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Tom Armistead

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  • Altera: Why I Added To My Position [View article]

    I think it just caught whatever the market was thinking about tech when we had the latest dip.

    I don't watch it that closely day to day, I just noticed it was down in the area where I added so I pulled the article out of the hopper.
    Oct 8, 2014. 05:29 PM | Likes Like |Link to Comment
  • Sell General Mills And Buy Procter & Gamble [View article]
    One item I watch on consumer staples is advertising as a percentage of revenue. The thinking is, there is a certain amount of advertising that is necessary to maintain brand strength.

    GIS has gone from 6% to 4.8% on this metric over the past 5 years.

    So I would question whether they have the resources to market innovative products and maintain the strength of existing brands.
    Oct 5, 2014. 08:48 AM | 6 Likes Like |Link to Comment
  • Coach: Why I'm Holding [View article]
    Thanks for doing the on site research. Apparently their retail operation is not in sync with their advertising which isn't what it should be in terms of they aren't spending to advertise in the usual places.

    On why there is no Stuart Vevers collection, his predecessor Reed Krakoff had his own brand, when he left to go into business for himself they sold him his brand. Maybe they don't want to repeat that type of scenario.
    Oct 4, 2014. 01:53 PM | 1 Like Like |Link to Comment
  • Coach: Why I'm Holding [View article]
    I saw that. They also said that the current offerings aren't directed toward the current clientele. Kind of like when JC Penney went upscale and lost their middle class customers. I wish they wouldn't mention COH in the same breath with JCP, it makes me nervous.
    Oct 4, 2014. 01:50 PM | 1 Like Like |Link to Comment
  • Coach: Why I'm Holding [View article]
    I could tell you a horror story about owning a sliver of a small thinly traded company controlled by family management.

    What happened was, I correctly identified the value and waited patiently as sales increased, etc. Unfortunately management finagled some sort of reverse stock split and mopped up all the small positions. Then they weren't required to file with the SEC, so they went dark, meanwhile keeping shareholders fully informed of their machinations, and offering a lowball buyout, which was higher then my cost.

    Not wishing to sit in the dark until kingdom come, I took the buyout. Of course they sold it out to a larger company at a fair price, which I never saw.
    Oct 4, 2014. 08:35 AM | 1 Like Like |Link to Comment
  • How To Fix Financial Capitalism? Focus On Ethics [View article]
    Moral and ethical concepts are associated with metaphysical belief systems and are considered irrelevant by a majority of market participants. It's about money, the next quarter, and the year end bonus.

    Such little salvage as we got from the financial crisis can be attributed to warranties, representations, and the law of contracts. All of these relate to whether factual information is correct.

    The corrective effect of these contractual terms was considerably weakened by the sluggish pace of the legal system, and by obstructive and dilatory tactics on the part of the offenders.

    Looking toward the future, the legal system has to operate faster, at least with respect to contracts. Discovery was a big item for obstruction, there were always multiple reasons not to provide information, it was too time-consuming, expensive, etc. But contracts proved to be enforceable in a court of law, if you were patient and had deep pockets.

    The establishment of contractual relationships between financial advisors and their clients, with clearly spelled out remedies for carefully defined breaches, and blanket rights of discovery, would solve the problem.
    Oct 3, 2014. 10:08 PM | 2 Likes Like |Link to Comment
  • Coach: Why I'm Holding [View article]
    There has to be a story, how they managed to do a U turn from profit to loss during the last year.
    Oct 3, 2014. 03:24 PM | Likes Like |Link to Comment
  • Intel: Normally Off Computing? [View article]
    Great stuff. I've been wondering, what is Intel getting for their huge R&D expenditures, not to mention ongoing capex? So I always enjoy your speculations on the topic.
    Oct 3, 2014. 05:25 AM | 5 Likes Like |Link to Comment
  • IBM: Taking A Large Position [View instapost]
    I wouldn't be surprised. He hasn't spelled out everything he's thinking on this position, and it's 11.6%, not chicken feed.
    Oct 2, 2014. 02:22 PM | 1 Like Like |Link to Comment
  • AIG Was Broke [View article]
    I have many lingering questions about AIG, as I was holding a speculative position when it was confiscated, and was familiar with everything except the excessive securities lending activity.

    In particular, I would like to know the ultimate value of the bonds that wound up in the two Maiden Lane facilities. Bean by bean, how many of them defaulted and what was the recovery in each case? Were any of them the subject of settlements for fraudulent behavior? Were any of them created or sold by means of fraud?

    Ben Bernanke reacted with uncharacteristic emotion to discussions of the AIG bailout. Many thought it was disgust at AIG's mismanagement. It could have been disgust at the indirect bailout provided to Paulson's Alma Mater, Goldman Sachs, as well as other investment banks that overnight became commercial banks and immediately made their way to the window.

    An army of lawyers, with their briefing books, and their sharp questions, and their sharp tactics, may shed some light on what really happened. Ultimately CDS was a zero sum game and the losses had to be offloaded somehow, in order for the key players to show a profit. Why not create a crisis and vote someone off the island?
    Sep 30, 2014. 07:09 PM | 1 Like Like |Link to Comment
  • Large Stocks Are Widely Mispriced [View article]
    The research cited supports the idea of the stock market as a Keynesian Beauty Contest.

    Of course when analysts are aware of each others work, they are going to see beauty in the same faces.

    I frequently prepare a valuation by my own methods, then compare it to the consensus target on, or to Morningstar's or S&P's opinions. When there's a big difference, not that common but it has happened with some well known stocks, is when there may be opportunity for outsize profits.
    Sep 30, 2014. 06:52 PM | 2 Likes Like |Link to Comment
  • Coach: Why I'm Holding [View article]
    Of course Bill Ackman is a genius on retail stocks. Look at what he did to JC Penny.

    I can see it now, he takes a position in COH, gets Ron Johnson in as CEO, and the destruction is complete.
    Sep 30, 2014. 01:41 PM | Likes Like |Link to Comment
  • Intel's Investment In China And Other Thoughts [View article]
    Maybe something in a bullish risk reversal would be in order here.
    Sep 30, 2014. 05:32 AM | Likes Like |Link to Comment
  • The S&P 500's Historical Relationship With The Price Of Oil [View article]
    Right now we are looking at an economy that will benefit from lower oil prices. Consumers in effect get a raise when gas prices go down. Part of the impetus that triggered the crash of 2008/2009 was the spike in oil and gas prices.

    Perhaps the analysis should be applied to the index without the energy sector, and then separately to the energy sector.

    I own XOM and OXY, but overall I think I'm better off with lower oil prices.
    Sep 29, 2014. 04:44 PM | 1 Like Like |Link to Comment
  • Options Strategy: Reverse Collar or Fence [View article]
    Unfortunately I've never seen software that could do that.

    I'm basically a stock investor, any bullish reversals (since I wrote the article, I've learned that's what they're usually called) I do arise from an analysis of the stock involved, when I become convinced that the risk is asymmetrical. The last time I did that was on INTC, a position that amounted to puts at 22 and calls at 26, it worked out well.

    In the past I've screened for stocks that have high current ratios, sufficient to identify cases where they are holding excess cash. If the P/E when adjusted for excess current assets is low, it reduces downside risk. If you also have high beta, that may be associated with high volatility, so then you would have a prospect.
    Sep 29, 2014. 04:11 PM | Likes Like |Link to Comment