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Mark Bern, CFA

 
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  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Tohapane - I saw the correction. Thanks! But I do see additional signs of weakness in housing and retail.
    Jun 3 10:26 PM | Likes Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Bruce - Thanks for sharing your thesis. I'm not calling for a crash, just lower performance than forecast.
    Jun 3 10:24 PM | Likes Like |Link to Comment
  • Herbalife: Nailing Pyramids To A Tree [View article]
    There have been witch hunts to bring down the MLM industry before and it has survived. There are companies that don't do it right, but HLF understands the rules well enough to remain in compliance. I am not buying the idea that anything new will be found this time.

    That said, I personally tried an MLM company 3 decades ago. I actually got to a level of making a meager living and was on the verge of more than doubling my income with one new distributor that I had signed, a health club chain. Then the company went out of business. The owner did not have enough experience in MLM and paid out too much. It happens. In the end, if a person really believes in the products and uses them personally there is potential to build a business. If, on the other hand, someone gets into the business to make money only, they will probably fail unless they already have a down line from another MLM and are just moving to the next big thing. There is a lot of that and those are some of the folks who really give MLM a bad name.

    It's no worse than a bank that sells it customers securities while, at the same time, it is selling those same securities short to profit from the crash that it knows is coming. Some of the arguments against MLM being a scam could easily be applied against some financial institutions and when compared, MLM might look pretty good.

    I can't help but see this as an investment opportunity. But I prefer Nu Skin (NUS) over HLF. The ruling in China by regulators gave us a gift on a company that trades at a trailing P/E of 12 after experiencing growth of 50% in 2013. Growth will be down from that in 2014 (probably closer to 20-30%) but that is from a higher baseline. Long-term growth could average well over 15% compounded and dividends could double. The fundamentals of the company are compelling. http://seekingalpha.co...

    I prefer to get paid via dividends and I like it when my checks increase each year. That is why I like NUS over HLF. But I also believe that HLF will do well in emerging markets also. From an investor's point of view I like NUS for the rising dividend (just my style). But either will likely appreciate as the "opportunity" is easy to sell to someone who has never heard it before. Thus, the emerging markets have hundreds of millions of people to sell the concept to over the next decade or more.
    Jun 2 08:45 PM | 3 Likes Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    jhooper - Thanks for the link!
    Jun 2 05:36 PM | Likes Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Climate change has happened over the history of the world. It has ebbed and flowed over the ages long before man's existence. It will continue to do so whether we want it to or not. And even if man's actions do make a significant difference it would require all major economies of the world to work in harmony to reduce the negative effects. That is not going to happen with China, India and many other emerging (and yet to emerge) nations going their own way.

    I suspect we will blow ourselves up before we make the planet uninhabitable.
    Jun 2 03:26 PM | 1 Like Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    I just saw that, too. Thanks for posting the change. However, there are several other weak links in the economy so it does not change my expectation by more than a tenth or two.
    Jun 2 03:20 PM | Likes Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Yeah, I'm looking for that one, too.
    Jun 2 03:19 PM | 1 Like Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Micro - Good question! As jj1937 has noted in his comment there does not seem to be a connection between QE and stocks anymore. So, what is continuing to drive stocks higher? My best guess is that the Fed is promising to keep interest rates low until at least 2015. And if Q2 growth comes in low I expect that the Fed governors will take turns making press releases at least once a week to tell us that interest rates may need to stay low even longer than originally projected. The duration will be extended by a quarter or two until the market responds positively. That would be my best guess since the Fed really does not have any real dry powder left that will not start us down the path of much higher inflation. There are several actions the Fed could take to goose the economy but none will be used until absolutely necessary. If used the trillions sloshing around at the Fed on deposit as excess reserves of banks will get pumped into the economy too fast and then the Fed would need to apply brakes at the same time. This is uncharted territory for the Fed and the next steps will undoubtedly cause unexpected outcomes.
    Jun 2 03:19 PM | 1 Like Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Inventories had been building for several quarters at a rate faster than sales. I don't think there will be as much additional inventory build up as you may expect. If consumers are going to spend as expected in the 2nd quarter retailers would not be lowering guidance. But I hope you are right. I'd rather have a better outcome. Thanks for sharing your view.
    Jun 2 03:11 PM | 2 Likes Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    pmiller - Thanks for sharing your perspective. Higher health insurance hurts, but so do things like low interest rates for those of us who have saved and want to invest more in high quality bonds. We have less to spend than we would in a normalized interest rate environment. Also, housing is looking weaker to me and with prices having risen many first time buyers are being priced out of the market, especially with stronger underwriting requirements to qualify for mortgages. There's a lot more but I'll save some.
    Jun 2 03:08 PM | Likes Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Gary - I get regular updates and news releases from ACT Research which covers the trucking industry. So far, everything looks strong. But a good portion of the demand in new rigs is to haul oil out of shale areas that don't have adequate pipelines to get product to the hubs. Pipelines are being built, so that will change in time. It is hard to get a grip on how strong the rest of the economy is via transport news. Rail is up for much the same reason as trucking. Again, that could change when pipelines are in place.

    Fleets had gotten well over historical average age and needed replacing. Much of that happened as a result of postponements during 2008-2011. The purchases of new tractors and trailers looks like some catching up to me and I expect that it will slow. Fleet upgrades happen during the good times.

    As far as the transports goes, rail is doing extremely well with modest increases to tonnage (outside of oil) because the big companies are able to raise rates consistently more over the last several years than in the past. That goes right to the top and bottom lines. Rail will continue to do well until we get into another recession, imho.
    Jun 2 03:04 PM | 2 Likes Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    Shaduc - Thanks for a breath of reality.
    May 30 08:45 PM | Likes Like |Link to Comment
  • China Creates A Buying Opportunity For Nu Skin [View article]
    yuan song - I will wait for a verdict before I change my positions. But thanks for sharing your thoughts.
    May 30 08:41 PM | Likes Like |Link to Comment
  • The Time To Hedge Is Now! Candidate Summary [View article]
    Dash - I really don't use screening tools. I am sure that there are some that would help to identify high-beta stocks, but I look at individual charts on individual stocks. I would tell you to look at industry ETFs to find the best industries but most of those securities have been created since the last recession. So, I just draw on my many years of experience. I know that does not help and I am sure that I miss some great candidates because I generally stick with the largest 1,500 or so stocks and mostly U.S. companies. In other words I try to stick to what I know best.

    For picking the targets I try to identify technical support levels, primarily those that are consistent since 2003. Support is often found at levels where multiple highs were made during those periods when the stock was trading up off the cycle lows. Support is also identified as levels where stocks have gone down to and then bounced. The strongest support is where both of those formations meet. I try to keep my target price slightly above the strongest support I find in the charts.

    I looked at hundreds of charts to find the candidates I came up with, but by moving down a little in capitalization or by checking industries I did not mention you may find some more possibilities.

    I hope that helps. Thanks for asking.
    May 30 08:39 PM | Likes Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    Sorry, but I thought from your earlier comments that you were implying that peasants were moving to the cities and buying homes with cash.

    I do understand that most residences are bought with cash. But the owners are not living in them, right? Who is? Are they rented and providing income to the owners or are they just sitting empty, deteriorating?

    In response to: "How many average Chinese workers could afford to buy a $250,000 to $450,000 apartment on an annual salary of $10,000?"

    You stated: "--- A lot. Wages, taxes, actual income and savings work very different between the West and China."

    That is the difference I would like to understand. Could you elaborate as to how a lot of average Chinese workers can afford to buy homes that are priced at 25 to 40 times their annual salary? Saying that it happens a lot does not explain how. This is puzzling to me and I'd like to understand it.

    Thanks.
    May 29 09:02 PM | Likes Like |Link to Comment
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