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Michael Nau  

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  • RadioShack: The Ultimate Contrarian Play [View article]
    They did in December, but were losing $1M a day. Now they probably have something like $50M-$100M. Also, on the revolving credit agreement, the only other source of liquidity, the balance declines with inventory. I estimate that they have 3-5 quarters left until insolvency.

    If you do believe in the turnaround, keep the position small and buy call options or sell puts. The options on this company are very skewed to the downside.
    May 14, 2014. 08:36 AM | Likes Like |Link to Comment
  • Prospect's 10-Q: SEC Seeks Reclassified Or Restated Financials, NICK Deal Won't Close By Termination Date [View article]
    Thanks for the update. Do you have any idea of the likelihood the deal will actually close, or is this just a delay?
    May 7, 2014. 07:38 AM | Likes Like |Link to Comment
  • UAW veteran headed to GM board [View news story]
    This sort of thing works out okay in Germany. VW is well managed and has union representation.
    Apr 26, 2014. 10:04 AM | 4 Likes Like |Link to Comment
  • The Limits Of Shareholder Capitalism [View article]
    SU, well said. It should also be noted that there are several ways of thinking about wealth maximization. Short-term maximization is all about cost-cutting and accounting flim flam, long-term maximization is about building a business.
    Apr 24, 2014. 08:48 PM | 1 Like Like |Link to Comment
  • The Good ETF, Part 2 (Sort Of) [View article]
    I disagree with the absolutist caveat emptor line of argument. Should everyone read the prospectus for SPY or VTI or whatever other index funds might be in their 401k accounts? Or all of their credit card agreements? That is impractical, most people won't, and don't have the time to spend their lives reading fine print.

    Perhaps the SEC can come up with a warning label system for strange/complex, or questionable stuff like TVIX, making it more clear to investors that they may not know what they are doing. This sounds especially reasonable for instruments like TVIX because futures and options (TVIX is based on futures) have more of a gatekeeping structure than common stocks or index funds.
    Apr 20, 2014. 09:53 AM | 1 Like Like |Link to Comment
  • Three Reasons Aspen Insurance Should Accept The Buyout From Endurance [View article]
    Thanks for the analysis, your argument seems spot on. Out of curiosity, how do you compare reinsurance companies that are primarily fixed income shops with others like GLRE or perhaps Y?
    Apr 19, 2014. 10:22 PM | Likes Like |Link to Comment
  • Weight Watchers International - Is The Fat Lady Singing? [View article]
    Good analysis, there is a decent business in there. The problem is that I don't trust Artal to do right by non-controlling shareholders. It is just too tempting for them to pile on the bad news in the coming months and take the company private for a song.
    Apr 16, 2014. 04:18 PM | 1 Like Like |Link to Comment
  • 5 Explanations For Greece's Bond Yield [View article]
    I wouldn't bet on Eurocrats sorting things out before the whole ship sinks.
    Apr 11, 2014. 08:30 PM | Likes Like |Link to Comment
  • Do Not Buy Alcoa [View article]
    Tom and phawk, I think you do a good job of briefly summing up the bull case. And the market seems to agree for now that AA will turn things around with its new strategy. But neither of you address the related issues of 1.) current valuation 2.) financial weakness.

    If AA can make the leap, then perhaps optimism is warranted. But if not, then the company is in serious trouble. Where we seem to disagree is 1.) the extent to which the macro environment in the coming year will support this new strategy 2.) whether financial weakness will spell disaster if things don't go according to plan.

    Time will tell who is correct, good luck!
    Apr 10, 2014. 02:46 PM | 1 Like Like |Link to Comment
  • Emerging Markets, Should They Be In Your Portfolio? [View article]
    Good points about the risks in emerging markets. Russia, Japan, and China (add Egypt and India) have historically been quite risky.

    So I think the question is whether the losses in the first half of the 1900s were "random", or a cyclical phenomenon. In other words, does international trade and liquidity regularly expand and contract over the long term? It seems like it does: WWI marked the end of a long globalization cycle and EM investors were more-or-less wiped out. International trade and capital flows have been growing steadily since 1950, especially after 1980. So are we to expect more globalization forever, or are there serious imbalances that will eventually end the liquidity cycle? Looking at the debt bubbles in China and Brazil and the massive overcapacity across EMs, it seems to me that the EM party will be over within the decade.
    Apr 10, 2014. 10:52 AM | Likes Like |Link to Comment
  • Should You Bet On Alcoa's Momentum? [View article]
    Did we read the same earnings transcript? GAAP EPS negative, yoy revenue decline, soft aluminum market. Management tried to spin this as positive, but these "restructuring" costs not counted in adjusted EPS seem to be a central part of the business model now. So what is there to be bullish about, especially looking at deflation in Europe and the coming credit bust in China? If I shorted stocks, AA would be near the top of my list.
    Apr 9, 2014. 08:24 AM | 3 Likes Like |Link to Comment
  • Bank Of Internet: Higher Rates Will Compress Margins For Bank Priced At 3.5x Book Value [View article]
    Wow, excellent article, well reasoned and articulate. Personally, I side with BOFI management on interest rates, but who knows, they are making a large gamble. I do totally agree about the longer-term problems with funding, runoff from MBS, and heightened competition- I've changed my mind significantly in the last year about the sustainability of BOFI's moat (weak to nonexistent).

    All that said, valuation shorts seem risky in this market. This is clearly a battleground stock with huge price swings and widespread disagreement about fundamentals. Shorts and longs should both be careful. Good luck everyone!
    Apr 8, 2014. 11:33 AM | Likes Like |Link to Comment
  • Tesla Motors launches business leasing subsidiary [View news story]
    Well, the stock is down. So they need something to pump it back up so they can sell more.
    Apr 8, 2014. 07:53 AM | 1 Like Like |Link to Comment
  • California green car incentive program goes dry [View news story]
    If that is the case, then CA should stop giving handouts to the affluent and use the money on something more productive.
    Apr 4, 2014. 01:25 PM | 7 Likes Like |Link to Comment
  • The Impact Of High-Frequency Traders [View article]
    Sensible analysis and proposals, the HFT threat to retail in terms of scalping is way overblown.

    I guess I'm a little less convinced that "flash crash" events are no big deal just because the 2010 crash was quickly reversed. In 1987, options and futures markets came close to collapse, and I'd hate to have the fate of markets depend on the whims of a few people in positions of power. That's why I'd add a very small transactions tax for trades held less than one minute (or hour or day or whatever). Won't affect long-term investors at all, but will make some of the HFT business models obsolete.
    Apr 4, 2014. 07:40 AM | Likes Like |Link to Comment