Zachary Scheidt
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232 Comments
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Blacklist Grows for Troubled Banks [View article]
Ray - I agree with you mostly. The issue is not necessarily that we need MORE regulation as much as we need to require adequate disclosure. If banks were required to show just how ugly their balance sheets were (bring all those skeletons out of the closet and open your book to the public), there would no longer be an incentive to act irresponsibly. Consumers could easily see who were the stalwart banks and the market share would increase. Being responsible at this point would be akin to being profitable. Instead of heavy handed regulation, we need to properly align the incentives so that responsible business practices are rewarded, not discouraged.
Thanks for the comments guys,
zachstocks.com
Chart Industries Rides the Natural Gas Trend [View article]
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Oil Inventory Report Fuels a Market Rally [View article]
Mmarrkk: I'll go back and look harder. But sometimes discipline means taking advantage of opportunities even when competitors are pulling in the horns. Discipline works both ways - discipline to produce within your means, but also discipline to continue producing when opportunity is there, but fear of risk is shutting down peers.
long_on_oil - I think the cuts in production were a result of FALLING prices as many projects made no economic sense at low NG prices. As we see these prices rise, production will increase. This is how the equilibrium of supply and demand work.
Toobad41- agree that Congress cannot set prices. Unfortunately they can influence them however, and can shoot us in the foot by placing trading restrictions. Do keep in mind that if 75% of oil is imported, the importers have a vested interest in keeping the prices high. So to offset that it would be wise for us to open up reserves we have set as "off limits" and also develop a more robust alternative energy platform.
Thanks for the comments guys! Come visit zachstocks.com when you can for more updates and energy insights.
Increased Deficit Spending: We Can't Afford It [View article]
Jamesa - I don't think the consumer is anywhere close to having paid down enough debt to "not need bank financing." They may not GET bank financing but in order to spend, consumers either need to take much more time to pay down debt, or they will need to fund it with MORE debt.
The Geoffster - I'm not sure I get "trillion" and I'm a numbers guy! Do you think our elected leaders can get THEIR heads around "trillion"?
tunaman4u2 - see note to AM chap - owning hard assets appears the safest play to me
WheelsComin... - don't forget... WE are the traders too. We have to make money during this environment which sometimes means stepping back and waiting for the herd to exhaust itself and then picking up the spoils later.
inthemoney: - good point, well spoken
JJJ: - I'm not quite sure, but that's definitely worth looking at deeper. Your point however, is a good rebuttal to WAKEUP's two posts :-) Even though everything is bigger (an ode to inflation), it's bigger to a greater magnitude and alarming when considered as a percentage of GDP
TeresaE - You're right. It seems this administration has a grudge against anyone turning a profit. But in punishing those evil capitalists, we don't realize that we are punishing the entire country. Because it is successful business who actually create jobs. What will happen when we put all the strong companies out of business and rely on the government to supply jobs and stimulus? I sure don't want to rely on their programs to feed my family.
RatWatcher - Thanks for the link...
All - thanks for the great comments! Come visit zachstocks.com when you can. Lets keep the dialog going!
How to Invest in Private Equity Through Public Markets [View article]
For instance, Blackstone (zachstocks.com/2009/08.../) has several new funds including a Yuan denominated fund and manages billions in AUM and collects management fees on these funds. The management fees are nice, but the real money is made through incentive allocations. These companies usually get to keep 20% of the profits of their investors. The stocks have been hit hard over the last 2 years as incentive allocations have been low but the environment is changing.
At this point, Blackstone has plenty of dry powder (and has had the cash for the last 9 months) to put to work at depressed prices. As some markets recover, the company is able to build those incentive fees and investors should see the stock rise quickly. A healthy dividend yield pays you to wait at the same time. So while investing in the individual funds or BDOs could be worthwhile, I think owning the company that manages those funds makes even more sense.
zachstocks.com
SuperNanke to the Rescue! [View article]
The market will follow fundamental information over the long run, but today's prices appear to be largely a function of investor confidence which is being juiced by positive statements out of the various governing bodies of our economic process. It is very difficult to know WHEN the market will swing back to a fundamental pricing measure (and likely take investor confidence along with it), but I think it's very clear that the risk is high in this environment. So as investors we've got to be careful not to drink the kool aid but also not get too committed to the short side until the confidence has run its course.
Keep the investment powder dry and the eyes wide open. We should see some much more attractive buying opportunities in the next several months. For today, buying on the hype could be disastrous.
zachstocks.com
Whole Foods: Stock Is as Pricey as Company's Wares [View article]
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Rosetta Stone Is Under Pressure [View article]
I've never actually used their products before but your insight might explain why they are finding it necessary to spend more on advertising in order to maintain sales growth. The trend is alarming and should cause investors to think twice before jumping in even at these lower prices.
zachstocks.com
Buffett's Latest NYT Op-Ed: The Greenback Effect [View article]
At that point, the Fed will have the dubious choice of either raising rates to fend off inflation (which would kill the expansion) or keeping rates low to continue to encourage the recovery (which leaves us with inflation). I'm pretty sure I know which direction will be chosen.
zachstocks.com
Three Ways to Profit from the Drop in Consumer Spending [View article]
The problem is that the trend of saving through cutting costs cannot continue indefinitely. There is a finite amount of cost that can be cut before damaging a business. Conversely, if revenue were to experience an upward trend, the business would become even more healthy and productive - and likely leverage against fixed costs.
I'm all for saving and expect businesses to maintain a lean cost structure. But I won't pay a growth stock multiple for retailers who are not actually growing, but instead cutting back on expenses so it LOOKS like they are growing.
Thanks for the comment,
zachstocks.com
Three Ways to Profit from the Drop in Consumer Spending [View article]
There are certain areas within retail that could actually hold up well. We had an article on Carters (which makes baby clothes) - zachstocks.com/2009/05.../ - and I think there is potential for a few specialty stores like this to hold up well. But as a general rule, there are many retail chains which will likely have a very hard time this holiday season.
Thanks for the comment!
zachstocks.com
Neutral Tandem Offers an Attractive Entry [View article]
TNDM is a strong leader in its category and I expect this to be a great buying opportunity if you are willing to hold on for some time. If the fundamentals change then my opinion needs to be revised. But if the price changes it may be that the opportunity just became more attractive.
zachstocks.com
Why I'm Adding More Blackstone Group [View article]
So when Blackstone takes their investor's dollars (not BX shareholders, these are investors in Blackstone funds), borrows additional capital (The fund borrowing - usually not a liability for BX shareholders), buys out a company at $500 million, and then sells it for $2 billion a year later, shareholders actually receive somewhere in the neighborhood of $300 million in incentive fees.
This is what will likely drive the stock higher in the next few quarters. There are plenty of opportunities to buy distressed assets and Blackstone has the capital to put to work.
Now not every deal will have this kind of return, but again, the majority of the risk is borne by the investors in the Blackstone FUNDS - not by shareholders of BX
zachstocks.com
Congressional Healthcare Games [View article]
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Retail Data Fails to Inspire [View article]
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