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Sophocles Sophocleous

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  • When Shorting Maximizes Portfolio Performance [View article]
    It is much more difficult to short than to go long. Even the best fund managers mess up, and no matter how overvalued, or how bad the business plan may be, it can take ages to make money in the short. (eg. Ackman's short in Herbalife, or Angie's List). So undercapitalized investors can easily get burned. I believe the key in shorting is to manage it in such a way as to increase your odds. By going short during weak or bear markets improves your odds. During a bull market, you can still short but you have to keep a tight leash. My advise to anyone who was looking at a short during today's market would be to time it with a change in sentiment and to put stop loss which would tell you that the specific change no longer stands. Take a look at TSLA. I had shorted it last year at around $150 when it started to decline. I had a $120 target but when it got there I got greedy and didn't take my profit, despite advise I had given to a friend who was short in very large size. When it got back to around $145, I knew I was wrong to not take my profit and that the negative sentiment had reversed. I closed the short with only a few dollars in profit but saved my portfolio from a huge potential short.
    Dec 8, 2014. 04:22 AM | Likes Like |Link to Comment
  • Cooper Tire Discounted Cash Flow Shows Upside Potential Of At Least 33% [View article]
    Looks like market took sale of CCT pretty badly. Down for the last 3 days in a row.
    Dec 3, 2014. 01:53 PM | Likes Like |Link to Comment
  • ACCO Investors Shouldn't Worry Over Temporary Events [View article]
    Thanks for the writeup. Reading up on it. Looks cheap.
    Dec 3, 2014. 12:50 PM | Likes Like |Link to Comment
  • Benchmark Electronics - A Compelling Growth Investment Among Small Caps [View article]
    I've done v well holding SANM which is also in same area. IBM sales are a concerning. If its already priced into the stock then fine but if it isn't then it will be a problem in the next few qtrs.
    Nov 14, 2014. 04:44 AM | Likes Like |Link to Comment
  • Benchmark Electronics - A Compelling Growth Investment Among Small Caps [View article]
    Looks cheap. Are you still long? Any new views after holding for 8 months?
    Nov 14, 2014. 04:37 AM | Likes Like |Link to Comment
  • Why The Shiller P/E Is Useless [View article]
    Good stuff. Thanks
    Nov 3, 2014. 01:19 PM | Likes Like |Link to Comment
  • ITT Educational's Short Squeeze Is Here [View article]
    I disagree. Tons of contrarian plays show up where the companies have not had as many issues as ESI. eg. HPQ, GME, CYOU, XRX, WLP, etc. Its a matter of how many problems and if you understand them and how much they may or many not affect the company or stock price.
    Oct 22, 2014. 04:45 AM | Likes Like |Link to Comment
  • ITT Educational's Short Squeeze Is Here [View article]
    I love a contrarian play but this still looks too risky for my appetite as there still appears way too many unknowns.
    Oct 20, 2014. 10:49 AM | Likes Like |Link to Comment
  • Is Bill Gross Worth $800 Million To Janus? [View article]
    I agree. I looked at this stock as a short opportunity but Pimco's numbers are huge. $2trn in AUM of which $222 was the Total Return Fund. Who is to say how much Gross can take of this? But 50b is 2.5% of total and about 22% of the Total Return Fund. Plus depending on the charges the Janus valuation may be justified with even less. There are people with a lot worse reputations and significantly worse track records who managed to move a lot of money around. So its a bit of roulette here I think. But if I were to play it short I think I'd look at the 6 months puts. At the moment standing aside.
    Oct 1, 2014. 08:55 AM | Likes Like |Link to Comment
  • Is Bill Gross Worth $800 Million To Janus? [View article]
    Citi believes market implies Gross brings 25-50b over next 12+ months resulting in +19% to +42% increase in EPS in 2016
    Sep 30, 2014. 03:43 AM | Likes Like |Link to Comment
  • Investing Like A Billionaire With The iBillionaire ETF [View article]
    Higher beta, stocks with higher multiples. Marginal outperformance these last 12 months. No thank you.
    Sep 9, 2014. 10:10 AM | Likes Like |Link to Comment
  • Valero Energy Corporation: Invest In Booming North American Oil Production [View article]
    Good stuff. VLO is one of the cheapest stocks in the market, and one of the cheapest consistent dividend paying stocks.
    Sep 9, 2014. 04:07 AM | Likes Like |Link to Comment
  • 2 Simple Charts To Monitor The S&P 500 [View article]
    You'll need to look at what the ETFs investment strategy is. Most likely they have certain criteria for them to hold the stock. This criteria could result in flipping the portfolio more often than you desire.
    Sep 8, 2014. 01:56 PM | Likes Like |Link to Comment
  • 2 Simple Charts To Monitor The S&P 500 [View article]
    You will need to study the growth rates in dividend paying companies, and focus on buying stocks with 2%+ current dividend yields. eg. if the company pays 2% currently, then they would have to increase that dividend by 17.5% per year in order for it to each your 10% goal.
    Sep 8, 2014. 02:26 AM | Likes Like |Link to Comment
  • 2 Simple Charts To Monitor The S&P 500 [View article]
    Personally, I don't believe buyandhold for individual stocks will work like it used to and at best will marginally beat the market based on quality and valuation depending on the involvement and experience of the investor. Technological changes are happening a lot quicker. All industries are more competitive. People look at Coca-Cola and thinking how lucky they would be if they were invested 30 yrs ago but don't think about how many companies have failed and even gone bankrupt. Just look at the DJIA. See how the 30 members have changed over the years. Buying and forgetting individual companies won't cut it. Now if you buy and hold indices then its a different story. Amateurs are better off buying indices. Some of these like 'dividend aristocrats' etf focus on dividend stocks. My backtest of models with dividend strategy show good results and one of the models I personally use looks at companies that have paid dividends for at least 10 years and are cheap.
    The key to investing in individual companies is using a value investing strategy. A company can change in many ways but the price you pay will never change. Sometimes it is the stock with deteriorating fundamentals that you buy, but it all depends on the story. You must ask yourself, what is the strategy? eg. you buy a stock that is trading at a premium to the market. That means you are buying a growth stock/story. Is the company still growing at above average rates? If it's not then the fundamentals can remain very strong but you will lose money because the market will reprice the stock. If you are buying a stock at a discount then you are a value investor. The problem with value investing is that you can get caught buying a value trap. The stock could be cheap but it doesn't mean it won't get cheaper. It will depend on how much the fundamentals are deteriorating. For example, if sales are declining at a small pace but the company is generating significant amount of free cash flow and doesn't have much debt then more than likely, if you buy it cheap, you will make a good return. Because despite the drop is sales, the company could do buy backs, and pay dividends. The company could even be bought out by private equity firms or a competitor. On the other hand if management is horrible then it could be an issue.
    You need to understand why you hold a stock, and what are the catalysts. If I'm holding a growth stock and it stops growing above average, I'm out. If I buy a value stock and it has appreciated and price is stalling, I'm out. I'm constantly monitoring to see if something has changed. At the same time, you need to be humble. Some times we are wrong. If you are not entirely sure then you scale out of a position. If reduces your loss on the downside and guarantees profits on the upside. I could talk for hours on this subject... That is why I recommend amateurs and/or individuals who don't have the time are better off indexing and buying more on the dips.
    If you'd like to do some reading I'd recommend "quantitative strategies for achieving alpha".
    Sep 6, 2014. 08:01 AM | 3 Likes Like |Link to Comment