Sandy Lighthouse

Growth, long/short equity, value, growth at reasonable price
Sandy Lighthouse
Growth, long/short equity, value, growth at reasonable price
Contributor since: 2015
Hey Dana, Belief is indeed a powerful thing, but a mere fraction as powerful as markets. I gotta believe that Tesla articles with your as usual catchy titles get you massive clicks. Good job my friend.
Making investment decisions based on long term weather forecasts takes bigger balls than I've got.
I only buy individual stocks when I think the risk reward ratio is substantially better than owning an ETF. So is AAPL, the largest cap company in the world with 70% of it's revenue coming from a single product, likely to outperform QQQ on a risk adjusted basis? IMO, no. Besides, AAPL is 12.5% of QQQ anyway. If you want to own AAPL, own it through QQQ.
In our rural area, Walmart used to be the hub of the community. We were on the "Walmart Scholarship Plan"- the money we saved buying staples at Walmart put our kids through college. We loved Walmart and knew every corner of "our" store. Then things changed.
Walmart went through a nationwide store remodeling plan put together by accountants and retailing consultants. Product choice dropped drastically and was not good enough to compel us to learn the new store and adopt it as "ours". Amazon came along at about that time and offered better price, choice, and convenience. Then Walmart's vaunted inventory control seemed to break down. Many items (besides ammo) were perpetually out of stock. We now avoid going into Walmart.
I say that customers and employees no longer "buy in" to Walmart as they once did. (Think of "buy in" at Trader Joe's or Costco for comparison). Walmart doesn't "get" groceries- just not in their DNA. So Walmart has lost it's soul. And their website sucks. (We do a little "site to store"). The only way Walmart accelerates is if somehow they get religion about customer experience, which ain't gonna happen.
Is WMT a good investment. I don't know. But I normally I start my investments from the most macro perspective available, and in my opinion the macro for WMT is a mature corporation entering into decline.
My wife's a flight attendant for one of the big four airlines. We also fly lots of other airlines non-rev. We buy tickets on Ryan Air, German Wings, Alaska, and Southwest. We have the ability to assess airline horror stories from a very broad base of experience and knowledge. We've heard two first hand accounts from paying Spirit customers that are beyond anything we've experienced in 30 years of flying. We will fly Spirit under no circumstances.
I should have also mentioned that Phillips products used to be sold at the big boxes. For whatever reason, they moved their sales to the internet. Just one example.
Completely understand all that, Watching. Hybrid ICE cars, like the Prius, recapture the kinetic energy just as efficiently. What BEV enthusiasts don't understand is that cost per mile matters.
Contractors only use jobsite delivery for bulky products. And, yes, when building a home there's a lot of bulk involved. When remodeling or repairing a home, the bulk goes down, and the smaller higher value added products go up. So the big boxes have their stronghold, but the internet is eating away at the periphery. Big boxes are limited in their inventory, while the internet is infinite. A decent example is deck screws. Through a third party seller (the manufacturer), Amazon sells 25# box of color coated #9 x 3" Phillips brand (top quality and labor saving) deck screws for $99 taxes and shipping included (arrives in five business days). Lowes and Home depot sell their inferior brands for $93 (as I recall), pre taxes. That's just screws, actually a low value added product that is fairly heavy.
BMW I3 is already in production and is a far superior product. 2800 lb vehicle wastes less energy transporting it's own mass than a 4500 lb vehicle.
"American Airlines" says it all. It's an AIRLINE. Just possibly one of the ugliest industries out there. Combines the romance of flight and travel with dependence on egomaniac unionized pilots, cut throat competition, weather, commodity price dependency, and razor thin margins for equipment failure or human error. Almost forgot, maniac terrorists intent on playing "blow the infidel's planes out of the skies."
You flat out nailed it Skeptic84. And the Germans and Japanese are far better at heavy industry and electrical engineering than a bunch of Koolaid drinking Silicone Valley techies. The fun and games are about to be over in BEV's as the competition gets serious.
Thanks for a great article Itinerant. Commodity super-cycles are measured in decades. All other resource commodities have years of cycle trough ahead of them. Gold may or may not be an exception.
Hey Dana, you're four months older than me, have 2 kids like me, have a meal ticket wife like me, and the story of our marriages matches. All the best my friend.
Home Depot is not as Amazon or internet proof as you might think. ( I'm a contractor.) Almost anything ship-able, from caulking to nuts and bolts to plumbing parts to power tools can be had cheaper and easier (Amazon Prime) on the internet than at Home depot or Lowes. Seriously. I don't know the percentage of profits the big boxes get from the smaller stuff, but that part of the business is a dead man walking.
OK Dana. Don't know about Kinder Morgan, don't care. I've seen lots of attempts at building empires on foundations of debt, haven't seen any succeed... Wait a minute, does this apply to U.S. economic recovery?
Ian, there must be 4 times the normal number of comments. You struck a nerve. I'd call it the "idealists getting a dose of reality" nerve. Tesla is another company that may catch a dose of reality sooner or later.
Profits for cloud services are floating the boat at Amazon. Amazon's retail website is awesome for consumers, but loses money.
I like you Dana, and I wish every success. But Jim Chanos is on the opposite side of this trade, and I have nothing but respect for the man. I go with Chanos.
Last I looked POT had a fair amount of debt on it's books.
Thanks for the article. So PSMT is an expensive stock in an expensive stock market.
"Twitter's future offers hope"??? Ever heard of "the slope of hope"?
FB gaap earnings yoy went from 30 cents to 31 cents per share, about 3% growth. The press reported non gaap earnings that didn't include stock compensation.
Headline FB EPS yoy 3rd quarter non gaap $.57 vs .43. Same numbers gaap are $.31 vs $.30. First three quarters '15 gaap $.75 vs .86 in '14, an actual decline.
I agree that valuations are nuts.
Here's my understanding of why the markets are rallying: The markets took a hit because China looked like it might blow up and take everyone down with it. Now the sentiment is that China won't blow up.
Yeah, but how about the color?
Article on Recode says Chrome OS not on the way out- scroll down to the bottom.
Some of my favorites include RIO, POT, NEM, XOM, NUE. Not that I'm that knowledgeable on the subject. But I'm learning as fast as I can. What are some of your favorites?
What to do with commodity stocks? Play it cool and wait. Commodity bottoms can last for years. Never buy commodity stocks until they are so hated that no one even cares any more. And the climb off the bottom is so slow no one notices except in retrospect. And when you do buy, buy only the best.
People in the commodity business are no dumber than people in tech. The tech people just have the advantage of being in a high growth industry that makes them look good. Remember when Uncle Fester laughed at the Iphone and called it a toy? How about Fiorina buying Compaq? Oh yeah, almost forgot Fester buying Nokia. How about Apple's board dumping Jobs for Sculley? And the brown Zune? How about Gates developing OS2 for IBM? How about Gates saving Apple with a cash infusion? How about IBM not retaining the intellectual rights to the first PC OS? We'll see how smart Musk looks five years from now when the government subsidies all evaporate, although it probably won't matter to him because he'll be living on Mars. How about Otellini turning down Jobs to fab processors for the Iphone? How about Verizon letting ATT scoop them for a 5 year Iphone exclusive?
There's some exceptional people in the commodity business. They're just human like everyone else. And people being human creates risks and opportunities in the markets.
If by some miracle the fed does raise rates, it will be one and out. Realistically, what's the difference between 0% and .25%? .25% only matters if it's the first step in a trend.
Nice piece. Market seems to disagree with you about CC&V acquisition as Anglo Ashanti stock soared on the news and Newmont dropped substantially.
Read your excellent commentary every day Bezek. Thanks. Keep up the great work!