Seeking Alpha

King Rat

King Rat
Send Message
View as an RSS Feed
View King Rat's Comments BY TICKER:
Latest  |  Highest rated
  • IBM -4.1% AH; buybacks boost EPS, but hardware sales remain weak [View news story]
    I meant a boom for IBM, not a booming economy overall.
    Apr 16 06:33 PM | Likes Like |Link to Comment
  • IBM -4.1% AH; buybacks boost EPS, but hardware sales remain weak [View news story]
    I rarely suggest buying the dip, but as long as you're not overloaded in IBM (>20% of a portfolio in any stock), you will probably outperform the market over the next year.


    Quarterly EPS down 10% but annual estimates for the year up 20%.
    Management is telegraphing that the downturn is ending and a new boom cycle is about to begin.
    Apr 16 06:29 PM | 1 Like Like |Link to Comment
  • SanDisk +6.8% AH on margin guidance hike; Micron +1% [View news story]
    MU is up, what, 300% over the past 15 months and you are complaining about management?

    For what it's worth, raiding staff may be common in some circles, but I would hardly call that professional.
    Acting unprofessionally in order to get a more "professional" C-level officer is a catch-22, is it not? Besides, with so much similar intellectual property between the two, such action would needlessly lead to mutually destructive lawsuits.
    I hold neither stock, but if I had to choose which management is more professional from recent stock performance alone, I would have to say MU is already more professional. Not that 80% stock growth yoy is anything to sneeze at. Congrats to both SNDK and MU for a job well-done.
    Apr 16 06:10 PM | 4 Likes Like |Link to Comment
  • El-Erian: Different styles stopped working well at Pimco [View news story]
    Gross is from Ohio. El-Erian is from New York. No wonder they are not fit for
    PACIFIC Investment Management Company. Aren't there enough firms from back east to hire them?

    New Yorkers are nice people but way too intense for California.
    Likewise Ohio is great, but in Ohio, chill is a weather condition.

    PIMCO needs a go-with-the-flow, home-grown Californian to take the helm.
    Apr 14 02:36 AM | Likes Like |Link to Comment
  • Recalls at GM shouldn't affect ratings says Fitch [View news story]
    As cynical as that sounds, you may be right. Most people are too numb to care that the same person trying sell them a new car promised that the old car was safe. Of course if it were you I guess you'd trade up for a motorcycle.
    Apr 11 05:14 PM | Likes Like |Link to Comment
  • Vornado spinning off shopping centers, hires Equity One CEO to run them [View news story]
    Spinning off assets paid for with commercial loans with interest rates that will reset in 3 years' time, after interest rates start to rise.

    In other words, VNO is cashing out at the top of the retail bull market. Good luck to future long term EQY shareholders.
    Apr 11 05:09 PM | Likes Like |Link to Comment
  • Titan Machinery Is A Perfect Short [View article]
    Yes, Skaterdude, good points there. I agree with you that inventory buildup will dampen cash flow. Thus I suspsect TITN is undervalued in that regard.

    However I have not been long TITN since perhaps you started going long. I see they are expanding too fast, buying where they don't build, but the returns on new stores keeps slipping. Overall they increase profit potential, but at the expense of leverage. I prefer to sleep easy at night. I would rather buy back in to TITN upon seeing signs of reduced leverage even if the stock doubles, than buy back in to TITN with the situation unchanged, even if the stock drops by half.

    If the expansion has been paying off, we should see sales acceleration (higher revenue) from stores purchased 12-24 months ago. Over the past few years, however, new stores seemed to add LESS revenue.
    Apr 7 01:25 PM | Likes Like |Link to Comment
  • Trading system in "Flash Boys" mulls faster exchange application [View news story]
    "trading" may be rigged for HFT, but investing is more or less fair.

    for anybody who got in on AAPL in 2003 and sold in 2012, would the buy price (pre-split) of 18.77 be much worse than 18.770001?
    Would the sell price (post-split) of 654.15 been much worse than 654.149999?

    Invest (not trade) in the right stock at the right time and you will not even notice.

    Anyway, the margins are so minute for HFTs that just subjecting them to the same margin, fee, and tax requirements as everybody else would put them out of business. For example, I seem to lose a penny or whatever in government fees alone on each transaction, so if some HFT greases 1/1000th of a penny from my trade, how can they possibly profit unless they don't pay that same government fee that I have to pay?
    Apr 7 01:27 AM | 1 Like Like |Link to Comment
  • Gazprom stops courting U.S. investors after Crimea crisis [View news story]
    Gazprom is not listed on international exchanges. You have to buy it "OTC".
    To: TheJollyGreenMan
    See if your ISA account allows you to buy OTC shares on the exchange you are allowed to invest on.

    To cabesa: as Gazprom trades OTC in the US, it is already "unlisted" so cannot be "delisted". Even if the stock was for some reason forbidden to trade in the US, the price in Europe may fall temporarily, but the bank underwriting the ADR in the US would probably be forced to pay US investors for their shares.

    Russia has a history of jailing CEOs who do not fall in line with the single party system. If the Russian government makes CEOs of native corporations fear for their safety, please do not think the same government would blink or think twice about liquidating some foreigner's shares either. Russian government so far in the 21st century has been one of very few democratic nations more corrupt than Argentina.
    Apr 7 12:56 AM | Likes Like |Link to Comment
  • Thee Sunday reads [View news story]
    bbro, you are missing a big one here: It is tied to an extremely nebulous "deflator".

    Also, it adds in assumed trade happens via bartering or non-dollar exchanges when certain numbers are inconsistent between quarters. For example, if pool cleaners and mechanics both have a sudden downturn, out of historical seasonality, the GDP will assume pool cleaners cleaned the mechanics' pools in return for mechanics changing the oil of pool cleaners' trucks for free.

    Also the GDP counts inventory growth as GDP-positive when growth often means slowdowns in consumer purchases while inventory drops can mean boosts in activity.

    Lastly, there are times when mal-investment requires unwinding (de-leveraging) in order to allow for new investment. That unwinding may hurt the GDP number even when it is positive for future investment.
    Apr 6 06:34 PM | Likes Like |Link to Comment
  • Finland's PM resigns [View news story]
    So in Finland it's the centre-right politician who leaves after 3 years for something more prestigious. In the US it's the center-left politician who leaves after 4 years for something more prestigious.

    Around the world politicians use voters as spring boards to luxury and riches. It doesn't matter what message they use to pander to voters, the voters buy it up every single time. The days of monarchy are downright nostalgic.
    Apr 6 05:52 PM | 2 Likes Like |Link to Comment
  • U.S. trade rep to try to break trade stalemate with Japan [View news story]
    The TPP would have passed a year ago if the US, Japan, and South Korea did not keep interfering with it. Those three countries may see themselves as important but they are destroying the spirit of the TPP as condition of their membership.

    A 9-nation trade pact that honors all 9 members is better than a 12-nation trade pact that favors the biggest 3.
    Apr 6 05:43 PM | Likes Like |Link to Comment
  • The world needs to get ready for the next nuclear plant accident [View news story]
    The US actually HAD functioning, net positive thorium reactors some 40 years ago.

    The technology is not experimental and when you consider red tape for uranium-based reactors, thorium would probably be the cheaper design in today's world.
    Apr 5 06:29 PM | 2 Likes Like |Link to Comment
  • Report: Bakken oil output to soar as spending hits $15B [View news story]
    I used to be long CLR a while back but haven't touched any Bakken-related stock in a while. I have to wonder about the region's aggregate IRR going forward.
    $118B of revenue left over 20-25 years but $15B being spent this year alone.

    Seems to me that there will have to be losers in the region for anybody to win, because there is not enough net value. Those are not odds that favor the individual investor or even most funds. This is a sector for hedge funds not ashamed to lose other people's money.
    Apr 5 05:33 PM | Likes Like |Link to Comment
  • Fixed-income CEFs still on sale [View news story]
    Good question. Duration (to maturity) is also important.

    1) How leveraged are they?
    2) What is the average duration of borrowing?
    3) What is the average duration of buying?

    If they are leveraged 4-3 but are borrowing at 2% for 11 years out but collecting 5% for 12 years out, I would not be so worried as leveraged 4-1, borrowing 1% for 1 year out and collecting 6% for 22 years out.

    In the latter you risk leverage, rising borrowing costs, and falling market value of existing holdings. Longer duration bonds have generally higher yields, but also higher risk associated with varying yields of new, similarly rated bonds. That risk magnifies the risk associated with leverage.

    Discount to NAV can be a trap indeed, though I would be curious to know more in this case.
    Apr 5 02:52 PM | 2 Likes Like |Link to Comment