kotika98's Comments

Chinese Railways and Speculating Pig Farmers

Tue, 27 Oct 2009 04:49:45 -0400

and what is this old communist canard about the new bourgeois classes as the only beneficiary? Come down here to the Yangze river delta and ride the trains to see what wide variety of people are traveling.

Chinese Railways and Speculating Pig Farmers

Tue, 27 Oct 2009 04:45:18 -0400

> are those high-speed rails, which may be fast, exciting and fun to ride, economically justified? Even if they were justified in the US or Europe, where the economic value of every hour saved is many times the value in China, they are probably not justified in China.

haha, you should come down here and ride on the fast trains in the Shanghai/Nanjing/Hangzhou area to see that everyone benefits. The 220 km/hour trains depart every 15 minutes, carry nearly a thousand people each, and even so are full to the neck. Plus I sont see how this hurts the airlines - noone ever considers flying between these cities.

Is This Market Overvalued? Not Yet

Sat, 10 Oct 2009 22:14:08 -0400

Looking at that chart it seems that 9-10% is about fair, and we are at above 8%, so upside is not great here.

China Security & Surveillance: A Speculative Growth Company

Sat, 10 Oct 2009 22:08:01 -0400

This company has been trying to cover up the lack of growth in its core business with acquisitions. They havent been able to acquire very profitably either, while buying up a bunch of companies with margins lower than their own.

And, "if you believe the analysts" is too much to ask. The guys who have ratings on this stock are the same guys who brought them public, so make your own conclusions.

GE CEO Immelt: Misdirected on Healthcare

Sun, 04 Oct 2009 04:58:33 -0400

Wow, thats pretty strong language. I see a gap in logic here. One is that imaging is not the same as the supposedly useless if you believe the author cancer medicines. GE does not make cancer medicines.
The other mistake the author makes is that what GE is trying to do should be done and will be done in any case. It does not benefit and is not harmed by the passage of the bill in congress or any other imaginable events. So whats the logic of this article?

What Did the Ratings Agencies Know About AIG?

Wed, 23 Sep 2009 11:55:44 -0400

the rating agencies should have been downgrading AIG all along as it was piling up the 200$B in financial insurance, a notch for every extra 20$B added. If they did that AIG might have stopped before it was too late. I personally realized something was fishy when the CFO proudly declared that AIG was unlikely to pay out even a dollar on all those financial insurance products it wrote - when was that? Sometime in 2007?

Federal Express Worth 25 P/E? I Don't Get It

Wed, 23 Sep 2009 11:03:15 -0400

i think you are missing the solid balance sheet and the possibility that FDX will earn north of $4.50 EPS in calendar 2010. FY2010 is so over.

Capitalism, Socialism and 10-Year Returns of Country ETFs

Tue, 08 Sep 2009 21:46:11 -0400

the tax rates you are using are all wrong!

The US rate is much more than 25%, and China's is much less than 27%. India wishes it collected 43% of income, but doesnt.

If you are going to do statistics, you better collect more accurate data, and on more qualtities. Otherwise, you should just make an in depth analysis just on a couple of similar otherwise countries but which have a significantly different level of taxation.

High Frequency Trading Glitsch

Fri, 31 Jul 2009 08:45:20 -0400

"Much of the liquidity high frequency traders are adding to the mix is simply to match trades created by other high frequency traders."

This is pure silliness - it may or may not be true but how would anyone know? Its not like anyone has an overall birds-eye view of the markets who could tell.

Dangerous Fallacy in GDP Measures

Mon, 13 Jul 2009 02:21:55 -0400

if you destroy a bridge that is being used to transport goods, the destruction of the bridge will take out of GDP sales of all those goods. If the bridge had a tollbooth on it, the negative impact on GDP is even more direct. The author postulates that the destruction of infrastructure would "add" to GDP, and the basic argument here is idiotic.

Second point is that once reconstruction starts sometime later, often couple years down the road we should indeed count the activity in GDP because construction workers get payed, machinery gets bought etc... so there is nothing in this article aside from moralizing.

The Latest on Fuel Cells: Novellus Systems' Investment Pays Off

Thu, 09 Jul 2009 07:18:32 -0400

just because INTC and NVLS invested it does not mean they are planning to make and sell fuel cells. nothing in the news suggests that they are going to do so, in fact i'd say it is extremely unlikely.

Imax: Fast Money's Rising Star

Thu, 02 Jul 2009 15:12:00 -0400

did you forget to mention they have a busted balance sheet?

China Pays Too Much for Oil in Iraq at $16 a Barrel

Fri, 26 Jun 2009 10:37:24 -0400

this is hilarious... western oil companies dominate the world non-government owned oil production. Addax itself was not built by the chinese, there are dozens of other western owned oil exploration and production companies, even while China has none. Moreover there is a reason that these companies have been so successful which is that they take calculated risks while the beauraucrats at Petrochina are completely incompetent in this area. If chinese were so smart, they would drill for their own offshore oil in the East and South China sea.

When Anonymous Sources Disappear Entirely

Mon, 22 Jun 2009 07:27:38 -0400

>Given the choice between a simple assertion and that same assertion backed up by “people familiar with the matter”, I’ll take the simple assertion any day.

Not so. "people familiar with the matter" are people who have firsthand knowledge as opposed to transmitting hearsay through the rumor mill. The reporter does in fact know which is it, so we have to rely on their integrity. If reporters start making simple assertions, then there is nothing stopping them from reporting simple rumors as fact. Because we cannot always rely on the reporter and even their boss, the Editor's, integrity traditionally all information must be sourced. In the good old times Editors refused stories sourced anonymously unless there was strong reasons for them to be protected - like Deep Throat.

When Anonymous Sources Disappear Entirely

Mon, 22 Jun 2009 07:19:01 -0400

It sure sounds like the words are from the horses mouth, that is Jobs himself. That would explain perfectly why it is not necessary to attribute it to "people familiar with the matter".

Strange Inconsistencies in the $134.5 Billion Bearer Bond Mystery

Fri, 19 Jun 2009 12:45:01 -0400

one reason the italian authorities are unable to confirm whether its the real thing, is because they have never seen a real one. The US Treasury does not post pictures on its site, for obvious reasons.

Strange Inconsistencies in the $134.5 Billion Bearer Bond Mystery

Fri, 19 Jun 2009 11:45:35 -0400

dude, the total amount of outstanding bearer bonds is 100 million, not 100 billion!!! Look again at it:
www.treasurydirect.gov...

China'a One-Birth Policy to Stifle Future Economic Growth

Thu, 11 Jun 2009 05:48:31 -0400

the one-child-policy is only enforced in the cities, and then only for people with public sector jobs. in the countryside it is offically alllowed to have more children, and whatever restrictions there are are easily circumvented. that applies also to migrant people living in the city.

the tale about shortage of labor is a fake - there are difficulties finding people willing to work factory jobs for less than $150/month but it is a result of growing affluence and opportunities , not shortage of hands. China's population is still growing by approx 7 million people a year.

finally, the shortage of women is probably real, but probably only relevant in the social/political questions, not economics.

China, Shipping and the Great Commodity Carry Trade

Mon, 08 Jun 2009 00:34:42 -0400

how disappointing to see an article with a title containing an investment professional term like "carry trade", and find an article written by an amateur gold bug. Apparently illiterate, too.

Russia, China Gang Up on the Dollar

Thu, 04 Jun 2009 00:20:09 -0400

Chinese could make their own currency THE reserve currency if they allowed it to be freely convertible, and at a market determined floating rate. The silliness of the whole situation is that they actually think they dont want the US dollar to lose value, but i dont quite see why they want to keep accumulating even more of the crap. After the amount climbed beyond 1T and heading to 2T can you really call it a reserve? Reserve is something you keep to be able to spend on a rainy day, but this 2T is just sitting on the balance sheet of the chinese central bank and the government cannot actually go ahead and spend it even if it wanted to.

Why Thinking Like an 'Evil Genie' Doesn't Work in Currency Markets

Wed, 03 Jun 2009 12:40:06 -0400

and the other thing is that the US had been running loose monetary policies since at least end of WWII, so long term depreciation of the dollar is completely inevitable - and also more or less unactionable.

Why Thinking Like an 'Evil Genie' Doesn't Work in Currency Markets

Wed, 03 Jun 2009 12:35:40 -0400

currencies are diferent - while other markets are zero-sum game in this case all the guys who are putting on bets now that the dollar declines can make money, at the expense of people who dont follow currency markets regularly and belatedly discover a year or two down the road that they should get out and invest their dollars abroad. Its when your average Joe pulls his S&P500 index fund in his IRA or 401K and puts it into BRICs thats when you know the dollar decline is done. So far only pros at endowments have put serious percentages of their portfolios into foreign markets.

6 Challenges for Qualcomm's Zeebo in China

Tue, 02 Jun 2009 21:59:39 -0400

a game console in china will succeed *unless* they figure out how to pirate the games. the assumption of every game console shop in china is precisely that noone will ever buy a non-pirate version of any game. for example, apparently nintendo DS is hard to pirate and so DS is virtually nonexistent in china.

and finally, you if need a TV to play it, chinese youth have no use for this console and i suspect in other countries too.

Whats missing in china is a portable game device with a mobile phone built-in. Sony and Nintendo have been slow to come to market with that, so there was a business opportunity for someone to come in with a properly designed gamephone (Nokia failed). I am surprised that given qualcomm expertise in phone cpu chips they could not get this right.

As the Dollar Continues to Collapse, Where Will You Put Your Money?

Wed, 27 May 2009 20:20:40 -0400

> "If you short them, you'll still do fine in real terms, but you'll have to watch your shorts lose money in nominal terms, and that's just hard, psychologically."

This plainly shows the author does not know what he is talking about.

Housing's Big Picture Isn't Pretty

Sun, 24 May 2009 12:16:54 -0400

what a bunch of bull! In America land is still unlimited, and home prices are a function of building cost only. You dont need to go back 50 or 100 years to try to guess what those costs are. Look at the annual report of DRHorton or Toll and you can find out precisely how much it costs to build every kind of house (depends on location a bit). Bare land values are 30-50K per lot and than cannot go neiter much lower not much higher. Bottom line - and those figures you cite confirm it, house prices go at the rate of inflation in the long run. Only in locations where land is no longer available without limit can prices become detached from building cost, and truly there is only Manhattan in the entire USA where there is not going to be an inch more of land to build.

The S&P 500 P/E Needs to Correct

Sun, 24 May 2009 10:45:16 -0400

Ok, and another thing... I am all for fundamental analysis, but over the years i am more and more aware that professionals value companies on EV/EBITDA. This past year this has become even more crucial as the EV/EBITDA measure emphasises strong balance sheets. For example PE ratios in some industries such as tanker and bulk shipping and yes, banking, were already very low going into 2008 --- all for a good reason! The market was correctly discounting their highly leveraged balance sheets.

All You Need to Know about the First-Time Homebuyer Tax Credit

Sun, 24 May 2009 10:44:30 -0400

> I thought the purpose was to incentivize with the aim of helping the housing market, not so much just to subsidize lower income people.

The purpose is to get more votes in 2012.

The S&P 500 P/E Needs to Correct

Sun, 24 May 2009 10:14:43 -0400

Cramer also used to say that you buy cyclicals when the PE is highest, and sell them when PE is lowest. Now that cycle has come around, and we are reminded that almost every company depends on the general economic health to make money. So, dont worry be happy - the earnings graph shows we will recover to S&P earnings of between 50 and 70 within a year or year and a half. I honestly dont know what the level of the index that justifies, but the market trades on next years earnings not on current quarter earnings. Keep that in mind when you look forward to Q2 results. In any case Q2 is traditionally a non-event, the three other quarters are always alot more important. Q1 gives the start to the year, Q3 is back to school quarter, and Q4 is christmas quarter. Thats on the consumer side, and on business spending side capital investment decisions are not made in Q2 either.

Hedge Funds Should Be 'Regulated Out of Existence'? Time for a Reality Check

Sat, 23 May 2009 00:22:44 -0400

Ok, and how would you "ban" hedge funds? Is there some law on the books which defines what a hedge fund is? Actually hedge fund is an investment partnership, not more not less. So would you want to ban investment partnerships in general? Thats clearly unlawful. While we are at it why not abolish the stock market as a whole.

2 Concerns with Michael Lewis's Review of Buffett Book 'The Snowball'

Wed, 20 May 2009 14:12:57 -0400

Buffett really had bad timing with those derivatives bets, and you have to also think about who the other side of the bet is. The proposition was made to him by those Harvard math PhDs at Goldman - do you think Goldman would do it if it wasnt pretty sure of it? Buffett on the other hand will also eventually make money on this bet, he gives all the sound reasons in his yearly report why Black-Scholes does not apply to this kind of very long term derivative. So who is right and who is wrong? Buffett is wrong but both Goldman and Buffett will make money off of this in the end, the losers being the retail suckers who trade options and futures.