4 Stocks That Buffett Could Buy Now [View article]
You are not discounting FCF correctly. Also make sure you understand the difference between FCFF and FCFE. Whether you use FCFF or FCFE you need to discount by either the WACC or cost of equity for the firm minus a projected growth rate. "WACC or Re - g"
You need to research how to calculate a WACC (Weighted average cost of capital and the cost of equity) you also need to learn how to estimate the rate of growth in earnings / dividends.
Because of your error you have a denominator that is clearly too small which is causing you to overvalue these firms by a HUGE amount! You have a ways to go in your journey to learn how to properly value equity using free cash flow valuation methods. Keep learning!
Consumer Price Increases Being Absorbed by Retailers, For How Long? [View article]
Logical Thought, great point! It appears that companies are maintaining profitability by not hiring and freezing existing wages rather than trying to pass on these costs.
Regarding Meredith Whitney and her predicted crises with states and municipalities:
Of course you are right about what effect an economic upturn would have on a given states or municipalities income statement and thus operating leverage. However, I think Ms. Whitney is more concerned about financial leverage, due to the high level of borrowing that so many states and municipalities have engaged in during the extreme upturn and have generally continued to do since the downturn began.
I have not studied the problem directly so I do not have any specific examples to use but what I am driving at here is, do you think that the difference between your forecast of a some defaults 2011 and her forecast of a full blown crises is simply that she is also looking at the high level of borrowing and relatively higher interest rates that must be paid by states in addition to operating activities?
The Spin Behind the Pending Home Sales Report [View article]
BennyProfane, great comment. There is a very strong link between housing and "domestic" employment. Corporations are hiring, just not in the US. As long as our employment to population ratio remains low, home sales and thus prices will remain low as well.
I wrote an article about this relationship in the first week of December which illustrated this point. It is the third graph in the piece. It was also the first time I used the smaller illustration of the growth (or lack of) in the number of people employed.
Initial Jobless Claims Take a Holiday Break [View article]
Mr. Ingram, good observation, the number of people falling off the unemployment rolls is another thing that we will have to track on our own as we move forward since they will no longer be counted.
I think it is pretty clear what is happening to the labor market if you look close enough. I wrote an article that I think addresses this issue a few weeks ago, here is a link. seekingalpha.com/artic...
The Recent Correction Is Not Quite Deep Enough [View article]
Thanks for putting in the work and taking the time to write this article. Good Work.
This rally has extended well beyond my expectations. The spring rally lasted 51 days before the Greek crises started and acted as a catalyst to start the correction and flash crash a few days later sealed the deal.
I guess the market a begun to develop callouses where Europe and domestic employment are concerned. We will see how long this peace can last.
Will the Markets Really Explode With Profits if Republicans Win? [View article]
One Eyed Guide, thanks for taking the time to write the article.
In 1994 America had a several "exploding" new technology industries, a Y2K bug that threatened to shut down every computer in earth (that's what the fear was anyway). This technological rebirth left no industry untouched. Productivity exploded due to an expansion in aggregate demand for almost everything.
Today we have a housing market, which historically has lead us out of a recession that is, for all intents and purposes, dead until further notice, productivity gains which resulted from labor reductions and cost cutting, and finally, a new green industry which threatens to never get off the ground until there is but a single drop of oil left on the planet.
If the republicans win there may be a "bump" . But the reality of the economic data will remind us that we have a long way to go, regardless of who is the majority in congress.
Corn And Soybean Prices Have Opposite Effect On Fertilizer, Food Company Stocks [View article]
RedBaron, Don't think I could call that a comment, so I will thank you for your continued "contributions". Of course its part of my job to follow weather closely.
The NOAA also released its drought outlook today & the while there is always drought somewhere in the US, drought this year is west of most of the corn belt and conditions are improving according to their map as shown below.
baseballman24, its simply a false dichotomy to think that if one is not long one should be short. As I written many times here on SA, sometimes the best choice is to sit on the river bank and watch the water go by unless one likes making red vs. black bets at the roulette table, which is historically not the best way to manage or protect one's capital.
Weather is a qualitative factor, something the analyst or investor cannot quantify and the current weather situation really has nothing to do with Mosaic's business, as it has no nitrogen operations. I don't wish to repeat here what I have already written about the drought since about June 19/26 but those views have not changed. This piece adds Mosaics own guidance to the equation.
Thanks, I always appreciate an alternate POV as this is what creates contrast and ultimately makes a market of buyers, sellers, holders and watchers.
Hi baseballman24, thanks for reading the article. A response such as yours usually indicates someone who is long the stock. I won't repeat in comments what I have already written in the above article as well as since June 19 and earlier. However, I do not think Mosaic is a short. Time always reveals the truth. Good luck with your investment and thanks again for reading the piece and for your comment.
U.S. Corn Production Hammered By Drought, Global Supplies Still Adequate [View article]
foms, your link worked this time. I post the drought outlook on the Mays Report blog about every two weeks. Didn't post most recent one as I was on a business trip when it was released. Thanks again.
4 Stocks That Buffett Could Buy Now [View article]
You need to research how to calculate a WACC (Weighted average cost of capital and the cost of equity) you also need to learn how to estimate the rate of growth in earnings / dividends.
Because of your error you have a denominator that is clearly too small which is causing you to overvalue these firms by a HUGE amount! You have a ways to go in your journey to learn how to properly value equity using free cash flow valuation methods. Keep learning!
Consumer Price Increases Being Absorbed by Retailers, For How Long? [View article]
Thanks for reading the article.
Cautious Optimism for 2011 [View article]
Of course you are right about what effect an economic upturn would have on a given states or municipalities income statement and thus operating leverage. However, I think Ms. Whitney is more concerned about financial leverage, due to the high level of borrowing that so many states and municipalities have engaged in during the extreme upturn and have generally continued to do since the downturn began.
I have not studied the problem directly so I do not have any specific examples to use but what I am driving at here is, do you think that the difference between your forecast of a some defaults 2011 and her forecast of a full blown crises is simply that she is also looking at the high level of borrowing and relatively higher interest rates that must be paid by states in addition to operating activities?
The Spin Behind the Pending Home Sales Report [View article]
I wrote an article about this relationship in the first week of December which illustrated this point. It is the third graph in the piece. It was also the first time I used the smaller illustration of the growth (or lack of) in the number of people employed.
seekingalpha.com/artic...
What I love about this work is taking the spin off the ball so investors can see what is really the case. Thanks for taking the time to read me.
Initial Jobless Claims Take a Holiday Break [View article]
I think it is pretty clear what is happening to the labor market if you look close enough. I wrote an article that I think addresses this issue a few weeks ago, here is a link.
seekingalpha.com/artic...
Thanks again for reading me.
The Recent Correction Is Not Quite Deep Enough [View article]
This rally has extended well beyond my expectations. The spring rally lasted 51 days before the Greek crises started and acted as a catalyst to start the correction and flash crash a few days later sealed the deal.
I guess the market a begun to develop callouses where Europe and domestic employment are concerned. We will see how long this peace can last.
U.S. Jobs Report Likely to Be Robust [View article]
Oil-Dri Should Continue to Sop Up Profits (And Grow Its Dividend) [View article]
Will the Markets Really Explode With Profits if Republicans Win? [View article]
In 1994 America had a several "exploding" new technology industries, a Y2K bug that threatened to shut down every computer in earth (that's what the fear was anyway). This technological rebirth left no industry untouched. Productivity exploded due to an expansion in aggregate demand for almost everything.
Today we have a housing market, which historically has lead us out of a recession that is, for all intents and purposes, dead until further notice, productivity gains which resulted from labor reductions and cost cutting, and finally, a new green industry which threatens to never get off the ground until there is but a single drop of oil left on the planet.
If the republicans win there may be a "bump" . But the reality of the economic data will remind us that we have a long way to go, regardless of who is the majority in congress.
Corn And Soybean Prices Have Opposite Effect On Fertilizer, Food Company Stocks [View article]
The NOAA also released its drought outlook today & the while there is always drought somewhere in the US, drought this year is west of most of the corn belt and conditions are improving according to their map as shown below.
Here is a link:
http://goo.gl/iqBmX
As I conclude in the above report, weather can & often does change on a dime and investors need to be aware of this. Thanks again.
Corn And Soybean Prices Have Opposite Effect On Fertilizer, Food Company Stocks [View article]
If it weren't for divergent opinions there would be no markets to invest in. I hope you both continue to read and offer your opinions.
Mosaic Continues Higher Despite Weak Q4 And Soft Q1 Guidance [View article]
Weather is a qualitative factor, something the analyst or investor cannot quantify and the current weather situation really has nothing to do with Mosaic's business, as it has no nitrogen operations. I don't wish to repeat here what I have already written about the drought since about June 19/26 but those views have not changed. This piece adds Mosaics own guidance to the equation.
Thanks, I always appreciate an alternate POV as this is what creates contrast and ultimately makes a market of buyers, sellers, holders and watchers.
Mosaic Continues Higher Despite Weak Q4 And Soft Q1 Guidance [View article]
U.S. Corn Production Hammered By Drought, Global Supplies Still Adequate [View article]
U.S. Corn Production Hammered By Drought, Global Supplies Still Adequate [View article]