Seeking Alpha

Marc Gerstein

 
View as an RSS Feed
View Marc Gerstein's Comments BY TICKER:
Latest comments  |  Highest rated
  • ETFs for Contemporary Crises [View article]
    I think when people criticize the newer products, they drastically overestimate hoe effectively the typical investor handles conventional products. Is it hard to know when to sell FOL? Of course it is. Is it hard to know when to sell AAPL? Of course it is. Nothing in the stock market is easy.

    Leveraged daily returns do add a new wrinkle. But these are no longer new. Investors collectively have had several years now to learn how these function. Use of these products have been huge, and by now, most of the angst seems to be coming from gurus rather than investors who actually use the products.

    Ultimately, one will succeed or fail with these products based upon the accuracy of the macro judgments the investor faces. For example, FSE has been a huge loser of late. But that's not because of a flaw in the product. It's because those who bought a few weeks ago badly misjudged the market. That's life. That's the market.

    What these products accomplish is that they give investors new areas in which they can exercise judgment. Is it harder or easier to judge (i) whether gold will outperform stocks, or (ii) whether GOOG will beat or miss its next earnings guidance? Different investors will answer differently. Now, at least, those who'd rather not make company-specific judgements have other choices.
    Aug 5 09:55 AM | Likes Like |Link to Comment
  • Teavana Needs to Penetrate Urban Areas to Become a Buy [View article]
    "And Marc, Santa Monica, at least from a walkable/proximity to retail standpoint, is actually quite similar to Manhattan. Just not quite as dense obviously. :-) "

    That, actually, explains a lot. Shopping streets, walk-ability, urban cores . . . that's all well and good for a few select areas such as Manhattan, Santa Monica and similar sections of other cities. But it's not representative of the US as a whole. I think you're getting way too hung up on a 1970s notion of what shopping malls are. Today, the label mall applies to an incredible variety of locations many of which precisely fulfill the functions of what you label urban core. Take Boca Raton FL for instance. It's a highly affluent community (one which is definitely ripe for TEA) but there is no downtown Boca Raton core per se. What you think of as an urban core core would be likely fulfilled by Mizner Park and/or Town Center and TEA is in Town Center, which is probably the better choice because foot traffic there is likely to be a lot heavier. There is a Whole Foods nearby in a good-quality "strip mall" on Glades Road, but TEA can't be there because they are too specialized for the level of square footage available (there are no small shops). Note: Although you and some Manhattan folks can walk to Whole Foods, most others drive to strip malls (nice strip malls, nicer than the stereotype, but strip malls nonetheless)!

    Let's take Long Island. I could see TEA on Stewart Ave in Garden City, and they may eventually get there. But any customer they can get on Stewart Ave they can also get in Roosevelt Field, which is where they are, and at Roosevelt Field, they get a lot more, including my wife, who never go to Stewart Ave. And if they are planning a second Long Island location, I'd much prefer to see them go to Walt Whitman Mall rather than Stewart Ave or, say, Middle Neck Road in Great Neck (another upscale boutique area). Again, the malls would give them all of the Stewart Ave or Midden Neck Road shoppers plus a whole heck of a lot more.

    I could do similar analysis for other areas I know about where TEA is located, and I suspect others could do likewise for areas with which they are familiar.

    If you lived in Manhattan, I'd strongly suggest you rent a car, drive across a bridge, and look at the rest of the world. You may not actually be in Manhattan, but being in a Pacific equivalent, you are talking a lot like a Manhattan-ite, which is all well and good as a matter of personal preference, but it is leading to some serious distortions in your assessment of TEA's locations. I strongly suggest you get past you Whole Foods location thing. For most of the US, it doesn't work.
    Jul 28 03:04 PM | Likes Like |Link to Comment
  • Teavana Needs to Penetrate Urban Areas to Become a Buy [View article]
    "While Teavana locates in shopping malls on the outskirts of town, it is not part of the streetscape -- in outdoor, traditional walkable shopping environments -- in places like Manhattan, San Francisco, Santa Monica (where Whole Foods, for instance, has three stores within 1.5 miles of my house) and even in smaller, but still trendy neighborhoods like Portland, Oregon's Pearl District or Burlington, Vermont's Church Street."

    I'm not sure what you're envisioning when you speak of "shopping malls on the outskirts of town" but I suspect it's something of an urbane New york Seinfeld-ish thing (even though you mention you're from Santa Monica). I looked at the TEA store locator and frankly, have no problem at all with what I see. the company is still very small and accordingly, is going to be absent from a huge number of places where one might think they could or should be.

    It seems to me that you are operating from a perspective that there is some sort of urban (big or small) center where the big spenders go with Joe Six-pack shopping on the outskirts. That may have been the case a generation ago (the old Seinfeld show assumed it was so), but that is not the reality in the 21st Century USA.

    I can't speak for every location in TEA's list but in the areas I know, TEA has done just fine. In the NYC area, for instance, Roosevelt Field is a great choice accessible to huge numbers of people in the Queens-Nassau area. there are average folks, and upper end folks, enough of the latter to keep that store packed with people often having to mill about just to even squeeze inside the store, where buying is brisk.

    I'm reasonably familiar with South Florida as well and nobody there would dismiss Town Center (Boca Raton), Sawgrass Mills (Sunrise) and The Gardens Mall (Palm Beach Gardens) as being on the outskirts. (By the way, Palm Beach Gardens isn't listed on the web page to which you link, but it is in the zip-code based store locator.) Those venues are core destinations for people who live nearby. As to Boston and Chicago, what's wrong with Boylston (Prudential Center) and Michigan Avenue (Miracle Mile!) respectively? Meanwhile, King of Prussia PA is a HUGE destination, not just for locals but for people who drive quite a distance.

    There are many places where I think they could do well where they have no store (City Place in West Palm Beach, downtown Delray Beach, FL, SOHO in NYC, etc, etc, etc, etc), but that's because the chain is still so tiny. But nothing in the language you quote from the S-1 ("high traffic locations within malls, lifestyle centers and other high-sales-volume retail venues") excludes any of these areas.

    I have no opinion on the IPO; actually, I tend to hate IPOs, especially in well-known, heavily-hyped names, and feel investors usually do better taking it slow and picking their spots in the secondary market. But I don't think it's reasonable to object to TEA based on their location profile.
    Jul 28 10:02 AM | Likes Like |Link to Comment
  • ETF Pullback Choices: 1 Year With the ETF Pullback Model [View article]
    1. I express Sharpe ratio as a decimal

    2. 1-year

    3. It's a weight and as such, is expressed as 0.70

    4. I use Thursday; no special reason except that my first article was on a Thursday and I stuck to a 1-week re-balancing interval.
    Jul 25 09:26 AM | Likes Like |Link to Comment
  • China and Fuwei Films: Seeking Sanity [View article]
    That's what's so intriguing about the increasing virulence of the arguments. One way or another, half the parties are going to get very badly embarrassed in the not-too-distant future. I've often been accused of being a bit long-winded (or a lot long-winded), but sometimes, even blabber-mouths like me need a sense of when its better to set up camp in the wonderful world of shut-the-heck-up. :-)
    Jul 11 11:18 AM | Likes Like |Link to Comment
  • China and Fuwei Films: Seeking Sanity [View article]
    "it was sheer dumb luck that we got out when we did."

    Spotting fraud or comparable problems really is incredibly difficult, and sometimes, it is better to be lucky than good.

    I suppose one useful framework would be to look for companies whose operations seem typical. I love creativity, but that's in the arts and I suppose in technology. When it comes to CEOs and COOs, I prefer people who are boring. When you do see "innovation," ask if it flows naturally from what had gone before. Also, in the quest for that which is above average (we all want that), there's a matter of how far and how much. I, for example, a home-builder would have continued to grow revenues and profits in 2008, 2009 and 2010, we'd have had to wonder. Maybe there is a good reason why a company can be especially outstanding, but we would have to really look hard.

    Even so, we can never be 100% sure of anything. Hence my preference for broad diversification and my disdain for so-called "focus investing."
    Jul 11 11:12 AM | Likes Like |Link to Comment
  • China and Fuwei Films: Seeking Sanity [View article]
    Bear in mind NYSE came public via RTO. Bear in mind too that FFHL is not an RTO. I think too much attention is being given to issues that are of no relevance.

    Separately, if you are focusing on ADRs, I hope you're checking the 20-F and 6-K reports. I've become sufficiently concerned lately about the quality of ADR data handling by the major data providers, particularly for European companies many of which report semi-annually rather than quarterly (a practice I regard as absolutely unacceptable in this day and age), I now include in most models a filter that simply bars ADRs.
    Jul 11 11:00 AM | Likes Like |Link to Comment
  • China and Fuwei Films: Seeking Sanity [View article]
    There are questions of what kind of BOPET film a particular company makes and how broad their distribution reach is. As noted, FFHL is not counting on the market alone to pull them upward. Hence its efforts to sell in a broader range of countries and to move into upper-end BOPET applications.

    Anyway, to you and king707, it's gratifying to see people argue business/valuation merits re: one of these stocks!
    Jul 11 10:55 AM | Likes Like |Link to Comment
  • China and Fuwei Films: Seeking Sanity [View article]
    Really! When did auditors become celebrities, like baseball players? Do you have any idea how many U.S. firms use auditors most of us (who are not accounting professionals) never heard of?

    And since when does use of a Big 8 accounting firm assure honesty. Oh wait a minute . . . it's not the big 8 any more because some of the leading firms imploded due to fraud (remember the Enron/WorldCom days).
    Jul 11 09:56 AM | Likes Like |Link to Comment
  • China and Fuwei Films: Seeking Sanity [View article]
    Yes, I'm aware Citron claims the takeout offer is fake. And like I said, at some point, we're all going to know one way or the other.
    Jul 8 02:21 PM | Likes Like |Link to Comment
  • ETF Pullback Choices: Is There a Silver Lining for Europe? [View article]
    ETF Pause Trading on Folio is my personal account. All personal accounts offer graphs like this allowing the customer to examine performance. I put a screen shot from my own account into the article.
    Jun 29 05:20 PM | Likes Like |Link to Comment
  • Managing Trading Costs While Applying the Triple-Play Income Strategy [View article]
    "What if we then consider them still good enough until they fall off the top 25, and only then do we make a new purchase?"

    That's a very good question. It would not be easy to definitively test that exact approach (though I may yet think of a way), but my instinct suggests to me that the answer would be "yes." I feel this way because of the tests where I stretched the holding periods to a year. I'd have to think that over that length of time, there's a pretty good chance many of these stocks will fall below the top 5. If you were to sell when they fall below 26, you might well be trading more tightly than if you just went to a one-year holding period.

    as to StockScreen123, the Prudent Yield Hog portion of the strategy is already available as a pre-defined model. I had held off on the others waiting to see how they fare in the real world, but they could be implemented as pre-defined models very quickly and if a user wanted to get the codes before that, they could simply search for screens whose names contain the words New Triple Play, open them, and save into their own accounts. (StockScreen123 has a setting that allows users to make their models publicly visible; I went into my own account and set the screens accordingly.)
    Jun 27 02:22 PM | Likes Like |Link to Comment
  • Adding Pandora to Your Stock Radar [View article]
    "Since the company is losing money, a P/E ratio is much more difficult to estimate."

    Well duh . . .
    Jun 17 12:09 PM | Likes Like |Link to Comment
  • Apple's Valuation: The One Article Every Investor Should Read [View article]
    Presumably, "Zaky" (how cute!) is adding long-term investments to cash and equivalents. That's not usually done, but if he wants to, OK. That still leaves AAPL at 21% vs. CSCO's 51% just on cash and ST inv. MSFT is 25% on just on cash and ST inv. If you want to add their LT investments, you'd have to raise them to 30.1%. So it remains that just among these three big-names, APPL is the weakest Cash play (again, remember that CSCO and MSFT are already paying dividends).

    And by the way, when I said I don't like APPL (in another comment here), I was referring to the stock. I still enjoy my iPOD and am 50-50 as to whether my next phone will be Droid or iPhone. Also, by the way, Zaky and possibly others clicked on my Forbes link and saw that I went cold on Apple valuation on 3/23/11 when it closed at 339.19. Since then, the stock has done a whole lot of nothing, having closed today at 332.24. But I wasn't always cold toward the stock. If you followed the link in the Forbes article, you'd have seen my earlier one from 6/25/10, when I defended APPL valuation; the stock was then priced at 245.22. Were they good calls? That's for you all to decide. But if you think bullish ahead of a 38% gain followed by a thumbs down ahead of a sideways drift makes me a loser, then so be it.

    Those are my only full-fledged articles on Apple's valuation. There was also an April 2010 instablog discussing some disturbing (in my opinion) analogies between Apple and AOL when it ruled the world and was revered by a legion of investors. (Those factors are why it's 50-50 I'll go Droid.) Note, too, that I did not take that occasion to go sour on the stock which I assumed, correctly it turned out, would ignore such issues in the relevant time horizon.

    So anyway, I'm really not sure what's left for me to say on this topic, at least unless/until there's a meaningful change in the status of Apple stock or the company. You know how I feel about Zaky's analysis. You know how I feel about Apple's valuation and you can trace it back to 6/10. You also can also look up a much more comprehensive explanation of why I, despite being a customer, have reservations about how the company is approaching its business. Read up if you wish. Ignore if you wish. Like it if you wish. Hate it if you wish. nobody here gets to say who wins or loses; only the market can do that, and we're all going to have to just sit back and wait until it's good and ready to tell us. So I'm going to un-check the follow-comments box now. If anybody feels a need to further discuss Apple with me, use the Seeking Alpha messaging capability.
    Jun 8 11:47 PM | Likes Like |Link to Comment
  • Apple's Valuation: The One Article Every Investor Should Read [View article]
    No, I actually used sec.gov.
    Jun 8 11:02 PM | Likes Like |Link to Comment
COMMENTS STATS
1,071 Comments
1,649 Likes