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Martin Vlcek  

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  • Crude inventories higher by 1M to 488.2M barrels [View news story]
    I think OPEC cutting production on Dec. 4 is unlikely by anything more than a symbolic amount which will be hard to enforce in reality if it involves anyone besides Saudia Arabia. They may start stabilizing the market with words, but action? I don't think so. They want non-OPEC to participate in the cut, which would be even harder. And with the geopolitical mess in the Middle East, I don't think an agreement is likely.

    Until mid December, I see more oil weakness. Then maybe when we get the rate hike off the table, oil can rebound temporarily before the final capitulation as weak producers go out of business:
    Nov 25, 2015. 03:30 PM | Likes Like |Link to Comment
  • Oil: My December Outlook [View article]
    real gold,

    Yes, this is a risk, definitely. In my personal portfolio, I have some cheap FXE LEAPS puts.

    As I mentioned in my long term outlook in the article, I expected one more larger dollar spike as the global situation deteriorates. But I believe when EU economy gets worse, the U.S. economy will get worse as well somewhat, and the dollar's gains will be somewhat limited. I believe some buying pressure will be diverted into gold, U.S. Treasuries and even bitcoin in the case the EU really starts disintegrating.
    Nov 25, 2015. 12:50 PM | Likes Like |Link to Comment
  • Oil: My December Outlook [View article]
    The Protagnoist,

    I expect oil to first fall before and after the Suadis announce no major cuts, and only then rebound, following the FED rate announcement on Dec 16.

    The short term oil rebound will IMO come from the partial unwinding of the long U.S. dollar trade. I believe the FED will either NOT raise in December, or the raise is already priced in anyway, as is the ECB further loosening policy. There will be no immediate catalyst for further U.S. dollar strength, so the heavily crowded trade will unwind.

    But in the long run, I still expect oil to get cheaper as I explained in the article.
    Nov 25, 2015. 12:47 PM | Likes Like |Link to Comment
  • Is Shorting VXX Really More Profitable Than Being Long SVXY Or XIV? [View article]

    As I was afraid of, the conversation with you is again absolutely unproductive and I am calling it quits. You react to things I never wrote and misrepresent what I wrote and start arguing about them. That's not nitpicking from me. You are basically arguing with yourself off the topic. This benefits no one. It just wastes time.

    "Most other assets as stocks do not incur shorting fees" seriously?
    "BTW NBG is not an inverse leveraged name" who says it is?
    "If skew predicts expectation by disparity in put and call premiums then it would have been easy to predict market reaction after during earning release just by looking at the skew of the options prior"
    Yes, it is easy to predict the direction of the market in such cases. But it is unprofitable to take part in the trade anyway due to high shorting costs, so almost nobody will short the stock anyway.

    That's basic rules of arbitrage: if the costs to arbitrage (short the stock) are high, then the arbitrage (the difference between where the price of the stock is and "should be") can remain quite large because it doesn't pay off to short the stock all the way to the fair value point.
    Nov 25, 2015. 10:50 AM | Likes Like |Link to Comment
  • U.S. Stocks Have Become A Deflationary Asset [View article]

    I share your outlook (deflationary followed by inflation). I would add sovereign debt defaults or debt monetization and Japan style is probably likely scenarios.

    I suggest at least some physical gold as an insurance. If it will not be needed, it will be a tiny cost and will not hurt your returns. If it will be needed (hyperinflation, disintegration of the fiat currencies), then even the tiny amount will go a long way, it will buy a lot.

    Other than gold, I suggest real estate and some agricultural land. You can live in one house and rent the rest to family members or others (that hedges your costs of living, so you are inflation neutral). Agricultural land hedges your food costs, if it will be needed you will eat your own food, if not, you will sell it to others.

    Other then that, just enjoy your life and invest your time into your family and friends and yourself (learning new skills and interests, helping others, etc.). If you help your friends/family, you may high on their list if the barter economy kicks in.
    Nov 25, 2015. 02:30 AM | Likes Like |Link to Comment
  • U.S. Stocks Have Become A Deflationary Asset [View article]
    User 509088,

    Are you super green 24% up translated to USD or CAD currency? That's a massive difference:

    I am super green in Euros too. If that's 24% in hard U.S. dollars, big respect.
    Nov 25, 2015. 02:16 AM | Likes Like |Link to Comment
  • Oil: My December Outlook [View article]

    Thank you for your comments. Everything is possible. Defense sector stocks have had a big rally for a month or two. Even drone stocks such as AVAV. Seems like big time warmongering is expected.

    Russia is desperately trying to get access to the Middle East ports and space, trying Lebanon and now Jordan I think. That could fit your scenario because if Russia closes Syria air space, NATO would try to do the same in Iraq and Russia would have nowhere to get into Syria legally. Turkey is a no go, that we already know.
    Nov 25, 2015. 12:18 AM | 1 Like Like |Link to Comment
  • Oil: My December Outlook [View article]

    My base case scenario is a fall below $40 now and then a spike to above $50. But this is just one scenario and markets always keep surprising us.
    Nov 25, 2015. 12:10 AM | 1 Like Like |Link to Comment
  • NYSE Crackdown On... You [View article]
    Well, I never use stop orders and always GTC orders and I use options to protect when I want to, but this new rule pretty much tells you what is going to happen next. First, lower volatility into the presidential elections and then mayhem. Massive market crashes in individual stocks and perhaps the broader market (and massive short squeezes in other stocks at the same time, so almost every market participant will be a loser. Look at KBIO 10-bagger losses/gains in a matter of days for a hint of what is to come).

    Without a stop loss, Wall Street insiders are going to trap much more dumb money in the positions as they will not be stopped out of the market at minus 10% but will hold on until they are down 50% and then capitulate at the bottom, as always.

    These investors will be turned to buy and hold investors
    (aka buy and lose a decade of gains and wait ten years to break even in inflation adjusted terms investors)

    Also, make sure you have a really good broker that doesn't use these synthetic orders as he will be on the hook for massive lawsuits when the next market crash comes (think of the CHF 40% spike a year ago on a more massive scale).
    Nov 23, 2015. 03:43 PM | 2 Likes Like |Link to Comment
  • Is Shorting VXX Really More Profitable Than Being Long SVXY Or XIV? [View article]

    Welcome again!:).

    You are commenting on something I didn't write or imply. I implied that the shorting fee, not the hard to borrow fee, is reflected in options prices. That's two distinctive things.

    The time premium for put options can be higher than the time premium for the calls for the same strike prices. This is because the market prices in some fall into the options pricing, so the put/call parity is skewed to the downside, e.g. a synthetic short costs you net time premium. This usually happens when the shorting fee is also high (for the same reasons, because the stock is expected to fall). Check NBG for example.
    Nov 23, 2015. 06:24 AM | Likes Like |Link to Comment
  • VW refuses compensation for European owners [View news story]

    "I own one and never and issue".

    Try to tell that to some Audi/VW owners who had to pay ~$2,000 to 3,000 for a new gearbox incl. the work. This was right after the warranty expired. The servicemen kept telling them there was no problem when they complained of noises in the gearbox during the warranty period. There were class action lawsuits on this in the U.S. and China, the big markets that can protect its customers. The class action lawsuits are weak or nonexistent in Europe, so in Europe, the consumers are unlikely to get anything back.
    Nov 22, 2015. 11:30 AM | 4 Likes Like |Link to Comment
  • GulfMark Offshore Is A Buy, Trading At 26% Of Its Tangible Book Value [View article]
    Very interesting discussion going on.

    My 2 cents is that the offshore market continues to be in a very tough spot. And may be so for many years, so cash preservation will be key for the companies that try to survive in this industry. I am substantially hedging all my long oil and gas stock positions by shorting the oil and nat. gas futures, benefiting from the contango (via short USO and UNG). The commodity prices are very dependent on the strength of the U.S. dollar, which can be very volatile depending on whether the global economy (Europe, Japan, China) disintegrates further. The U.S. dollar can easily skyrocket 20% more, if we get a panic and a global recession like in 2008/2009. That would wreak havoc on all commodity stocks, especially small caps, that are desperately trying to stay afloat at the moment. Hence the hedge.
    Nov 22, 2015. 11:22 AM | Likes Like |Link to Comment
  • Premiere Global Services: Acquisitions Are Masking Falling Organic Sales [View article]
    Hello Maudes Capital,

    Nice to hear from you. I don't think they are overpaying as a strategic investment. The price is exactly at my long-term intrinsic value target of $14 even without the strategic (M&A) premium, so I would say they paid a full but fair price. I think recurring revenue and a more or less stable installed customer base is very valuable in today's world where revenue growth is hard to come by, so it has to be acquired (by both PGI and Siris Capital), and marketing costs for acquisition of new customers are sky-high and rising.

    That being said, the need to acquire growth (stagnant or falling organic sales at PGI) is not going away by the acquisition.
    Nov 22, 2015. 11:08 AM | Likes Like |Link to Comment
  • Is Super Micro Still A Buy? [View article]

    Agree with you on Intel. SMCI is usually the first to the market, or very early to the market with new products based on new Intel releases. The stock has fallen nicely for another good entry point. The overall market risk is high so I would size any small-cap position smaller than you are used to.
    Nov 22, 2015. 10:59 AM | 2 Likes Like |Link to Comment
  • Is Shorting VXX Really More Profitable Than Being Long SVXY Or XIV? [View article]

    If shares are hard to borrow or unavailable to borrow to short, the shorting fee will almost always be very high. This fee has to be reflected in the prices of options used to short the stock. The counterparty needs to be able to hedge the exposure in some way. So you will pay much higher time premium, and far out of money options may not be available to decrease the costs enough.
    Nov 22, 2015. 10:57 AM | Likes Like |Link to Comment