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Michael Nau

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  • American Capital Agency's Dividend Sustainability Analysis (Post Q4 2013 Earnings) - Part 2 [View article]
    Scott, excellent article as always, your articles seem to be worth more than all sell side analysts put together. If you're staying long, so will I, I like to be in good company.
    Feb 25 07:54 AM | 8 Likes Like |Link to Comment
  • GOP hopeful of debt-budget deal today [View news story]
    What about Jefferson? Was the Louisiana Purchase constitutional? Or how about the alien and sedition acts? Or mass internment of Japanese Americans during WWII for no crime but their race?

    There is a difference between not liking Obama's policies and claiming that he is ripping up the constitution.
    Oct 11 08:00 AM | 8 Likes Like |Link to Comment
  • Futures sharply higher as President hands Syria off to Congress [View news story]
    What a mess. I voted for Obama and still like the guy, but this episode shows a severe lack of leadership and clear thinking. I say avoid foreign entanglements in the Middle East like the plague.
    Sep 2 11:10 AM | 8 Likes Like |Link to Comment
  • It Is Not Different This Time - It Is Worse [View article]
    Austin, there's a big, public university and a lot of white-collar government jobs, which is an environment that attracts a lot of entrepreneurs. Just like silicon valley, Seattle, or Boston. There is a reason why low-tax conservative states tend to do worse on education and public health except for the parts that look like blue states. fafatooey, hating on people with education is part of the problem.

    My bigger point was this: look at the countries that are beating us at education and the sorts of social policies they have. Nobody to our political right, only countries to the left.
    Apr 7 07:20 PM | 8 Likes Like |Link to Comment
  • What Will Fix Apple's Declining Shares? Patience, Time, And Faith In Management [View article]
    Wall Street hates company, consumers love company: buy signal
    Wall Street loves company, consumers hate company: sell signal

    AAPL and KO are neck and neck for having the best brands in the world. Ignore the financial engineering flim flam. Cook's options vest over a ten year period, his interests are aligned with long term investors, so sit back and relax.
    Mar 4 10:59 AM | 8 Likes Like |Link to Comment
  • Investing In 2013: Remember 1977 [View article]
    I guess a touched a nerve. I won't claim that Boomers did nothing, they had a lot of achievements. Society, technology, and the economy all advanced since they came of age in the late 1960s. What I am saying is that my generation is getting sick and tired of our elders (they are still in power, I can't legally be a senator or president) calling us lazy, saying how we don't act right like in the good old days, we need to work harder, save more, have more discipline. As if Boomers occupied the moral high ground and followed their own adivce. They don't, and they haven't, Democrats and Republicans, conservatives and liberals.

    The young generation is waking up, beginning to realize its power. From elections in Italy to the Arab Spring to high turnout in the recent U.S. election, we are starting to have a voice. We will rewrite the social contract so that we are included.


    Feb 27 11:45 AM | 8 Likes Like |Link to Comment
  • Is Apple Just Boring? [View article]
    I like boring, way less valuation risk. All AAPL has to do now is keep chugging along with incremental improvements to its existing products, have a moderately successful new product category every 3-5 years, avoid doing anything boneheaded with its cash, and it will solidly outperform. Wall street chronically undervalues FCF in favor of "stories". If I want a good story, I'll read a novel.
    Feb 25 09:37 AM | 8 Likes Like |Link to Comment
  • 20 Signs The U.S. Economy Is Heading For Big Trouble In The Months Ahead [View article]
    Whether a channel is "balanced" is just an opinion, unless we can agree to some objective measurement and follow the data wherever it leads us.

    The problem is that many people already "know" the answers to everything. Humans are great at clinging to all sorts of bizarre ideas while violently opposing the suggestion that they may be wrong. Yes, reader, at least one of your beliefs is wrong.
    Feb 20 11:55 PM | 8 Likes 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 01:25 PM | 7 Likes Like |Link to Comment
  • Herbalife, MLMs And The Unhappy Folks Of Whoville [View article]
    Good article, you got right to the heart of the heart of the issue. For the sake of the public interest, I hope this thing gets shut down.
    Mar 21 11:21 PM | 7 Likes Like |Link to Comment
  • Ramey rides the wave, Herbalife is top pick for 2014 [View news story]
    I don't see why HLF should command such a high multiple even if the company is legitimate. Distributor churn is a serious growth risk. Also, the balance sheet is a total mess- shareholder equity is negative if you discount inventory.
    Jan 2 09:52 AM | 7 Likes Like |Link to Comment
  • American Capital Agency's Mid-Q4 2013 Book Value Projection And Derivative Portfolio Valuation Analysis - Part 3 [View article]
    Agreed, the buyback plan will affect book value if it continues at 3%+

    Personally, I'd like to see a much more aggressive buybacks whenever the stock is more than 10% below book.
    Dec 5 10:18 AM | 7 Likes Like |Link to Comment
  • Emerging Competition Threatens Apple In 2014 [View article]
    Michael, you are my favorite AAPL bear, I always enjoy reading your articles. I think you've laid out the bear case pretty clearly, but I think you are a bit too pessimistic. Here's my rebuttals:

    1.) I don't put a whole lot of stock in market share or revenues, I'm more interested in earnings and free cash flow. Otherwise, I'd buy AMZN. EPS has declined somewhat in the last year, but FCF is highest ever for a September quarter. It seems clear to me that while growth might be slowing down, AAPL is a cash machine.

    2.) The zero growth on tablets figure isn't entirely fair considering the product cycle. I'd expect growth with the next product refresh.

    3.) You are right to be skeptical about AAPL coming up with the "next big thing". That is quite difficult to do. But it is clear that the company might. I'd say that such an option on future products is worth a non-trivial amount, but that the current market is giving this optionality $0 value considering its cash and slow-growth existing businesses.

    4.) AAPL is able to fund its capital return program almost entirely out of FCF. This will leave most of the cash pile intact yet will reduce the float by 20%-25% in the next year and a half. AAPL will be able to drive EPS growth out of buybacks without having to mortgage much more of its fortress balance sheet.

    So I've concluded for now that the glass is half full, but it is good to hear an opposing point of view.
    Oct 31 06:06 PM | 7 Likes Like |Link to Comment
  • I Concede Defeat In Amazon.com [View article]
    Akram, I think you last comment gets to the heart of the issue: AMZN longs consider things like free shipping as "investments" rather than a regular cost of business as per the business model. Other companies are not valued that way, but somehow AMZN is special.

    The market domination story may or may not play out, but the evidence is on the side of the bears right now. The question is how long the bulls are willing to wait for the promised land. 5 years? 50 years?
    Oct 25 12:10 PM | 7 Likes Like |Link to Comment
  • The Sky Is Not Falling, But It Is Teetering On Its Edge: Protect Your Portfolio [View article]
    I think the figure above is a bit misleading because it measures a stock (debt amount) compared to a flow (tax revenue). With the sequester, the deficit for the next decade has dramatically shrunk and debt-to-gdp will be about level during that period. There's longer-term issues, but no emergency, the real risk right now is a politically-motivated technical default.

    Also, the government is not like a household. It can print money (I can't), and it does not need to accumulate savings over the life course. If the government was like a household, it should always run on a surplus. Instead, surpluses are either spent on new programs, tax cuts or some combination thereof. The government does not need to save. If anything, the government is more like XOM, which will do just fine into the future and never need to pay off its debts. In fact, it can steadily grow debts with revenues ad infinitum, so the real thing to watch is debt-to-gdp and servicing costs.
    Oct 7 11:22 AM | 7 Likes Like |Link to Comment
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