Actavis Buys Warner Chilcott, Upside Seems Limited [View article]
Greetings Peter,
Dismissing the point about Apple might fit conveniently into your rationalization. That is all well and good.
However, the point of using Edson Gould's downside targets is to determine the next best opportunity to buy a stock if you've missed the initial run up (if the fundamentals are still intact). That is the lesson of Gould's work on the topic, not, "... it was clear that they cannot possibly maintain the level of growth..."
While you cite the clarity of Apple not growing to the sky, as the stock was within days of approaching the $705 peak, it also became the most widely held institutional holding as noted in Barron's (another rag) on September 19, 2012 (found here: http://bit.ly/13BuaxJ). Clearly, the professionals didn't see what you say was so obvious.
Next, regarding your comment "WPI did not move from NJ to Switzerland. No such plans were announced (though I was hoping that they would)." According to Actavis' website (another rag):
"The Company has global and U.S. headquarters in Parsippany, New Jersey, USA, AND international headquarters in Zug, Switzerland." (found here: http://bit.ly/13Qo2fC). Before the merger with Actavis, WPI was incorporated, for tax reasons, in NV but headquartered at 311 Bonnie Circle, Corona, CA, 92880. Because of the merger with Actavis (and other cos.), WPI gained the Swiss joint headquarters with the NJ incorporation.
Also, According to the Press Release from Actavis regarding the WCRX acquisition (another rag):
"At the close of the transaction (the "Effective Date"), which is expected by year-end 2013, Actavis and Warner Chilcott will be combined under a new company incorporated in Ireland, where Warner Chilcott is currently incorporated. The newly created company, which is expected to be called Actavis plc, or a variant thereof ("New Actavis"), will be led by the current Actavis leadership team. (Actavis Investor Relations press release, paragraph 5: http://bit.ly/18ctIrj;highlight= )
While you may believe that there is an incredibly untapped market for their products in Zug, Switzerland, many corporations understand the aforementioned location as a tax haven. (another rag's view: http://ti.me/13Qo07m). Go ahead, choose your favorite rag that reports on Zug, Switzerland. They'll likely indicate that aside from a rich history, it is a modern day tax haven.
There isn't anything wrong with tax havens, however, ignoring it when deciding to buy ACT at a 52-week high MIGHT come at a steep price.
Actavis Buys Warner Chilcott, Upside Seems Limited [View article]
Greetings Peter,
You said:
"is there such a thing as unlimited upside . . . ?"
At the time of the above referenced article on Apple "Considering The Downside Prospects For Apple" (found here: http://seekingalpha.co...), market sentiment suggested that Apple could not be bought below $550, let alone at, or near, $420. Based on our reasoning, this suggested that the prevailing view, whether justified or not, was that Apple had unlimited upside.
You said:
"It is probably news to the author, but assuming new corporate name and its ticker symbol, even of a company based in Switzerland, does not change the domicile of the purchasing company, hence no tax benefits . . ."
According to the Bloomberg citation above, the most recent acquisition will entail the following:
"It also comes with headquarters relocated to Ireland and lower taxes for the combined company.
"The deal is the second by Actavis to combine product expansion with a major tax advantage that will lower the company’s tax rate to 17 percent from about 37 percent over the course of a year."
This has been reported in Actavis' most recent press release as cited above. Therefore, we are not making the claim that a tax benefit will be gained from the acquisition, ACT is making this claim. Additionally, this was exactly the same claim (tax advantage and moving domicile) that was made by Watson Pharmaceutical when they acquired Actavis, another cut and paste from the IR team.
Also, Zug, Switzerland is renown as a tax haven, though diminishing of late.
AEM has declined below our original buy recommendation price. AEM has lost -42% from the date this sell recommendation article was published to May 21, 2013.
15 Reasons Why Apple Is A Once In A Lifetime Opportunity [View article]
Greetings Olson,
Now that Congress is putting Apple on the grill for standard tax evasion procedures, can scrutiny of their accounting be much further off?
Give it time, maybe Apple will take the fall on the matter, even though they are among hundreds of companies that take advantage of the same tax and accounting gimmicks (found here: http://yhoo.it/14vcotp).
Apple is down -23% since this article was published. The stock is struggling to achieve our recently calculated $528 upside target. Let's hope AAPL doesn't revisit the 52-week low. Otherwise, it could decline to our extreme downside target.
Rail Manufacturer Crushes Earnings Estimates And Is A Buy On Any Pullback [View article]
Bret,
You've gotta be piling into this position at $18. I don't use forward projections, for the reasons pointed out by Daniel, but what's your take on this company now?
Kinda made me twitch when I saw the "golden cross" next to the "death cross." I mean, what good are the "crosses" when they don't give consistent indications over a long or short time frame.
Homebuilder Short Part 2 - Ryland Homes [View article]
Greetings MI,
I made a mistake about the actual timing based on the disclosure. Thanks for clearing that up for me.
Also, the call was solid so I was interested in seeing if there was a follow-up article based on actual transactions or a changed perspective/position.
After the breakout from the prior 52-week high, I was curious to see if your perspective had changed. However, as you noted earlier, you've reiterated the short recommendation.
I'm not looking for someone to hand-hold their readers through recommendations. Instead, I'm trying to verify quality of work with reasonable follow-up. Too often, recommendations are never followed up even though authors have exited the transactions.
Without knowing what you did, the standing short rec appeared to be still standing (at approximately the $43 level) even though you entered and exited the trade before reiteration of the short at $50.
Your disclosure made more sense after you explained it, which is the reason that I asked. No beef at all, just seeking clarification as a student of the market. Thanks.
Homebuilder Short Part 2 - Ryland Homes [View article]
Greetings MI,
Your disclosure for when this article was published says "I am waiting for a capitulation spike higher in RYL (a day when the stock spikes 10%) and at that point I intend to purchase 2 month OTM Put's at a price 10% below the current stock price."
and
"I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours."
Additionally, the publish date of January 23, 2013 seems to indicate that if you had no positions and were not planning to engage in a transaction at the time then it would have been difficult to take advantage of the move down that you've indicated since 72 hours after would have brought you to Saturday January 26th before you would make any trade, based on your disclosure.
Again, my question wasn't whether you made the trade or not, I was curious when you decided to exit the transaction, especially if the trade goes against you, as it may have for those who followed this recommendation.
It seems that you're sticking to the short thesis without a follow up article that you exited the initial short rec...got it.
"I personally have never read any compelling explanation of how the Fed printing money makes the stock market go up."
This may be a simple function of not reading a compelling explanation of how the stock market has risen 100% of the previous declines of -40% or more when the Fed didn't exist (1860-1913).
"Fed Blameless in Current Run, History Shows It's Typical Market Behavior" (found here: http://seekingalpha.co...)
The Sell-Off In Gold Has Become Plain Silly [View article]
Greetings Ken,
Since the introduction of paper as money, the only reason that gold and silver was ever used as money was to legitimize the introduction of paper currencies. Governments knew that they were going to take the gold backing and convertibility away as soon as the public was "comfortable" with paper in circulation.
The most fascinating thing is that the public knows the history of the good ol' bait and switch of paper for gold. Yet, the public has continually accepted the introduction of a paper currency that is "backed" by gold or that has a gold "standard."
If the public is gullible enough to have the exact same game played on them of the last 3,000 years then it is no surprise that a few tinfoil hats, the uber gullible, demand to have the same scam played on them by begging for the gold "standard."
It's something like that thing that Einstein said about expecting different results.
WRCX is getting an offer to be acquired Actavis (ACT) at $20.08 a share.
Based on the December 16, 2011 price to April 30, 2012 sell recommendation, the annualized return was +276%, excluding the August 2012 special dividend payment.
Based on the December 16, 2011 price to the completion date of the transaction, expected by year-end 2013, the annualized return would be +78% including the August 2012 special dividend payment.
Actavis Buys Warner Chilcott, Upside Seems Limited [View article]
Dismissing the point about Apple might fit conveniently into your rationalization. That is all well and good.
However, the point of using Edson Gould's downside targets is to determine the next best opportunity to buy a stock if you've missed the initial run up (if the fundamentals are still intact). That is the lesson of Gould's work on the topic, not, "... it was clear that they cannot possibly maintain the level of growth..."
While you cite the clarity of Apple not growing to the sky, as the stock was within days of approaching the $705 peak, it also became the most widely held institutional holding as noted in Barron's (another rag) on September 19, 2012 (found here: http://bit.ly/13BuaxJ). Clearly, the professionals didn't see what you say was so obvious.
Next, regarding your comment "WPI did not move from NJ to Switzerland. No such plans were announced (though I was hoping that they would)." According to Actavis' website (another rag):
"The Company has global and U.S. headquarters in Parsippany, New Jersey, USA, AND international headquarters in Zug, Switzerland." (found here: http://bit.ly/13Qo2fC). Before the merger with Actavis, WPI was incorporated, for tax reasons, in NV but headquartered at 311 Bonnie Circle, Corona, CA, 92880. Because of the merger with Actavis (and other cos.), WPI gained the Swiss joint headquarters with the NJ incorporation.
Also, According to the Press Release from Actavis regarding the WCRX acquisition (another rag):
"At the close of the transaction (the "Effective Date"), which is expected by year-end 2013, Actavis and Warner Chilcott will be combined under a new company incorporated in Ireland, where Warner Chilcott is currently incorporated. The newly created company, which is expected to be called Actavis plc, or a variant thereof ("New Actavis"), will be led by the current Actavis leadership team. (Actavis Investor Relations press release, paragraph 5: http://bit.ly/18ctIrj;highlight= )
While you may believe that there is an incredibly untapped market for their products in Zug, Switzerland, many corporations understand the aforementioned location as a tax haven. (another rag's view: http://ti.me/13Qo07m). Go ahead, choose your favorite rag that reports on Zug, Switzerland. They'll likely indicate that aside from a rich history, it is a modern day tax haven.
There isn't anything wrong with tax havens, however, ignoring it when deciding to buy ACT at a 52-week high MIGHT come at a steep price.
Best regards.
Actavis Buys Warner Chilcott, Upside Seems Limited [View article]
You said:
"is there such a thing as unlimited upside . . . ?"
At the time of the above referenced article on Apple "Considering The Downside Prospects For Apple" (found here: http://seekingalpha.co...), market sentiment suggested that Apple could not be bought below $550, let alone at, or near, $420. Based on our reasoning, this suggested that the prevailing view, whether justified or not, was that Apple had unlimited upside.
You said:
"It is probably news to the author, but assuming new corporate name and its ticker symbol, even of a company based in Switzerland, does not change the domicile of the purchasing company, hence no tax benefits . . ."
According to the Bloomberg citation above, the most recent acquisition will entail the following:
"It also comes with headquarters relocated to Ireland and lower taxes for the combined company.
"The deal is the second by Actavis to combine product expansion with a major tax advantage that will lower the company’s tax rate to 17 percent from about 37 percent over the course of a year."
This has been reported in Actavis' most recent press release as cited above. Therefore, we are not making the claim that a tax benefit will be gained from the acquisition, ACT is making this claim. Additionally, this was exactly the same claim (tax advantage and moving domicile) that was made by Watson Pharmaceutical when they acquired Actavis, another cut and paste from the IR team.
Also, Zug, Switzerland is renown as a tax haven, though diminishing of late.
Best regards.
Time To Sell Agnico-Eagle [View article]
This is only something to those who made the counter case against selling the stock after it rose +40%. As indicated in the article above:
"Our experience indicates that there will be many opportunities to re-acquire Agnico-Eagle at better relative prices."
Here we are...at the same price as the original buy recommendation. Thanks.
Best regards.
Forget Apple, Google Is The Tax Avoidance Elephant In The Room [View article]
Regards.
Time To Sell Agnico-Eagle [View article]
15 Reasons Why Apple Is A Once In A Lifetime Opportunity [View article]
Now that Congress is putting Apple on the grill for standard tax evasion procedures, can scrutiny of their accounting be much further off?
Give it time, maybe Apple will take the fall on the matter, even though they are among hundreds of companies that take advantage of the same tax and accounting gimmicks (found here: http://yhoo.it/14vcotp).
Apple is down -23% since this article was published. The stock is struggling to achieve our recently calculated $528 upside target. Let's hope AAPL doesn't revisit the 52-week low. Otherwise, it could decline to our extreme downside target.
"Considering the Downside Prospects for Apple"
(found here: http://seekingalpha.co...)
Regards.
Rail Manufacturer Crushes Earnings Estimates And Is A Buy On Any Pullback [View article]
Rail Manufacturer Crushes Earnings Estimates And Is A Buy On Any Pullback [View article]
You've gotta be piling into this position at $18. I don't use forward projections, for the reasons pointed out by Daniel, but what's your take on this company now?
Regards.
A Dead Cat Bounce For Gold Prices [View article]
Kinda made me twitch when I saw the "golden cross" next to the "death cross." I mean, what good are the "crosses" when they don't give consistent indications over a long or short time frame.
Regards.
Homebuilder Short Part 2 - Ryland Homes [View article]
I made a mistake about the actual timing based on the disclosure. Thanks for clearing that up for me.
Also, the call was solid so I was interested in seeing if there was a follow-up article based on actual transactions or a changed perspective/position.
After the breakout from the prior 52-week high, I was curious to see if your perspective had changed. However, as you noted earlier, you've reiterated the short recommendation.
I'm not looking for someone to hand-hold their readers through recommendations. Instead, I'm trying to verify quality of work with reasonable follow-up. Too often, recommendations are never followed up even though authors have exited the transactions.
Without knowing what you did, the standing short rec appeared to be still standing (at approximately the $43 level) even though you entered and exited the trade before reiteration of the short at $50.
Your disclosure made more sense after you explained it, which is the reason that I asked. No beef at all, just seeking clarification as a student of the market. Thanks.
Regards.
Homebuilder Short Part 2 - Ryland Homes [View article]
Your disclosure for when this article was published says "I am waiting for a capitulation spike higher in RYL (a day when the stock spikes 10%) and at that point I intend to purchase 2 month OTM Put's at a price 10% below the current stock price."
and
"I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours."
Additionally, the publish date of January 23, 2013 seems to indicate that if you had no positions and were not planning to engage in a transaction at the time then it would have been difficult to take advantage of the move down that you've indicated since 72 hours after would have brought you to Saturday January 26th before you would make any trade, based on your disclosure.
Again, my question wasn't whether you made the trade or not, I was curious when you decided to exit the transaction, especially if the trade goes against you, as it may have for those who followed this recommendation.
It seems that you're sticking to the short thesis without a follow up article that you exited the initial short rec...got it.
Regards.
Homebuilder Short Part 2 - Ryland Homes [View article]
Regards.
Why Inflation Never Came [View article]
This may be a simple function of not reading a compelling explanation of how the stock market has risen 100% of the previous declines of -40% or more when the Fed didn't exist (1860-1913).
"Fed Blameless in Current Run, History Shows It's Typical Market Behavior" (found here: http://seekingalpha.co...)
The Sell-Off In Gold Has Become Plain Silly [View article]
Since the introduction of paper as money, the only reason that gold and silver was ever used as money was to legitimize the introduction of paper currencies. Governments knew that they were going to take the gold backing and convertibility away as soon as the public was "comfortable" with paper in circulation.
The most fascinating thing is that the public knows the history of the good ol' bait and switch of paper for gold. Yet, the public has continually accepted the introduction of a paper currency that is "backed" by gold or that has a gold "standard."
If the public is gullible enough to have the exact same game played on them of the last 3,000 years then it is no surprise that a few tinfoil hats, the uber gullible, demand to have the same scam played on them by begging for the gold "standard."
It's something like that thing that Einstein said about expecting different results.
Regards.
Warner Chilcott Is A Sell [View article]
Based on the December 16, 2011 price to April 30, 2012 sell recommendation, the annualized return was +276%, excluding the August 2012 special dividend payment.
Based on the December 16, 2011 price to the completion date of the transaction, expected by year-end 2013, the annualized return would be +78% including the August 2012 special dividend payment.