Sebrock's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/138156/comments http://seekingalpha.com/article/108533-the-convertibles-collapse-offers-investment-lessons-for-all-investors?source=feed#comment-318042 318042
When an arbitrage strategy is not self funding and truly hedged (by means of cash flows where if you are in an illiquid position, the cash flows will still keep you earning a return) and the non-levered returns are the same as yields on much simpler instruments, then you get out, not leverage up. ]]> Mon, 01 Dec 2008 08:56:23 -0500
When an arbitrage strategy is not self funding and truly hedged (by means of cash flows where if you are in an illiquid position, the cash flows will still keep you earning a return) and the non-levered returns are the same as yields on much simpler instruments, then you get out, not leverage up. ]]> http://seekingalpha.com/article/82724-will-housing-bottom-in-2010-or-2012?source=feed#comment-193074 193074 Thu, 26 Jun 2008 07:47:38 -0400 http://seekingalpha.com/article/77209-monsanto-turn-rising-food-prices-into-profits?source=feed#comment-167287 167287 Wed, 14 May 2008 07:40:55 -0400 http://seekingalpha.com/article/69197-survey-of-banking-industry-intangible-assets?source=feed#comment-128789 128789 Wed, 19 Mar 2008 11:27:12 -0400 http://seekingalpha.com/article/68332-why-the-u-s-dollar-won-t-die?source=feed#comment-125949 125949 Thu, 13 Mar 2008 10:27:06 -0400 http://seekingalpha.com/article/67631-two-explanations-for-surging-oil-prices?source=feed#comment-123698 123698
I'm pretty sure I read an editorial by him in the NY Times or WSJ that said the exact opposite. Are you sure this list is right?]]> Fri, 07 Mar 2008 15:03:10 -0500
I'm pretty sure I read an editorial by him in the NY Times or WSJ that said the exact opposite. Are you sure this list is right?]]> http://seekingalpha.com/article/65946-we-re-range-bound-but-it-doesn-t-feel-like-it?source=feed#comment-118720 118720 Mon, 25 Feb 2008 11:10:29 -0500 http://seekingalpha.com/article/65789-thoughts-on-ambac-bailout-mbia-berkshire-s-muni-bond-backing?source=feed#comment-118517 118517 Sun, 24 Feb 2008 20:51:17 -0500 http://seekingalpha.com/article/62299-the-monolines-need-200-billion-no-way?source=feed#comment-113764 113764
I would love your insight on Advanta. By my calculations, the stock is worth somewhere near the $20 mark. On an adjusted book value without any future revenues the company is easily worth $11. If you start with their balance sheet and assume that their CDO investments are completely written off and then assume that 9% of their receivables are charge offs (in the 00-01 recession they reached as high as 7.5%) the $13 book value becomes $11. Off balance sheet their securitization portfolio has an average net yield of 4.5% (if charge offs approach 9%, then there are still no losses - only a drop in the total income from securitizations of 0 (which is reflected on the income statement). So now we are left with $11, now lets assume that their net income stays at $70m after 2 tough years and you capitalize that income at a 15% cost of capital - you get an additional $9 a share. So back of the envelope this company is worth way more than the current market price. It basically comes down to this, if you dont like Advanta at current levels then you pretty much are making a bet that the economy is going to completely fall off a cliff which would make the S&P drop a lot more than this already depressed stock (I'm actually long Advanta @ 6.80 and short @ 50 delta the S&P - so far it's working out great). Another thing to consider is that Advanta lends to small businesses - we run several small businesses and can tell you that any purchase we make on a credit cards (Advanta of course) we do to manage the receivables cycle or as investment (we arent buying useless electronics like the consumer card customers) and our credit card expenditures are part of our debt calculations so we dont spend what we shouldnt. I think a lot of businesses are this way. So you could definitely see a rise in delinquencies past 30 days (as you did see in December) but it is also possible that the small businesses slow down and pay down their debt burden on their cards as they receive payment. It is also possible that Advanta's spread increases as Libor spreads come down and credit card rates increase. Am I absolutely crazy about this or are people so hysterical about financial stocks that they are crapping on everything? I mean if I had all the money in the world, I would buy the entire business and be a very happy man. There are very few stocks I can say that about and it's been quite some time that the environment has looked so good for those who like to invest based on intrinsic value and not relative value. I guess everyone will keep on second guessing and mistrusting financial institutions until the whole monoline issue is further understood even if it doesnt affect every financial stock.]]> Wed, 30 Jan 2008 20:47:05 -0500
I would love your insight on Advanta. By my calculations, the stock is worth somewhere near the $20 mark. On an adjusted book value without any future revenues the company is easily worth $11. If you start with their balance sheet and assume that their CDO investments are completely written off and then assume that 9% of their receivables are charge offs (in the 00-01 recession they reached as high as 7.5%) the $13 book value becomes $11. Off balance sheet their securitization portfolio has an average net yield of 4.5% (if charge offs approach 9%, then there are still no losses - only a drop in the total income from securitizations of 0 (which is reflected on the income statement). So now we are left with $11, now lets assume that their net income stays at $70m after 2 tough years and you capitalize that income at a 15% cost of capital - you get an additional $9 a share. So back of the envelope this company is worth way more than the current market price. It basically comes down to this, if you dont like Advanta at current levels then you pretty much are making a bet that the economy is going to completely fall off a cliff which would make the S&P drop a lot more than this already depressed stock (I'm actually long Advanta @ 6.80 and short @ 50 delta the S&P - so far it's working out great). Another thing to consider is that Advanta lends to small businesses - we run several small businesses and can tell you that any purchase we make on a credit cards (Advanta of course) we do to manage the receivables cycle or as investment (we arent buying useless electronics like the consumer card customers) and our credit card expenditures are part of our debt calculations so we dont spend what we shouldnt. I think a lot of businesses are this way. So you could definitely see a rise in delinquencies past 30 days (as you did see in December) but it is also possible that the small businesses slow down and pay down their debt burden on their cards as they receive payment. It is also possible that Advanta's spread increases as Libor spreads come down and credit card rates increase. Am I absolutely crazy about this or are people so hysterical about financial stocks that they are crapping on everything? I mean if I had all the money in the world, I would buy the entire business and be a very happy man. There are very few stocks I can say that about and it's been quite some time that the environment has looked so good for those who like to invest based on intrinsic value and not relative value. I guess everyone will keep on second guessing and mistrusting financial institutions until the whole monoline issue is further understood even if it doesnt affect every financial stock.]]> http://seekingalpha.com/article/59666-the-big-rollover-is-officially-here?source=feed#comment-109389 109389 Thu, 10 Jan 2008 09:07:29 -0500