Chungst

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    • Sun Feb 24th 23:58 PM | Rating: 0 0
      Commented on:
      An Options Strategy for Volatile Times
      To Jim C. who wrote: "MEh, on the day of earnings sell a call and a put at the money. ... This has even worked on very volatile issues."

      If the stock gaps on earnings, you are screwed. Many option sellers faced this problem and were forced out. If you did that on VSDI for Q3:07 earnings (not to mention Q4:07 earnings), it went down huge as the stock got put to you.
      View article »
    • Sun Feb 24th 23:40 PM | Rating: 0 0
      Commented on:
      Is Loews Corporation the Next Berkshire Hathaway?
      "In some ways, it makes the company more difficult to value and results in the holding company (LTR) trading at a discount to the sum of its parts."

      Making such a statement by itself does not prove the statement. Can you supply valuations to support your assertion? It would be nice to see what valuation metrics you used and to compare those with BRK.

      Thanks.
      View article »
    • Thu Feb 21st 18:33 PM | Rating: 0 0
      Commented on:
      Is There a Chinese Middle Class?
      CrossProfit:

      Any chance SA could put a disclaimer, i.e. as an adminstrative item, that this is a plug for a book so we can it out of the way and not detract from the article? Having it as the last line of an article is bad form (this is my opinion, of course).

      Also, I agree with you that article was informative. However, I prefer thought-provoking to informative, and by thought-provoking, I agree with your concept of "it is up to the reader to either agree or disagree with the article."

      Thank you.

      Cheers.
      View article »
    • Thu Feb 21st 18:12 PM | Rating: 0 0
      Commented on:
      Is There a Chinese Middle Class?
      kkin365:

      The purpose of constructive criticism is to help the author write better pieces in the future so we can all benefit. The piece didn't add a lot of value to me -- which may not be the case for you -- and thus the constructive feedback. I prefer thought provoking pieces and if the author can incorporate that into her future pieces, it will incentivize me to read her pieces and possibly buy her book or at least recommend her to people who would be interested. Or, stated differently, if this is the best she is doing then I have little incentive to read her up coming book much less recommend it.

      Separately, as a matter of style, her conclusion or summary came across as a book-plugging piece. It really detracted from the article and unfortunately, that was the last thought she left me with -- plugging her book. It would have been better (at least for me) to leave the last thought as a means to summarize, better yet to synthetize, her key points. Again, this is a matter of style.
      View article »
    • Thu Feb 21st 16:58 PM | Rating: 0 0
      Commented on:
      Most Overbought/Oversold Stocks
      Thanks for the information -- would it be possible to provide a legend or help explain the different colors, the rationale for hash marks and circles, etc.
      View article »
    • Wed Feb 20th 16:24 PM | Rating: 0 0
      Commented on:
      INVESTools: The Bull Case
      I'll provide a full rebuttal after the 10-K filing becomes available. John Lewis employed numerous assertions that looks good on the surface but lacks substance.

      By the way, SWIM continues to post poor stats at it's TOS unit. The 1st and 2nd derivative of TOS' growth function in its funded accounts clearly point out this concern.

      "In the Jan 2008 news release on Dec 2007 stats, SWIM stated:
      - Funded accounts of 57,775 at month-end; 159% higher than December 31, 2006
      - Client assets of $2.58 billion at month-end; 134% higher than December 31, 2006

      In the Dec 2007 news release on Nov 2007 stats, SWIM stated:
      - Funded accounts of 54,950 as of month-end; 171% higher than November 30, 2006
      - Client assets of $2.62 billion as of month-end; 154% higher than November 30, 2006

      The key thing to focus on is despite an increase of 2,825 in funded accounts, client assets declined by about $40 million, i.e. the average funded accounted declined from about $47,680 in November to about $44,656 in December. The decline in average client asset implies customers lost money during December."
      (originally posted on a message board at Investools on 1/15/2008)

      Then I looked at the 2/13/08 new release and discovered the following: "Client assets of $2.49 billion at month-end" and no mentioning of total funded accounts. Any analyst worth his salt knows that despite the positive spin of "New accounts opened of 8,050" and "New funded accounts of 3,675" that the FAILURE of disclosing total funded accounts is a red flag. As an analyst, I can't add the 3,675 number because SWIM didn't disclosed churn or turnover.

      What is interesting is client assets went from $2.62B to $2.58B to $2.49B in two short months (DESPITE higher funded accounts in December!). The question to ponder is: Why did client assets decline when Investools has such a great investment product, i.e. a killer app for stock and options trading? Hmmm.

      Lastly, John Lewis, I was awarded my CFA(r) designation in 2001 (if that means anything) and I would appreciate if you don't drag the CFA(r) designation into the debate -- the CFA Institute has nothing to do with SWIM.
      View article »
    • Wed Feb 20th 02:31 AM | Rating: 0 0
      Commented on:
      NutriSystem Looks Sweet Heading Into Earnings
      Check out the link: shortsqueeze.com/?symb...

      Short interest is about 71% of the float!!!
      View article »
    • Tue Feb 19th 17:53 PM | Rating: 0 0
      Commented on:
      Read This Before Buying E*Trade
      Rich Shinnick: You are being so difficult.

      First, you wrote the piece (I stated earlier no one put a gun to your head to write it). We, as the readers, provided feedback at our option. Given your background that you've advertised (akin to shingle theory) that you are highly educated (with a JD no less) with years of investment experience (your bio stated 10 years of "studying"), you should have figured out (by yourself) why some critics told you how to improve your analysis (trust me, I've tried nicely earlier). Instead, you want to come across as a neophyte in investing -- sorry, you can't play both sides of the fence or "Homey don't play that" where I'm from. If you really are a neophyte or incompetent, then I will not hestitate to treat you like one.

      Second, I commented to you earlier about objectivity and having a reasonable basis. I am astounded that someone with a JD and 10 years of investing experience would respond with: "I could call the investor relations department but that is what they would tell me." How difficult would have been to say to ETFC's investor relations that I have concerns over the company's $2.6 billion consumer portfolio and can you walk me through the migitants or does the company have safeguards in place? To make assumptions on what the company will say is NOT OBJECTIVITY and trust me I've tried to teach that concept to you but you don't listen. Clearly someone like Prescient11 was able to use a little more effort and supplied more information about these loans based on the link provided. Therefore, this information is AVAILABLE and you chose to OMIT key information like FICO scores, etc because you chose to avoid calling the company to get the information in the first place.

      Rich Shinnick, if you advertise yourself as someone with a JD and 10 years of "studying", then you ought to be intelligent to discern when someone (like myself) is trying to coach you to do a better job. Instead, you make excuses and make up answers rather than take the advice.

      You owe it to yourself to learn how to speak to the investor relations department. Since you have a JD, then you ought to understand the impact of "Fair Disclosure" (aka Reg FD that levels the playing field such that the investor relations or senior management must treat each investor fairly). If you don't speak to the company, you will miss out on key information. Let me conclude with this comment, even Warren Buffett calls the IR department himself.

      Cheers.

      Cheers.

      View article »
    • Tue Feb 19th 16:12 PM | Rating: 0 0
      Commented on:
      Read This Before Buying E*Trade
      "Furthermore, nobody has pointed at anything in the article that is "innacurate" information." -- RS

      As a buy-side analyst for a number of years, I will tell you that OMISSION of key information equates to "inaccurate" information and I am not dealing with semantics. I don't have time to go over your numerous faulty comments, but I will address one in that you originally wrote (more like pontificating out loud):

      "$2.6 billion Consumer Loan Portfolio
      Does it surprise you to know that E*Trade holds $2 billion in RV loans and $500 million in boat loans? They have a little over 1% of this total portfolio reserved for loan losses as of the end of 2007. Here is my question. How will a portfolio of RV and boat loans do in a recession? Could this portfolio be a little bigger problem in the future than just a 1% write-off?"

      You never checked with ETFC's investor relations about these concerns. So, I ask you again, HOW DIFFICULT IS IT TO DO YOUR JOB??? Please advise, how difficult is it to call the company and get answers to these basic questions --- questions with negative implications based on your writing, etc.

      Lastly, Mr. Shinnick, you have demonstrated you don't like, much less appreciate, constructive criticism. Therefore, I will exit this "dialogue" and allow you the last word (which history shows that you enjoy).

      Good luck.

      View article »
    • Tue Feb 19th 15:54 PM | Rating: 0 0
      Commented on:
      Is There a Chinese Middle Class?
      I am sorry, but your article comes across as a self-promotion of your yet-to-be published book or stated differently, your piece fails to add value. In contrast, when I read books by Chin-ning Chu (author of the famous "Think Face Black Heart"), she adds value through her didactical style despite dealing with mudane material -- that is to say I can still remember most of the analogies she employed because of their lasting impacts.

      Please allow me to leave you with this comment. Someone once asked me to explain the difference between spam (his pejorative term) and an interesting article on a website? I answered an interesting article is thought-provoking.

      Cheers
      View article »
    • Tue Feb 19th 06:58 AM | Rating: 0 0
      Commented on:
      Read This Before Buying E*Trade
      Richard Shinnick, you are missing the point. If you write a piece and submit into the public domain, you are inviting feedback -- be it positive or negative feedback. However, when you receive negative feedback, it's how you response that is the key. Since you unilaterally wrote and submit this article (i.e. no one put a gun to your head) you are held accountable for the quality of the information. When someone points out a defect in your argument, in my humble opinion, you are now obligated to verify that information yourself as opposed to attacking the critic with your comment of: "Response 1: Ok, who is the counterparty? Ambac?"

      I am very serious about this because how difficult was it for you, i.e. the analyst on ETFC, to simply call up ETFC's investor relation's department and get the answer from the horse's mouth. Therefore, this behavoir is not called "taking ownership" as you liked me to believe -- to me, this behavior is akin to being a sore loser.

      A good analyst has to independently verify the information because a good analyst has to be objective. When I was studying for my CFA exams, AIMR (now the CFA Institute) stated that one must have a reasonable basis for the recommendation. People can debate what is meant by "reasonable basis," but to me, it meant looking under sufficient rocks to make sure I did as best of a job as I could. And yes, I did discover some fraud in my career as a Buy-Side Analyst.

      Cheers.



      View article »
    • Mon Feb 18th 23:14 PM | Rating: 0 0
      Commented on:
      Read This Before Buying E*Trade
      I've been following the debate, based on what has been written, it's clear the author (Rich Shinnick) didn't do a good job and deserved the resulting feedback.

      I will also advise Mr. Shinnick to stop coming across as a sore loser. People took time and energy to give constructive criticism such that Mr. Shinnick would be a better analyst as a consequence. I don't know what Mr. Shinnick seeks to gain (perhaps to comfort his damaged ego) by attacking the critic(s) who made good faith evaluations of the article.

      Mr. Shinnick ought to know that there is a unwritten rule about people who write essays: Attacking the essay is fair game. If Mr. Shinnick doesn't want feedback, then common sense would suggest that Mr. Shinnick refrain from submitting articles in the public domain.

      Cheers.
      View article »
    • Thu Feb 14th 14:28 PM | Rating: 0 0
      Commented on:
      Ark Restaurants Corp.: Growth Opportunities Abound
      Mr. Simenauer:

      Are you enrolled in the CFA Institute's CFA(r) program. Please advise.

      Regards,
      Chungst
      View article »
    • Thu Feb 14th 14:04 PM | Rating: 0 0
      Commented on:
      MBIA vs. The Evil Short Sellers
      Herb, you are barking up the wrong tree. I did not read Mr. Ackman's 2002 paper, but unless Mr. Ackman wrote in said paper about (a) the massive bubble in the US (or global) housing market and the resulting (b) fraud in the mortgage business, then he was generally correct but does not deserve all the kudos you have bestowed on him. I am not challenging Mr. Ackman's astute call on predictable consequences resulting from insuring risky transactions, but you clearly haven't shown the necessary cause and effect, i.e. the role of fraud in mortgage applications. When you see that the rating agencies were caught flat-footed by the mortgage fraud (and please note that these rating agencies such as S&P* are somewhat transparent in their ratings -- that is to say any user of the ratings can challenged the assumptions used to derive the ratings), such events detract from Mr. Ackman's 2002 call.

      Cheers.

      * With respect to rating agencies, since I have work as a corporate bond analyst on the buy side for a number of years, I will say companies like S&P goes out their way and publicly disclosure their rating process to arrive at credit opinions (i.e. the methodology employed), make their analysts available to their customers to defend these credit opinions, etc. With respect to corporate bonds, S&P publishes their "Corporate Ratings Criteria" each year and Sol Samson makes himself available to answer any question on said tome (the 2006 edition had 128 pages) and I believe the same is true for S&P Structured Products group. There was rampant fraud in these mortgage applications.
      View article »
    • Mon Feb 11th 22:11 PM | Rating: 0 0
      Commented on:
      Walgreen: Attractive Valuation and Growth Story
      Mr. Hines:

      I understand that because you are long WAG, it may affect your ability to understand opposing viewpoints. I still believe you haven't made a case for convenience at WAG and instead you have argued why one shouldn't invest in WAG from an ROIC perspective.

      You have argued that consumers will choose WAG out of convenience over WMT based on your comment of: “[i]t takes about three minutes to park your car, walk into a Walgreens, find what you want, pay for it, and be back in your car again.” Then you strengthened this argument with your comment of: [i]t's like buying Coke out of a vending machine; why do people pay $1.25 when they can get it from the grocery store for 25 cents.”

      Any investor who understands ROIC could see the holes in your argument. First, your argument implies that WAG doesn’t get a lot of business because the parking lot is empty and that there are few customers in the store all because of the 3-minute turnaround time from car to store and back to car that you have asserted. In contrast, WMT has a lot of business because it’s parking lot is crowded (hard to find a parking spot since it takes 3 minutes), lots of consumers are shopping in WMT (10 minutes to pay for something), etc. This begs the question why a company like WAG would spend so much money to build (or rent) a big box, spend the money on inventory, face slow inventory turns, etc, etc, just for the random convenience shopper who pay a small price premium? In contrast, WMT’s big box makes economic sense since the parking lot is full, consumers are buying cartloads of products, etc (please note the sales velocity along with high inventory turns, etc), respectively. In this sense, WAG is wasting economic resources and is destroying value by using a broken business model.

      Now, let’s address the Coke vending machine analogy. From a ROIC perspective, it makes perfect sense to use vending machines (low economic cost base) to sell a random Coke products than to spend the money for a big box, the inventory, etc (see previous paragraph). The high mark-up helps offset the uneven demand for the Coke product (and we know demand is uneven because the buyer is random because he is looking for convenience at time of purchase).

      Mr. Hines, I don't believe I can convince you so you can have the last word if you choose. I've enjoyed our friendly "debate" and I wish you much success on your WAG investment.

      Cheers.

      View article »
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