Seeking Alpha

Nat Stewart

 
View as an RSS Feed
View Nat Stewart's Comments BY TICKER:
Latest comments  |  Highest rated
  • 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 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 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 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 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 08:07 AM | 10 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 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 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 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".

    http://mcd.to/Uj2dmL

    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 12:03 PM | 8 Likes Like |Link to Comment
  • Sense And Nonsense About Climate Change. What Do Investors Need To Know? [View article]
    Individualistic, conservative, hierarchical-thinking white males are the ones who created this (USA) country and pretty much everything of tangible, man-made value within it. Perhaps such characters are confident they can solve any technical climate problems as they occur without resorting to a panic or hysteria - Just as we put a man on the moon, developed satellite communications, the fundamentals of computer science, put a lunar rover on mars, etc.

    And what is all this about "climate change" wasn't the problem "global warming" all of 5-10 years ago? And I believe before that it was the ice age. It is nice when every "change" in the climate can be used to prove your hypothesis - extremely useful from a political point of view.
    Jan 9 11:46 AM | 7 Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Michael, your primary point, as I understand it, is that micro cap stocks below the cutoff point that you have suggested should not be eligible for awards, because they are prone to what you consider to be manipulation. I understand that concern.

    I weigh things differently. Specifically, I believe that:

    -Work should be judged on it's creative and analytical merit exclusively, and authors should strive to do their best, most accurate and truthful work possible

    -Individual investors should be accountable for their own actions, including being accountable for any lemming-like trading behavior, and should learn from their mistakes

    -It is sound policy for the site to put info for readers on liquidity issues/risks on all micro cap articles (which I understand to be current policy).

    -It is sound policy for authors who do micro cap articles to take the liquidity issue into account in their articles, and make a reasonable effort to make sure readers are informed on the issue.

    -Investors should not be shielded from potential ideas because a third party reader views it as "not appropriate" or "crap" for whatever reason (beyond quality and merit of analysis).

    -authors should not be penalized on merit-based compensation or recognition do to the personal opinions of other readers with regards to suitability, etc, which by the nature of things are individual choices and circumstances.

    Your personal opinion is that companies like CAW are crap.

    Well, not everyone agrees. Sardar Biglari, a well known value investor who some have called a "young Warren Buffett" owns about 12% of the company. The stock passed the quant screens of Rentech, arguably the most sophisticated quant hedge fund in the world.

    Bottom line: You might have an opinion, it might have some merit, but don't expect everyone to agree.
    Jul 26 08:48 PM | 6 Likes Like |Link to Comment
  • Don't Judge Berkshire Hathaway By Its Book Value Cover [View article]
    "On a risk adjusted basis, Warren has destroyed investor value."

    As others have noted, this article is so full of inaccuracies and misconstrued opinions that it is almost not worth responding to.

    However, I will debunk the above statement. BRK.A has the highest sharpe ratio of any stock or mutual fund over the past 30 years. The very highest, not just one of the best. And this is based on stock price returns, not book value. In other words the author makes a declarative statement and is not just "kinda" wrong, but is 100%, dead wrong, as wrong as one could possibly be. And this is very typical of the rest of the article.

    Anyone who wants a real understanding of Buffett's massive risk-adjusted outperformance should read the following academic paper (PDF):

    http://goo.gl/Kv9kKY
    Mar 12 03:31 PM | 6 Likes Like |Link to Comment
  • Are Pyramid Schemes Inherently Fraudulent? [View article]
    I doubt the HLF participant marketing material is any more misleading than the State Lottery commercial I heard on the radio this morning. The formula is to get people fantasizing about easy riches, wile ignoring the basic math (Most tickets expected value = less than 60 cents on the dollar).

    Everyone knows state lotteries function as a tax on the poor but no one cares.

    "Herbalife's grand deception is suggested by the high failure rates of its new recruits"

    Not true at all. All 100% commission opportunities have a tremendous churn rate of participants. For example, life insurance is sold by promising a great career, but the real formula is to capture the new participants "natural market" then let them (the 99%) fail out. Participants by and large know this, but they do it because they figure, "it might work".
    Mar 10 11:45 AM | 6 Likes Like |Link to Comment
  • The Paper World Of Brookfield Asset Management [View article]
    Didn't reply? What is this?

    http://bit.ly/16n5pED

    The company spent a great deal of time replying, as can be seen in the above author provided link.

    This article is in fact a textbook or classic smear job: It raises a bunch of questions and suggests something nefarious or underhanded is going on, while not offering a shred of documentation or proof. Clearly, the author has an axe to grind.
    Mar 11 06:59 PM | 6 Likes Like |Link to Comment
  • How Has Herbalife Kept The Game Going For So Long? [View article]
    What if all the negative things about the herbalife business opportunity are well known, but people ultimately choose to participate regardless?

    It is not that far fetched.

    A substantial portion of the population knowingly use a product that slowly kills them (Tobacco). A substantial percent freely choose to travel great distances to play games that they know are rigged (casinos). People willingly play state lotto's even though the vig is often as much as 40%.

    The shorts are on a cruisade to help the poor? Great.

    I dare them to do an analysis of state lotteries - they are not called a tax on poor people for no reason.

    Here is a story: When I was in school I worked briefly at a convenience store. I felt bad for a number of the poor, hard luck people who I felt were ruining themselves financially with lottery tickets. I spoke up and did my best to explain how bad the odds were, and why they should not play. You know what? They don't give a damn. Don't want your "two cents" or mathematical explanation of the odds. Basically look at you with a look that says, "F off" or "who cares" and then ask to buy 40 more tickets.

    Bottom line: What if the people negatively impacted by the severely low odds MLM/HLF business opportunity still want the freedom to participate and make their own decisions - you know, like real grown ups?

    Regardless, the HLf product is documented to work for it's primary purpose - weight loss and weight management. Quite frankly, given the massive obesity crisis in the low income population, I would not be surprised if this real product benefit vastly dwarfs the harm created by the low odds mlm opportunity.
    Jul 26 11:31 PM | 5 Likes Like |Link to Comment
COMMENTS STATS
345 Comments
367 Likes