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Vikram Saxena

 
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  • 60% of Google Employee Stock Options Are Drowning [View article]
    This is:
    -an anachronistic article (SEEN THE PERFORMANCE OF STOCKS LATELY?)
    -making specious conclusions (EMPLOYEES LEAVE TO GO WHERE?)
    -based on incomplete information (TSOs ANYONE?).
    Oct 11, 2008. 12:52 AM | Likes Like |Link to Comment
  • Google: Android Skepticism, Plunging Stock [View article]
    A lot of people in New York do not get Google's business investments; a fund manager on CNBC once questioned why having your own browzer helped Google?

    Google operates in a chaotic, hyper-dynamic and nebulous domain. The domain is unique because the distribution, marketing and support costs are significantly less than traditional businesses, even traditional software businesses.

    This gives Google the luxury to run a thousand R&D experiments, and expose some of them to the public, with very little incremental cost after the initial development effort. Even if the experiment goes nowhere, it often generates enough ad revenues to justify the investment. But perhaps more significant, by becoming one of the players, Google develops a significantly better understanding of that particular niche. As a result, Google reduces the chance of missing the Next Big Thing; further it gives them the insight on how to monetize that particular domain with their core offering.

    The conversion from cell-phones to smart-phones is still in an early phase which opens up opportunities for 2nd-tier hardware vendors to get a leg in. MacOS, and Linux have shown that even in a Windows world, other OSes' too can thrive. Android will never dominate the market; however it will find a place in open-source mobile OSes.
    Oct 11, 2008. 12:24 AM | Likes Like |Link to Comment
  • Browsing Through Lehman Emails [View article]
    I saw a graphic after that fateful weekend:
    DIck Fuld: Long Term Investor
    John Thain: Trader

    I wish Lehman had injected some fresh blood into its Board or Senior Management so that they could see how bad things were becoming. At times of extreme stress, long term insiders can not detach themselves from the past, and internalize the implication of the present.

    Fuld never understood how the game had changed with hedge funds, no uptick rule, blatant naked-shorting, and trend following computerized trading severely exaggerating any directional move in a nervous market.
    Oct 9, 2008. 09:16 PM | Likes Like |Link to Comment
  • The Last Days of Morgan Stanley [View article]
    The issue of trust became a non-issue once MS became a commercial bank. Sure they will have to de-leverage even more they are no dependent on the market's trust to finance themselves. There next debt offering is not due for 7-8 months. In the short-term they can always sell 3 month commercial paper to the Fed if they need cash.

    MUFJ also bought out the 25th largest bank in the US. They want to remain in good terms with the Feds. It is highly unlikely they will dump MS now. They know they will lose the other deal if they turn out to be an unreliable partner. Also they can not get a bigger stake in MS since anything greater than 25% will trigger foreign ownership rules essentially restarting the process. So MUFJ has too much at stake to run away but very little room to negotiate a better deal.

    And at the end of it all, Paulson will severely regret the day he made the political decision to let Lehman go under. That stupid political statement started the slide and the House of Representative's decision to vote against the rescue plan, added the push to destroy confidence in the world's financial system.
    Oct 9, 2008. 09:06 PM | Likes Like |Link to Comment
  • The Duplicitous Sheila Bair [View article]
    To those who commented about Citi also benefiting from the tax break:
    (1) It only applies if companies are bought as a whole not the case in Citi's offere.
    (2) Citi does not have a lot of profits to write-off the losses again :(.
    Oct 8, 2008. 09:06 PM | Likes Like |Link to Comment
  • @VIC: Bill Ackman on Wachovia [View article]
    Milt:
    You seem to have missed the WHOLE point of Ackman's presentation and this article. The remaining assets after what Citi takes are worth MORE than Wells offer; according to Ackman between $7-$19/share.
    Oct 7, 2008. 07:23 PM | Likes Like |Link to Comment
  • Bank of America: 'Paulson Plan Benefits Mostly Goldman, Morgan' [View article]
    Mish:

    Your interpretation of BAC comments is downright criminal. Just because GS/MS have been very aggressive in markdowns does not mean they will benefit the most. It is likely that in the reverse auction the price paid by the Fed will be closer to where the rest of the banks are marking the assets. Further MS/GS have little to no exposure to Sub-Prime; GS was short and MS took their hits an year ago.

    Do you have anything constructive on how to fix the problem? All you do is shill for your asset management firm and spread FUD. The stock market wiped out close to $1.4T in value today, more than double of the $700B requested by Paulson to provide liquidity to the debt markets. You must be popping open the bubbly celebrating as Americans see their pension funds, IRAs and 401Ks get wiped out.
    Sep 29, 2008. 10:39 PM | Likes Like |Link to Comment
  • Ten Bear Market Phases, Current Edition [View article]
    Mish:

    I find your analysis interesting, since it often highlights the negatives which are often ignored. But the spin you put on the numbers is nothing but scare mongering, bordering on the line of unethical conduct.

    A few months earlier, you had a blog post about AAA rated bonds having large defaults and suggested that it was a Titanic about to sink. What you failed to mention was that the market was already treating those bonds as junk they were already trading at anything between 20-50c/dollar. For people who trade them their AAA rating was meaningless.

    The current post has a link which claims:
    ". Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back."

    Your inference is that all the loans made out by banks are bad loans and the financial system is on the verge of collapse. This is nothing but scare-mongering.


    A vast majority (at least 90%) of Americans pay their mortgage on time. Commercial real estate, in spite of the prognostics of doom, is holding up reasonably well. Further real-estate, even a depressed market has an intrinsic value: the replacement value. People will continue to need homes and the collateral in place is not worthless. Even in the places hit with the biggest defaults, the liquidation value of homes is rarely if ever below 50% of the high water mark; more often than not homes sell at 60-80% of the high water mark. And not all the defaulting homes have zero equity; nor were all bought at the peak of the market. And by the way, the best run bank will go insolvent, if there is a run on the bank and everyone withdraws their deposits.

    REBEL: I disagree with you on government intervention.The banking system can tolerate large losses as long as their magnitude is known; what it can tolerate is uncertainty about losses which leads to irrational and illiquid markets. We need a RTC redux to buy and hold properties at their liquidation values and then sell them once the market recovers (inflation will help that happen sooner than you think). It is easy to talk about tax-payer money being misused but if you consider all the ways our politicians spend our taxes, a housing bailout is going to be universally useful in propping up the US economy and our financial system. The cost of inaction when measured across all metrics (fear/uncertainty crippling lending, weaker dollar, higher commodity prices and inflation, falling paper asset pricing, lower economic growth and higher unemployment) is going to be a lot more than what backstop which the Federal government puts to put a floor on the housing mess. Remember unlike much of other government spending, the government is getting real assets with real utility out of this spending, and helping almost everyone in the US.

    Jul 26, 2008. 07:07 PM | Likes Like |Link to Comment
  • What's Behind the Slide in Oil and Commodities? [View article]
    Missed the Key: That Tricky/ECB hinted that they were done with the rate hikes due to the rapid decline in the Euro zone economy. This is likely to end Euro's run against the USD, which will also gain from the end of the Bush era. Plus the $150 spike target was almost met, and July it traditionally a slow month for oil.

    The key is where it bottoms. Does it stay firmly above $120 or does it test $100.
    Jul 26, 2008. 01:49 AM | Likes Like |Link to Comment
  • Is Valero a Better Buy than Exxon Mobil? [View article]
    The US still imports refined products so there is no overcapacity in this area. The refiners are trading at below replacement value and are a great long term buy. Right now they are suffering because of being at the wrong end of the stick (weak economy/high oil). Worldwide the demand for refined products is increasing so the long-term fundamentals are great for this industry.
    Jul 25, 2008. 04:12 PM | Likes Like |Link to Comment
  • India's Strong Growth Should Continue [View article]
    sooth_sayer: Have you the skyline of major Japanese cities and compared them with Indian cities. Like HK, Japan also grew vertically. Vertical growth bypasses land constraints and hence can lead to excess supply. Except for the metros, most Indian cities do not have a skyline! When it comes to housing, demographics are a key. India has the largest number of people under 25. Household formation is increasing with better economic climate, which will provide support to the real-estate market.
    Jul 25, 2008. 03:50 PM | Likes Like |Link to Comment
  • Bangalore Blasts Threaten Indian Outsourcing [View article]
    Blasts like this happen with amazing regularity in India, thanks to the generosity of a neighboring country. Things come back to normal in a day or two, even if there are massive casualties. Most of the blasts happen in public places and are designed to scare people, rather than damage buildings or infrastructure. In this particular case, the loss of life thankfully was minimal compared to the past.

    BTW though IT seems to get a lot of headlines in the US, it is certainly not the life-blood of India.
    Jul 25, 2008. 03:41 PM | Likes Like |Link to Comment
  • India: The Bear Case [View article]
    The communists are out!
    Jul 22, 2008. 08:36 PM | Likes Like |Link to Comment
  • India Battles Rising Inflation, Lower Growth; Ratings Agencies Turn The Screw [View article]
    The key of course is oil, which is the main cause of the increasing imbalance. However, the Indian equity markets are trading in mid-teens P/E to trailing earnings. Even if the growth rates come down the market is very fairly valued. There is a general apathy towards equity investing across the globe, which might be coming to an end soon and will benefit the beaten down Indian market. The confidence motion is a boost in the short term; the market is poised for a rally. And if oil continues to correct, the rally could really develop legs.
    Jul 22, 2008. 08:29 PM | Likes Like |Link to Comment
  • India's Strong Growth Should Continue [View article]
    sooth_sayer:

    Can you comment more about the Ponzi scheme? There is little or no seller financing in India; even bank led financing was a mirage less than a decade ago. Most of the money came from the unaccounted economy (black money) and transactions were conducted in all cash deals with people literally exchanging bags of cash.

    As the other Vikram(Vikram12) pointed out, you also have to look at real prices versus nominal prices. The Indian Rupee has been depressed for the past two decades that shows up in pricing.

    You also have to account for population density in India versus the USA. Land is relatively scarce in India and that will show up as higher premiums for homes, especially when compared to non-Metro/non-Coastal America where homes sell more on replacement value and not speculative value.

    Growth in real estate prices in rapidly growing emerging economies is a not exclusive to India. Rising incomes coupled with the availability of credit, and rapid urbanization increases the value of real-estate at a much larger rate than the GDP.

    Vikram12: Your comments about Gold is not easy for a non-Indian to understand. There used to plans to get the gold into circulation as capital but now that availability of capital is no longer a challenge they have been shelved. India is benefiting from the wealth effect of Gold which not many people factor in to their models.

    Today's vote of confidence will be good for the equity markets. Further the recovery in the US equity markets is going to be good for equities in the emerging markets as well. And BSE is trading in mid teens of trailing P/E. Much cheaper than the US market with much better growth prospects.
    Jul 22, 2008. 08:20 PM | Likes Like |Link to Comment
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