Seeking Alpha

Nat Stewart

 
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  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    I am curious if this means Seeking Alpha will be cutting back on the "quick screen" and "retirement dividend" type articles. These in my mind are clearly a different market than the more detailed, thoughtful, independent research type articles. I think u could almost have a "spin off" to split this content onto a new site.

    Regardless, i think this is a big blow for yahoo finance. They are clearly (continuing) their move towards becoming a site that focuses on a lower end readership. I have found it to be useless for some time now.
    Jul 25 01:57 PM | 5 Likes Like |Link to Comment
  • Hedgeye Report On Kinder Morgan Fails To Impress [View article]
    So I am also perplexed by the way some people are starting every comment with the word, "so". I first noticed it about a year ago when I it was done on an analyst's call by the CEO of a power company. It seemed odd to me that someone with such a title would be saying, "So, we made that investment in Brazil..."

    If you are forming an old and cranky club, maybe I can pre-buy my membership?
    Sep 11 06:38 PM | 5 Likes Like |Link to Comment
  • Hedgeye Report On Kinder Morgan Fails To Impress [View article]
    MLPs are vulnerable because they access capital markets frequently. When the L.P. units get trashed, it raises their cost of capital, which harms the underlying business.

    In other words, the short arguments can create events which actively make the short case more compelling. Kind of a George Soros Reflexivity effect.
    Sep 11 10:48 AM | 5 Likes Like |Link to Comment
  • Tesla Motors Presents A Terrific Shorting Opportunity [View article]
    The problem with a stock that has lost touch with fundamentals is it can just as easily double or triple as it can lose 50%. That is the problem with trying to fade momentum-squeeze plays while the positive feedback cycle is still in tact. Much easier (if you must try these plays) is to wait for the dissipation cycle to set in - deep declines, false breakouts to the upside, with prior super bulls clinging to hope at each positive uptick. In a stock like this it usually only sets in after a period of massive volatility - one of the most opportune yet dangerous market phases to trade. Enjoyed the article.
    Aug 6 08:31 AM | 5 Likes Like |Link to Comment
  • Sense And Nonsense About Climate Change. What Do Investors Need To Know? [View article]
    "So, when terms like denier and believer are invoked, one should suspect organized superstition (i.e. religion) is involved."

    I agree. The best way to understand this debate is through the lens of Edward Bernays classic book (1928), "Propaganda". If you have not read the book, note that he is a defender and practitioner of Propaganda, not a critic. I highly recommend that anyone who has not read it to pick up a copy. You will have a much better understanding of what drives public "debate" in a democracy and why "acceptable" viewpoints are often so monolithic.

    For a taste of the book, here is the first sentence:

    "THE conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. "
    Jan 9 04:59 PM | 5 Likes Like |Link to Comment
  • The Secret Of Warren Buffett's Alpha [View article]
    I just noticed your use of the Average True Range indicator for the screen. I think this is a very useful indicator for trading, however I think there is an issue with the way it is used here and it might not be doing what you intend it to do.

    The problem is that for the indicator to capture volatility accurately in this context, it needs to be relative to the stock's dollar price.

    For example a 10 dollar stock with a .75 ATR is much more volatile in real terms than a 100 dollar stock with a .75 ATR. This is going to bias your list towards lower dollar priced stocks, not necessarily lower volatility stocks.

    For example more than 50% of your stocks are under $20 and none are greater than about $56. If your reverse the sign on the ATR measure, all are over $20 and the highest price is almost $170.

    For your purpose it would be nice if the finviz screen had something like "ATR/price" or "ATR/average price"
    Jan 7 02:49 PM | 5 Likes Like |Link to Comment
  • The Better Burger Threat To McDonald's [View article]
    The return on incremental invested capital in 2011 was 37%, which is phenomenal for such a large company. McDonald's is indeed a powerhouse.
    Jan 1 12:22 PM | 5 Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Solutions, Some of the write-ups here are very detailed and reflect a high level of financial understanding and research acumen. Some are professional in quality and have a real, justified impact on a stock's price. These articles reflect well on the site's title, "Seeking Alpha".

    Other articles feature non-researched stocks and ideas that were put together with a quick stock screen, and a simple narrative or story. Oftentimes these articles completely miss key facts about a company (In some cases quite severe) because no real research as been done. There is nothing wrong with this second type of article. Indeed the better authors of this style are entertaining and fun to read.

    The point is the two article types are completely unrelated, and have a different audience. The first type of article might objectively be worth a large sum of money to an individual or fund looking to invest in specific companies. The second type of article will never be worth more than a few cents to an individual reader, but can be worth something if it reaches enough people.

    Some of us are just noting that it is two different markets and products without much in common.
    Jul 27 05:04 PM | 4 Likes Like |Link to Comment
  • Why I'm More Confident Of My Herbalife Short Position Today [View article]
    Being correct is not always the same thing as making money, and nowhere is this more true than short positions. Conviction is fine, however not feeling pain when a short blows up 25% is in my mind is not a wonderful quality.

    With regards to Amway, I suggest you ask your relative how much they ended up spending on self help tapes, seminars, conferences, etc. The economics of the Amway scheme now revolve around what they call "tools". Basically the big wigs use their Amway pyramid to sell expensive self-help products to the struggling distributors, which is where the real profit to the scheme now resides.

    The entire industry that relies on commission only sales is by and large extremely misleading to new recruits, never mind highly misleading lottery commercials (such as the "just imagine" themed ones). In that regard HLF and MLM in general are not unique. Much of the industry is based on capturing the "Natural market" and churning through "opportunity seekers." The friends and family who buy product just to "help out".

    With regards to MLM it is true that these businesses mostly are silly and don't work out for the vast majority, but in the end no one cares. This fact is counterbalanced against the folks who do successfully use the underlying products to lose substantial weight. There is an obesity crisis among low income people in this country, if they all had an HLF shake instead of a bag of potato chips and a big mack for lunch, perhaps that would be progress.

    The group-based, or cult-like atmosphere of an MLM might indeed be an effective social element to the product that makes it more effective. It has been found social networks and peer pressure are effective tools for change such as weight loss.
    Jul 23 10:38 AM | 4 Likes Like |Link to Comment
  • Are Pyramid Schemes Inherently Fraudulent? [View article]
    The pyramid element in financial sales is the sales manager. They bring in "recruits" and when they fail out, the recruits "natural market" become a part of the sales manager's book of business. Nothing new here.

    Operational leverage is critical to making real money with a direct distribution model. This does not make it a scheme or a scam. It is common sense, really. The type of person who might succeed with HLF distribution is a smart promoter, and such a person will see this immediately. Since this is how the product comes to market, it makes complete sense - kind of like creating a mini-franchise within the business.

    The product itself is legitimate and meets an immediate need in the marketplace. The obesity crisis is far more dangerous than the fact that most hlf distributors never make it to the 365 day a year vacation life in the promotional material.

    Elitist hedge fund managers can't see the benefit of this product because they live in an elitist bubble, with no clue about the product choices of average or below average people.

    I fail to see anything wrong with the model. Many, many products are sold with the "hope-ium" formula. If you believe the adds, the worlds most popular cola can make you the happiest, most popular person in the world, after all.
    Mar 10 01:51 PM | 4 Likes Like |Link to Comment
  • Reality Check For Peter Schiff [View article]
    Why would we ever sell all those valuable, real assets to pay back debts in a currency we can print? Talk about a seriously bad trade.
    Oct 31 03:53 PM | 4 Likes Like |Link to Comment
  • Texas Pacific Land - The Ultimate Buy And Hold Stock [View article]
    Great write-up. Unfortunately, with the stock up over 50% over the past few months and at all time highs, it will not be able to buy back the same level of stock given the same cash flows as it has in the past. Right now it is trading like a momentum stock. Fortunately, there are a few other stocks like this with similar properties that seem to be less discovered.
    May 31 01:13 PM | 4 Likes Like |Link to Comment
  • 5 Reasons Tesla Motors Will Thrive [View article]
    Finally saw a model S a few days ago. A beautiful car. In fact, my wife pointed it out and asked what it was, which is highly irregular. Would love to test drive one.
    Mar 21 08:28 PM | 4 Likes Like |Link to Comment
  • Herbalife Share Buybacks: A Fool's Errand? [View article]
    Aside from the issues with this particular company (which i do not have an opinion on) I disagree with the way you are evaluating share buybacks.

    You are suggesting that the the current market price determines if a share buyback is accretive or beneficial to shareholders. This is not the case. What maters is the internal rate of return on the money spent relative to other alternatives, as measured buy free cash flow and EPS per share. This is very easy to map out with a few numeric examples. Otherwise a nice article.
    Feb 1 10:24 PM | 4 Likes Like |Link to Comment
  • Attractively Valued Blue-Chip Dividend Champions For Your Retirement Portfolios [View article]
    One interesting note is that both Carlisle and Dover emerged from the private equity firm GL Ohrstrom Co Inc, which was founded by the legendary George Ohrstrom in the 1920's and I believe is currently run by his grandson. I have noticed that some of the old school private equity firms have a good track record of bringing companies to market that end up being great long term investments.
    Jan 23 10:21 PM | 4 Likes Like |Link to Comment
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