Jake Berzon

http://www.odessapage.com/new/

33 Comments

    • ADM: The Way to Play the Agriculture Commodities Game [view article]
      Yes, Ethanol was certainly the story on this stock two years ago. Cramer along with other TV Stock Evangelist Pundits (all big momentum players) were pumping up ADM based on this story. But ADM is so much more than ethanol. It is also biodiesel, alcohol and most importantly food.

      I wouldn't fret over fuel prices dropping recently. Ethanol is a gas additive mandated by law to reduce pollution in many states. Renewable fuels are also mandated by the U.S. Energy Independence and Security Act of 2007. Retail prices of biofuels are only very loosely tied to the price of oil based fuels. They are much more a function of government imposed demand and input costs.

      Today, corn is the input of choice for ethanol production and ADM has access to plenty of corn at the same prices as last year (they hedge). If corn goes out of favor, it would be relatively easy for them to convert production to other renewable inputs, like switch grass.

      The bottom line is, when you can pick up such a quality stock at its tangible asset value, you do it!       Sep 19 02:28 PM
    • Capitalize on Water Shortages With Grain ETFs [view article]
      John, much of the wheat grown in the US and practically all of the wheat grown in Kansas and Colorado is dry land farming - no irrigation whatsoever. Not that this takes away from the global water shortage, but just to keep the facts straight... Sep 19 12:44 AM
    • Valero Energy: The Price of Oil [view article]
      This is all fine and good, except that the assumptions are so out of the blue that the resulting conclusion on how low oil can fall is worthless!

      Why nor take a more analytical approach by first looking at oil appreciation in terms of a basket of currencies, then build real worldwide oil supply and demand curves and use those to estimate price change contribution due to this. The result translated back into $ would give you a much better estimate of the equilibrium price of oil without with speculation factor removed. Yes, it is much more work, but the result will at least be believable...       Jun 12 03:10 AM
    • GE: Nuclear Growth Galore [view article]
      SF123,

      Thank you for your price update on the cost of Nuclear Power Plants. Unfortunately, the article does not mention how these costs break down and it is not clear whether these costs include real estate, regulatory process, time value of money and etc. It is also unclear what portion of the FPL Group's $12 billion estimate for a GE power plant would go to GE. My article assumed that GE can benefit to the tune of $5 billion a quarter in revenue over the long term from new nuclear power plant design ins. This still appears to be a valid assumption, based on this article. Here is a link: online.wsj.com/article...       May 27 06:55 PM
    • JPMorgan, Bear Stearns: More Smoke from Wall Street [view article]
      The reason that Bear Stearns didn't get rescued through an open credit window is because it was too far gone at that point and arranging a shotgun wedding with JPMorgan - Chase was the least expensive, most efficient, quick and sure way to return confidence and prevent a disaster. The Fed really impressed me with this one. May 24 03:07 AM
    • Two Great American Companies [view article]
      This week Brady Corporation announced better than expected results and improved outlook. Its stock completed the first leg of its ascend to a previous high. I took this opportunity to lighten my exposure to the US stock markets, by getting out of BRC on Friday, May 23rd, 2008 at $36.59. My gain is 19.5% (including the April dividend payment and excluding commissions) in just 4 1/2 months. May 24 02:36 AM
    • O Canada, O EnCana (duh!) [view article]
      One other thing that you better learn quickly is not to get too greedy and lock in your gains once the risk outweighs the potential reward.

      I realize that the "miserable" Q1 performance is expected to be short term. Whatever the excuse, whether paper loss or operational, the company still didn't post the numbers as expected. There is a large downside risk, if they miss again for whatever reason. And as gas and oil prices continue to skyrocket, consumers in North America are cutting back. I am convinced that EnCana businesses will not be able to grow as fast as expected.

      Thus, this was the right time for me to lock in the gains.

      Regarding taxes, the break is for incomes under $65,100, for joint filers. Because of our particular situation, I anticipate that almost all of our income this year will come from capital gains and my intention is to take gains only up to this limit.

      Hope this clarifies things.

      P.S. I enjoy writing about my personal stock selections. My goal is to produce readable and interesting pieces. However, I do not do complete brain dumps or full stock analysis and have no interest in inducing anyone to buy or sell stocks.       May 20 03:29 AM
    • Buying CurrencyShares Canadian Dollar ETF as Loonie Falls Below Dollar [view article]
      My crystal ball tells me that under the right circumstances, i.e. additional lowering of interest rates, Obama winning presidential election, and etc. S&P 500 will finish the year in the positive territory, in which case 2009 will be disastrous.

      In either case, price inflation will migrate from the wholesale level to the retail level on a much bigger scale. This will not translate into wage inflation, and the consumer will get squeezed 'till it really hurts.

      This will cause a bigger than ever anticipated default rate by consumers on credit cards, which will cause a major market decline across the board (30%+ is quite possible). I think various actions by the Congress and the Fed could delay this past year end, but I do not think that anything that they do (perhaps, short of switching from a market economy to a planned economy) can avoid it in 2009.

      But that's just my crystal ball...       May 19 06:32 AM
    • A Few Reasons to Buy Yen [view article]
      BobL,

      Not that this has any relevance to Japan and Yen, but to set the record straight, I have never poisoned any rabbits. I wrote a couple of Bugs Bunny type of short stories, were I cast myself in the role of Elmer Fudd.

      Thanks,
      Jake
      P.S. Send my best regards to Ken. He would never ask you to post this, if it was a matter of "3 people"...       May 12 01:27 PM
    • A Few Reasons to Buy Yen [view article]
      Dear BobL,

      First of all, I would like to thank you for thoroughly studying my blog on odessapage.com/new (even if your goal was to twist my words around). Once again, I would like to remind you that I do not recommended anything to anyone. YTD, I have, in fact, saw some opportunities and purchased Brady (up 10% as of this writing), Pentair (up 19%), GE (down 3%) and added to my Cigna position (down 11% on the added portion and up overall), among others. I have also opined that JP Morgan stock price will benefit at the expense of Bear Stearns. It did significantly the day after I wrote that article, but I did not purchase it, because my Fisher Investments portfolio had too many financials in it as it was, even though JPM was not one of them. Both of my recent currency trades are also up since purchase. This year I have also sold PDS at a more than 35% profit, which I held for 5 months, KG, which went up almost 16% in 6 days that I held it. In this portfolio, so far this year, I am comfortably beating the S&P 500, as I also did last year. I have also gotten rid of 17 of the 69 stocks that Fisher Investment purchased for the account they were managing.

      As far as the run up in stocks over the past two months, even with that S&P 500 is still down 12% since its peak in September. Now, please keep in mind, that my basic strategy is to buy on dips of individual high quality stocks in the "right" industries and sell those stocks when they run up. Thus being a net seller is mostly a function of the stocks I have bought having reached my targets for them and not seeing as many opportunities for new buys.

      Now, as far as my two tongue and cheek writings about the rabbits - I don't expect everyone to understand or enjoy my humor and to read everything that I write. There are sufficient number of others who "get it" and enjoy it!

      Thanks,
      Jake
      P.S. Please allow me to simply ignore your silly comments on the article that you did not read, because it was "too long."       May 09 01:13 PM
    • A Few Reasons to Buy Yen [view article]
      Dear BobL,

      Firstly, judging by your statements, you appear to be acting as an agent for Fisher Investments. As such, you must be aware of the fact that Fisher Investments is taking legal action against me over a review article I wrote about them: www.odessapage.com/new... . To others, I would suggest that this fact by itself is sufficient to discredit Ken Fisher and disregard Fisher Investments.

      Secondly, I am not "recommending stocks" or anything else for that matter. I am not (and do not pretend to be) either a financial adviser or a stock analyst. I am a writer and comment on my personal market moves. Unfortunately, this year, I have been additionally burdened with having to get out of the 69 positions that Fisher Investments put me in. I have gradually done just that over the past three months and expect this process to take another 12 - 18 months to complete. (For various reasons I do not comment on these trades.)

      My view is that markets will come down from their current levels this year, which is why I have been a net seller of stocks since August of 2007. The last three trades I wrote about have been a sale of PDS and iShare purchases of Canadian and Japanese currencies. To say that I "keep recommending stocks" after reading my blog, would, at best, be a drastic misrepresentation. On the other hand, even the worst markets for stocks, sometimes present great buying opportunities. When I see what I think to be one of these, I try to take advantage. More times than not I have turned out to be right.

      Now, as far as Yen and Japan are concerned. I have been following them continually since my days at Hitachi - something like 14 years now, but only decided that it was time to invest in Japan recently. (Seeking Alpha posted my original article on Japan on 11/8/07 here: seekingalpha.com/artic... ). In it I wrote: "In the past quarter, Japanese currency began decoupling from the US$, appreciating 8% since June." It went up more than another 15% until the middle of March and I only made my recent Yen purchase after it corrected close to 8% from that high and hit a support level. Thus, contrary to your claims, nothing in my actions "assumes that the dollar will keep weakening because it has been weakening."

      In both my Canadian currency (FXC) and Japanese currency (FXY) articles I plainly state that I am making these purchases to diversify some of my cash holdings away from $US and not as an "investment"... Is it a coin flip? Perhaps, but I like to think of it as insurance (or hedge) instead. In any case, at least I will stand some chance of having coins to flip, in case the next US president will do what Mr. Bush should have done at the start of his presidency.

      One last note, Bob. I enjoy healthy arguments and welcome folks pointing out inaccuracies, oversimplifications, poor assumptions and etc. in my articles, however if you intend to misrepresent what I say and twist my words around, please do us both a favor and stay away.

      Sincerely,
      Jake       May 06 01:51 PM
    • A Few Reasons to Buy Yen [view article]
      William,

      Japan has much lower inflation than the US and BOJ is in a much better position than the Fed to keep inflation at bay by raising interest rates, which should increase demand for Yen further. Looking at the graph of FXY, you will notice that Yen skyrocketed in the first quarter, at the same time that the Japanese were converting their holdings back into Yen. Looks like the rush by the Japanese out of $US debt took a breather in the second half of March and April, but I expect this primary trend to resume. Even after reducing their holdings by more than 5% in the first two months of the year, Japan still owns 12% of all treasuries - more than any other nation.

      I am concerned with future changes in the supply of and demand for Yen vs the $US, which is the ultimate driver for market price. Current and expected real rates of return in various markets are certainly a part of the equation driving demand for currencies.       May 01 09:42 AM
    • A Few Reasons to Buy Yen [view article]
      I forgot to mention that the cash used in this transaction was that, freed up by selling PDS on March 28th, 2008. I wrote about that in my Odesskiy Listok blog. Seeking Alpha did not republish that post. May 01 09:04 AM
    • Jackson Hewitt: Taxes at a Discount [view article]
      User 177145, you were correct to point out that I was too early jumping into this stock and that it made a bottom much lower than I was anticipating. However, it has already recovered more than 20% over the past two weeks since you made your post.

      JTX remains in a strong position and is a valuable franchise. The company made some mistakes, which I did not anticipate and it quickly paid for them with a lower stock price. Those problems were temporary and are behind us now.

      As inflation picks up further many of the mom and pop shops will be driven out of business or will be forced to raise prices. JTX input costs, on the other hand, will not change significantly and they will be in a great position to gain market share.

      Unless management makes some bad mistakes or the US economy collapses completely, this stock should double from here by next summer.       Apr 30 03:11 PM
    • Buying CurrencyShares Canadian Dollar ETF as Loonie Falls Below Dollar [view article]
      Algoa, it was prudent for me to diversify some of my cash holdings into Loonies, now that the Loonies have corrected to a reasonable value range. Similarly, it is prudent for you to start buying into some US based ETFs. I bet, we will both be more right than wrong in the long term and that's really the name of the game. Mar 28 03:16 PM
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