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  • Loving The Leverage: Bank Of America [View article]
    Wharton, new home construction will improve because people have to live somewhere; leased and rented homes don't build themselves and after a half decade of severe underbuilding supply is at historic lows.
    Sep 2 04:52 PM | Likes Like |Link to Comment
  • Loving The Leverage: Bank Of America [View article]

    I'm not an expert on what the CAPE has correctly or incorrectly predicted although I do know there are people who disagree about it's long term record. I do know the doom and gloom crowd have been hanging their hat on the CAPE for the last few years and have missed out on a once in a lifetime bull market opportunity. I also know the U-6 unemployment stats only go back a couple of decades and don't cover enough recessions to know what a reasonable rate should be. It's also come down from the mid teens.

    Comparing the U-6 to historical expectations based on the U-3 is a red herring. You would need to need to compare it's range over a number of past business cycles to get a gauge on whether the current U-6 rate is an issue or not based on where we are in the recovery. It's a pretty good shot that a 12.2 U-6 is historically about where a 6% U-3 is in the cycle, not as good as it should be, almost a half decade into recovery but closing in on normal.

    In regard to GDP, 2% growth is 2% growth, you have no argument from me that this is a very slow recovery but a recovery none the less. While we certainly could be doing a lot better there's no reason to believe the sky is about to fall either.
    Sep 2 04:26 PM | Likes Like |Link to Comment
  • Loving The Leverage: Bank Of America [View article]

    Other than probably leaning toward the opposite political spectrum as you I pretty much agree with everything you've stated. The slowest recovery in history is why we have plenty of room for improvement before we need to worry about overheating and the next recession. What get's you in historically gets you out (pendulum swings both ways), that has not been the case in this recovery as banking and housing got us in an neither has gotten us out. Even after housing starts doubling from their great recession lows they are still 50% below their long term historic average and only at the level of the bottom of the worst housing related recessions prior to the last one.

    Ditto on the CAPE, the great recession accounted for a significant portion of the 10 year average where there were no earnings. What does that have to do with the outlook going forward? IMO, the better metric is to look at the normal S&P 500 P/E ratio and gauge it based on where the economy is in the cycle. It's been bouncing between 16-18 or it's historic average to a moderately above average. Given 6% unemployment and what got us in still hasn't significantly contributed to the recovery I, see no problem with the valuation of the market in general right now.
    Sep 1 12:58 PM | 2 Likes Like |Link to Comment
  • Loving The Leverage: Bank Of America [View article]
    Thanks to all who responded this helps a lot. I might just make my first foray into warrants. I like the long time frame and potential enhanced gains. I'm thinking of trading a small part of my existing long BAC position in for some BAC-B.
    Aug 31 03:19 PM | 1 Like Like |Link to Comment
  • Loving The Leverage: Bank Of America [View article]
    Good article except having never traded options I only have a cursory understanding of how they work. That said I'm a BAC bull and I think it's likely bank stocks in general get back closer to historic P/B ratios over the next few years as damage from the financial crisis fades, the economy continues to improve and profitability grows. I can see BAC trading in the $40's near the expiration date on BAC-BW however having never traded options or warrants I'm not sure I fully understand the pricing dynamics.

    For instance I looked up both warrants and the A warrants are trading at $7.16. If I add in the strike price of $13.30 it would cost me $20.46 if I exercised the warrants into shares of BAC. or ~$4.30 over the current share price of BAC ($16.09). I assume this premium is due to the expectation that in the future BAC will be trading significantly over the $20.46 price tag to convert the warrants today and traders are betting on the future upside, while limiting their exposure to downside and freeing up cash to deploy elsewhere. I get a little confused when I think about what these warrants would be trading for if we were running up against the expiration date. My understanding is the warrants will be worthless if they are not exercised by the expiration date, so I would assume that they would trade at a discount to what it would cost to buy the warrants and exercise them (assuming again BAC trades above the strike price) and that eventually someone actually wanting to own BAC common stock would buy and exercise them to get the stock at a discount to it's trading price.

    Is this about right for how to expect the warrants to trade? I tried to find the warrants on TD Ameritrade but could not find them there. If I were to take a small gamble on the warrants, how do I do it?
    Aug 31 12:45 PM | 2 Likes Like |Link to Comment
  • NQ Mobile: Despite 20-F Filing Hype, Nothing Has Changed [View article]
    <<<nobody has to prove anything anymore because those who are long do not ask the management to explain that imaginary round-tripping>>...

    I'm sure you are correct that anyone long NQ right now doesn't care or want to know if NQ is round tripping. Unfortunately you need people who aren't long this stock right now to buy your shares in order to profit from NQ. They're gonna care if NQ is round tripping. I seriously doubt even a blessing from the auditor to the frauds is going to allay those fears. At best it will be worth a dead cat bounce.
    Aug 26 04:19 PM | Likes Like |Link to Comment
  • NQ Mobile: Why Investors Should Look Deeper Beyond The Fluff [View article]

    Delloite was not even hired to investigate Muddy Waters claims (Shearman was) let alone hired to perform a "forensic audit".
    Aug 25 01:04 PM | 1 Like Like |Link to Comment
  • NQ Mobile: Why Investors Should Look Deeper Beyond The Fluff [View article]
    GGG you might want to take some reading comprehension lessons. Delloite was not hired to investigate Muddy Waters claims the lawyer was. Therefore the conclusion of the report is the lawyers opinion NOT Delloite's. Did anyone really think NQ's lawyer was going to find them guilty?

    The disclaimer about missing files and no credible explanation was not just a side note, it was CYA for when this fraud get's exposed. IE: when you lose the rest of your money and go looking for someone to blame the lawyer is going to point to that disclaimer and say they told you so.
    Aug 25 01:01 PM | 1 Like Like |Link to Comment
  • NQ Mobile: Why Investors Should Look Deeper Beyond The Fluff [View article]
    Due to the VIE structure, shareholders have no claim to what ever money might be left from the IPO and bond. What ever money there is provides no floor to U.S. shareholders.
    Aug 25 10:34 AM | Likes Like |Link to Comment
  • NQ Mobile: Why Investors Should Look Deeper Beyond The Fluff [View article]
    If you understood the company well you would know that Deloitte was NOT hired to investigate Muddy Waters claims the Lawyer was. In addition to the limitations the lawyer agreed to, their opinion was also only based on the information NQ didn't delete from multiple devices. did anyone really think the lawyer was going to find their client guilty?
    Aug 24 08:26 PM | 4 Likes Like |Link to Comment
  • NQ Mobile: Why Investors Should Look Deeper Beyond The Fluff [View article]
    Another outstanding article MI!
    Aug 24 05:04 PM | 1 Like Like |Link to Comment
  • NQ Mobile: It Can't All Be A Scam, Can It? [View article]
    I figured I'd take a quick look at ONP just for kicks. I remember them being part of the infamous class of 2011 Chiscams so I went back to their 2011 10K in addition to their most current 10K. As I suspected a growth story before they were outed and a contraction story after. It's also interesting that they were a growth story at the height of the world recession and contracting during the recovery.
    Aug 23 11:10 AM | 1 Like Like |Link to Comment
  • NQ Mobile: It Can't All Be A Scam, Can It? [View article]
    I've seen enough of your posts to know you are not clueless Titan but I don't get the blind faith in NQ and the total dismissal of MW. Muddy didn't make up YDT's SAIC filing showing total revenues a fraction of what NQ claims they receive from YDT, they didn't make up being outed as spyware on China TV, being booted from the Apple store, third party and major legit competitor market share stats showing NQ to be a bit player at best, offices that don't exist, major vendor turning out to be a relative working a kiosk, knock of Segway etc...

    M.W. also isn't responsible for them choosing to hire a lawyer to head their "independent" investigation instead of an auditor, they were not responsible for the lawyer needing to add the disclaimer that files appeared to be missing from multiple devices and management couldn't offer a credible explanation why, M.W. isn't responsible for the 20-F being 6 months late, PwC demanding to expand the scope of the audit and NQ deciding to replace them with the "Auditor to the Frauds", they aren't responsible for the chairwoman of the audit committee and the special investigation resigning as well as their less than a year tenured CFO. They're not responsible for the laughable "minority" investments clearly done to provide fake valuations to NQ business segments.

    I get cynics betting that the fix is in and the auditor to the frauds is going to find a way to game the minimum standards of auditing to ignore the obvious signs of fraud and sign off on the 20-F. I don't get how any rational person sees NQ as nothing more than an innocent victim. The street certainly doesn't. In regard to ONP I only marginally followed their story when they were accused of fraud but weren't they a growth story before being accused of fraud? I did follow CSKI closely and remember they were a growth story however they announced bad earnings after being attacked just before their auditor resigned. My Canary in a coal mine FAB Universal (NYSEARCA:FAB) put out disappointing earnings after being outed and is in the process of being delisted even after their replacement auditor played ball. Finally NQ announced bad earnings in their last SEC filing.

    I have no formal accounting background so I don't have a great understanding of how the accounting side of fraud works but I do understand that following the money is how fraud is investigated and things like acquisitions and expenses is how the fake money is disposed of. Is it just a coincidence that NQ's expenses ballooned after M.W. outed them? Even if MDP finds a way to play ball, will NQ still be a profitable high growth story going forward?
    Aug 23 10:44 AM | Likes Like |Link to Comment
  • NQ Mobile: It Can't All Be A Scam, Can It? [View article]
    The credibility of M.W. and others allegations and analysis is what took NQ down not the fact that they said mean things about NQ. As others have pointed out, when M.W. has made less convincing cases the stocks have not taken the same hit. IE: M.W. can't take 2/3 off the market cap of a stock by just pulling stuff out of their rear end as the more delusional longs want to believe. I wouldn't read too much into the dead cat bounce back to the 20's when the defenders of the faith were out in force trying to discredit M.W. and drawing in the gullible bottom feeders. NQ was already on it's way back to reality long before it became clear the 20F wasn't going to be filed on time.

    I see two versions of the long argument that make some sense. The most cynical and the one I can respect the most is that the fix is in, MDP is going to play ball, and game the minimum standards for auditing a company in order to avoid the obvious signs of fraud and sign off on the 20F, so who cares if they are a fraud. The second version is basically the same except we'll pretend that MDP gaming the minimum audit standards to find a way around the fraud means there was no fraud. Hopefully you're in the first category. I'm not sure MDP can successfully game the minimum standards and even if they do whether it will make a difference. Short term it probably will and might be a reason to be long NQ however long term, real investors will see through the auditor downgrade and this fraud will trade like the fraud it is. See ONP for an example.
    Aug 22 04:00 PM | Likes Like |Link to Comment
  • NQ Mobile: It Can't All Be A Scam, Can It? [View article]
    A. The fires did happen and represented a real risk to Tesla's business that was not fully understood at the time .

    B. Even after the hit to share price following the fires, Tesla had an insane valuation, probably higher than Fiat's even then, while Fiat sells millions of cars a year and Tesla sells thousands. IE: When you're invested in a momentum stock priced beyond perfection any threat to the business is going to send the smart money running for the hills.

    C. The stock did a 180 in about a month as the extent of the problem and the solution became clear and palatable to the street.

    D. Tesla only lost about 1/3 of it's insane market cap on this news and regained it all in about a month. NQ lost 2/3 of what would be a rational market cap if their financials were legit and nearly a year later lost more ground.

    If you want a good example of stocks moving on fake news go back a couple of months to NQ's mysterious run up one day on a rumor that they were about to file their 20F. A couple days later the stock craters on news that not only won't they be filing their 20F anytime soon PwC wants to expand the scope of the audit. A couple days after that one of the largest institutional holders (Altimeter?) files that they've completely bailed. That was a great example of stocks moving on fake news (and who might have benefitted). The fake rumor run up lasted about 3 days.
    Aug 22 10:31 AM | 1 Like Like |Link to Comment