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Michael Nau

 
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  • What Just Happened? [View instapost]
    Not sure if % change in the VIX is the best way to measure volatility spikes- its a percent of a percent, which is weird. Maybe vol of vol is better.

    Or maybe it is better to think qualitatively: yesterday the VIX went from extremely low to very low relative to the historical mean. I would guess that most of your other 5-sigma events are similar and don't correspond to a commonsense idea of a true crash or black swan event.
    Jul 18, 2014. 10:27 AM | Likes Like |Link to Comment
  • President comments on Iraq [View news story]
    We have no dog in this fight, nobody over there likes us. Not even our "friends".

    So long as there is no oil embargo, I don't see how our interests are at stake.
    Jun 13, 2014. 02:21 PM | 2 Likes Like |Link to Comment
  • Fitch Ratings close to sounding default knell on RadioShack [View news story]
    Seems unlikely, not a whole lot of synergy. In any case, the good parts of RSH (if there are any) can be had more cheaply in Chapter 11.
    Jun 11, 2014. 01:44 PM | Likes Like |Link to Comment
  • Iraq in flames again, rebounding oil industry threatened [View news story]
    I don't think this is a partisan issue. Fact of the matter is that the U.S. military has a limited ability to impose political control over the Middle East, regardless of whether the CIC is a Democrat or Republican. Our military is designed to win wars, not occupations or revolutions.

    We should just focus on those few who actively target the U.S., provide non-military aid to our friends and otherwise mind our own business.
    Jun 11, 2014. 01:39 PM | 7 Likes Like |Link to Comment
  • RadioShack flies higher. Catalyst? [View news story]
    The book value has probably already evaporated.
    May 30, 2014. 10:51 AM | Likes Like |Link to Comment
  • OTC Markets Group: 10 Cents Of Growing Free Cash Flow Per Dollar [View article]
    I don't know anything about the business, but I would guess that the company is very exposed to equity market downturns in general, particularly if Fed-based liquidity is drying up.
    May 28, 2014. 10:55 AM | Likes Like |Link to Comment
  • Cardtronics: Aggressive Accounting And Secular Decline Drive 40-70% Downside [View article]
    Fair enough, thanks!
    May 27, 2014. 12:59 PM | Likes Like |Link to Comment
  • Cardtronics: Aggressive Accounting And Secular Decline Drive 40-70% Downside [View article]
    Excellent analysis, very informative. Out of curiosity, I took a quick glance at the balance sheet and it looks pretty fragile: stockholders equity of $250M, but goodwill of $410M and other intangibles of $150M, probably mostly from the rollup strategy. On top of that, $270M of equipment that is probably overvalued (if the thesis presented here is correct). The company seems to have minimal slack if it runs into trouble.

    So what I'm wondering is whether the convertible or sub debt is an even better short than the equity, because the revolving credit line seems likely to eat up everything in the event of bankruptcy. I don't have access to fancy financial info, so I don't even know if this is workable. KCM, thoughts?
    May 27, 2014. 11:44 AM | Likes Like |Link to Comment
  • SEC Suspends Fortitude Group Yet Cannabis Stocks Rally [View article]
    So they're all OTC? Maybe outsiders should wait until they are in the fully regulated markets.
    May 27, 2014. 09:31 AM | Likes Like |Link to Comment
  • SEC Suspends Fortitude Group Yet Cannabis Stocks Rally [View article]
    The whole sector seems like a scam to me, but I'm no expert. Alan, is there any of these companies that you would actually own yourself?

    Or more broadly, any companies trading above pennies with the strictest filing regime and timely SEC filings? If these companies are legitimate, why don't managers make sure the share price >$5?
    May 27, 2014. 08:23 AM | 1 Like Like |Link to Comment
  • Short Credit Acceptance: Approaching A Negative Inflection Point [View article]
    greddy, I agree that CACC is just about the best in the business, as I have written before. The problem is that the business is very cyclical, is headed towards decline, and investors seem to be expecting steady growth going forward. That is extremely unlikely to happen.

    I do like the company, though, and plan on buying after the stock starts trading according to normalized earnings/book value.
    May 21, 2014. 01:47 PM | Likes Like |Link to Comment
  • Short Credit Acceptance: Approaching A Negative Inflection Point [View article]
    WM and BH, thanks! I won't try to estimate EPS for 2014, but there is a chance that the company has a few more quarters of earnings growth before gravity sets in. I think the key questions will be 1.) whether competition will continue to lower spreads 2.) the estimated default rate of 2014 loans, which may change to the upside or downside 3.) whether management decides to scale back or continue leveraging up despite the increased risk.

    Personally, I'd like to see the company start deleveraging now, lock-in more conservative financing, and begin to hold some more cash. This would hurt earnings for a while but will help prevent the pennies in front of the steamroller phenomenon. It would also be much more likely to grow book value in the long run than the strategy of borrowing to buy back stock at all time highs. So when the cycle turns, I wouldn't be surprised if the company trades at $50, but it will take some time.
    May 21, 2014. 07:29 AM | Likes Like |Link to Comment
  • Southside Bancshares: Great Bank, Sold Off For Shortsighted Reasons [View article]
    Great write-up, thanks!
    May 20, 2014. 07:55 AM | Likes Like |Link to Comment
  • 7 Signs China's Economy Is Headed For Collapse [View article]
    Is it the U.S. in 2009 or Japan in 1991? That is the question. It looks more like early 1990s Japan to me, so trailing PE metrics are misleading.
    May 18, 2014. 10:32 PM | 4 Likes Like |Link to Comment
  • T&T Capital Management Q1 Review [View article]
    Well done, my IRA thanks you for your AIG write-ups a while back! Keep up the good work!
    May 15, 2014. 12:16 PM | 1 Like Like |Link to Comment
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