Seeking Alpha

Davidoff

Davidoff
Send Message
View as an RSS Feed
View Davidoff's Comments BY TICKER:
Latest  |  Highest rated
  • U.S. oil inventory highest in 80 years; crude drops below $47 [View news story]
    Alex,

    If your input price decreases, it means that your margin increases on the output. If oil price goes down, ceteris paribus, your refining margin increases, so I don't really follow your logic. Oil price decreased by roughly 60%, while the price at the gas stations decreased by roughly 25-30%. Refiners and governments (tax revenue) make even more money today, since much more people can afford a cheaper gas, while their main input costs them 60% less than only 5 months ago.
    Jan 22, 2015. 01:38 PM | 1 Like Like |Link to Comment
  • U.S. oil inventory highest in 80 years; crude drops below $47 [View news story]
    Markets perceive it as on oversupply and demand insufficiency. Another financial dogmatism, but honesty, I don't know who is being wright right now. Fracking system actually did increase the production and the efficiency. Market was supposed to equilibrate itself, since that methodology isn't profitable at such low price levels, but it should take at least 6 months.
    On the other hand you've got regions such as Libya and Iraq that have been taken over by Islamist regimes. They sell oil at extremely low prices to finance their regimes and their warfare. I suppose that they flooded the black market and that's why a lot of shady companies and even countries became much more reluctant to buy at the legal market at higher prices. Thus, the demand became actually much lower than it used to be. I think that today's situation reflects the oversupply of illegal commodities, that take away the demand on the legitimate markets. I doubt that a higher productivity played a significant role in that downtrend. Oil prices began to decrease precisely when journalists started to write about how ISIS finances its activities, through the sale of Iraqi oil reserves. I doubt that it is a simple coincidence.
    Jan 22, 2015. 01:20 PM | 2 Likes Like |Link to Comment
  • Gold rallies as Swiss abandon euro floor [View news story]
    The Swiss legal system works through referendums. It means that if the Swiss government would decide to join EU they will have to submit that proposal to the popular vote. If you analyse the most recent referendum results that have a direct link to Swiss integration to EU, such as immigration laws, you clearly see that at least 50% of people wish to keep their sovereignty.
    Today, through the bilateral agreements with EU, Switzerland is de-facto a EU member State, without any representation of Switzerland in the European Commission or Parliament. However, in the most recent years, people showed that they would like to see Switzerland becoming much more independent of EU by cutting most of the ties with EU.
    As I see it, Switzerland will never fit into EU. On one hand they have an extremely strong national ideology and political neutrality towards international relationships. On the other hand there are way too many cultural differences that would never allow Switzerland to fit well into the European politics. For example, weak federal government >< strong cantonal governments, the only Western European State with compulsory military service, legal fire weapons circulation, obscure financial system (even without banking secret through secret hedge funds), free cash circulation (the only country in Europe where there are no cash purchase limits >< limited to 3.000€ in EU), highest wages and the lowest university degrees rate in Europe. I can go on and on. People don't feel European, they feel Swiss and there is absolutely no chance that any referendum proposal would pass.
    If Switzerland becomes a EU member, it will be comparable to the UK and it would complicate the EU decision making system even farther. I don't see that happening any time soon. Besides the economical point of view, it wouldn't be advantageous neither for EU, nor for Switzerland. I must say that I doubt that it would even be advantageous for Swiss economy on the long term either.
    Jan 15, 2015. 09:11 AM | 6 Likes Like |Link to Comment
  • BlackBerry beats by $0.06, misses on revenue [View news story]
    Neither! In both cases the company is in a terrible shape and needs tremendous improvements. Chen has probably done only 30% of his job at the moment. The remaining 70% are revenue, sales and image improvements and it's definitely the hardest part.

    But it's ok, keep looking at the half full glass! It's the least you could do considering the pre-market.
    Dec 19, 2014. 07:48 AM | 5 Likes Like |Link to Comment
  • BlackBerry beats by $0.06, misses on revenue [View news story]
    $793M in revenue? I think that they have just beat their own personal record! Even though the company got much more cost efficient, people are obviously not buying their products. The company KEEPS shrinking. If you consider the fact that they laid off a huge part of their workforce and sold all the assets that they could, unless the company shows some revenue improvements, it will become an extremely tiny corporation very soon. It's good to make some profits, but the present valuation is simply not justified with such a low revenue and sales. If you take off the tax credits, all the subsidies and especially NON-GAAP, well, you don't have much left. BBRY is kept artificially alive by its accountant engineering, nothing more. Unless we see $1B in revenue next quarter, it's pointless to expect any upside. Once Chen's (TH 2.0) magic will vanish and we are extremely close to it, BBRY will vanish as well.
    Dec 19, 2014. 07:28 AM | 9 Likes Like |Link to Comment
  • Cigars part of U.S./Cuba deal [View news story]
    Castro dynasty is close to their end and they perfectly realize that. Cuban people are genuinely unsatisfied by their life conditions while they perfectly realize that Castro family sit on billions. In what other country of the world doctors dream to become taxi drivers? Cuba and that absurd regime live upside-down and it is about to end pretty soon. Market will become more liberal, people will buy computers and will discover Twitter, Facebook, alternative media channels and soon Cuba will become the next Tunisia or Egypt.

    Castro are businessmen before anything else and they need to stop that embargo because there is absolutely no money left in Cuba to steal. They already put their greedy hands on everything they could, while their family grows bigger and bigger.

    Now United States are going to have another "partner" parasite to feed with their tax revenue. Put another country on the long list of America's needy friends who are going to get billions each year while spitting on the American flag, without any economical or political spillovers for the US.

    I suppose that it's the perfect timing for Cuba. Obama desperately craves to be considered as the new Kennedy by historians and journalists and he makes any absurd move he can in that way. On the other hand Russia announced that it wanted to reopen its Cuban military base a couple of days ago. Well, turns out Cuba is already sold to the US.
    Dec 17, 2014. 04:06 PM | 1 Like Like |Link to Comment
  • Oil plumbs new lows as inventories unexpectedly rise [View news story]
    To be honest I'm not an oil industry expert. However, I read a lot of studies explaining that since most of the US oil results of the infamous fracking technic, producing oil at less than $70 is simply unsustainable. Even though, as it is being mostly admitted, fracking technics got much more cost efficient during the last 5 years, it is still a much more expensive production method than the regular drilling.

    So the recent slump has 2 most obvious consequences :
    1. US won't become the world's first oil producer unless oil gets back to its initial price range.
    2. Without the massive US production, oil supply will go much lower and thus prices will go up again.

    Correct me if I'm wrong, but I don't see oil staying at $60 for much longer. It will take maybe an extra month for the Wall Street experts to realize that, but I think that there is a lot of money at stake for those who will go long at these prices.
    Dec 10, 2014. 02:02 PM | 3 Likes Like |Link to Comment
  • EU lawmakers vote for Google breakup [View news story]
    hk,

    Saying that there won't be any European wars in the future just because there is a Union, is completely absurd. Ukraine might be the prefect example of that precarious heaven. Moreover, the most hazardous element of that tricky European equation might actually be its own citizens. We might face a civil or even a secession war in a very near future. EU opened the gates to all the polarizing elements of the society, such as Islamists, Communists, extreme left Socialists, Anarchists, Neo-Nazis and Ecologist Hippies. Somehow instead of bringing peace and security, EU created even more instability. In my lifetime I've never seen so many separatists taking such dire actions simultaneously. As an example you could take Corsica, Catalonia, Scotland, Flandres, Venice and many other tiny European regions fighting for their independence. Moreover, there are dozens of newly founded political parties that have their whole political program built on the retreat of the EU and in most European countries they take a huge share of votes. Marine Le Pen's "Front National" got the most votes in France at the European elections, UK's Ukip got second (Nigel Farage), Nederland's PVV (Geert Wilders) got fourth and so on and on. The Eurosceptic parties already represent 25-30% of the European Parliament. As I see it, the future of the European citizens became much more uncertain since the EU. Instability creates fears and it's bad for the economy and for the society's wellbeing.
    Nov 27, 2014. 05:34 PM | 3 Likes Like |Link to Comment
  • European Commission to accuse Apple over illegal Irish tax deals [View news story]
    "The OECD rules only came into force in 2010, and have yet to be adopted by Ireland."

    It remains extremely shady for "outsiders" to understand how the EU actually functions. Obviously, there is no common fiscal legislative background between countries, so it is completely impossible to define where is the limit between fiscal competition between member States, which is a grey zone and the governmental help to some national corporations, which is completely illegal in the European law. So even though Apple quit Ireland in 2007, it remains unclear which law EU is going to use to make Apple pay and sacrifice it as a public example. I wonder if Apple Europe subsidiary, formerly based in Ireland, could be presented as an Irish national corporation benefiting of illegal Irish State's aid, providing it with an unfair and uncompetitive advantage. As I see it, that's what EU officials are trying to lobby.
    Anyhow, I'm pretty sure that even though it's a political satire, Apple will still have to put its hands in the pockets and pay big time. In the best case it's going to be a huge settlement and in the worst case Apple will have to give back 100% of the tax benefits that it got from Ireland, which could potentially represent dozens of billions of dollars. That's usually what happens when you put your money offshore to "spare" a couple of bucks, governements always catch you up, take everything you owe them and even more. It's very unfortunate that Apple didn't see it coming 2-3 years ago.
    Sep 29, 2014. 09:49 AM | 1 Like Like |Link to Comment
  • Apple -2.8% as Bendgate, iOS 8.01 get more publicity [View news story]
    WisPoker,

    Sorry, but when you pay $1000 for a phone, quality and warranty service are the requested minimum. I'm sure that if you weren't owning shares, but instead bought an iPhone 6+ you wouldn't be whining like that and talking about intelligence. Compassion concerns me quiet more than intelligence and the thing is that Apple's first reflex was to bully their clients and to make them pay $300 extra to fix their phones. There are thousands of cases around the world and not only it gives a lot of unnecessary bad publicity for Apple, but it is also going to cost Apple a lot to replace these phones and to convince consumers that they are still decent enough to be purchased. Moreover, it shows that things aren't as under control as they used to be 5-10 years ago.
    Sep 25, 2014. 01:56 PM | 14 Likes Like |Link to Comment
  • Apple Short Interest Jumps 44% [View article]
    I'm not sure that AAPL really delivered what investors expected. Consumer are still here, but concerns remain and they might even have become even more exacerbated since this month.
    AAPL released new potential sources of revenue such as Apple Pay, Apple Watch and iHealth. The issue is that these new sources of revenue depend entirely on iPhone sales. There is absolutely no alternative or safety nets for the AAPL's future (besides its cash) in case if iPhones would suddenly go out of the trend. There is an absolutely irrational and exuberant hype surrounding iPhones, but the issue is that these types of trends vanish as suddenly and unexpectedly as they appear. What if iPhone 6 would make a flop on the long run? After all, iPhone 6 is a breakthrough compared to 5s, but they only sold 1m more 6's than 5s's so far. What if iPhone 6s/7 won't have the same success? What if iPhone would become the next Nokia or Blackberry? It would be completely irresponsible to swipe these concerns, since they are completely justified.
    Today iPhone counts for 58% of AAPL's revenue. iPad sales have already been decreasing for over a year now. So what's next? iWatch is entirely dependent on iPhone, no other brand's user would consider buying it. Apple Pay and iHealth depend on iPhones as well. So basically, once again there is no "big" releases or new product segments. Cash is obviously important, but when a company lacks of vision and uses its old cows, money won't safe it on the long run.
    A lot of Apple aficionados feel disappointed by the new iPhones. There are no Liquid Metal technology, no Sapphire screens and obviously huge lacks of basic durability engineering studies. iOS8 offered a new round of glitches and battery drains, without any true innovation to counterbalance these inconveniences. If the quality of AAPL products goes down, design alone won't satisfy consumers anymore.
    If as expected, the coming Keynotes would only deliver some minimalistic refreshments and no new products, I think that AAPL will face a slow downtrend such as the one we saw after the iPhone 5 release. A business that doesn't go forward, always goes backwards.
    Sep 25, 2014. 07:22 AM | 3 Likes Like |Link to Comment
  • Long lines seen worldwide for iPhone 6 release [View news story]
    It is cheap, but the question is, will AAPL shares raise in price and reach the market's average PE, or will other companies face a severe correction in the coming months. I think that a huge correction is coming. In my opinion, it's not AAPL that is being cheap, but rather other companies that became way too expensive especially considering the incredibly disappointing results. Time will tell. This year reminds me of 2007-2008. More and more self standing economists and financial analysts claim that we are heading straight into a new crisis and when you see the valuations of companies such as BABA, FB, TSLA, NFLX, TWTR, I tend to agree that we are in the middle of a huge bubble and a lot of investors might lose a lot of feathers.
    From a strict economic point of view, nothing has fundamentally improved and there is absolutely nothing that could justify the present market's valuations.
    Sep 19, 2014. 07:09 AM | 2 Likes Like |Link to Comment
  • Long lines seen worldwide for iPhone 6 release [View news story]
    My friends went to France and Germany today to buy new iPhones. Queues were amazing, over 100 people per store. The issue is that only about 1/3 of these people could actually purchase an iPhone and most of them simply came to take their preordered devices. The demand is obviously tremendous, but apparently there are huge supply issues in Europe according to the store managers. Hopefully it's only temporary. In any case, if AAPL won't be able to supply people with iPhones now, they will most certainly wait a couple of months. It's not an issue for Apple addicts, it gives an even more exclusive ora brings even more enthusiasts.
    Sep 19, 2014. 07:01 AM | 2 Likes Like |Link to Comment
  • iPhone 6 first weekend sales could disappoint, Bernstein analyst says [View news story]
    There are a little bit more than 250m of sold iPhones (all models) on the world market so far. Do you actually believe that AAPL would be able to sell 91m additional expensive high end phones in just one single quarter? That kind of irrational expectations, even from long investors makes me consider this stock as a potential short candidate in the very near future. AAPL will obviously present tremendous sales, probably in the range of 39-41m, but somehow people tend to expect miracles from AAPL, like if instead of selling $1,000 phones, it was selling bottles of Coke.
    Sep 17, 2014. 07:18 PM | Likes Like |Link to Comment
  • BlackBerry buys virtual ID solution provider Movirtu [View news story]
    No way... Gee, thanks for breaking it up for me! See, the issue is that a company in BBRY's situation must be as transparent as possible. With revenue down 65% Y/Y, devices revenue down 82% Y/Y, services revenue down 29% Y/Y and $1b in convertible bonds, BBRY must show investors that it counts every penny. When a company doesn't earn any money, cash is the only guarantee for investors. Buying unknown companies, with unknown revenue for an unknown price might only send a positive signal to biased longs who wish to see only the bright side, but it's considered as suspicious to shorts and people who might consider investing in BBRY. By doing so, Chen is going to create even more uncertainty for the next results and it might introduce a brand new round of downward spiral.
    Sep 11, 2014. 09:45 AM | 1 Like Like |Link to Comment
COMMENTS STATS
314 Comments
790 Likes