DaveinHackensack

Weekly Summary of Thoughts

Why not start? You solicit donations on your site; this would be a way for your readers to compensate you while getting something else in return.

Weekly Summary of Thoughts

Mark,

OT, but I sent you an e-mail last week asking if you’d like to become an affiliate for site I just launched, and, by doing so, offer your readers a discount on membership to the site. In the event my e-mail got stuck in your spam file, I’m mentioning this here.

The site is shortscreen.com ( shortscreen.com/ ), and it offers tools and ideas for short sellers, including a screener based on the Altman Z-Score model (actually, on that model and the Z”-Score version). I think it might be of interest to those of your readers who short stocks as part of their overall portfolio strategy.

If you agree, here is the scoop on the affiliate program: ( shortscreen.com/become... ).

KIT Digital's FeedRoom Acquisition: Lots of Potential, Lots Of Questions

I shorted this at $11.55 yesterday.

Greenlight Capital: Cautious over Q2

I shorted BAGL a couple of weeks ago, at $13.78. Click the link if you want to see my rationale for that.

Companies Rated Triple-A

You seem to be confusing the Altman Z-Score with the credit ratings assigned by the rating agencies. If you run the Altman Z-Score Model on Apple, you'll find the model shows it to be in excellent shape financially. Apple doesn't get a triple-A rating from the rating agencies because they only rate companies that issue debt.


On Mar 14 03:17 PM martyg wrote:

> so apple computer is not on the list because it has no debt (zero)
> and it has over $26 billion in cash. they must be packing the furniture
> and staring bankruptcy right in the face within 2 years.

11 Stocks Selling Below Cash

USEG, a stock I've mentioned on my site a few times, is selling for less than net cash at today's closing price. Yahoo! Finance shows $70.31 million in cash, and $14.15 million in debt for USEG, with a market cap of $53 million.

Deflation, Inflation, Rinse and Repeat

When, within the next 24 months, would you suggest starting to short Treasury bonds?

Where Are Cash-Rich Companies Hoarding Their Money?

<I>"Banks are going under, and the FDIC only insures deposits of up to $250K—they raised limits as part of the mega-bailout. Treasuries are looking less and less attractive with every intervention/ liability the Feds add to the US balance sheet."</I>

What about investing it in TIPS or in the commercial paper of strong, non-financial companies (e.g., UTX)?

@VIC: Unprecedented Value

If these managers weren't buying anything -- if they were forced to sell even, due to clients pulling their money out -- do you think they would admit that?

@VIC: A Radically Different Context for Value Was Going On Outside

"So, at what point do we find "value"?"

One idea that comes to mind from reading Vitaliy Katsenelson's thesis about secular range-bound/bear markets: instead of considering a stock a value because it trades at a discount to market-average P/E multiples, look at what the market average P/E multiples were at the end of previous range-bound/bear markets. For example, after the range bound market ended in about 1950, the one year trailing P/E ratio on the S&P was 7x. So, theoretically, if you could find a stock trading at 7x today, and you thought that company's earnings were sustainable (a key point), that might be a value.

The Beginning of the Endgame for Monetary Policy, Redux

The key cause for optimism here is the resilience of the U.S. dollar and the demand for U.S. Treasury securities. That gives the government the ability to borrow at low rates to buy up distressed assets, provide more fiscal stimulus to the economy, provide direct capital injections into key companies, etc. Our debt as a percentage of GDP compares favorably to that of some other first world countries.

After the current crisis dissipates, and the flight to quality recedes, the bond market may drive up the U.S. government's borrowing costs, but this can be ameliorated if we pass reforms that put our entitlement spending on a sustainable trajectory.

The Beginning of the Endgame for Monetary Policy, Redux

<I>"Did we ever have a financial crisis before we took the dollar off the Gold Standard?"</I>

Only about once every decade or so. The 19th Century was full of them. We even had a populist presidential candidate (William Jennings Bryan) blame one of these financial crises (a wave of deflation) on the gold standard.

@VIC: Mohnish Pabrai the Dhandho Investor - Interesting Times, Interesting Opportunities

To be fair, Pabrai did well in the 2000-2002 bear market, although he has gotten his head handed to him on a number of stocks over the last year and a half or so.

Cash Is King?

David,

As a commenter on my site noted when I quoted from your piece here, your arithmetic appears to be wrong here -- USEG's enterprise value, according to your numbers above, should be negative $2 million, not negative $20 million. Good post otherwise.

Is the Commodities Bull Market Over?

"According to Jim Rogers, the famous commodities guru, commodity prices move in cycles of about 18 years, and since the current bull market started at 2002, he expects it to last until about 2020."

Jim Rogers has said the current secular bull market in commodities started in 1999, not 2002, and I don't recall him definitively saying he expects it to last until 2020. He's usually more careful in his statements. He has said that, historically, the shortest such secular bull market in commodities last 15 years, and the longest lasted 23. If that history is a guide, the current secular bull market could last until 2014 or longer.