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  • Disaster Scenario For Treasury Bonds: Is The 10-Year At 2.83% A Trigger Or Trap? [View article]
    Hi Preston Moore,

    Thanks for the comments. I agree that inflation for most people is higher than the official numbers. The Fed cares a lot about wage inflation, but unfortunately, that is one are that if lagging.
    Aug 18 11:49 PM | 1 Like Like |Link to Comment
  • Disaster Scenario For Treasury Bonds: Is The 10-Year At 2.83% A Trigger Or Trap? [View article]
    Hi silverant,

    Thanks for the comments. I agree that a higher yield on the 10-year is a big risk for stocks too. I like cash right now.
    Aug 18 11:47 PM | 1 Like Like |Link to Comment
  • Disaster Scenario For Treasury Bonds: Is The 10-Year At 2.83% A Trigger Or Trap? [View article]
    Interesting analysis from Jim O'Shaughnessy:

    A Generational Selling Opportunity for the U S Long Bond

    http://bit.ly/1ezSjoy
    Aug 18 11:21 PM | Likes Like |Link to Comment
  • Disaster Scenario For Treasury Bonds: Is The 10-Year At 2.83% A Trigger Or Trap? [View article]
    Hi Jimnack,

    Thanks for the comments. I agree about inflation (and should have mentioned it in the article). I think that there is a greater chance of inflation rising than falling. Another risk to bonds.

    Good luck!
    Aug 18 11:17 PM | Likes Like |Link to Comment
  • Disaster Scenario For Treasury Bonds: Is The 10-Year At 2.83% A Trigger Or Trap? [View article]
    Hi Read The Papers,

    Thanks for the comments.

    I agree that the Fed, and many others, would view a 3.5-4.0% 10-year as a threat to the recovery and I also agree that they would try to talk down interest rates if that level is reached.

    However, I am concerned that the Fed may lose control of the 10-year in the interim. The so-called bond market vigilantes may drive the 10-year yield higher before Fed intervention kicks in. Also, if there is a small move higher in yields it could cause more selling. That seemed to happen earlier this summer. Selling begets selling.
    Aug 18 07:59 PM | Likes Like |Link to Comment
  • Bullish On American Apparel: Beyond Controversy, An Inflection Point And Growth [View article]
    Hi all,

    I received a question about what I think about APP's earnings that are expected to be released today after the close. I wanted to answer it here to clarify a few things.

    I am not an analyst that builds quarterly earnings models and tries to guess the EPS numbers. Therefore, I don't have an estimate about APP's earnings.

    My perspective on APP is a long term one. I will review the earnings information, but slight EPS out-performance or under-performance is probably not going to change my perspective much. I plan on writing a follow-up article on APP. Unfortunately, I am behind in my writing and I hope to catch up soon.

    One quick comment. Last week the company released the monthly same store sales numbers. See:

    http://bit.ly/1eEpCHi

    It is interesting to see that APP is still posting good comps, despite some of the problems other retailers are having. I have been hearing a lot of negativity on the back to school season from analysts (see CNBC or Bloomberg), so it will be interesting to see how APP performs in, what seems like, a difficult environment.

    I am happy to answer questions about APP, but will do so in the article comments.

    PLEASE NOTE THAT THIS IS NOT INVESTMENT ADVICE. SEE DISCLAIMERS ABOVE AND IN MY BIO. PLEASE DO YOUR OWN HOMEWORK. THE STOCK HAS A LOT OF RISK.
    Aug 12 11:32 AM | 1 Like Like |Link to Comment
  • Bullish On American Apparel: Beyond Controversy, An Inflection Point And Growth [View article]
    Hi Mckalip,

    Thanks. Glad you enjoyed the articles.
    Aug 12 11:08 AM | Likes Like |Link to Comment
  • Breach Or Breakdown For Alcoa As Weak Aluminum Overshadows Downstream Success [View article]
    Hi JakeBlade,

    Thanks for pointing this out. It looks like both of these directors have been buying every few months. It is good to see directors buying stock, but I am not sure that the timing of the purchases means much.

    http://yhoo.it/wlSZNo
    Aug 8 12:58 PM | Likes Like |Link to Comment
  • Bullish On American Apparel: Beyond Controversy, An Inflection Point And Growth [View article]
    Hi,

    Thanks for the comments.
    Aug 6 10:46 AM | 1 Like Like |Link to Comment
  • Is Martha Stewart's Recipe Of Brand Value And Uncertainty Worth More Than $113 Million? [View article]
    UPDATE: With the decision in the Macy's trial coming up, I reduced my position in MSO. I still hold some shares, but less than I did. My appetite for risk is lower now than it was. I may regret this later, but risk management is critical.
    Aug 2 12:01 PM | Likes Like |Link to Comment
  • Bullish On Regal Beloit: Buying The Dip, Sentiment Lows, And Misunderstood Growth Potential [View article]
    Hi brettkeirstead,

    Thanks for the question.

    I was a bit disappointed with the earning. However, it does not change my outlook.

    My thesis was that [i] earnings are in a lull (which was better understood by the market after the Q1 miss) and will eventually do better and [ii] the balance sheet has a lot of firepower.

    On the earnings front, the Q2 results were disappointing, but I still think the company has drivers to improve in the next few quarters. Importantly, the company said that the C&I market is stabilizing. They have been too optimistic before, so it'll take some time to see if they are right.

    On the balance sheet front, the CEO said the the company probably has about $1 billion of firepower for new deals (including additional debt that they could raise). The company had $3 million of deal related expense in the quarter, so they have been active even if nothing materialized yet. This new information is constructive.

    All in all, I was a bit disappointed, but my thesis did not change. I was encouraged by the stock price performance. The stock dropped, but did not fall to the lows from May. The May lows are an important level, so it is good that the stock stayed above that level. Basically, the stock is at the same level it has been for the last three months. This tells me that investors did not think there was too much incremental bad news.

    I plan on writing more about the results, so please stay tuned. I also plan on buying more shares.
    Jul 31 09:24 PM | Likes Like |Link to Comment
  • Bullish On American Apparel: Beyond Controversy, An Inflection Point And Growth [View article]
    Hi Michael,

    Thanks for the comment.

    Interesting comment about the Columbus store. It is summer vacation now, so I am assuming that your observation is about the school year, correct? What other stores are near the American Apparel store? Do they usually seem more full? Very interested to know.

    My observation about the NY store is purely anecdotal. I don't do official channel checks and it is by no means scientific.

    The company stopped doing earnings calls and investor conferences. While this is disappointing for investors trying to get info on the company, I can understand. They are in a messy period and working on a turnaround. There is probably not much that they can say to make investors more bullish on the company. I assume that if/when the company hits a few milestones, it will start doing more investor relations.

    I agree that this is a high risk, high reward situation.
    Jul 31 08:15 PM | 1 Like Like |Link to Comment
  • Bullish On American Apparel: Beyond Controversy, An Inflection Point And Growth [View article]
    Hi APPInvestor,

    Thanks for the comments and questions.

    There are lots of risks with APP and its accounting history and track record of losses are important risks. Also, I am not an accounting specialist.

    In my analysis, I assumed a higher share count that includes the impact of the warrants and an additional assumption for future dilution. Please see the table in the article.

    The company had 108 million shares outstanding at the time of the 10Q publication. In its income statement it doesn't include the dilutive impact of warrants because of the net loss. However, in my calculation I include the impact of the 53 million warrants. I assume that the company uses the proceeds for the exercise of the warrants to repurchase 15 million shares, to counter the dilutive impact of the warrants (this assumes the company buys back shares at $3, above the current price, to be conservative). I also assume 20 million shares of future dilution to be conservative.

    This is not a valuation of the warrants now, but a set of assumptions to figure out the share count in the future. Like all assumptions, it may or may not be correct. This does not answer your question about the accounting of the warrants, rather it is how I see the warrant situation playing out.

    Shareholder equity has been declining for a few years. It seems that the net losses were the main driver. The fact that shareholder equity is negative is a risk and a concern. However, I view it more of a lagging indicator than a leading indicator.

    I am not sure about the future pricing of the warrants. I am not a specialist either.
    Jul 31 11:15 AM | 1 Like Like |Link to Comment
  • The Disaster Scenario For Treasury Bonds [View article]
    Hi michaelxyz,

    Thanks for the comments. We disagree about this, but I recognize that there are good arguments that run counter to the way I see it. Good luck.
    Jul 31 10:55 AM | Likes Like |Link to Comment
  • Bullish On American Apparel: Beyond Controversy, An Inflection Point And Growth [View article]
    Hi Theodor,

    Thanks for the comments.
    Jul 30 04:34 PM | Likes Like |Link to Comment
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