, ..., and 2007."

This recent article explores what our current Fed official and White House folks have said..

www.shtfplan.com/headl...

Public Storage (PSA): Q3 FFO of $1.44 beats by $0.19. Revenue of $352M (-5%) vs. $405M. (PR)

Revenues for the Same Store Facilities decreased 4.6% or $16.9 million in the quarter ended September 30, 2009 as compared to the same period in 2008, due to a 4.2% reduction in realized rent per occupied square foot, combined with a 1.0% reduction in average occupancies. Cost of operations for the Same Store Facilities declined 0.6% or $0.7 million in the quarter ended September 30, 2009 as compared to the same period in 2008. Net operating income for our Same Store Facilities decreased 6.3% or $16.2 million in the quarter ended September 30, 2009 as compared to the same period in 2008.

This business, like the real economy, is disintigrating.

Short Amazon: Risky Investment at Current Price

All good points and are neccesary in order to see the 26% earnings growth. I do and did consider.
But it still does not justify such a high premium to both net tangible asset value and earnings.


On Oct 27 06:24 AM southbeach wrote:

> interesting perspective, and I somewhat share your skepticism about
> the sustainability of Amazon's current share price. conceptually
> though, there are some factors to consider which I don't think you've
> adequately addressed:
>
> 1. e-commerce market size is growing, and will continue to grow -
> hence it's not a zero sum game for leading ecommerce players - so
> if Amazon grows with the ecomm market, they could still grow earnings
> nicely
> 2. share of ecommerce wallet - Amazon is again well positioned to
> benefit disproportionately from their superior proven ability to
> execute and delight customers - launching new categories, and growing
> strongly in non $ denominated countries (e.g. € zone, Yen) which
> provides a strong lift to dollar denominated earnings, and taking
> more than ecomm market growth rate in overall share
> 3. leverage - Amazon and Walmart will be the players most likely
> to be able to leverage their scale to really crank the revenue handle
> - and generate strong bottom line growth, even on compressed margins.
>
> 4. International growth - see above - the weaker the dollar gets,
> the more international sales in stronger currencies boost earnings
>
> 5. Innovation - Amazon is pushing into some interesting areas (cloud,
> payments) which could further boost their reach and customer base.
> 'Owning' the consumer's transaction info - that crucial billing relationship,
> really aligns with the audience growth objectives of the core business.
>
> 6. Strong management - there are some very good long serving executives
> at Amazon who know the game very well, and this stability allows
> the company to continue their track record of above average execution.
>
>
> So, I'm not joining your short trade just yet (there's a good chance
> of getting run over by the sentiment train right now), but I may
> do so once the post earnings party euphoria starts to fade.

How to Value Amazon?

I used the same logic for First Solar when FSLR was 300 + in May of 2008.

.. I guess what's desperately missing is human capital.

On Oct 26 07:36 AM logicalthought wrote:

> AMZN has continued to amaze me in that it has nothing truly proprietary
> (not even the Kindle) and is essentially just an extremely well-designed
> web site backed by fulfillment warehouses. In theory, one could replicate
> the entire company (currently valued at around $50 billion) for,
> say, $3 billion, consisting of $1 billion to replicate the web site
> and warehouses and $2 billion for an absolutely ubiquitous ad campaign
> to build instant name recognition. Requiring, then, a return on just
> $3 billion of invested capital (vs. AMZN's $50 billion valuation),
> one could then theoretically underprice AMZN on just about everything,
> and therefore massively steal its market share. I don't understand
> why no one has ever done this, so meanwhile, lol, I continue to shop
> at Amazon.

Hain Celestial Group: Buy, Sell or Hold?

Humbling field to be in these days.

These comments are rather frivolous. I mearly wrote that article to show the similarities of the bear market rally of 1930 to todays.

My last paragraph I wrote: "If today happened to be the top of this bear market rally and history "rhymes" again, then 81 days from now, Oct. 25, 2009, the Dow would be 6,617 if it were to fall 29% from it's high it reached today at 9,321."

Obviously, that day was not the top to this bear market rally. So that idea has proved wrong only a few days after I wrote it.

I admit I can't predict human behaviour or actions of the Fed, but I do coninue to believe that this rally is simply a bear market rally and we'll be getting lower lows in the months and years ahead in my opinion.

How about a comment about my take on HAIN?

On Oct 23 05:40 PM thiazole wrote:

> LOL, I was looking at some old articles I linked (to bring up when
> the authors were proven wrong) and noticed that his prediction of
> 6600 was coming up in 2 days, so I wanted to hold him to his prediction.
> Looks like you beat me to it.
>
> I think it is good for everyone to go back and read some of the many
> comments by people who agreed with him. I wouldn't care so much except
> for the fact that I keep seeing similar articles/posts being made
> today.

Amazon.com (AMZN) up 15% after hours, to $107.49 - a level it hasn't reached since the '90s - on a strong report of a 69% increase in earnings, led by what it calls its top product: the Kindle, which one analyst thinks will bring in $1.9B in annual revenue in 2012, up from $300M this year.

Impressive report to say the least. But valuation has already priced that in at current price.

Will be interesting to see retail sales increase from people no longer paying their mortgages or Credit Cards and have all that extra income to buy I-phones and Kindles. I know for one, I underestimated the consumer. I personally think it's quite dumb and would prefer to see people both paying down debt and saving more.

The charity of the Treasury is another bubble in the works.

Interesting Points from Julian Robertson's FT Interview

JR..Just a rational man who got his big start to wealth in 1982, at just the right time to participate in the greatest boom in the history of the world. Lucky for him.

Long AAPL, dumb in my opinion. It's like being long MSFT in 1999. Dumb.

I don't give him much weight. Sorry, I just don't.

Jobs Overstated: The BLS Comes Clean

Thanks for keeping it real Mr. Martenson.

Is the Dow Really Cause for Celebration? Look Behind the Ticker Tape

Hoover hinted to Roosevelt "We have gold because we can't trust Government" which was said to be an old proverb.

On Oct 15 05:35 PM Graham and Dodd Investor wrote:

> Gold is a hedge against the chicanery of governments and the foolishess
> of central banks. Of which there is plenty these days.

The Great Depression and Minsky Tells Us This Market has Upside Potential

Will October of 2009 be the April of 1930 and will this rally take over as the greatest suckers rally of all time?


On Oct 15 05:09 PM Graham and Dodd Investor wrote:

> This is a "1930" market. But wait for "1931"!

API's Monthly Report: U.S. Sept. gasoline demand +6.6% vs. year earlier to 9.058 mbd. Oil demand +4.1%.

Curious to know where the demand came from with millions of less people commuting to work everyday.