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Jeff Borack

 
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  • Why Jim Rogers and Robert Shiller Aren't Buying U.S. Stocks Yet [View article]
    Shiller's data (www.econ.yale.edu/~shiller/data/ie_data... is always interesting to look at, and as far as I can tell, the best way to get a true sense for how fundamentally over or undervalued the market is. He adjusts historic earnings and dividend data from 1871 forward for inflation, and then computes the price to 10-year average earnings ratios on a monthly basis. I downloaded that excel file, and added a column to look at price/dividend ratios as well. The average P/E10 since 1871 has been 16.3x, compared to a current P/E10 of 13.1x. The average dividend ratio has been 29.1x compared to todays ratio of 34.0x. So the data is mixed, implying that today is an average time to own stocks. However, it's also interesting to consider that the minimum P/E10 during this period was 4.8x, indicating that there is more room for pessimism.
    Apr 27 12:13 PM | 4 Likes Like |Link to Comment
  • The Time Has Come to Regulate Search Engine Marketing and SEO [View article]
    This article only considers the website managers point of view. Google is popular because users (the people searching for information) believe the search results or accurate or useful. Creating SEO rules or expecting google to show the public how they rank results would certainly allow websites to game the system and attract more users at least for a while. But will people searching for information benefit?

    Using your "streets of LA" example, imagine you've never been to LA before and you want a good cup of coffee. Google is the guy you ask for directions, and he gives you a list of the top 10 best coffee places using an extremely sophisticated algorithm (and google maps it for you too). If google gave bad advice, you could always ask someone else. Google has competition despite popular belief. If google was legally forced to follow a specific algorithm or was forced to explain his algorithm to the public, do you think that would make his recommendations better or worse? The coffee houses might benefit, but not the drinkers.
    Jul 13 09:49 AM | 3 Likes Like |Link to Comment
  • Bringing Kodak into Focus [View article]
    Thanks for the comments. To address some of these points, Kodak discusses environmental and "asset retirement" obligations starting on page 82 of the most recent K. To sum it up:

    At December 31, 2008 and 2007, the Company’s undiscounted accrued liabilities for environmental remediation costs amounted to
    $115 million and $125 million, respectively. These amounts were reported in Other long-term liabilities in the accompanying
    Consolidated Statement of Financial Position.

    which includes:
    a Corrective Action Program required by the Resource Conservation and Recovery Act (“RCRA”) at Eastman Business Park (formerly known as Kodak Park) in Rochester, NY. At December 31, 2008, estimated future investigation and remediation costs of $63 million were accrued for this site.

    As far as the buildings are concerned:
    As of December 31, 2008 and 2007, the Company has recorded approximately $67 million and $64 million, respectively, of asset
    retirement obligations within Other long-term liabilities in the accompanying Consolidated Statement of Financial Position. The
    Company’s asset retirement obligations primarily relate to asbestos contained in buildings that the Company owns.

    I won't go any further, but if you're interested, the report speaks frankly about these obligations and shows how expenses and liabilities have been decreasing as remediation takes place.
    Jul 15 01:03 PM | 1 Like Like |Link to Comment
  • It Isn't Just Location: Housing and the Economic Recovery [View article]
    Adkins: If today it’s worth $200,000, 30 years from now it’s going to be worth $400,000 or $500,000. Yeah, you’d be a fool to sell your real estate, plus the closing costs going in and out will kill you anyway, so you might as well hang on to the thing.

    If it goes from 200k to 500k in 30 years, thats a return of 3.1% per year. And of course that doesn't take into account the insurance, taxes, interest, maintenance, and upgrades. You would be a "fool" to hold onto that.
    Jul 8 11:58 PM | 1 Like Like |Link to Comment
  • Why Jim Rogers and Robert Shiller Aren't Buying U.S. Stocks Yet [View article]
    For some reason that link above formatted incorrectly when I clicked the publish button. Lets try again: www.econ.yale.edu/~shiller/data/ie_data...
    Apr 27 12:16 PM | 1 Like Like |Link to Comment
  • A Scarcity Of Alpha [View article]
    Those smart guys should have told you apple will be the best trade of 2012: http://bit.ly/yqpZHv
    Jan 7 11:20 AM | Likes Like |Link to Comment
  • Deckers: Will Ugg Sales Be Up for Christmas? [View article]
    Hey, thanks for the comment. DECK actually is trading at a discount to its peers. I usually model companies, but for DECK I just spread the numbers and put together a comp sheet because I admittedly have no ability to forecast the future in this case. You can download the excel spreadsheet from my blog at harbor.typepad.com. DECK trades at a discount to steve madden, wolverine, skechers, and nike based on LTM earnings, and 2009 and 2010 forward estimates from bloomberg. 2010 P/E for Deckers = 10.4x, Steve Madden = 16.6x, Wolverine = 13.2x, Skechers = 21.0x, and Nike = 15.8x. LTM P/E are 10.0x, 29.9x, 15.0x, -140.9x, and 17.8x respectively.
    Sep 25 07:41 PM | Likes Like |Link to Comment
  • Stocks with the Highest Short Interest [View article]
    Readers of this might find this paper interesting:

    Abstract:
    We study the information content in monthly short interest using NYSE-, AMEX-, and NASDAQ-listed stocks from 1988 to 2005. We show that stocks with relatively high short interest subsequently experience negative abnormal returns, but the effect can be transient and of debatable economic significance.

    empiricalfinanceresear...
    Jul 10 11:39 PM | Likes Like |Link to Comment
  • Why Trinity Industries Is Undervalued [View article]
    I think the potential for the wind tower business to grow is significant, but that's really a function of your belief on what a barrel of oil is worth. TRN expanded its wind tower backlog when oil was peaking at $140. Now it's down around $30. That makes wind and all alternative energy less viable, and as Denny mentioned above, the crash of the ethanol industry has also negatively impacted the tank car business. The backlog is now large enough to support the current level of production for the next 3 years.

    I modeled growth of the wind tower business (combined with the tank head business because that's how TRN presents it) of 0% going forward, which I believe is pessimistic. The excel model I used is attached at the bottom of that article, so readers can open it up and change the numbers or any of my assumptions to come up with a different valuation.
    Apr 21 10:47 AM | Likes Like |Link to Comment
  • PDL BioPharma: Past, Present and Future [View article]
    Jimmy - a big part of what I like about PDLI is that the cash flows are relatively straightforward to estimate. Licensing agreements have been generating revenue for years, and future revenue isn't dependent on any expenses. EBIT margins should be in the 95% range. MRNA (or any biotech in the burn phase) doesn't share these characteristics.

    elephant - avastin is a big contributor to revenue, and management listed it as one of the primary drivers of growth in 2008. I don't see any reason to believe that growth should disappear, but I modeled it as non-existent in my pessimistic scenario. In any case, whatever growth PDLI does experience is true growth, not dependent on any incremental reinvestment of profits. Investors keep their cash flow and the business grows organically at the same time.
    Apr 11 03:16 PM | Likes Like |Link to Comment
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