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Lenny Grover  

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  • Forex Trading Is Far More Hazardous To Your Wealth Than Commonly Believed
    Thu, Feb. 19 GCAP, IBKR, FXCM 9 Comments

    Summary

    • Data from the US shows that ~60% of active US retail forex traders lose money each quarter.
    • The US data suffers from a particularly perverse form of survivorship bias.
    • A recent study by French securities regulator AMF tracked individuals over a multi-year period, and found that roughly 9 of 10 of French retail forex traders lost money.
    • Aggressive marketing and sales tactics continue to induce retail traders to experiment with currency trading.
    • Regulators around the world should evaluate whether additional consumer protections required for the retail Forex industry, as complaints increase.
  • FXCM January Metrics And PR: Long On Porcine Lipstick, Short On Self-Awareness
    Thu, Feb. 12 FXCM 43 Comments

    Summary

    • Preface.
    • FXCM attempted to spin its January metrics update as a big positive when the numbers, in context, tell a very different story.
    • Impression from recent FXCM PR is that company sees itself as returning to "business as usual" without adequately adapting to the aftermath of the SNB shock.
    • Reality is that SNB shock was NOT merely a single isolated event; it will produce substantial headwinds in the near term and may fundamentally change the retail Forex industry.
  • Peeling The Onion Of FXCM's Misleading Marketing
    Mon, Feb. 9 FXCM 59 Comments

    Summary

    • FXCM's no debit balance "policy" was repeatedly referred to as a "guarantee" in marketing materials, across multiple geographies.
    • In a 2009 CFTC proceeding, the complainant was awarded a portion of his lost principal and an entire section of the decision was devoted to FXCM's "Deceptive website."
    • FXCM is alleged to have recently used misleading marketing materials apart from their "guarantee."
    • FXCM sent demand letters and solicited payment for negative balances.
    • FXCM seems to be quietly changing their marketing and disclosures.
  • Misleading Marketing, Poor Risk Management, And Bad Trade Recommendations Dog FXCM
    Mon, Feb. 2 FXCM 28 Comments

    Summary

    • Many FXCM marketing materials unequivocally stated traders are not responsible for negative balances.
    • FXCM staff members knew its retail traders were overwhelmingly long EURCHF as of October 2, 2014.
    • FXCM staff, on FXCM-owned website, were recommending EURCHF trade at least as late as January 8, 2015.
    • FXCM allegedly sent demand letters to some customers with negative balances.
  • FXCM Spin Game Doesn't Change Its Misleading Marketing And Disclosures
    Thu, Jan. 29 FXCM 30 Comments

    Summary

    • While virtually all media outlets are reporting that FXCM's 1/28 press release is a boon for affected customers, it is not what it seems.
    • FXCM has a long history of implying in its marketing and disclosures that clients' are not liable for account deficits.
    • By asserting the (dubious) right to collect from customers with account deficits, FXCM is putting lipstick on its pig carcass.
  • 'Tax Inversions' Are Tip Of An Iceberg That Already Cost The U.S. Treasury Hundreds Of Billions
    Sep. 28, 2014 AMGN, AXP, BA 89 Comments

    Summary

    • The Dow 30 components, alone, have collectively disclosed at least $50B in (mostly unrecognized) “deferred” US taxes on foreign earnings.
    • US-headquartered multinational companies have accumulated hundreds of billions of dollars (>$630B from the Dow 30) of “undistributed foreign earnings” not subject to US taxes unless and unless repatriated.
    • Undistributed foreign earnings disclosures and deferred tax liability (future repatriation taxes) estimation methodologies can vary significantly by company.
    • A tax code that incentivizes indefinite foreign re-investment, relative to capital repatriation, is indefensibly bad public policy with an uncertain future - future effective tax rate assumptions should reflect this uncertainty.
  • USA Technologies Preferred Stock: Bet On A Buyout
    Jul. 29, 2014 USAT 7 Comments

    Summary

    • Company has turned the corner to profitability; limited debt and total liquidation preference limit the downside risk of the Preferred security.
    • Accumulated liquidation preference is already ~83% higher than the current USATP price, but non-compounding cumulative dividends result in an unusual IRR calculation.
    • If the company is bought out before mid-2023, you can earn a 10+% IRR over the holding period, however, longer holding periods result in lower rates of return.
    • If you believe USAT is likely to be bought out sooner rather than later, the Preferred shares may be a better bet than the common--with less downside risk.
  • Consumer Dissatisfaction And Disruption Threaten 'Too Big To Fail' Banks
    Jun. 2, 2014 BAC, C, JPM 4 Comments

    Summary

    • Too Big To Fail (TBTF) banks losing market share in mortgage origination and credit card issuing.
    • CFPB data shows TBTF banks have more complaints relative to market share than competitors.
    • Crowdlending, crowdfunding, and online-first banking threaten to disrupt legacy business models.
    • TBTF break-ups would create value for shareholders and consumers, while promoting stability.
    • Entrenched management teams unlikely to voluntarily act in shareholders’ interests.
  • Looming Public Pension Crisis Is Bigger Than It Appears
    May. 27, 2014 HYD, HYMB, MLN 42 Comments

    Summary

    • Public pension plans are vastly underfunded and imperil state and local budgets over the long-term.
    • High credit ratings and optimistic actuarial assumptions mask the full extent of the looming crises.
    • Low yields on long-term municipal bonds reflect hunger for yield and obliviousness to underlying risks.
  • Why 'Too Big To Fail' Banks Remain A Disaster Waiting To Happen
    May. 2, 2014 C, JPM, BAC 58 Comments

    Summary

    • Bank of America’s accounting error is merely the latest big bank stumble.
    • Big banks’ low P/B ratios may be the product of “distorted” balance sheets.
    • Big banks’ management of counterparty risk “fails to meet expectations”.
    • High leverage ratios, inadequate risk management practices, and overstated asset values are a potentially lethal cocktail.
  • Luby's: Undervalued Turnaround Play With Balance Sheet Stronger Than It Looks
    Apr. 23, 2014 LUB 112 Comments

    Summary

    • Trading below book value, while book likely understates the market value of company's real estate portfolio.
    • While recent performance has been poor, Fuddruckers restaurant concept is compelling.
    • Company has more than enough runway to successfully execute on turnaround plan.
    • Management is heavily invested in the company and aligned with shareholders.
    • Company has suffered from macro headwinds that may ultimately reverse.
  • Travelzoo: An Undervalued Internet Company
    Apr. 22, 2014 TZOO 5 Comments

    Summary

    • Low valuation, both in absolute terms and relative to comps, seems to undervalue business.
    • Roll-out of new booking engine may improve company revenue performance.
    • Popular, highly-rated, mobile app allows company to benefit from audience shift to mobile.
    • Macro factors/cyclical upswing could also boost TZOO.
  • There Is An Audible Hissing Sound Coming From The Nasdaq... And The Smell Of Opportunity
    Apr. 16, 2014 NFLX, P, SPLK 5 Comments

    Summary

    • Richly-valued tech/momentum companies have been the hardest hit over the past few weeks.
    • Many growth/momentum companies are still richly valued.
    • The market is occasionally "throwing the baby out with the bathwater.".
    • Value opportunities are starting to emerge again after months of absence.
  • The Ultimate Business SaaS Index (50 Companies, $170+B Market Cap, Crazy Valuations)
    Feb. 26, 2014 ATHN, ATTU, AZPN Comment!
  • WhatsApp Is The Geocities Of Bubble 2.0 And Facebook Is The New Yahoo
    Feb. 20, 2014 FB 15 Comments
  • Why Rocket Fuel Is A Very Risky Bet, Even For A DSP Bull
    Feb. 4, 2014 FUEL 24 Comments
  • Unlocking The Value Trapped In Facebook
    Jan. 28, 2014 FB 6 Comments
  • Dearth Of Value Opportunities: Frequency Of IPO 'Pops' May Imply Market Overvalued
    Dec. 31, 2013 TWTR, NDLS, DATA 3 Comments
  • The Long Case For Rubicon Technology
    Apr. 18, 2013 RBCN 3 Comments
  • Enterprise Software Valuations Are Still Sky High
    Apr. 15, 2013 ATHN, AZPN, CRM 8 Comments
  • More IPO Madness: Workday Appears To Be Overvalued
    Oct. 15, 2012 WDAY 1 Comment
  • Are We In Another Tech Bubble...Or Something Different?
    May. 2, 2012 JIVE, LNKD, N 8 Comments
  • 8 Reasonably Valued Technology Companies That Analysts Like
    Sep. 8, 2011 ATVI, MRVL, MSFT 4 Comments
  • 11 Value Picks With Low EV/EBITDA And EV/FCF Ratios And Manageable Debt
    Sep. 6, 2011 BTN, LOJN, NEI 7 Comments
  • 10 Tech Companies Trading At Lofty Valuations
    Sep. 6, 2011 RENN, BIDU, YOKU Comment!
  • 11 Attractively Valued Dividend Plays With Low Debt And 1%+ Yields
    Sep. 6, 2011 MRO, TXN, COP 4 Comments
  • Finding Bargains Amid the Rubble: 8 Stocks to Watch This Week
    Aug. 8, 2011 BHE, BTN, HOFT 2 Comments
  • Zillow: Valuation Matters
    Jul. 21, 2011 Z 8 Comments
  • Important Metrics for Dividend Income Investors and 8 Companies to Watch
    Jul. 6, 2011 NPK, AZN, AHGP 2 Comments
  • Follow Up on Trendy High Growth Tech Companies With Sky High Valuations
    Jul. 1, 2011 YOKU, BIDU, OPEN 5 Comments
  • Large-Cap P/E Contraction in the Technology Sector
    Jun. 28, 2011 INTC, CSCO, DELL 4 Comments
  • 8 Trendy High Growth Tech Companies With Sky High Valuations
    May. 2, 2011 YOKU, BIDU, OPEN 9 Comments