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Richard Shaw  

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  • Which Non-U.S. Countries Have the Highest and Lowest Forward P/E Multiples? [View article]
    All of these data points are provided by Schwab, as stated in the caption to the table. We did not do any calculations to arrive at the numbers.

    It is certainly possible for cash flow to be negative, but we have no way to test the accuracy of the numbers published by Schwab. We do not subscribe to the S&P/BMI database, so must rely initially on the quality of the data feed to Schwab. Of course, and suspicious looking number is a red flag to do more research.

    In this article, we are just compiling and reporting to you the published numbers. Thought it would save you some time instead of doing it yourself

    Yes, the Egypt multiple are quite different today as a result of the riots and political
    Jan 28, 2011. 12:54 PM | Likes Like |Link to Comment
  • Which Non-U.S. Countries Have the Highest and Lowest Forward P/E Multiples? [View article]
    Your observation on government control of firms and possible intimidation of accounting firms, or the newly formed Chinese credit rating agencies, is something that should be evaluated. The degree of government control varies substantially among companies. It might also be useful to think about CPI linked benefits and TIPS in the US where the US government is the party obligated to pay, the party that defines the ongoing definition of CPI and the measurement and reporting of CPI --- not Treasury Department today changing the way deficit accounting is done to magically create a situation where the debt ceiling is farther away today than it was before -- or years ago when the governor of CT solved the budget crisis by declaring a 13th month to the year, taking in the first most of the next year as tax revenue for the current year -- or Russia taking international oil company assets on the basis of supposed environmental violations -- government and business are not always a good mix, although sometimes they do do well together.
    Jan 27, 2011. 10:00 PM | 3 Likes Like |Link to Comment
  • Sovereign Risk and Currency Risk Ratings by Country [View article]
    The customer is always right. We have submitted and SA has published replacement text, that uses terms that avoid the confusion that several have reported and found problematic. Hope that helps
    Jan 26, 2011. 10:02 PM | 2 Likes Like |Link to Comment
  • MLPs -- Part 8: What to Own? ETF, ETN or Individual MLPs [View article]
    That is good to know. Discounts are always a good thing when you are on the receiving end. Investors who do not reinvest are therefore being diluted to a small degree by those who do. Thanks.
    Jan 26, 2011. 08:40 PM | 2 Likes Like |Link to Comment
  • Sovereign Risk and Currency Risk Ratings by Country [View article]
    Your suggestion is appropriate. I am making modifications as you suggested and resubmitting to SA for text replacement.
    Jan 26, 2011. 08:16 PM | 1 Like Like |Link to Comment
  • Sovereign Risk and Currency Risk Ratings by Country [View article]
    Oh don't be ridiculous. They have the highest rating on the risk scale. Perhaps the article deals in double negatives or double positives, and I have expressed my regret that the reading may be less than easy, but it is not as impossible to understand, or perhaps you just are having a bad day.

    The use of high and low is consistent and with a modicum of effort you could read it.

    A high rating on a risk scale in the text of this article means a good risk, and a low rating on risk a scale in the text of this article means a poor risk.
    Jan 26, 2011. 07:30 PM | 2 Likes Like |Link to Comment
  • Public Master Limited Partnerships -- Part 1 [View article]
    Would if I could, but that would be something SA would have to do -- authors have no control of post-publication documents.
    Jan 26, 2011. 01:22 PM | Likes Like |Link to Comment
  • Sovereign Risk and Currency Risk Ratings by Country [View article]
    The US data are not provided by Schwab for reasons that are not known to us, but from other sources and using the same numeric conversion of the EIU rating scale, the US has an overall country risk of 3, a sovereign risk of 2, a currency risk of 3 and a banking risk of 4.

    Norway, which does not have a country fund, has a one level better ranking than the US on each of those four categories.
    Jan 26, 2011. 11:15 AM | 2 Likes Like |Link to Comment
  • Sovereign Risk and Currency Risk Ratings by Country [View article]
    I do see what you mean. saying that Turkey has the lowest risk rating was meant to be the same as something like the lowest credit rating which is bad, and that Switzerland has the highest risk rating to be like the highest credit rating which is good. Note well taken.
    Jan 26, 2011. 02:57 AM | Likes Like |Link to Comment
  • MLPs -- Part 8: What to Own? ETF, ETN or Individual MLPs [View article]
    whmitch -- we can't give personal investment advice through this sort of remote communication to an investor we do not know -- and even if we were to try, the full context of your portfolio and personal circumstances are not known to us, which would make a recommendation or judgment irresponsible on our part -- in a generic sense, we like energy stocks, and like those companies with oil or gas in the ground and strong dividend streams the best, but that may be in part due to the typical circumstances of our clients -- with rising world demand for energy, oil replacement rates not keeping up with rising demand, and alternative energy not seeming to be able to replace oil and gas as energy sources to a major degree in the intermediate future (particularly for materials and transportation), we see intermediate to long-term oil and gas positions as solid investments, but ones that will be volatile.
    Jan 25, 2011. 10:34 PM | 2 Likes Like |Link to Comment
  • Are SPDR's GMM and Schwab's SCHE Good Alternatives to EEM and VWO? [View article]
    Limit orders to sell in a crashing market are useless. Limit orders on stops, in a declining market are likely to keep you in your position while others exit (stop loss orders are generally market orders, and market orders on thinly traded stocks in a jittery market are dangerous).

    To each his own, we'll stick with liquid securities.
    Jan 25, 2011. 09:00 AM | Likes Like |Link to Comment
  • MLPs -- Part 8: What to Own? ETF, ETN or Individual MLPs [View article]
    Gration and whmitch -- not entirely sure what you are asking -- you appear to be focusing on this statement:

    "if you have enough money to buy positions of sufficient size to make the commissions and the K-1 paperwork (see our article on MLP Investor taxation) and the increased portfolio complexity worthwhile, then we would tend to favor owning a basket of MLPs."

    By that statement, I mean that it if in order to buy a basket of individual MLPs, the positions sizes would be so small that either the trading commissions or the accounting fees would be an expense ratio problem, then you probably should by an MLP fund of some sort.

    For example, if you plan to devote $1 million to MLPs, no problem, but 10 or more. If you plan to devote $100,000 to MLPs, probably not problem, you could put $10,000 in each and still not have an expense problem. However if, you have only $10,000 to put into MLPs, then we would think that 10 positions of $1,000 each would not be a good idea from an expense perspective.

    Because SA readers vary from beginning investors with thousands or tens of thousand of dollars, to wealthy investors with millions of dollars, and some institutional investors with billions surfing for ideas, its tough to write statements that make sense to all eyes, but that is what we meant.

    We didn't actually refer to a minimum, just that at some point dividing an allocation to a category among individual securities becomes uneconomic for small accounts, which may be better served with funds.
    Jan 25, 2011. 08:56 AM | 5 Likes Like |Link to Comment
  • MLPs -- Part 6: MLP Structure and IRS Qualification [View article]
    You are quite correct, that the payout ratio is not the best ratio to evaluate payout. The distribution to cash flow from operations ratio is more meaningful. Because so many people are concerned about the standard distribution to reported earnings ratio, we gave it, and in fact you have guessed the topic of an upcoming article, comparing traditional payout measurements to cash flow from operations (CFO) related measurement (similar for REITs with FPO -- funds provided by operations) --- can't get it all into one article -- that's why there are nine so far -- if we didn't provide that ratio someone would tell us the payouts are too high, so we felt the need to show it, but we might have better waited a subsequent article. Thanks for the comment. Stay tuned for the CFO data.
    Jan 24, 2011. 07:08 PM | 2 Likes Like |Link to Comment
  • How Much Is Gold Worth? [View article]
    Debt is part of what creates the ratio of GDP to currency. If there were not debt the turnover would probably be lower.
    Jan 23, 2011. 07:25 PM | 3 Likes Like |Link to Comment
  • Setting Stop Loss Levels [View article]
    First, we are not traders, so not sure how valuable our view may be on your problem.

    Second, we believe that taxation of gains should generally be secondary to questions of price direction. Clearly, prices bounce around and to avoid whipsaws and "premature" taxes in stages, it makes sense to hold, but when direction is down, it can be tax-wise and profit-foolish to void taxes that are less than price declines that my develop. Right now the GE price is up not down.

    Only you can select the time frame and price variation level that you consider significant enough to close positions.

    You are right that the common belief is that gaps are subsequently closed, but when is not certain, and it does not always happen.

    If your rules try to predict reversals, then maybe the gap is a signal to you. If your rules follow reversals, then maybe it is premature to close.

    The key for traders is to have rules that have proven themselves to work profitably over a span of time and trades, that fit your personality and emotion (because emotional control is key), and then to follow your rules. If your rules say close the position when it goes above certain indicators, then that is probably what you should do.

    Somebody else, maybe you, might be using a different system, that just raises the stop level as it trails the price rise.

    If you include fundamentals in your trading, then you need to understand and judge why the price make the gap. If there is a real reset for value based on some important change, then maybe the gap will hold. If not, it may give back.

    Long-term investors, instead of traders, would probably just say "thank you" and do nothing.
    Jan 23, 2011. 07:22 PM | Likes Like |Link to Comment