bsharvy

Genco Shipping: A New Bubble in the Making?

This article has a lot of problems. Forward PE is for 2009, so why don't the contracts for 2009 "count?" What's the basis for this comment: "PEG ratio also does not make any sense, because apparently, no growth in earnings is expected for GNK in the foreseeable future." The 5-year estimated growth rate is 9.7%.

Saying a shipping company is just a bunch of ships, like a closed-end fund, is completely wrong. A closed-end fund holds stocks. A shipping company is a service provider.

The calculation of NAV is invalid. If you are going to reduce the NAV for things like dividends paid and (unrealized) investment losses since the last statement, you need to increase it by earnings since the last statement. I'm skeptical of subtracting the payment for the remaining 4 ships also, as that is an obligation that's probably already on the balance sheet as a liability. Finally, the covenants aren't expressed in terms of the DCF model you developed, so the whole analysis is moot. The stock yields 20%, so a cut is a simple way for the company to raise cash that is already priced in. No stock trades at a 20% yield with the expectation it will stay there.

I have my own concerns about GNK, mainly regarding its free cash flow and debt. I think it is a good, but speculative, buy.

FAS and FAZ: A Short-Seller's Dream?

I've never been able to short an ETF. Whoever is shorting this stuff doesn't use Schwab.

More Market Swings Are on the Way

The Swiss franc hasn't been backed by gold for 10 years.

Why These Are Good Times for Bonds, Despite the Looming Interest Rate Hike

Every time I read anything about long-term Treasuries, it is negative. The bearishness on Treasuries is unrelenting and unanimous. I'm starting to think I should buy long-term Treasuries.

Dick Fuld: My Part in His Smouldering Resentment

Fuld didn't do anything everybody else didn't do. So he was greedy, big deal. He misclaculated. So? Are we supposed to believe all those Americans who bought million-dollar homes on salaries of $45,000/year with no down payment hoping to flip them a year later were motivated by humility? Quit your pathetic whining. Fuld mostly played by the rules, and "mostly" play by the rules is what Wall Street does. It's the politicians who made the rules that allowed a financial crisis, and both the bankers and the general public who drooled their way into the crisis. The public got greedy, the public got burned, and now the crybaby public wants to blame everybody but itself. Grow up and leave Fuld alone.

Eight Reasons Bank of America Is Going to $20

I have no opinion on BAC, but I wouldn't trust this author. He starts by bragging, and misrepresents his track record. He tosses in right-wing political cliches like calling the Financial Times anti-American because the FT says Americans think of nationalization as a European folly. His only "refutation" of the FT article is to call it "anti-American." What a peacock. Dumber still, he then presents material supporting the view that Americans do, in fact, regard nationalization as a European folly. As for his bragging about Apple, his article history shows that he has stayed long Apple for all of 2008, which wipes out all the gains of 2007.

Where Will Oil End 2009?

1) Oil isn't a safe haven, it is priced in dollars, so when the dollar falls, oil gets more expensive.
2) OPEC doesn't doesn't have the power to allow or disallow any oil price.

E*Trade: Very Undervalued

The balance sheet is a mess, particularly if you focus on tangible book value. The company attributes $2 Billion in equity to goodwill. It is currently priced well above its tangible book value per share. It is leveraged a whopping 50:1 based on tangible assets.

Gross profit is very good relative to market cap. It may be a undervalued, but you have to gauge value relative to risk. How stable are its assets?

BTW, anybody know why Yahoo is reporting negative revenue? It seems to be a glitch.

20 Companies Most Likely to Go Bankrupt in Next Year

Why was this article even published? It offers no analysis, no interesting facts...nothing but an assertion by some entity named "Audit Integrity." It's hard to see how Mylan could be anywhere near bankruptcy. It's current ratio is good, its free cash flow is good, its expected earnings are good. Is there any way to respond to this article other than just contradicting it?

CEFs Reverse Course: Risk Avoidance Tops the Week

A CEF isn't legally required to make distributions; if it is willing to pay taxes, it can keep and reinvest the income.

The problem with BIF and BTF is that the fees are high. You are paying over 2% a year for the ability to own Berkshire in small amounts.

Solar Energy Brightens Up on Stimulus Bill

Why no mention of ESLR?

Preferreds Get Crushed Again

The majority of preferred shares are issued by financial companies. So, preferreds got clobbered last week because the financial sector got clobbered. It's not really worth an article in its own right, nor would it have been hard for the author to point that the explanation is obvious rather than mysterious.

Genco Shipping: A New Bubble in the Making?

Why don't you believe the 5-year PEG? Just asserting "It's laughable" isn't a reason.

Your calculation of NAV didn't include cash flow after the last statement, but it did include expenses after that statement, such as dividends paid. That's an error.

If the payment for the four ships is already on the balance sheet as a liability (not sure), you shouldn't be subtracting it AND the liabilities from assets. That's double billing.

The Correlation Between Crude Oil and the U.S. Dollar

Doubt this: "The slide from record crude prices of $140 triggered the US dollar rebound."

More reasonable: The strengthening of the dollar contributed some unknown amount to the slide in oil prices.

Where Is Penn West Energy Trust Going?

Penn West has some collars and other hedges on oil price which 1) were extremely beneficial in the last quarter, and 2) are not well documented. To really understand the risks of this company you have to understand its hedges. Anytime you hedge something that falls from $150 to $50 in a few months, you're in a potentially great situation. This article spends too much time focussed on irrelevancies: Reuters ratings and price targets are almost meaningless, as is moving into new headquarters.