Seeking Alpha
View as an RSS Feed

Papa of Four  

View Papa of Four's Comments BY TICKER:

Latest  |  Highest rated
  • The Bitter End? The Rise And Demise Of The South American Aluminum Industry [View article]
    The Norsk Hydro plant is the only one I see as viable. This is in part due to the companies extensive alumina production in Brazil, but also the companies unique approach to evergy conservation which has lowered production cost considerably over the last decade.

    I have written about this a few times over the last couple of years.

    Most recently here

    Thanks for the update PoF
    Apr 15, 2015. 10:09 AM | 1 Like Like |Link to Comment
  • Truett-Hurst's Quarter And One-Off Effect [View article]
    Perhaps, just a link to the blog in question, so the rest of us are up to speed about what the CEO is saying that is so harmful.

    That would help.

    Feb 19, 2015. 02:37 PM | 1 Like Like |Link to Comment
  • Truett-Hurst's Quarter And One-Off Effect [View article]
    Paulo, while I agree with you about the nature of the one off charge, I do not agree about inventory levels.

    Inventory levels of this size are necessary for he company to fulfill its obligations under the new contracts.

    Unlike many other industries, they can have no guarantee of being able to pick up extra inventory closer to the time they will utilize it. There is only 1 grape harvest per year!!! To be absolutely certain they have enough inventory to fulfill the obligations, they are forced to buy and carry. The fact that inventories are high relative to even Mkt Cap, is a good indicator of how undervalued this company is from a growth perspective.

    I do not feel as yet it is worth trying to attribute a valuation based of off earnings. Imagine what would have happened if analysts had done that for amazon for most of that companies life time.

    I would also expect some dilution over the next couple of years, to finance further growth. As long as the dilution is not detrimental to share holder value it is acceptable.

    Feb 17, 2015. 01:41 PM | 1 Like Like |Link to Comment
  • 2015 New-Year Outlook: Bear, Bull, Or Both? [View article]
    NO economic theory is ALWAYS EXPANSIONARY. 2 is bigger than 1 and 1000 is bigger than 100. This is why regulated inflation is required to stop an economy over heating. All we are doling is regulating the rate of expansion to try and prevent explosions.

    That is econ 101.

    and destruction is always net positive growth, once you understand that concept, as the void must be filled by something. That something always has value under the fundamental economic model.

    As an individual you may choose not to attribute any value to it at all. This is in essence the argument that surrounds climate change and many other things.

    If I believe climate change is a natural phenomenon, I can not ignore the consequences for the human race. If it rains, I put up an umbrella.

    Feb 15, 2015. 10:30 PM | Likes Like |Link to Comment
  • 2015 New-Year Outlook: Bear, Bull, Or Both? [View article]
    Yeah, I got that, I was just trying to clarify my position for the other reader.

    The upshot should be that ALL black swan events are buying opportunities. Also that Long term sentiment changes, should be seen as possible inflection points for both Bull and Bear markets.
    Economic theory IS expansionist, which is why Very Very Long term markets always go UP. Which is why I said that sentiment is what ultimately causes declines.

    Have a great rest of the weekend

    Feb 15, 2015. 11:09 AM | 2 Likes Like |Link to Comment
  • 2015 New-Year Outlook: Bear, Bull, Or Both? [View article]
    You miss the point hayesatlbch, it does not matter how the war is fought, it is the additional application of resources.

    Yes they may build fewer tanks and ships than they did for WW2, but they will spend more on intelligence, drones, public relations, cyber terrorism and many other things. The USA used to be an agrarian/manufacturing economy, is the economy smaller because it is more service oriented?

    Countries build less tanks and warships than they used to, but very few spend less on their military as a whole.

    The space race was beneficial to the US and Russian economies due to the application of resources. WW2 was economically beneficial due to the application of resources. WW3 should not cause the markets to sell off from an economic stand point. It will cause them to sell off from a sentiment point of view, IF IT HAPPENS.

    The real point that I am making is that; the VAST majority of declines ST and secular Bear markets are driven by sentiment, not economics.

    Intervention into normal every day economies, can also cause bear markets. Sanctions are a good example of this, but you should not forget, that sanctions are DRIVEN by sentiment.
    ie: WE do not FEEL what you are doing is right, so WE will punish your economy with sanctions.

    Or to put it another way.

    It costs more to build than it does to destroy. Destruction is always net positive for growth. The sell off is only a reaction to the feelings about the destruction. These feeling are normally Short term.
    The feeling about our kids being worse off than us, is Long Term and therefore, is more likely to cause a secular Bear market than any "black swan" event as they only produce a Short Term sentiment change.

    Just a thought.
    Feb 15, 2015. 10:29 AM | 1 Like Like |Link to Comment
  • 2015 New-Year Outlook: Bear, Bull, Or Both? [View article]
    DAG, thanks for the illustration of the two sides.

    I generally work under the assumption that both bulls and bears are right about any individual stock or market at all times. Both sides are entirely right about the optimism and pessimism represented by the respective arguments. The resolution of this argument is the price. I did a full explanation of the position here in an instablog at the beginning of the year.
    Long term markets continue higher because human beings are by default optimistic. It is for this reason we are able to do things like leverage debt.
    We think that each successive generation will be better off than the last. For the first time, in November, I heard that this was not the general sentiment of the population. This is a very important inflection. Short term confidence that things are getting better, is rising but long term most Americans believe that their children will be worse off than they were. So we have consumer confidence going up even though there is long term pessimism. We have participation rates increasing, but wage stagnation or depreciation when marked against inflation.

    The market may continue higher fueled by inflation, but once adjusted for inflation you could consider them to be flat or slightly down in the future.
    Once you add in all the other non financial factors the markets are vulnerable to steep declines. The geopolitical issues for example are causing down days in the market. This is ridiculous from an economic stand point.

    For example if the Ukraine, were to turn into WW3 it would be a boon to the economy.

    So why are we selling off on the idea?

    Because the idea of WW3 is terrible, and that sentiment is stronger than the underlying economic benefits.

    If we have a resolution to all of the geopolitical issues at present, we may enter a secular Bear market, just based of the idea that our children and grandchildren will be worse off than we were.

    Feb 13, 2015. 09:39 AM | 1 Like Like |Link to Comment
  • Himax Technologies EPS in-line, beats on revenue [View news story]
    Still does not change the fact that with that $0.09 in earnings on the books FY eps is $0.44,. Which is what we knew back in January when I wrote this article.
    since then the stock has been up 15 - 20%. but that still only gives a E/P of 18-20.

    Given the growth rate in the companies core driver business Himax should be getting a PE 22 which gets up to the forecast $9 - $10

    All the other addition stuff discusses in that article and more recently this one.
    is additional and gravy. Could also be covered under the non driver business.

    "We are very pleased to be experiencing growth in both our driver and non-driver business segments. We are particularly excited about the prospects for our LCOS microdisplay and WLO products, which are integral parts of the eco-system for the rapidly emerging head mounted display products and next-generation cameras for mobile devices. Equally exciting is our market leading single-chip solutions for pure in-cell touch display, which we believe will soon become mainstream in portable and wearable devices. In summary, Himax is at a significant inflection point, with many of our non-driver products ready to enter the consumer market after many years of product development" from the release

    The growth this year came from China and Korea buying televisions. the companies core business and are undervalued for doing just that.The company is ready to start making money out of its other products, why would anyone sell


    Feb 12, 2015. 09:43 AM | 5 Likes Like |Link to Comment
  • Steel Yourself For Earnings [View article]
    Nice 7% move up on a down day, hope to see this continue through to earnings at the beginning of next month.


    Feb 9, 2015. 11:29 AM | Likes Like |Link to Comment
  • Steel Producers: Something's Gotta Give [View article]
    That is my thought, same with the BRL, although for (GGB) the income statement is supported by USD earnings, it costs them less to produce. Should that not lead to higher margin? They got hit with repatriation taxes, but have since instituted a puyback program, to mop up outside of Brazil.

    Buying up the ADR should help offset taxes and provide more value to shareholders.

    Feb 6, 2015. 11:27 AM | Likes Like |Link to Comment
  • It's Christmas All Over Again For Himax Technologies [View article]
    I like the comment CT, but I think there would be an initial pop because of AAPL. but investors are starting to get the idea that the HIMX base price should be higher, so even without AAPL HIMX should command a higher valuation. This was not the case with GTAT which is why they went bust.

    HIMX has been very good about getting its customers to pay for expansion and so have little debt compared to growth. They make the end customer leverage the customers resources to enhance HIMX's production capability. This may mean that they make a little less up front, but it does mean they will not go bust at the whim of one customer and will make more money in the long run.

    Feb 6, 2015. 08:47 AM | 1 Like Like |Link to Comment
  • Steel Producers: Something's Gotta Give [View article]
    I was just writing about this from the (GGB) stand point.
    How do you feel about Turkish Steel. What effect do you think the rapid expansion and upgrading of Turkish producers by Russia will have?
    Why has the conflict in the Ukraine, not been more bullish for Steel?

    I have come to my conclusions, I just wondered if you have a different take on it.

    Many thanks

    Feb 6, 2015. 07:56 AM | Likes Like |Link to Comment
  • Saudis raise oil price in U.S., cut it for Asia [View news story]
    Not just fellow opec.

    we should also not forget the Russian pipelines

    Feb 5, 2015. 05:52 PM | 2 Likes Like |Link to Comment
  • The 1 Key Factor Moving The Market [View article]

    that is a very naive statement. Perhaps you need a greater understanding of why a stock like AAPL would dip on news out of the Ukraine or Greece.
    The global economy is in intricate web and not all relationships are apparent.

    For some events your Cramer like analogy could be absolutely true!!!!

    It is unfortunately not true for events related to either Greece or the Ukraine at the moment. They are both very relevant to the number of iPhones that APPL may sell in the future.


    Feb 4, 2015. 06:13 PM | 1 Like Like |Link to Comment
  • Finding Value In The Dividend Aristocrats List [View article]
    I prefer (GGB) to (NUE) for a value and growth perspective. 3% dividend in helpful too.
    They have cash dropping to the bottom line at (GGB) which is coming from a sale to (NUE) and just initiated a buyback also.

    Thanks though.

    Feb 4, 2015. 02:41 PM | 1 Like Like |Link to Comment