MMMPARSLEY1's Comments

What Is Overstock's CEO Afraid Of?

Wed, 04 Nov 2009 15:44:34 -0500

Fascinating Article.

I love getting deep into these reports, but the work can be brutal, thanks for making more lucid the plight of overstock.com, as it tries to inflate its stock despite a pitiful balance sheet.

BTW, at almost the exact moment this article was published, OSTK eroded all of its 9% gain for the day.

Barron's says shares of private prison operators (CXW, GEO, CRN) trade at untenable discounts as investors obsess over states' stop-gap attempts to curb costs, and overlook prisons' steady profitability, and a widening gap between supply and demand.

Mon, 19 Oct 2009 00:58:09 -0400

Untenable Discounts?

Book values and P/E Ratios are about 1.5 and 15 respectively. Those are pretty average stats, certainly not enough to make these stocks a screaming buy.

Natural Gas ETF: Nowhere to Go but Up, Yet It Keeps Going Down

Sat, 11 Jul 2009 03:02:44 -0400

Fantastic Post.

But Natural Gas Isn't Oil. It's not as much directly effected by the rise and fall of the US Dollar as the supply and demand is domestic. Of course, if people have less to spend and less accessibility to borrowed money, they may not have as much discretionary and non-discretionary income; but I'd argue that the price people will pay to heat their home in winter will not decline at the pace of deflation - if that is the eventual macro-economic result.

Lastly, deflationary forces would have to knock down the price of drilling by 50% before most drillers would be able to operate on any margin at all. This winter will find extractions down, with consumption likely to be up as prices are low. The eventual result could be a price spike with production stuck and demand fixed.

On Jul 10 08:03 PM Did U Think The Ponzi Scheme Would Last? wrote:

> Any of you guys ever hear about this thing called deflation that's
> going around? If not, time to read up on Prechter who predicted
> this would all happen well in advance. The money supply is the monetary
> base that we all hear about the fed debasing but it is also credit
> (and its brother, debt) that the fed HAS NOTHING TO DO WITH AND NO
> CONTROL OVER ONCE IT IS OUT THERE.
>
> Are you listening? The debt that the banks have been allowed to
> push into the money supply has inflated it FAR more than the fed
> could ever hope to. And now that debt is going bad. When the debt
> is written off, the money supply shrinks. Period. The fed has no
> control over it because the debt is a couple orders of magnitude
> larger than what the fed can print up.
>
> Some people think the fed can just print forever. China, apparently,
> does not agree. They made it clear to Geithner recently that he would
> not be allowed to do this without interest rates skyrocketing. If
> that is allowed to happen, home sales will plummet and housing prices
> will follow them down. This will trash the banks who are trying
> to hold the debt associated with overpriced homes on their books
> as if it will some day return to 2006 valuations. If interest rates
> go to 10% or more, home prices could see 1985 values.
>
> It's a catch 22 and the result is deflation. The fed is caught between
> a rock and a hard case (China). Commodities have rolled over for
> the next wave down.

Book Review: The House of Dimon, by Patricia Crisafulli

Sat, 11 Jul 2009 02:50:47 -0400

I find this article chafes my spirit rather uncomfortably.

All you have to do is look at JP Morgan's Balance Sheet. With a (miraculously rising?) current ratio of 1.08 and an indiscernible mix of debt, I don't trust Dimon and Co. at all.

The next wave of credit problems is coming, and without the consistent and directed strategical planning of our money masters, JPM wouldn't survive the next wave - Along with every other highly leveraged megabank.

Google's Eric Schmidt on the New World

Fri, 03 Jul 2009 21:18:13 -0400

How about government not funding both "real innovation" AND ALSO not funding broken "traditional businesses". How about reverting back to nature's primal law; competition.

It's not fair to anybody if the government helps fix an economic result.

No Bailout for the Governator: California's 'Fiscal Emergency'

Thu, 02 Jul 2009 15:20:12 -0400

Incidentally,

How do you run a state into the ground. It's basically a business which earns money for simply setting up shop and forcing you to pay them for doing nothing; for adding to absolutely no value. It's 100% pure profit.

The only obligation is to redistribute the money inefficiently.

It's a tough job, but somebody has got to do it.

No Bailout for the Governator: California's 'Fiscal Emergency'

Thu, 02 Jul 2009 15:17:32 -0400

Concept Wizard,

California could put 128 billion in the bank if that was how much they were cash flowing each year.

Problem is that they have expenses; teachers to pay, police to pay, health care costs, government programs, state welfare, debt to service etc.

No business or state banks all its revenue. I think this goes without saying.

Chart of the Day: Household Equity

Tue, 09 Jun 2009 09:30:54 -0400

Although Felix Salmon tends to analyze the data fairly, the original creator of the chart, "WcW", appears to have implied that the homeowner's equity/National GDP (HE/GDP) returning to historically moderate numbers means housing demand will stabilize in the near to moderate term.

The main message I take from the above visual is that superfluous savings got locked into homes, leaving many to tap their housing equity in order to have cash for their daily living expenses. Said from another angle, too many people bought too much home for too much and that is likely to be corrected by an inversion of the HE/GDP recent highs to the downside.

Buffett Gets 'Comeuppance' After Gold Outperforms

Sun, 07 Jun 2009 05:16:46 -0400

I worry about Gold when it appears historically overvalued vs. other commodities like Natural Gas and Agriculture.

Although I'd be scared shitless shorting gold in the near term, I feel much more secure holding UNG or DBA than GLD.

BTW, Natural gas just doubled bottomed on ridiculous volume.

Schadenfreude: Finally, Countrywide's CEO Getting What He Deserves

Sun, 07 Jun 2009 05:01:57 -0400

Understanding these oft-neglected signals are what make the traders exceedingly wealthy.

Schadenfreude: Finally, Countrywide's CEO Getting What He Deserves

Sun, 07 Jun 2009 05:00:38 -0400

Classic body language when a human being is clearly lying is the ol' finger over the mouth/nose.

Check out what is being said and and the motion of Mozilo's hand in that video at the 7:22 mark on the embedded video above.

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

Mon, 25 May 2009 13:21:38 -0400

I am not suggesting anybody do this, but if society brakes down via a dollar debacle or some other scenario; there will be nothing stopping you from growing some nice herb for you and your terrified friends and relatives. If you want, you could even exploit your ability to grow such herb by selling it, pocketing whatever people decide to exchange as a unit of currency.

I don't think that is going to happen - but I don't think the people I know are ready for a man vs. man, woman vs. woman, man vs. child etc. internal warring for an extended period of time. Even if I have to eat the grass in my yard, I probably won't shoot my neighbor for his pinto beans he's been storing in the basement.

The Bears' Skepticism Is Getting Old

Sun, 17 May 2009 16:01:07 -0400

InvestBaboo,

While it's impossible to argue against the idea that the masses opinion of the safety of equities is a strong negative indicator, I don't believe the seekingalpha community is representative of the average investor. Most people in this community actively follow the newscycle, and have healthy skepticism about whatever they hear on CNBC. Moreover, a significant amount of the posters here have some skill in doing their own research and due diligence.

There are plenty of reasons to be bearish. The most significant one is that bear markets don't end at 22x projected year-end earnings. That's where we stand right now. A double from here would be valuing companies in a time of suspect growth at Internet Bubble PE's of 44x 2009 earnings! If valuations are halved from here because of the continued drag on earnings and the consequent weakness in investor sentiment, the market would be valued at a conservative, yet still fair, 11x 2009 earnings.

I offer that as only one example of legitimate reasons to be prudently bearish. I also want to caution you to believe the seekingalpha community shares the same demographic as the CNBC Jim Cramerites who are much more reliable negative indicators.

Dave

On May 17 12:28 PM InvestBaboo wrote:

> This is very good. Almost all the comments here are bearish and many
> extremely bearish in nature. By definition such overabundance of
> bearish sentiment in the early stages of a bull market is good because
> it helps sustain the rally and take the market to new heights.

>
> As I have always said everytime I have tried to judge the direction
> of the market based on my own anaysis I have been wrong. I just follow
> the trend. We have had a negative week and yet the charts don't say
> the trend has ended. If the trend does end I will jump ship and let
> my bearish emotions come out in full swing and have a good cry with
> all the bears. Meanwhile, I will finger those crispy currency notes
> I have in my pocket thanks to the recent bull market which I benefited
> from by just following the trend rather than sitting on the sidelines
> like most bears shaking their heads in disbelief. Why people just
> don't follow the market rather than sitting on the sidelines and
> trying to second-guess is beyond me!

How Should We Improve Seeking Alpha's Comment Rating System?

Fri, 15 May 2009 21:08:09 -0400

And we sometimes wonder why the tax code has to be so complicated! Look at how complicated properly structuring something as simple as a Seeking Alpha Commenter Reward System can be!

I guess I'm not trying to say that our income taxes need to be as complicated as they are, but rather than it's best to find a simple, straightforward, user-friendly system than as "perfect" a system human minds can develop. At some logical point, there is a degree to which seeking perfection outweighs the benefits of a simple, yet slightly flawed system which everybody can understand.

Personally, I feel that the current reward system could use a little fine-tuning. Perhaps a simple mathematical formula that combines Positive vs Negative Ratings as a percentage (which would reward quality posters who post less frequent but high-quality posts) and also as a sum total would work. The main point I'd like to emphasize though is err on the side of simplicity over erring on the side of complexity.

Dubai World sues MGM Mirage (MGM) to limit its exposure to the troubled $8.6B City Center project. Dubai World wants the court to free it from making future payments and meeting other obligations of its partnership deal. MGM -3.5% premarket.

Tue, 24 Mar 2009 09:01:57 -0400

Whoever could have predicted building multi-billion dollar complexes to lure people from lush, beautiful countries into the middle of a glorified dust-bowl wouldn't work?

After today's 12%-or-so rally in bank stocks it may be time to unload, BofA analyst Richard Bernstein says. Soaking up toxic assets only delays the eventuality of consolidation, he says, and the government won't be able to prop-up sickly assets forever.

Tue, 24 Mar 2009 06:00:55 -0400

I'm not sure if I agree with Bob Lobb that there are "tons of underpriced properties" available right now. It's hard to argue that any asset is priced too low when the unsold supply of that asset is reaching historic highs on a monthly basis.

In a few months, after a few more housing inventory numbers come in, we may begin to postulate housing values may be bottoming. But for this theory to be viable in a few months, a steep drop in housing inventories MUST take place in the meantime. Even if that is to occur, remember that 2009 in the safest year for mortgage defaults as it is the year where subprime mortgage resets abate while Alt-A's and Option Adjustable Rate Mortages lurk in the shadows - the latter resetting in 2010 and 2011. If the USA is going to save itself from the subprime debacle, it will do it just in time to retrench for the next wave of housing specific weakness.

To state that Geithner's plan is some kind of panacea, or to offer it as an argument that bank's will begin to reap in unencumbered profits because of this shows naivete, at best. Today's banking sector excitement is easily explained by modern man's propensity to stay enamored by fast moving, BlackBerry epitomizing, short-term thinking/gratification

So although equities may very well be undervalued, as the housing inventory situation is very US specific, there is likely much more asset destruction and deflationary pressure ahead in the housing market, which should supress some sectors of the market - like those profiting of our ability to make our mortgage payments - ie the Banking Sector.

traderfeed.blogspot.co...

Eclectica Asset Management's Hugh Hendry Is Wickedly Good: See for Yourself

Sun, 22 Mar 2009 05:12:36 -0400

Its Hugh Hendry's certainty in his abilities which makes me cautious about heeding his advice. There are many places around the world who have been producing a lot and consuming very little of that. Betting in equities that will benefit from a rise in the producer nation's consumers would seem to be a very safe bet at a time when T-Bills and Savings Accounts offer almost no yield at all.

The whole world won't stop consuming at the same time, because wealth and purchasing power is variable. One nation's currency depreciation is another's appreciation. Somewhere someone will be relatively better off than they were before in contrast to the global median, and unless the world's population goes on an ascetical binge all at the same time, there will be money to be made somewhere.

Burying your money out of fear tends to be a self reinforcing feedback loop that is only going to be a profitable one if everybody agrees on it. And everybody right now seems to agree that this is, indeed, a time to bury -- from townies, to investment advisors, to Mayan prophecy interpretors of global doom.

Hugh Hendry is bright, indeed, but he should be looking at the masses of common people around him who take the same position - albeit via more simplistic reasoning - and wonder if he's missing a clear negative indicator. Furthermore, his recommendation on gold should be taken with caution. The only demand driver for gold over the last year has been the ETF gold trading funds. Easy in, Easy Out.

Pride comes before fall.

Don't Watch CNBC

Sun, 15 Mar 2009 06:26:48 -0400

It's hard for anybody to argue the following against the central tenet espoused in this column; that CNBC gives viewers a trading advantage and/or serves a valuable public service.

For most of us on seekingalpha, it goes without saying that CNBC broadcasts their scheduled programming to a global audience, and by the time you hear them pick up on a story - that story has already effected the markets.

A more accusatory argument, and also my personal opinion, is that CNBC relies on online brokers and other agents advertising dollars to operate. Those businesses make money on trading frequency rather than profits. They also are in a powerful position where they can reach hundreds of millions of homes around the globe, and seem to have utilized that luxury to deliberately spread dis-information about how and why the market moves - on both intra-day and long-term basises.

They do this because if you are an trading company on Wall Street, you likely make the bulk of your money by profiting from others transaction costs. They get what spills out of your cup everytime you fill up. Those "collection agencies" reside where the real money is made and where the real influence lies.

Many Wall Streeters don't know any more than you or I, and likely much less, about analyzing financial statements and dealing with risk management and risk/reward. That is not their business for the most part. They are not better traders than you or I, but merely the beneficiaries of our fear and greed surrounding money and our propensity towards taking an action - any action - to appease our emotional state.

CNBC begins their market-hours broadcast right off the trading floor of the NYSE. They end it right there too. Right in the middle of Wall Street. Right in the Middle of the private trading firms, the investment banks, and all the enormously wealthy money changers/handlers of the modern age. Their incentivized to create more transactions, and you are their target.

Buy Monday and Sell Thursday. Buy Thursday and Sell Monday. It doesn't matter what's going on. It doesn't matter what you are buying or what you are selling or whether you are making money or not. It doesn't matter what the market does. The goal is to keep you trading, to keep you from investing for the long term.

CNBC as a collective organization was unaware of and powerless against the recent market crash, although to be fair many of the more intelligent inside the company likely agreed with "The Economist" magazine which often argued in 2007 that most asset values were overpriced globally. The important thing is not to harp on them for helping cause a crash or deepen it - asthey most certainly didn't cause it.

Rather, it is their indefensible new catchprase they can't stop agreeing on that "Buy and Hold investing is dead." In this kind of environment, where everything is cheaper than it was before and therefore is - with hindsight's clarity - a much better buy and hold than before.

Yes, if you can avoid watching CNBC, I'd recommend it. You could find yourself saving time and money. There is also a large, though subtle, opportunity cost to watching the network,especially in light of their existing at this moment many attractively priced small, mid, and large-caps out there.

Think about sectors you think have strong still have growth potential, or sectors you think have been unfairly punished. Then analyze a few companies in them and find ones with a strong balance sheet that illustrates both a strong margin of safety (high percentage of tangible assets and or only cash vs. current market valuation) and growth potential. Those companies are out there and you can find them if you put in the time.

Notable earnings before Thursday's open: SFD, SOL

Thu, 12 Mar 2009 01:32:02 -0400

What about (Ocean Power Technologies) OPTT!

It will be interesting to see the progress on their power-buoy system and hear whether they have started designing the 500MW powerbuoy.

We should hear about that tomorrow on the conference call.

"In less than two months, the hopeful enthusiasm that welcomed the Obama administration has given way to growing worry and frustration. I find myself wringing my hands, not over the goals President Obama has set but over the ineffectual ways the administration has pursued them." (WaPo)

Thu, 12 Mar 2009 01:28:51 -0400

What surprises me most is that Obama actually seems intent to come through on some of his campaign promises. If Obama branded himself a man of "change", coming through with real political action post-election on populist driven political rhetoric microphoned to the masses during the election; this appears to me to be change.

Whether America's wealthy elite excused their opulence to the detriment of the other 98% or whether we truly need an elite class to "raise the tide" and "lift all ships" remains to be seen. I, personally, don't feel that we've had an executive department that combined intellectually brilliance with ethical concern for quite some time. I've only lived 26 years, so my fully-informed knowledge on the previous statement is specious at best, but I'm sure the majority of you who lived a few more years than me will agree.

Nobody should rightfully expect Obama's vision to have been a success by early March, so let's give him ample time to see if his team can improve upon Bush's 8 miserable years of knee-jerk political theatre.

I'm on the fence for now and am more curious than furious.

Where Is That Mythical Housing Bottom?

Wed, 11 Mar 2009 00:50:18 -0400

One caveat to GoMyLittleSheep's argument is that if you paid more for your house, you are also making higher monthly payments, thus making you more dependent on the income-stream that you had when you applied for the mortgage.

For many individuals, because they paid such a steep price for their house, they can not afford even merely one small financial setback because it will cause them to fall behind on their pay schedule.

In this environment, it's hard for people invest for the next 30 years and buy up all the excess inventory (which as of now is at a record high, ~13 months supply), causing the potential problem of housing staying at low prices due to large supply and, at best, average demand while more and more of those who suffer a financial setback are forced to sell their home due to foreclosure.

Goldman Sachs Is Toast

Tue, 10 Mar 2009 23:50:38 -0400

Check out this guy's blog. There is a link provided under his photo at the top left of the page, www.dormroomderivative.../.

Are people paying him to be a professional negative indicator? No offense, brother, but your skill in markets, if applied to chess, would leave you open for a 4 move checkmate.

Goldman Sachs Is Toast

Tue, 10 Mar 2009 18:52:46 -0400

Rohan,

Thanks for the further clarification on the $122,000,000.00 dollar cash holdings.

If what you are saying is true, this 19 year old blogger from Michigan will be quite wrong as time unfolds.

Dave

Goldman Sachs Is Toast

Tue, 10 Mar 2009 05:53:59 -0400

I'll take the opposite side of that bet anyday.

Goldman has $122 billion in cash, which I believe is still considered a tangible asset. Are you sure that they are 23x overleveraged?

It appears to me they have significantly more room for error than either Bank of America (BAC) or Citigroup (C). I'd imagine some financial companies are going to remain standing when this is all said and done, and I see few mega-institutions left standing as cash rich as Goldman.

I'm more of a micro-cap hunter than a institutional bank analyzer, so correct me where I'm wrong. Perhaps my arguments are too simple.

Dave

VIX Suggests Changes in Selling Behavior

Sat, 07 Mar 2009 05:00:22 -0500

Are you guys all sleeping? The market will all do what nobody is expecting it to.

The next move is going to be a short squeeze of historic proportions, for not other reason than the market is over-shorted.

Nobody is saying it, that is exactly why it is going to happen.

Dave

Fannie Mae (FNM) tests a new idea to reduce foreclosures: allowing homeowners to short sell their houses at less than the outstanding loan value, and forgiving the difference. FNM would set the minimum price it's willing to accept.

Fri, 09 Jan 2009 13:41:19 -0500

Who would be the buyer of these short sales?

Investor Sentiment and Market Returns: Now's the Time to Be Bold

Fri, 28 Mar 2008 23:11:22 -0400

Money is being printed with rapidity to increase "liquidity".

Who's fearful it's going to end up in Joe Sixpack's pocket? Not I.

Who thinks it is going to end locked in commodities sending them to levels that cause commodity prices to fall sharply on their own weight, while destroying economic growth? Not I.

Who think it's going to end up in companies that are innovating and creating new efficiencies (alternative energy, distribution technology) instead of just extracting stuff from the earth? I do.

Stocks are going to rise from here - especially China Stocks.

Buy EFUT, WX, XFML now, and you'll be sitting pretty in 10 years.

Bear Stearns: 'Remain Calm! All Is Well!'

Mon, 17 Mar 2008 07:57:10 -0400

Would you stop it already, Tony?

4 Recommendations to Defend Against a Financial Armageddon

Mon, 17 Mar 2008 07:39:10 -0400

In many sectors, stocks are not subject to future writedowns, but many of these stocks are trading at or below book value. Although I am extremely bearish on financials in the short-term, I think many stocks, such as the companies more logically independent from consumer spending, with PEGs of .1-.2 are quite attractive.

I own a company right now with 24 million in assets which is trading for 14 million today. After writing off their unprofitable operations, they earned 800K after tax last quarter alone. With a real PE of 4 trading at 40% lower than book value, there is plenty of room to absorb an economic slowdown.

From a pure valuation standpoint, many companies are cheap right now. As more cash is injected into the system, that cash is likely to fall somewhere - and I doubt it will continue to be buying commodities unsustainably or a rush to lower 2-month treasury yields to under 1%.

Correct me where I fail in understanding...

Tongjitang Chinese Medicines: Finding Value in China

Mon, 17 Mar 2008 07:19:02 -0400

Tongjitang has over 110 million in cash. 797.x Yuan.