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Nat Stewart  

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  • Lumber Liquidators' Campaign Of Distraction And Deception [View article]
    There was no reason to make a personal attack on an individual named Ray Cotton. If you took issue with his qualifications, you should have made a precise case of it.

    The elitism and snobbery implied by your critique of his background was very unpleasant to read and not something I expect to see on an investment site.

    Then you chose to end with ominous statement, "Mark my words: Cotton will not survive this scandal"

    An unfortunate choice of words given the psychological stress a person in his position must be under right now - unnecessarily cruel.
    Mar 10, 2015. 09:28 PM | 25 Likes Like |Link to Comment
  • Checking Stock Quotes Regularly Is A Waste Of Time [View article]
    The ability to profit from price fluctuations is actually much greater than u seem to realize. The issue is that the only way it works is when u are trading against others who are making mistakes, typically do to over-reaction. This means it is a limited opportunity and also that to do it well it takes quite a bit of study to identify consistently. In my opinion a trader who is well grounded in long term fundamentals is in a good position to select a pool of stocks to buy when the crowd for whatever reason drives price down quickly on flim-flam news of little long term significance. The expected value after such occurrences can be very high over the next few days to few weeks.
    Sep 15, 2014. 08:16 AM | 22 Likes Like |Link to Comment
  • Exxon Mobil: Slow But Steady, Value Erosion Is Underway [View article]
    I wonder how different your metrics would be if u used per share metrics, for example cash flow per share vs. just cash flow. Share count is down something like 25% since 2007, after all.

    With many of entrepreneurial competitors likely to be busting out or severely constrained, the next few years might be a key time for a highly capitalized company like exxon to pick up some solid long term assets cheaply.
    Jan 20, 2015. 08:52 PM | 20 Likes Like |Link to Comment
  • The Bull Trap That Is Philip Morris International [View article]
    Interesting observation. I live near a rehab facility. One thing I notice is that when the rehab population is out on the street in crowds on "break" or whatever, every single one of them is smoking a cigarette, without fail. It is a dense cloud of cigarette smoke.
    Sep 19, 2014. 04:27 PM | 13 Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Michael, I believe that your need to make this personal by insulting me and questioning my integrity is in violation of this sites policy. The site explicitly states that "bad faith" accusations such as your "supposedly passed the CFA exams" statement are not tolerated. It degrades the discussion and I find it insulting. If you want to make a 300/1 bet on the topic I can fax u the documentation and U can send me 2K or whatever u bet, otherwise u owe me an apology.

    There is nothing unethical about recognizing that individuals are responsible for their own actions. There is nothing inherently unethical about writing about micro cap investing ideas. There is nothing unethical about recognizing solid micro-cap articles with special recognition.

    I have made many mistakes in investing, like most, and had to suck it up and learn from it, again like most sensible people. This includes 15 years ago when I attempted to buy a micro cap on the open with a market order and was badly skewed by a price spike that immediately collapsed. I learned from that and moved on, and never made that mistake again.

    Authors have certain ethical obligations when writing articles. A properly done article on a micro-cap is not inherently manipulative. I don't know why you refuse to acknowledge this. For example in my micro-cap articles (which I write as a hobby and am unpaid) I encourage readers to use limit orders and to be patient when taking positions, if they choose to do so.

    I bother to respond because, I for one have found some really interesting micro and small cap stocks on this site. The authors of these pieces deserve recognition, just like anyone else, imo.
    Jul 26, 2014. 10:24 AM | 13 Likes Like |Link to Comment
  • Is Tesla's Gigafactory Becoming A Gigafarce? [View article]
    "When the automobile changed from a horse and buggy, wonder if people thought this would work."

    Almost no one. Investors in particular thought it was a niche product with limited utility. Henry Ford CREATED the mass market when he drove costs down and productivity up beyond what was thought even remotely possible.

    The greats always go for what is beyond though possible. And, win or lose, they create a legacy beyond mere financial returns.
    Apr 8, 2014. 02:38 PM | 13 Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    I disagree. Lets take your example, CAW. Lets look at it's ownership:

    Holder Shares Reported
    BIGLARI, SARDAR N/A Jul 1, 2013
    ROTHSCHILD JONATHAN E 168,510 Aug 15, 2012
    KORNHAUSER RICHARD W 5,486 May 8, 2014
    HEIT STEPHEN 2,581 Dec 7, 2012

    Top Institutional Holders
    Holder Shares % Out Value* Reported
    Renaissance Technologies, LLC 306,000 5.07 936,360 Mar 31, 2014
    Dimensional Fund Advisors LP 207,376 3.43 634,570 Mar 31, 2014
    North Star Investment Management Corp 170,432 2.82 521,521 Mar 31, 2014
    Biglari Capital Corp 776,259 12.85 2,375,352 Mar 31, 2014
    Vanguard Group, Inc. (The) 29,606 0.49 90,594 Mar 31, 2014
    CALPERS (California-Public Employees Retirement System) 24,958 0.41 76,371 Mar 31, 2014
    Wilen Investment Management Corp. 22,948 0.38 79,629 Jun 30, 2014
    Price (T.Rowe) Associates Inc 19,247 0.32 58,895 Mar 31, 2014
    Bridgeway Capital Management, Inc. 17,521 0.29 53,614 Mar 31, 2014
    BlackRock Institutional Trust Company, N.A. 6,759 0.11 20,682 Mar 31, 2014
    In other words owned by some of the most successful institutional investors and hedge funds. If you don't like the idea, just ignore it. The micro-cap space is a legitimate area of research and idea dissemination. In fact, small and micro-cap are where most of the legitimate inefficiencies reside. When an analyst brings valid, new info to a stock, it makes sense that the price jumps. There is nothing wrong with this, it is logical!
    Jul 25, 2014. 06:56 PM | 11 Likes Like |Link to Comment
  • Hedgeye Report On Kinder Morgan Fails To Impress [View article]
    I thought the hedgeye report made a fairly compelling case The question to me: Is this business model legal, ethical, and sustainable? There is a difference between "not liking" how they operate and there being a serious legal, ethical, or sustainability problem.

    Outlining supposed problems with the IDR structure was the weakest part of the report. Basically, the IDR creates two security types: One focused on current yield, the other on growth. Which one is better at any given time depends on investor preferences and valuation.

    Also, the MLP structure has been fantastic in that it has allowed the very rapid development of needed energy infrastructure - a tremendous boon to the US economy. That should not be forgotten.
    Sep 11, 2013. 10:57 AM | 11 Likes Like |Link to Comment
  • Are We Turning Japanese? [View article]
    "What really matters for national economic growth is not population per se, but the labor force and people's willingness to work."
    There is an increasing disconnect between productivity and "work", and it has been slowly accelerating for at least 70 years. Fake work is an epidemic. In one way or another, many jobs are a product of deficit spending with little economic purpose - In other words they consume more than they produce. Entire sectors of the economy that employ millions are a result of government complexity and regulation that in real terms do nothing to boost productivity and standards of living (Just as one example).
    In my opinion, we need to stop thinking about "growth" as an ideal in and of itself, and start thinking about wealth or well-being per person. The difference is much like the difference between "Earnings growth" and "earnings growth per share." Only the second one is really valuable to the shareholder.
    We can have "growing earnings and well-being per person" without perpetual population growth. With Automation and artificial intelligence very rapidly taking once decent paying jobs, new frameworks and new thinking will increasingly be required.
    Feb 10, 2014. 08:07 AM | 10 Likes Like |Link to Comment
  • Herbalife: Who's Consuming All Those Shakes? And Why... [View article]
    "...nobody who buys a lottery ticket thinks the odds are in their favor."

    This is not true. I had the good fortune of working a part-time job at a deli-convenience store while in college and learned many useful things about the bottom 50%, and particularly about the bottom 20%, or underclass.

    One of which is that the concept of mathematical probability or "odds" is completely incomprehensible to a large segment of the population. It might seem see strange to people here, but many people are literally not capable of understanding why lottery tickets are a bad value. If u try to "help" by explaining it they look at you like you are from mars.

    Sep 9, 2014. 11:04 AM | 9 Likes Like |Link to Comment
  • The Secret Of Warren Buffett's Alpha [View article]
    Good article. The "stable" part of the leverage equation is extremely important. Buffett does not like to use leverage that is subject to margin calls. If you look at how he set up his fairly recent put trades on stock indexes, he made sure that none of them were subject to collateral or margin calls between now and the settlement date. If you are subject to collateral requirements you can get squeezed out of your holdings at exactly the wrong times.

    The principle of accessing and using a stable, low cost source of financing and then investing stable, higher return assets is perhaps the most powerful wealth building formula that exists - The reason so many large fortunes have been made in real estate and private equity.
    Jan 7, 2013. 08:54 AM | 9 Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Yes, I am serous. I get your point but I disagree. My list documented that institutions have found a way to accumulate over 1m shares. I myself have accumulated micro-cap positions over periods up to 6 months. If some lemmings jump in and top tick a price spike, that is their problem that they should learn from. I am tired of this notion that info needs to be censored because dummies refuse to take accountability for their own actions.

    One of my largest stock holdings is a micro cap that trades less than 1k shares per day (NYSEMKT:NEN). many of us like micro-cap coverage, there is nothing about micro caps and disseminating info or research on them that is inherently not legitimate.
    Jul 25, 2014. 11:42 PM | 8 Likes Like |Link to Comment
  • eBay's Dividend Will Be Huge [View article]
    Well, since you seem to believe that "something is going on inside of ebay" that is more than meets the eye, perhaps you should write the article - or at a minimum provide some clue as to what you are talking about.
    Dec 4, 2013. 11:39 AM | 8 Likes Like |Link to Comment
  • The Better Burger Threat To McDonald's [View article]
    McDonald's is not a burger restaurant anymore, it is a low cost convenience restaurant where burgers are just one item on an increasingly diverse menu. Here is the current menu, note just 12 of the items are various "burgers".

    The real competitive advantages of McDonalds are its world class business systems, brand name, and strong record of product innovation.

    McDonald is about serving customers the foods they want conveniently, consistently, and at a low cost. "Burgers" are not of long term strategic significance within this formula and their share of the menu will continue to shrink.

    Gourmet burger chains have nothing to do with the future of McDonald's or its competitive strengths. And If I am wrong, It would be wonderful. A product slip-up would be a great time to buy the stock for the long (10+ years) term.
    Jan 1, 2013. 12:03 PM | 8 Likes Like |Link to Comment
  • Fonar: A Micro-Cap With 40% Upside [View article]
    My two cents:

    I spent 40 or so hours researching this company a while back. The biggest risk results from the fact that the CEO has total voting control, yet only a miniscule 2% economic interest in the stock. Then you notice a long, long history of related party transactions - I went back to the early/mid 1990's in SEC statements and after a while my head was spinning.

    It seems the family has made a good living conducting related business with Fonar - It might all be legitimate, I am not judging that - the question is, will shareholders ever truly be rewarded, or will the stock just "fluff up" for a time and then collapse again?

    Here is a good start to fixing the above issues. There have been positive developments in recent years, but not enough to get shareholder's sustained confidence.

    1.) Create a real incentive plan for the CEO that puts him economically on the same side of the table with shareholders.
    2.) A real return of capital policy: The private co-owners of the business assets have been receiving a huge cash flow yield - where is ours?
    3.) Clean up corporate governance - either own enough economic stock to have control, or earn control through good performance. the dual share structure is ridiculous, at this point. Add some real expertize to the board.
    4.) bring in a real CFO ASAP.
    5.) End related-party transactions once and for all.
    6.) Borrow money NOW to finish buying-out the private owners - the yield spread on debt vs. the the yield paid to the other owners is huge.
    7.) Bottom line they need to treat this like a public company. Regardless of control via a special ownership class of shares, a duty of loyalty is owed to public shareholders.
    8.) Get all this done, start returning capital, finish buying out the private owners, and the business has a nice change of excellent returns - the NOL will create a nice tax shield for some time to come.

    If we see that management is actually on our side in a real way via real alignment of interests and cleaned up corporate governance, the stock should trade sustainably over 25 a share and not just run up and collapse again as it has in the past.
    Mar 18, 2015. 11:43 AM | 7 Likes Like |Link to Comment