Michael B. Krause

http://scriabinop23.blogspot.com
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    • Mon Mar 24th 02:36 AM | Rating: 0 0
      Commented on:
      How Bad Is the Dollar's Fall?
      Take a look here.. This is coming to seekingalpha - a pro-USD argument.

      scriabinop23.blogspot....
      View article »
    • Sun Mar 23rd 12:00 PM | Rating: 0 0
      Commented on:
      Alan Greenspan Loses His Mind
      Everyone likes a good scapegoat.

      The reality is that while fed rates too low for about 1.5 years, they did NOT create this credit bubble.

      It was the 'flawed model' that created the credit bubble. Everyone went quant, followed models based on a low volatility standard deviation, and they worked long enough to make them 'right' in everyone's eyes.

      This was a function of not just money supply and poorly thought out consumption based fiscal policy (blame Mr. Bush for that), but the result of technology and math making their way into the markets as a justifying force as what is right.

      Guys: If subprime CDO tranches were more properly rated in the first place, subprime would have never happened. Subprime loans would have cost 9%-12% to the end buyer, not half of that.

      From there, its a cascading waterfall.

      And like the perennial bears say: Even low rates won't fix an overlevered consumer. So why did low rates allow the consumer to be overlevered before? They didn't because they were low rates; they did because someone (ratings agency in possible collusion with Wall street banks?) was modelling unrealistic loss levels on everything from junk debt to subprime.

      Simply put, increased money supply didn't help, but it was not the primary cause of our maladies. The primary cause was risk free euphoria associated with anything to be bought - houses, commodities, junk bonds ... (with the most ironic exception: stocks, we have a financial memory from 2000 what that leads us to).

      At least healthy risk models are coming back to the markets. We'll have an era of real returns coming up for investors worth the risk taking.
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    • Sun Mar 23rd 11:17 AM | Rating: 0 0
      Commented on:
      Market Sentiment: Eye-Poppingly Bearish
      Interesting about sentiment. I went to the UTC (near UCSD) mall here in San Diego yesterday. Mall full. Apple shop packed. I didn't expect it. Maybe a holiday weekend anomaly.

      But I tell you this: In a real depression/recession, the malls are empty on the weekends. This is not nasty yet. So who knows ...
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    • Thu Mar 20th 23:02 PM | Rating: 0 0
      Commented on:
      What's With This Volatility?
      Here. Here's the exact same data on S&P since 1950. Its good data.

      krausecomputer.com/per... (its in Excel zipped up)

      View article »
    • Thu Mar 20th 18:56 PM | Rating: 0 0
      Commented on:
      Visa: Already Priced to Perfection
      Lot of euphoric posting in this thread. Interesting. I do stand corrected about allocation of cash; from what I hear there is some more complex distribution methodology rather than sitting in a big bank account. (a portion will go to the litigation escrow account, another portion goes to share redemption ... this ultimately nullifies my 'value' call of V over MA shares on a cash vs cash analysis)

      But this is a conversion to liquid stock of Visa assets for the hundreds of banks that hold an interest in this ... The cash raised in the IPO goes to the company itself. The banks that own it are just shareholders with a now liquid position.
      View article »
    • Wed Mar 19th 17:49 PM | Rating: 0 0
      Commented on:
      Visa Already Twice MasterCard's Market Cap
      I deal with the valuations in my upcoming seekalpha article. Here's the original link. Your numbers are pretty spot-on though.

      scriabinop23.blogspot....
      View article »
    • Wed Mar 19th 16:41 PM | Rating: 0 0
      Commented on:
      Visa Already Twice MasterCard's Market Cap
      Market cap = Total outstanding shares * price.

      Not = float * price.
      View article »
    • Wed Mar 19th 16:41 PM | Rating: 0 0
      Commented on:
      Visa Already Twice MasterCard's Market Cap
      The float reflects 52% of the total capital stock. So if you could buy all of the 406M shares, you would only own 52% of VISA.

      Same goes for BX. They only sold a fraction of the company at IPO; the float is smaller than total outstanding shares.

      View article »
    • Wed Mar 19th 15:51 PM | Rating: 0 0
      Commented on:
      Visa Already Twice MasterCard's Market Cap
      www.sec.gov/Archives/e...
      View article »
    • Fri Mar 14th 13:02 PM | Rating: 0 0
      Commented on:
      Sigma Earnings Analysis: Shorts Should Soon Have to Cover
      Very nice ... Jim Cramer ! Why resort to the low blows? Are you short?

      I'm not advocating buying a hot potato here. 143% growth is definitely not in the cards, but even a 25% growth rate is realistic going forward. 3-5 years out = perpetuity as far as the stock market pricing mechanism, anyway.

      Even a meet at 300M for FY09 is 36% growth y/y. Impose that over a typical curve ... 36 ... 25 ... 20 and you get a multiple somewhere in between, with a price target way above currently trading prices.

      SIRF's margins after operating expenses are attrocious. Furthermore, the IPTV business is nascent, in the very early stages. Sure, there's always commoditization pressure of any chip product (and may I dare venture to say that GPS consumption is much more saturated than IPTV or Blu-ray), but surviving semi companies adapt with R&D and innovation. They now have a cash hoarde to be able to adapt.

      Blu-ray is another story entirely -- and even a fractional ownership of the market with accelerating adoption a year or two out spells an entirely new source of growth.

      View article »
    • Thu Mar 13th 17:59 PM | Rating: 0 0
      Commented on:
      Sigma Earnings Analysis: Shorts Should Soon Have to Cover
      Go to the 2007 annual earnings report (with 90M of revenue).
      You don't have to be a rocket scientist to figure out that even a repeat of that year with .24/share of earnings with a 20 PE gives you a 4.80 valuation. But on top of 300M assets reserve, this company now can leverage itself into many directions. Combine the book value with that 4.80 valuation at you have the most ridiculous price target of about $15/share, assuming earnings decline from 240M to 90M.

      So why would anyone in their mind be short from $20? You don't need any sophisticated ASP trend analysis to reveal that there's really an unfavorable risk:reward profile for a short position at these prices. Even if the Needham analyst is right, and SIGM's 300-350M guidance for FY09 is unrealistic (due to overall market weakness / demand limitations), even back under FY08 #s still yields an extremely viable business.

      The burden of proof now lies with the shorts now -- nothing past a superficial balance sheet and cash flow analysis is necessary to support the long case, simply because this valuation is so absolutely out of whack.
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    • Thu Mar 13th 10:10 AM | Rating: 0 0
      Commented on:
      Sigma Earnings Analysis: Shorts Should Soon Have to Cover
      I've made a few corrections to account for correct taxes, multiples. Although at 21.15, the current price, they are non issues.
      View article »
    • Thu Mar 6th 09:26 AM | Rating: 0 0
      Commented on:
      Sigma Designs: Too Inexpensive to Overlook
      the last 2 week's volume and price moves are either evidence of naked shorting, or a a consortium of major institutional holders all unwinding positions ... I'm apt to believe in #1. This is still a $40-$50 stock easily, even if guidance was down.

      View article »
    • Mon Mar 3rd 01:57 AM | Rating: 0 0
      Commented on:
      Inflation's Power: The Dollar in 25 Years
      these articles come out when inflation peaks. It will within these 1-2 years (hell, even months possibly).

      They are an indicator ... these prices should give incentive to finally invest in supply. Additionally, they will cramp economic growth.

      staflation is an interim step to deflation.
      View article »
    • Sat Feb 16th 11:43 AM | Rating: 0 0
      Commented on:
      The Long Bond is Falling - Why?
      of course it is - high cpi translates to higher yield on treasuries, which translate to a higher required yield (lower price) on the S&P.

      but true global recession will not coincide with price inflation, i guarantee you.
      View article »
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