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Tom Armistead  

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  • U.S. Debt At 104% Of GDP Hits Another Record. Stocks, Gold Should Do Well On Slow Rate Hikes [View article]
    Or maybe Debt Service to Tax Receipts, to figure coverage of fixed charges.
    Apr 14, 2015. 06:44 PM | 2 Likes Like |Link to Comment
  • Bloomberg: Disgruntled Altera shareholders pushing for Intel deal [View news story]
    On the last Altera conference call, an analyst asked management whether the flow of FPGA business (into data centers) would be steady or lumpy. Management said it would be steady, there is enough that once the trend is established it should develop smoothly from quarter to quarter.

    I plan to listen carefully to the ALTR conference call.
    Apr 13, 2015. 05:29 PM | 2 Likes Like |Link to Comment
  • Why I Remain Sanguine On S&P 500 Returns The Next 3-5 Years [View article]
    If you must overweight financials I would leave big banks out of it. There are plenty of honest insurance companies and regional banks out there.

    I like old tech, it seems like from time to time one of them is singled out for attack by the punditry, a sort of age discrimination applied to corporations which as a practical matter can live, grow and prosper indefinitely.

    Why not overweight energy? Many observers are seeing double bottoms.
    Apr 10, 2015. 06:39 AM | 2 Likes Like |Link to Comment
  • Atlas Financial Holdings: A Cheap, Niche Insurer With Runaway Growth [View article]
    When I broke into the insurance business in 1969, fly by night taxicab insurance companies were a dime a dozen. It's really easy to write a lot of that business, because nobody else wants any.

    So here we have a company that is growing by leaps and bounds, taking in new premium faster than it has to reserve for losses. There is plenty of room for error in that process. Plus, share counts have been increasing pretty rapidly, they are taking in new equity capital about as fast as they are writing new business.

    I would studiously avoid any involvement with this situation.
    Apr 9, 2015. 06:36 PM | 5 Likes Like |Link to Comment
  • IBM: Transition Developing Favorably [View article]
    That's what happened.

    The extreme emphasis we've seen on the concept that IBM has been "piling on debt to buy back shares" seems to be driven by some sort of negative PR apparatus. All I can say is, it's a hell of a way to earn a living.
    Apr 9, 2015. 01:00 PM | 2 Likes Like |Link to Comment
  • IBM: Transition Developing Favorably [View article]
    At one time I looked at buybacks net of increase in non Global Financing Debt, the conclusion was most of the buybacks were financed from cash flow rather than borrowing.

    The capital structure as it stands seems reasonable. Schroeter mentions that when IBM added debt to the balance sheet in 2007 or so, the market applauded. Now over 7 years later we get these extremely negative reactions.

    To me the debate is about whether the buybacks were a return of excess capital, or whether management should have spent the money attempting to grow the business.
    Apr 9, 2015. 12:49 PM | 2 Likes Like |Link to Comment
  • Intel reportedly ends Altera talks; shares fall (updated) [View news story]
    Well I'll settle for $54...
    Apr 9, 2015. 11:53 AM | 1 Like Like |Link to Comment
  • Data Center Group Drives Intel's Profits [View article]
    Bruce, good job, this is the type of analysis we need on Intel: look at the segments, state your assumptions, and talk about what that means to EPS and ultimately price per share.

    I have a somewhat similar article I was working on, I'm going to leave it in the hopper, you touched most of the bases already.

    I'm optimistic, but I'm looking to 2016.
    Apr 9, 2015. 10:47 AM | 2 Likes Like |Link to Comment
  • Intel reportedly ends Altera talks; shares fall (updated) [View news story]
    The decision is made by the board, including the CEO, on behalf of shareholders. John Daane who is demonstrably careful to maintain credibility has said some things about the potential market for FPGAs in server acceleration that could be interpreted in ways that support a seriously higher valuation.

    As a shareholder, I wouldn't mind a quick profit, but I expect to eventually be rewarded even if the company is not acquired.
    Apr 9, 2015. 10:33 AM | 2 Likes Like |Link to Comment
  • Intel reportedly ends Altera talks; shares fall (updated) [View news story]
    It's interesting that both companies gained on the rumor, and both lost when it was quashed. There are a lot of synergies on the IP here, as opposed to simple expense reduction. Intel needs Data Center growth, and Altera has relevant IP. Altera would be worth more if part of Intel due to the potential for higher R&D expenses.

    I think something in the mid 50's would have done it. The two companies seem comfortable working together so I agree with PalmDesertRat, this might not be over.
    Apr 9, 2015. 09:48 AM | 2 Likes Like |Link to Comment
  • Can A Sovereign Currency Issuer Default? [View article]
    The very polite academic discussion of EMH, MMT, bond bubbles and sovereign debt manages to walk around political issues that will come to the forefront yet once more as the presidential election comes into view.

    The liabilities of the US Government include substantial promises made to social security and medicare recipients, as well as veterans and their families. Less well defined is the expectation that various social welfare programs will continue indefinitely and even expand. The corresponding asset on the implied balance sheet is the ability to tax future income of citizens and corporations.

    As became clear during the 2011 debt ceiling crisis, there are those who resist paying government obligations by subjecting themselves to further taxation. Primarily they are motivated by concerns about redistribution: money passed out by the government goes into the wrong hands, in their estimation. So the USG edged closer to default and got downgraded.

    So credibility or creditworthiness depends on access to the taxpayer's income. What can happen is, if nobody wants to pay for all the goodies government passes out, everybody sticks their hand out to collect and then finds a way to evade payment.
    Apr 9, 2015. 08:11 AM | 2 Likes Like |Link to Comment
  • Scarcity And Oversupply: The Intriguing Market Dynamics Between EUR:USD, Bunds And Oil [View article]
    BIS has said that oil is behaving like a financial asset. As this situation has developed, strength in the dollar index has been matched by weakness in the price of oil, and vice versa.

    Dornbusch's hypothesis offers a rational explanation as well as a model for the trajectory of oil prices recovering to a new long term stable level.
    Apr 8, 2015. 05:30 AM | 1 Like Like |Link to Comment
  • Is Intel Trying To Hide Its Mobile Troubles? [View article]
    I'm looking forward to it.

    After working the numbers for a while DCG is key here, it amounts to a strategic imperative.
    Apr 7, 2015. 11:16 AM | 2 Likes Like |Link to Comment
  • Is Intel Trying To Hide Its Mobile Troubles? [View article]
    I don't like the change. I was in the process of doing a segment by segment projection and mobile is important due to the large operating loss.

    Going forward I simply assume the operating loss improves by $800 million per year. Supposedly SoFIA is going to change all that, starting in the second half. Show me the numbers.

    The growth areas are data center and internet of things, both of which will continue to be available as segment information, DCG and IOTG. If these segments grow and maintain margins comparable to 2012 to 2014, everything will be fine.

    The real key is DCG. Diane Bryant put up a slide showing very impressive growth of the TAM for big data. If that occurs, and Intel gets its share, everything will be very fine. Data center growth is a strategic imperative for Intel. I'm not going to let concern for sunk costs in mobile distract me from keeping my eye on the ball.
    Apr 7, 2015. 10:39 AM | 3 Likes Like |Link to Comment
  • Schlumberger CEO: 'Oil Price Decline Not Due To Overcapacity' [View article]
    Thanks for sharing this info. It seems like pundits generally explain all oil price movement by supply and demand, postulating over or undersupply to match the price movement.

    The reality is more complex, and this is another piece of the puzzle.
    Apr 6, 2015. 11:53 AM | 5 Likes Like |Link to Comment
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