Sean Daly

Sean Daly
Contributor since: 2010
Company: Alpha Creative Capital
Excellent article. Had you done any risk-adjusted performance analysis adding international dividend ETF exposure?
Rogue,
Thanks for your insights. I have heard similar reports domestically.
More broadly, India's delays in purchasing this year will also make for some interesting months ahead:
http://seekingalpha.co...
LK,
Maninder is right. Tupolev is the leader in LNG aircraft, with test flights as early as 1988:
http://bit.ly/H3UfsL
http://bit.ly/HautyU
Nyshtri,
Thanks. In regards to your comments, I found this article on banking reforms in Wenzhou very interesting:
http://on.wsj.com/HmYtZB
Wenzhou is the proverbial "tip of the spear" for all economic reform in China. It's been the true "incubator" of Chinese capitalism since 1980.
I myself connect this further step in liberalization to the broader political transition, but I can't substantiate that.
Soft or hard, food inflation was a very difficult issue for working people in China through most of late 2010 - 2011, so I do see that as something they need to tackle. I co-wrote an article with a former Singapore central banker last year that explored the relationship between monetary policy and the development of a buoyant service sector economy:
http://bit.ly/H0o5P3
China needs has a lot more college graduates now and needs to start employing them in a larger service sector.
Rocco,
Great article. You wrestle with the issues that are at the true heart of Apple's foray into TV.
In a way, television is simply less “digestible” than the prior mediums that Apple has succeeded in. The company could “eat” the movie, book, and music market precisely because those are completed art works that are not time sensitive. They are asynchronous in their reception. An Apple TV that offers network reception but can’t open the cable programming to tailored, “pick and chose” subscription would remain an accessory product.
Remember: Apple is not providing a pipe. If you still need that cable or Fios connection for bandwidth, the iTV will remain a new, secondary cost.

If the iTV can port everything via Airplay through a Wifi hotspot off your phone, then you might be able to kill off the cable bill, paying a lesser amount to Apple and, say, Verizon or Sprint. In that case Apple siphons off customers interested in dropping cable for a less content-rich, more asynchronous (post-broadcast viewing time), more interactive experience.

There are other hurdles unique to television, some of which I mention in an earlier piece: http://seekingalpha.co...
keep.it.simple,
Thanks for your excellent comments.
Last month, after a conference, I spoke to GAMCO Investors CEO Mario Gabelli. One of the stocks he mentioned to me was MSG and their stable of sports brands.
That pick came to mind this week when reading about the many ambitions Apple might have for the iTV (and the various ways it might circumvent the cable companies).
William,
Excellent article. Its discussion of the legal dimension of real estate (and more broadly capitalism) reminded me of the work by Peruvian economist Hernando de Soto. Well worth looking at in this new context of a real estate bust in China.
Back in January, MIT’s Simon Johnson stated that the yuan will replace the dollar as the world’s reserve currency in twenty years. Of course, twenty years ago, pundits spoke of the Japanese yen and the Land of the Rising Sun in much the same tone of impending ascendancy.
Japan’s experience in the 1980s offers an important lesson to China today, though it is not the one commonly assumed. Often in China, the lesson of Japan—crystallized during the 1997 currency crisis—is simply: “Do not listen to the West. Do not appreciate your currency, as it will bring ruin.”
But the real lesson of Japan is a bit more complicated. It is that the FX intervention and a protected, politically-ingrained export regime had the effect of generating huge domestic liquidity that was not appropriately sopped up or routed.
The money found its way into overcapacity because the complete dominance of the export industry—and the relative immaturity of other business sectors—insured it would. The money found its way into asset inflation because few other venues were available.
The collusion of local government, banking, and business elites will make it a murky issue in China, as it did in Japan in the 90s (and perhaps even here in the US).
I did a report on US commercial real estate last year that explored "pretend and extend." You might find it interesting.
Here is the link:
http://seekingalpha.co...
aarc,
Great post. I personally see gold consolidating at a lower level for the early portion of next year, before making any new climb.
More generally, I see 2012 as the first year of what I have called elsewhere the "Post-Stimulus Era," a period when there is no longer $5 trillion in worldwide government spending dropped in to soften the hard edges:
http://seekingalpha.co...
Graham,
Excellent article. Extremely direct and convincing.
Last week Pimco declared that the euro and dollar will reach parity in 2012. That kind of dollar strength can only hurt gold and stocks --as I discussed Friday in the following piece:
http://bit.ly/tYQduY

Peter,
Nice article. Great "big picture" perspective with just the right level of detail and quantitative insights.
In its September estimates, the IMF reduced 2012 growth for both the US and Europe from 2.7% to 1.8%, and 1.6% to 1.1%, respectively. So next year will be tough sledding.
Diana,
Thanks for the comments.
You are technically correct about Brazil's outright "energy independence" in 2009. I was looking out at the Petrobas reserves and suggesting a more long-term, more general notion of independence (compared to China or India):
http://bit.ly/qc5iSM
In terms of the Olympics, you were also right --most countries usually have a serious "economic hangover" immediately after the games.
Though I would suggest that because Rio isn't until 2016, there will be money thrown at infrastructure for the next five years.
Personally, I see the Rio games more like Beijing or the '64 Tokyo event than Athens. It will have a modernizing effect. Brazil has its corruption, but it's a big consumer market, enjoys a far younger population, and is just hitting its industrial stride this decade.
It will be the first Olympics ever to be held in South America, so that alone will keep the multinationals (and their investment) interested.
Great article --"pitch perfect" in capturing the market's emotional tenor right now.
One other x factor coming up: the July 16th deadline for Dodd Frank's Title vii provisions on derivatives. It may be a non-event or it may precipitate an avalanche of class-action lawsuits against the banks:
seekingalpha.com/artic...

Semil,
Great article.
It's concise, elegantly written, and brings true clarity to Google's place in the present tech milieu.
My only quibble would be to perhaps add a "front." I see Google as also in a war with Apple, Visa, and ISIS in the mobile payments arena, something I see as somewhat distinct from mobile phones.
Here is a recent article that relates to the issue:
seekingalpha.com/artic...
Any thoughts on mobile payments as distinct locus of corporate strategy?
J.
Thanks for the kind words. NXPI broke 27 quite quickly. I assume due to expectations of the Google Wallet demo next week.
I think company-specific news may keep NXPI highly resistant to any broader downdraft. You might this interesting:
seekingalpha.com/artic...
This might offer an intro into the differences:
arstechnica.com/gadget...
Jgib,
Interesting comment. Let me know what you turn up in the footnotes.
Best Regards,
Sean Daly

North American Palladium is also way up today on the gold news. It's really coming off the mat this week:
seekingalpha.com/artic...
Strange week for commodities in general.
G_H,
Your question about what percentage of Chinese turbines are traditional gearbox is an excellent one. I don't have an answer for you, but I'll see if I can sift through my research and find one.
Cheap labor for servicing typically keeps China working with cheaper, older tech. But the turbines might be a different case as so much of it is being built in the far West, very distant from the educated labor pools.
As it stands, it's easier to find numbers for China's long term assessments. Last year, Beijing projected 330 MW of wind turbine energy by 2020. Last fall, REE expert Jack Lifton suggested this ten year project -– if completed as spec-ed -- will absorb a total of 59,000 metric tons of neodymium, 1,000 tons of terbium and 3000 tons of dysprosium.
More recently I've heard projections of 135 MW by 2015, so the wild projections tamp down the closer we get to the year.
Best Regards,
S.
G_H,
Exactly. I'm not pumping the stocks, but rather describing how new regulations in China may freeze out the speculation in wind turbine manufacture. This is breaking news. Less farms will be initiated and that will likely free up REEs that might then spill out into the world market via smuggling.

Great article.
In terms of Wal-mart, the company is planning to innovate their footprint with the new nano-sized stores. Watch for new growth in this smart offensive on the other superstores:
seekingalpha.com/artic...

The author, Chart Prophet, was also been completely wrong thus far on his discussion of palladium, platinum and rare earths:
seekingalpha.com/artic...
According to Staple's most recent 10-K:
in regards to last year’s revenue, 39% came from US / Canadian retail sales, 40% from its US / Canadian delivery business, and about 21% of total sales from the 26 countries that make up their foreign exposure.
"Staples operates nearly 2,300 retail stores. Of these, it has exactly 1,900 stores in the U.S. and Canada and 381 stores internationally."
Mike,
Interesting article. Yes, I also see Mosaic as entering the S+P within the next two years.
The buyout speculation is off the table, as Vale already bought the Mosaic property they wanted and BHP will try to grow their Potash division organically and with more bite-sized acquisitions. I wrote the following piece about MOS in early March:
seekingalpha.com/artic...
But haven't followed the issue lately. I enjoyed reading your article as it helped be get back up to speed.
Best Regards,
S.

Cameron,
Nice article. Keep up the great work.
A few comments discussed the importance of direct sales to business. Yes, that amounts to about 50% for both SPLS and OMX.
But consumer retail still consists of the other 50%, and that exposure to competitive forces is precisely what will stifle top-line growth and precisely what your article articulated in such fine detail.
Best Regards,
S.
Brad,
Great article. A sharp assessment of where the palladium market is at present. I wrote a piece in early January where I explored the long term supply and demand issues:
seekingalpha.com/artic...
And though many of the those trajectories still remain, the tape is telling us we are at a crossroads, with new variables having arisen.
In terms of Zefrun's comment, the contracts are deliverable into NYMEX palladium futures and I believe he can find the quotes here if he doesn't have a Bloomberg:
news.tradingcharts.com...

Today's earthquake may also have an impact. Palladium prices are also feeling the impact of automaker activity:
seekingalpha.com/artic...

NV,
Great article. The coming "tablet as commodity" era is already having real repercussions in the retail environment:
seekingalpha.com/artic...

Great article. The coming "tablet as commodity" era is already having real repercussions in the retail environment:
seekingalpha.com/artic...

This author is too sensationalist for his own good.
It is also to the detriment of Seekingalpha.com as a thoughtful site for financial research.
His approach to palladium is also mis-conceived. Here is a look at the industrial demand that will push palladium upward:
seekingalpha.com/artic...
This author has a sensationalist streak that I believe actually hurts SeekingAlpha.com as a site for financial research. The editors must know him personally because he throws in so many peripheral tickers into his articles (to create buzz) and gets away with it.
The author also has poor judgement as to why palladium and platinum have escalated in value.
Here is a link to an extended article on the industrial as well as speculative momentum in palladium and platinum demand:
seekingalpha.com/artic...
Rick,
Sorry about that. I meant to say:
"Last month, Acco Brands missed its earnings estimates."
Not "Last Friday."
The article is mostly focused on SPLS and OMX, but in the conclusion I added a comment about one of the smaller players to broaden out the discussion.
Here is the info from last month:
ACCO Brands Co. last announced its quarterly results on Wednesday, February 9th. The company reported $0.25 earnings per share (seekingalpha.com/symbo...) for the previous quarter, missing the Thomson Reuters consensus estimate of $0.26 EPS by $0.01.
Best Regards,
S.
K,
Thanks for your comment.
The original piece was published last Wednesday and had a far more open-ended title, "Mosaic: What's Next for the Fertilizer Giant?"
Yes, the fundamentals still look impressive going forward. However, the technical indicators I follow made me feel the stock price was stretched.
From Friday 2/4 to Friday 2/11 MOS went from 82.25 to 88.32. Then Monday, it popped further to 89.10, followed by news items on Tuesday and Wednesday that seemed inherently negative for a sector that is so central to the "hot money" right now.
I think the sector will see more volatility as it's entered a more "self-conscious" period in its run-up. Didn't the phrase "Food Crisis" just appear on the cover of this weekend's Businessweek?
If the world pedals back from utter apocalypse --as it often does-- the news flow will turn to how the world is coping and grain prices are ameliorating. It may hurt multiple expansion for MOS, just as hints of softening prices may have hurt CF Friday, despite its numbers.
The sector may enjoy another few months in the sun, but it will now be part of G20 discussion and State Department talking points.
The time to have bought was back in either early August or mid December.