Loading...
Symbols:
Get Seeking Alpha Free Stock Alerts by Email!
Get Free Stock Alerts by Email!
Transcripts
- Host Hotels & Resorts, Inc. F3Q08 (Quarter End 09/05/08) Earnings Call Transcript
- General Electric Company Q3 2008 Earnings Call Transcript
- DragonWave Inc. F2Q09 (Qtr End 08/31/08) Earnings Call Transcript
- Emmis Communications Corporation F2Q09 (Qtr End 08/31/08) Earnings Call Transcript
- Audiovox Corporation F2Q09 (Qtr End 08/31/08) Earnings Call Transcript
- Robbins & Myers, Inc. F4Q08 (Qtr End 08/31/08) Earnings Call Transcript
- Total System Services, Inc. Q3 2008 Earnings Call Transcript
- Tortoise Capital Resources F3Q08 (Qtr End 08/31/2008) Earnings Call Transcript
- Intraware, Inc. F2Q09 (Qtr End 08/31/08) Earnings Call Transcript
- LTX-Credence Corporation Business Update Call Transcript
-
Editor's Picks
-
Most Popular
- AMD Sheds Fabs to Keep Up with Intel
- Are Analysts Being Fooled By The Data?
- Auto Industry: Is Government's Loan Actually a Bailout, Payback, or Investment?
- Competitive Markets Don't Just Happen; It's Time to Regulate In the Public Interest
- The End of the BRIC Trade
- Best Market Reentry Time? When There's a Solution To Counter-Party Risk
- Full list of Editor's Picks »
- Cramer Should Be Suspended »
- The Bottom's Within Sight - Barron's »
- Back Room Deal? - Cramer's Mad Money (10/10/08) »
- Bargain Buys For Patient Investors - Barron's »
- Largest Bond ETF Now Trading At a Massive Discount »
- Is Gold A Sucker's Bet? »
- This Isn't a Bottom, It's a Disturbance in The Force »
- Where We Go from Here: Best and Worst Cases »
- The Devastating Week That Was »
- Jeremy Grantham: Stocks Still Aren't Cheap »
- Paulson in a State of Panic »
Trading Center
Hedge Fund Jobs
Job Seekers: Search jobs by category, get job alerts by email or live feed, apply online See full list of jobs »
Employers: See all recruitment options, get applications online or by email Post a job »
Michael B. Krause
60 Comments
Oppose the Treasury's Bailout Plan
I put together a letter you can send to your congressman based on this whole interest rate argument. Have a look. You can copy paste, put your name on it and hope the best happens, that being the Paulson does not get permission to buy foreign bank assets without any accountability or public discretion (yes, this is really in the proposal! I couldn't believe my eyes).
scriabinop23.blogspot....
Click there and copy paste my letter...
The Bull Market in Credit Default Swaps
The Paragraph That Changed the World: Will Treasuries Crash?
No mean to fearmonger - just evaluate reality.
ECB Move: An Opportunity To Trim International Exposure
The ECB is straying from its past alliance with the Fed, it appears. Whatever the reason, whether political or out of fiscal responsibility, it is straying. That has implications, however, since we are not isolated economies, and interdependence is a key trait defining our global trade experiment.
Trichet, ECB Missing the Point with Crude
Remember that speculative money is out of stocks and bonds, looking for a home. That $240B (or whatever the # is) is now pumping commodities.
Also considering the destruction of wealth and reigned in credit (slower velocity of money as well), I am not sure total money supply is so 'pumped' as of recent despite what shadowstats might suggest. Whatever has been sent to the system offsets the hundreds of billions of wealth that have already disappeared (or been transferred to 'subprime' assetholders).
I agree the EU should look out for itself, and it should not have to pay for US policy recklessness as well. But at the same time, my criticism focuses on two issues seperately: 1) rate policy may be ineffective versus actual coordinated world energy policy (and this should have been done a long time ago), 2) the EU is now not backing up the Fed, but they were months ago. The EU has not decoupled from the US economy, and erroneous moves have negative ramifications for them as well, despite the wave of anti-US dollar sentiment that is so popular now.
Sigma Post-Earnings Update: Staying Long, Though Concerns Remain
'Inventory was $34.5 million, an increase of $8.2 million over the previous quarter primarily due to the decrease in our shipment and the purchased VXP inventory... (Per the VXP inventory) We book it at its selling value and that was one of the adjustments that I explained to our gross margin. There’s about a $700k gross margin miss or unrealized amount associated the VXP sales during Q1. As we sell through the purchased inventory we’ll begin to get new inventory in that will actually have a gross margin and that will be another positive affect on our gross margin.'
It'd probably be fair to assume at least half of that inventory build was actually the booking of inventory at selling price on the VXP assets (18m purchased).
Still, 28m of inventories is a little over a buck a share to discount. I don't see your point. On the goodwill and intangible, again similar numbers. Thus the $14 strong buy target.
Peak Oil, Crude Price and Equity Correlation
Sigma "Massacre" - What To Do?
Commodities Prices: Speculation Exposed
What does that have to do with short term (next 10 years) oil price? Economies also cycle, viruses happen, famines, storms and wars destroy large swaths of populations every once in a while as well.
Such is the evolution of humanity.. Here's some interesting data on China birth rates. Even with one child policy, their birth rate is higher than that in the United States.
afe.easia.columbia.edu...
The Case for $1300/Oz Gold
As long as I've lived, Japan was (and still is) an export economy. The same applies to China with a much larger scale of magnitude. A strong currency will kill their GDP growth.
And then there are crude input costs. If China entirely removed the subsidies on crude (they force their refiners to run at a loss), margins on Chinese businesses would be at further pressure. The stronger currency would help offset this pressure, but at the same time would dramatically reduce demand for their goods from world consumers.
Commodities Prices: Speculation Exposed
Look at the percentage of income spent on food in India and China per capita. The real population driven energy demand drivers can not simply afford *unsubsidized* product in the long run with current CPI/consumption balances taken into consideration.
The whole Chinese and Indian labor/export model (which is the foundation of their rampant growth) does not work if the governments stop picking up the tab.
For examples, look at Indonesia. They just raised the price of gasoline (it is subsidized) to the equivalent of $2.45/gal. At a long run breakeven for refiners of $7-8 on the crack spreads (of $3.33 avg product price at $133 crude +$7 crack), that is still 27% below market clearing price.
And even with that, there are bloody riots.
The Urban consumer in China in 2006 has about $1469 of income annually. How much unsubsidized oil (at $3.33) can he afford with food already consuming probably in excess of 26% of his expenses (imagine these #s with the price increases in commodities/inflation) ?
The Chinese rural peasant (most of the population) has $448 of income. He spends 34% of his income on food in 06 (probably a lot more right now). How much $3.33/gallon product can he afford to be economically competitive in the rest of the world [only justified by his willingness to work for rock bottom labor rates]?
If you are the average Chinese or Indian, this is not the time to buy your first car. Any new buyer is on the margin, a very very slim margin.
www.ers.usda.gov/Data/...
You China+India demand pipe dreamers need to get over it. This is an Olympics diesel stockpiling blowoff top and will not be sustainable in the long run.
As long as Arab oil princes are running AC to 50 degrees F in their 5 million square foot palaces 365 days a year off oil fired power plants, they are quickly sowing the seeds of demand destruction and eventual replacement of energy sources (nuclear, wind, solar, etc).
Time To Abandon Stocks?
All of the evaluation of statistics and precedent will give you false justification for your investment behavior.
Simply put, if the managers of this country do a good job in the next 20 years, stocks will do great. If they goof it all up, you'll lose your money. Its that simple, and thats what you are betting on.
Commodities Prices: Speculation Exposed
Microsoft in Perfect Position to Undercut Previous Yahoo Offer
1) My calculations are based on the assumptions that search market share for MSN (and others: Yahoo, Google, etc) are fairly in line with their revenues. I am making (what some may consider disagreeable) a leap saying that search shares are consistent enough to get a handle on valuation. Is 100% of search worth $150B total? Maybe not search alone: but search, display and everything else that comes with it does come to that. MSN is worth more than search, but so are Yahoo and Google. So for blunt measurements (which are practical for such high multiple stocks), I think its appropriate.
Add up Google, MSN, and Yahoo market caps and you get somewhere close, plus or minus normal volatility (recall GOOG was worth 25% less just a few weeks ago because analysts incorrectly pinned Google's growth curve).
2. I meant revenue when referring to cash flow, not Cash flow on operations.
3. I agree it may not be foolish to merge, but at such a high multiple, all benefits from the merger would be likely forgone with such an overpriced initial transaction. High risk, minimal reward.
Lastly: $47B isn't a merger. Thats a money giveaway.
Microsoft in Perfect Position to Undercut Previous Yahoo Offer
I was a bit sloppy there - I made a causative assumption saying that since their real returns are much weaker (than even 6% earnings yield on such a high multiple that MSFT offered), that the likely result of such a collaboration would at best create normal (somewhere between the 58 multiple MSFT is offering and the best-case multiple of 6) returns for enormously high risk.