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Mercenary Trader

 
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  • Sorry Twitter, They're Just Not That Into You [View article]
    You're talking to a seasoned entrepreneur. Books are no substitute for experience, but ignorance is no excuse when knowledge is available. I think we may just need to agree to disagree...
    May 2 02:25 PM | 1 Like Like |Link to Comment
  • Sorry Twitter, They're Just Not That Into You [View article]
    Re, Amazon, they don't "own" the internet consumer -- their investors just have a lot of faith that Amazon's one-day future cash flows will justify the current multiple.

    And Amazon is subject to the same laws of gravity. At 480x TTM earnings the value of AMZN shares could fall another 30% and the company would still have a nosebleed PE. Those who bought AMZN in the 380-400 range are already feeling this heat as shares are 25% off their highs.

    Also, interestingly, AMZN is a "mass market" play in a way that Facebook also is.. and Twitter is not...
    May 2 11:29 AM | 1 Like Like |Link to Comment
  • Sorry Twitter, They're Just Not That Into You [View article]
    You have to know the rules before you can break them... investing is an art but it is also a science. Creativity is prized in science too, but a scientist who ignores basic principles of biology or physics because he feels 'constrained' by them will not get very far in terms of producing results relevant to the real world. Best of luck on your journey!
    May 2 11:24 AM | 1 Like Like |Link to Comment
  • Is Shorting China The New Widowmaker Trade? [View article]
    Actually in China's case, it literally is the government that creates the jobs, much of the time... when the government orders a bank to lend a hundred million to a badly run state-owned enterprise, or orders five new highways and skyscrapers to be built, as a function of central planning, that is substantially government job creation... which is part of the problem, and part of the reason China is heading into slow-burn crisis. The main question is whether the crisis will be dramatic or just prolonged and mired in muck.
    May 2 11:20 AM | 1 Like Like |Link to Comment
  • Repeat After Me: Boring Is The New Sexy [View article]
    This is not relevant to the context of the article.

    There are times when boring (aka sober value) is ignored or even shunned as capital flows elsewhere, even though some investors will always prefer it. There are also times when boring is, well, boring. But when you see the trajectories of vehicles like XLE and XLU, and compare them to the trajectory of IWM and IBB, it is clear this is a unique situation.
    May 2 11:18 AM | Likes Like |Link to Comment
  • Herbalife: Advantage Ackman? [View article]
    No. You took the statement out of context. The following sentence clarifies it. And this exchange already took place in this very comments thread.
    May 2 11:15 AM | Likes Like |Link to Comment
  • Herbalife: Advantage Ackman? [View article]
    We simply observed that an extraordinary amount of buyback activity -- which would be out of the norm for a valuation based assessment on the part of management, but fits as a counter-strike maneuver -- has been met with lackluster price response, indicating supply/demand dynamics that may give tactical near-term advantage to bears. That's it. It qualifies as an "objective position" in respect to being a straightforward observation.
    May 1 06:40 PM | Likes Like |Link to Comment
  • China To Bypass The United States... Blah, Blah, Who Cares? [View article]
    Your "new realities" are decades old. All your criticisms could have been recited verbatim in the 1980s, substituting Japan for China as the Amerika foil du jour.

    When hand-waving conspiracy criticisms and vague criminality assertions are broken-clock timeless, that is also clear sign they are pointless and worthless... America has its problems and issues and corruption factors, we are not cheerleaders by any means, but stuff like this is utterly useless...
    May 1 05:17 PM | 1 Like Like |Link to Comment
  • Herbalife: Advantage Ackman? [View article]
    Umm, what financial analysis would that be? We observed that

    1. HLF has bought back a large quantity of shares

    2. This activity has had minimal bullish impact on HLF price activity, suggesting

    3. A worrisomely large source of supply offsetting the buybacks

    As for breaking down the specifics of the HLF battle on the fundamental side, we specifically avoided that.

    So the "shoddy financial analysis" you speak of doesn't exist... care to try one more time? Then again maybe you'd better not...
    May 1 05:13 PM | 1 Like Like |Link to Comment
  • Is Shorting China The New Widowmaker Trade? [View article]
    Follow our stream...
    May 1 05:09 PM | Likes Like |Link to Comment
  • Herbalife: Advantage Ackman? [View article]
    Not really. Objectivity (or lack thereof) is a quality that can be assessed by general behavior, especially in the context of a debate. If someone makes a clear point and then sticks to that point, without embellishing it or overstating it, and without an undue display of emotional attachment, that is a general example of objectivity.

    If, in contrast, someone attacks an argument with a totally different argument (red herring / strawman), and does so because they have obvious emotional involvement in a pre-conceived worldview or outcome, that is a general example of non-objectivity.

    Meanwhile, given that message boards are heavily populated by stock cheerleaders and investors who have fallen in love with their holdings, and have no desire to even hide this, such is not a very high hurdle to step over. It is merely a combination of basic observation and logic.
    May 1 05:07 PM | Likes Like |Link to Comment
  • China To Bypass The United States... Blah, Blah, Who Cares? [View article]
    "Japanese are less happy than the average Chinese"

    Ah, no. In China there are eight-year-olds dying of lung cancer as a result of rampant air pollution. Huge portions of water and topsoil are permanently poisoned. Not just a majority of the wealthy but now rising portions of the middle class want to leave. There is no social safety net of any meaningful substance. And the vast majority of China's population remains rural and dirt-poor. Very hard to construe any way in which that statement skews accurate.
    May 1 03:18 PM | 1 Like Like |Link to Comment
  • Herbalife: Advantage Ackman? [View article]
    So the humorous part is your lack of reading comprehension? (Sorry, couldn't resist)
    May 1 03:15 PM | 2 Likes Like |Link to Comment
  • Herbalife: Advantage Ackman? [View article]
    Actually yes. We love our family, not our positions. We are loyal to friends and colleagues, not our investments or trades. Perfect objectivity is not attainable, but it is something that can be actively cultivated and strived for. Many however have no such desire at all.
    May 1 03:09 PM | Likes Like |Link to Comment
  • Sorry Twitter, They're Just Not That Into You [View article]
    "Growth" is a meaningless statistic my friend. Growth does not equal profits. It is possible for a company to grow like a weed for a very long time, producing no profits, and then get blindsided by a competitor, having produced no long-term value for shareholders at all.

    In TWTR's case, it is about future profit prospects in the context of valuation. We happily concede Twitter is a great company, with an excellent long-term future as a business. This has nothing to do with the fact that shares are grossly overvalued.

    Let us say my company is currently making $1 of earnings per share and is on track to make 100 times that amount in the next five years. Well that is fantastic growth -- the shares of my company must be a buy right? Not if they are ALREADY valued at, say, a THOUSAND times earnings.

    You should study the concept of the pari-mutuel system. Valuation and growth are not the same thing. If valuation of a stock is far too optimistic relative to actual growth, in terms of future expectations, then growth can be legitimately strong and the share price can still decline in value, a lot.

    Think of it like this: A stock that is trading at 400x estimated 2016 earnings could fall in value by 50%... and still be a growth stock, because now it is 200x estimated 2016 earnings which is still high.

    As David Einhorn put it, "a silly valuation times 2x is still silly." That is why tech stock valuations can reach insane levels. But it also works in reverse: "a silly valuation CUT IN HALF can still be silly." The sword cuts both ways.

    I suggest you read up on this and really think about it, because if an investor doesn't grasp the concept of growth premium relative to baked-in valuation in a pari-mutuel context, that investor should really rethink the risks of having any meaningful amount of money invested in high-beta stocks at all...
    May 1 01:56 PM | Likes Like |Link to Comment
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