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Zachary Scheidt, CFA  

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  • Treasury's Pricing of TARP Warrants: No Way Out [View article]
    Your points on the potential for corruption (or just the perception of corruption) are valid, but the biggest issue appears to be this administration's aversion to free markets. A dutch auction of some sort where market participants as well as the individual banks participate in bidding for these warrants would not only bring the US taxpayers the greatest return for the risk taken over the last 6 months, but would also lead to better liquidity, confidence, and price discovery in the banking industry.

    Good catch - interesting article. Hopefully we can get some revision to this measure before its too late.

    Zach
    zachstocks.com
    Jun 29, 2009. 03:30 PM | 9 Likes Like |Link to Comment
  • Three Investment Trends That Benefit From Cap and Trade [View article]
    Ferdinand - I wish I believed that your scenario would play out. However, the escalation of commitment appears to be in place where the deeper you become committed to an issue, the more you have to justify your actions instead of taking an objective look at the long-term consequences. This is a feedback loop which gets stronger through time. So a change in policy is not likely until we have tried and failed and moved on.

    I like the comment about Applied Materials - possibly another opportunity although it is larger and more well followed than the companies I typically invest in.

    What other opportunities are in play with cap and trade?
    Zach
    zachstocks.com
    Jun 28, 2009. 01:48 PM | Likes Like |Link to Comment
  • Healthcare 'Discussion Draft' Raises Concerns over Quality of Care [View article]
    Yoyomama - I understand your plight more than you may realize. I've got a special needs daughter and when I recently changed health insurance due to striking out on my own professionally, her condition was not covered. In the spring she had another surgery which set us back 6 grand (as far as I can tell - not sure if all the bills are in yet).

    But I would MUCH prefer this scenario where the doctors are competent and her treatment is good - to a socialist society where surgery is second rate and paid for by the government. Again, I do think there should be a safety net to make sure people don't go without care. But a free market for the majority of patients would actually lead to lower costs.

    Insurance is a business. And it should remain a business. These companies should be able to run actuarial models and spread risk among the entire base of their clients. But we should expect these companies to make money in the long run - they are providing a valuable service. Competition between insurance companies should lead to better rates, so I believe we should foster better business conditions for the private market to measure risk and set pricing for such programs.

    Bottom line, I don't want the government taking over private business because long-term this is very dangerous for the industry.

    I guess we both have our opinions. And that's legitimate. Thanks for the comment and I wish you and your family the very best of health,

    Zach
    zachstocks.com
    Jun 23, 2009. 10:55 AM | Likes Like |Link to Comment
  • Healthcare 'Discussion Draft' Raises Concerns over Quality of Care [View article]
    haha - Thanks for the comment Rick99...

    I've never been one to craft my opinion on polls or what the majority *wants*... I think that universal healthcare sounds great which is why so many Americans are in favor of it. However, just because someone wants something doesn't mean it is a good thing. Politicians who are swayed day by day by popular opinion and refuse to look at the long-term consequences of their actions are dangerous regardless of whether their actions are popular or not.

    I think you're right though. We ALL need to get to work in order to pay for the program because it will come out of our pockets eventually. Nothing is ever free - not even free healthcare.

    Zach
    zachstocks.com
    Jun 23, 2009. 07:41 AM | Likes Like |Link to Comment
  • Potash: Fertilizer for the Economy's Green Shoots [View article]
    Commodity stocks have certainly been hit hard over the last few trading days as fears over a stall in the recovery trump inflation concerns. But to put everything in perspective, the stock is still 37% above its low for the year and simply pulling back to an important support/resistance level in the $85-90 area.

    The valuation is still very attractive, the long-term demand for potash is still sound (despite short-term production decisions). There are certainly others in this area which are attractive. I'm particularly fond of Intrepid Potash (IPI) as an alternative to POT.

    Thanks for the comments guys,
    Zach
    zachstocks.com
    Jun 23, 2009. 07:35 AM | Likes Like |Link to Comment
  • Brink's Home Security Spinoff: Too Far, Too Fast [View article]
    NSX - sounds like a deal to me. Let's use closing price 6/30/10 to keep it simple. But I'm wondering if you want to narrow the range a bit...

    I'm expecting that $14.75 would mark the floor - and obviously the stock could be above the floor on 6/30 but still have my thesis be correct. By the same token, the stock wouldn't need to go to $55 for you to be right. I think $40 would still prove your point.

    So how about this, a close below $20 (a 33% drop) is a victory for me, and a close above $40 (a 33% increase) is a victory for you. If you win, I'll give you a complementary year to the ZachStocks Growth Model (zachstocks.com/zachsto.../) and if I win you hook me up with a security system (base model) with monitoring... and NO, you don't get the access codes :-)

    Sound like a plan? I love a good natured competition.
    Thanks for a differing opinion with a little humor,
    Zach
    zachstocks.com
    Jun 11, 2009. 07:56 PM | Likes Like |Link to Comment
  • Expedia: An Opportunity in Travel [View article]
    At this point Expedia is appealing the ruling. I'm actually a bit surprised that the stock hasn't reacted more to this news.

    For whatever its worth, the ZachStocks Growth Model (zachstocks.com/zachsto.../) had a significant position in Expedia since January, but we have recently reduced the position to a small number of shares as the price now appears much more in line with the fundamental value.

    Thanks for the question - will be interesting to see how this one shakes out.

    Zach
    zachstocks.com
    Jun 11, 2009. 02:55 PM | Likes Like |Link to Comment
  • Brink's Home Security Spinoff: Too Far, Too Fast [View article]
    haha - NSX we definitely need to look into an inverse ETF. Or maybe I could just get you to take the other side of each of my trades... Not all of them work out, but we've had some pretty good success stories... Still, I appreciate your good natured ribbing -

    Anyway, I'm not doubting the stable nature of this business. Just the inflated stock price. It's abnormal for a steady (but not rapidly growing) firm to trade at such a premium. One of two things is likely to happen in the coming 6 to 12 monts:

    1) The company grows into this multiple by surprising ME and the consensus of analysts and growing earnings relatively quickly in 2010..... OR

    2) the stock drops to a point where it is more in line with the current earnings picture.

    But my bet is that in a few months we will not see such a high multiple on this stock. So which is it? higher earnings or a lower stock price? Only time will tell.

    Thanks for the comments,
    Zach
    zachstocks.com
    Jun 11, 2009. 02:46 PM | Likes Like |Link to Comment
  • Thursday Outlook: Commodities, Global Markets [View article]
    It definitely appears that hard and soft commodities could be a long-term play both as an inflation investment from the domestic (US) side as well as from an international policy (China looking for options other than the dollar) side.

    There are plenty of large and small cap opportunities to play this move as well as simply buying long-dated futures contracts. You could play this trend directionally (more aggressive) or use plenty of hedging techniques to at least bet on stability in these prices. I think as a worst case scenario we will have a stable floor for commodities over the next 18 months.

    Good recap - appreciate the insight and the charts,
    Zach
    zachstocks.com
    Jun 11, 2009. 07:59 AM | 1 Like Like |Link to Comment
  • Still Believe in the Downside [View article]
    Rises in bond yields and commodity prices also correspond with rises in unemployment and an increased savings rate. Since GDP is still geared toward consumer spending (68% at last count), that's bad news for an economic recovery.

    I share your concern over a potential decline in the market and while we may not see the fear levels of the mid 600's on the S&P - we should see investor confidence get hit. Consumer names may be the first to get hit as these names have rallied more sharply than peers and an emotional retail investor is more likely to liquidate these names.

    Good article - enjoyed the insight - hang in there with your short picks,

    Zach
    zachstocks.com
    Jun 10, 2009. 09:03 AM | 5 Likes Like |Link to Comment
  • Renesola Breaks Out as Entire Solar Sector Shows Life [View article]
    Thanks guys for the comments... I do think several of the names in this group will continue to trade higher.

    Stone Fox - I used 13 as an arbitrary number to show that it doesn't take much in the way of multiple expansion to make a difference in the stock price. While we may not see 30 or 40 again, a 20 multiple for this growth company could certainly happen.

    So far it looks like investors want to keep accumulating.

    Good luck all with your positions,
    Zach
    zachstocks.com
    Jun 8, 2009. 07:46 PM | Likes Like |Link to Comment
  • Silver Flirts with $16 Mark: Where Will It Trade from Here? [View article]
    Hey guys - thanks for all the comments - sorry I haven't responded as I've been on the road a bit...

    You guys are right - $1,000 per ounce is pretty ridiculous. The chances of that number getting hit aren't very good unless the dollar were to completely collapse.

    However, the price of silver in the next year could certainly be sharply higher - and triple digits wouldn't be too hard to defend. I do think the possibility of China stepping in as a major player is worth thinking about although they would likely do it quietly at first, wishing to build a position before running prices higher.

    The think I like best about Silver is that the price can rise regardless of economic direction because of its precious metal and industrial metal features.

    Appreciate the lively discussion!
    Zach
    zachstocks.com
    Jun 8, 2009. 07:36 PM | Likes Like |Link to Comment
  • SolarWinds Raises $104 Million, Trades Higher After IPO [View article]
    long/short - Yes you definitely have a point there. This is certainly a different world than we operated in 12 to 18 months ago. However, I don't think JPM, GS and MS would accept a crap company today simply because they could not get the deal done. It will be interesting to see if these three will retain their "ivy league" status or if they will accept mediocracy in order to chase a few million here and there.

    Thanks for the comment,
    Zach
    zachstocks.com
    Jun 2, 2009. 07:13 AM | Likes Like |Link to Comment
  • Rising Silver: Four Ways to Play [View article]
    At this point it looks worthwhile to look at some long-term silver calls. (I suggest calls on SLV). The January out of the money calls have relatively small amounts of premium and if this move in silver truly does turn out to be a monumental move (which I believe it will be) the calls will quickly be in the money and accurately track gains in the price of silver. If, however the price of silver does NOT trade higher, you are only out the premium you paid for the calls.

    zachstocks.com
    May 27, 2009. 09:32 PM | Likes Like |Link to Comment
  • VMware's Cloud Computing Casts a Shadow on Growth Prospects [View article]
    412951 - I agree that flat earnings is not bad for this economy. The problem is that investors have been expecting much more which is why the stock has been trading at such a high multiple. The danger is not that VMW's business will decline, but that the stock will return to a normal multiple where current shareholders see their stock decline by 20, 30 or even 40%.

    VMW certainly is a market leader. I just wonder about the volatility and premium price for the stock.

    Thanks for the comment,
    Zach
    zachstocks.com
    May 27, 2009. 08:47 AM | Likes Like |Link to Comment
COMMENTS STATS
232 Comments
186 Likes