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Wade Slome, CFA

 
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  • Sector Weightings: Another Financial Toolbox Gizmo [View article]
    My pleasure.
    Nov 16, 2014. 10:54 AM | Likes Like |Link to Comment
  • NVE Corporation: A Cash Plump Activist Target [View article]
    You must add $3.3m Cash + $10.7m Marketable Securities (Short Term) + $86.2m Marketable Securities (LT) = ~$100m on 6/30/2014 Balance Sheet.
    Jul 29, 2014. 06:48 PM | Likes Like |Link to Comment
  • Shiller CAPE Peaches Smell Like BS [View article]
    There has been some confusion over my peach analogy, and perhaps it wasn't the best example. However, the analysis is the same, historical P/E ratios distorted by extreme earnings from many years back should have no bearing on what I pay today for an asset.

    Like the peach example, here’s another example of an index staying the same for 9 yrs then dropping in year 10. The distorted earnings number in years 2 through 5 distorts the current 10-year CAPE. Despite price going down in year 10 (1000 –>800…down -20%) and earnings going up modestly (99–>100), the artificially high CAPE (13.3x) makes index seem more expensive than reality (8x current PE).

    Yr 1 Price (1,000); Yr 2 P (1,000); Yr 3 P (1,000);Yr 4 P (1,000);Yr 5 P (1,000);Yr 6 P (1,000);Yr 7 P (1,000);Yr 8 P (1,000); Yr 9 P (1,000); Yr 10 P (800)

    Yr 1 Earnings (100); Yr 2 E (1); Yr 3 E (1); Yr 4 E (1); Yr 5 E (1);Yr 6 E (99); Yr 7
    E (99); Yr 8 E (99);Yr 9 E (99); Yr 10 E (100);
    10-Year Avg Earnings = 600/10 = 60

    Yr 1 P/E (10); Yr 2 P/E (1000); Yr 3 P/E (1000); Yr 4 P/E (1000); Yr 5 P/E (1000); Yr 6 P/E (10); Yr 7 P/E (10); Yr 8 P/E (10); Yr 9 P/E (~10); Yr 10 P/E (8);

    10-Year CAPE = 13.3x (800/60) vs Actual P/E 8x

    CAPE distorted by 66% higher than actual P/E.
    Jun 17, 2014. 01:53 PM | Likes Like |Link to Comment
  • The Most Hated Bull Market Ever [View article]
    To all the skeptics, thank you for the hate-filled comments. I think you may be just helping me with my argument?
    Jul 31, 2013. 10:44 AM | 1 Like Like |Link to Comment
  • Examining The Hype Over Facebook's $100 Billion IPO [View article]
    Stu: I simply meant that if I like the deal at the offer price (say $34 per share), but I am not privileged enough to receive shares, then I will be in tears if the first "traded" shares come out at $46, up +35%...less upside potential for me.
    Jan 31, 2012. 09:04 PM | Likes Like |Link to Comment
  • Predicting Market Movement Is A Game Of Whack-A-Mole [View article]
    ArtfulDodger:

    Thanks for the comments. I've given up on trying to convince the cynics. Successful market timers have no need to read my articles anyways. Good luck with all your investing...

    ~WS
    Oct 5, 2011. 01:46 AM | Likes Like |Link to Comment
  • In Equity Markets - 'It's the Earnings, Stupid' [View article]
    I generally agree with the buyback commentary you provided - I have written about this topic before in my article titled, Share Buybacks and Bathroom Violators: is.gd/2ZH0gC
    May 28, 2011. 03:43 PM | Likes Like |Link to Comment
  • In Equity Markets - 'It's the Earnings, Stupid' [View article]
    Yes, I would agree. You are absolutely right, money has flowed into bonds, which explains why bond prices are at a peak after a 30-year bull run. Money goes where it is treated best. If you are earning 3% on 10-year Treasuries and the earnings yield on stocks (inverse P/E) of 7.5%, then something has to give. Bond prices either crater to narrow the gap with stocks, or stock prices go higher to lower the earnings yield.
    May 28, 2011. 03:37 PM | Likes Like |Link to Comment
  • Citigroup: The Illusion of the Reverse Split [View article]
    You're right, Berkshire "B" shares did a 50-1 split last year out of necessity to complete the Burlington Northern Santa Fe deal for tax purposes. He frowns upon stock splits though in hopes of mitigating the number of speculators trading in his stock.
    Mar 22, 2011. 04:09 PM | 1 Like Like |Link to Comment
  • Smallcap Nanotech Company NVE Is Wade Slome's Highest Conviction Holding - Here's Why [View article]
    Dividend Inc:

    I rarely write about my positions, but if you comb through my previous articles on SA or InvestingCaffeine.com, I have written about AMZN, PETM, and ERTS as well.

    ~WS
    Jan 1, 2011. 11:53 PM | Likes Like |Link to Comment
  • Positive Prognosis for Genoptix [View article]
    Great report!
    Sep 22, 2010. 10:15 PM | Likes Like |Link to Comment
  • Japan: What Deflation? What Depression? [View article]
    Spot on Scott! I have written on the topic too, contrasting the differences between Japan and the U.S.:

    investingcaffeine.com/.../
    Aug 13, 2010. 03:13 PM | Likes Like |Link to Comment
  • Steve Jobs: The Gluttonous Cash Hog [View article]
    I agree with you. I'd like to see them create more industry-leading products too. They spent $1.3 billion on R&D last year, so they could double it this year and not even put a dent in the $42 billion.
    ~WS
    Jul 8, 2010. 01:45 PM | 4 Likes Like |Link to Comment
  • Stocks vs. Bonds on Steroids [View article]
    Not all bonds and bond funds are created equally. In order to determine the sensitivity of your bond portfolio to potential increases in interest rates you first need to find out the "duration" of the bond(s). If you take an interest rate change (e.g. 200 bp increase in rates) times the duration of the bond(s), then divide by 1 + Yield-to-Maturity. Running this exercise will provide an estimate of how "killed" your bonds will get hit IF rates rise. Long-term Treasuries are the most susceptible to interest rate risk, but bonds with shorter durations face lower rate exposure (however more inflation risk). Other risks include credit risk, liquidity risk, and reinvestment risk, among others.
    May 25, 2010. 07:51 PM | 1 Like Like |Link to Comment
  • Market Valuation Dipstick Shows More Room to Run Higher [View article]
    Bad analogy. I agree. Sorry.
    Apr 6, 2010. 12:20 AM | 2 Likes Like |Link to Comment
COMMENTS STATS
29 Comments
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