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  • Genco Shipping: Overvalued and Overleveraged in a Collapsing Market  [View instapost]
    All of your assumptions are based on oversupply beyond 2011. China shipbuilding is not going to be financed without a profit cushion in the equation. Do you really think shippers want to build more ships to operate at a loss? You do not mention any FACTS regarding ships being ordered by Vale and others. Where is the data? Where are your references? Do you really think these companies want to expose themselves to the non-core business of shipping?

    "Many of these ships are earning rates that are more than 2x current market rates. As these ships roll-off into the weakened market, Genco’s earnings will fall from $4.20 per share in 2010 to $0.62 in 2012, or a drop of 85% (assuming ships are re-charted at current 1-year charter rates). Genco is currently trading at 25x 2012 EPS."

    Current 1-year charter rates are due to the occurrence of natural disasters and the cyclical nature of shipping along with a known slowdown in shipping demand during the Chinese New Year. You fail to recognize these very important facts. Thus, your earnings calculations are low balling beyond an extreme.

    "Genco’s financial performance is highly sensitive to freight rates. The Company’s large fixed cost base (including interest) means even a 10% move in freight rates can more than double earnings per share. The figures below illustrate how Genco’s earnings move with freight rates."

    So, a 10% move up in freight rates is a possibility. Also, a 20% or 30% or higher improvement is a possibility. Talk about a stock shorting disaster. Or you can watch your capital disappear by playing a bearish bet with options.
    Feb 10, 2011. 09:21 AM | 1 Like Like |Link to Comment
  • The long-awaited correction may not have come to the Dow or the S&P 500, but small-cap stocks have suffered a two-day walloping that may bode ill for larger caps. Small caps, mercifully, seem to have found at least a temporary floor in trading today. (high-beta Russell 2000 stocks)   [View news story]
    a much needed weeding out of the weak hands
    Jan 21, 2011. 03:00 PM | 5 Likes Like |Link to Comment
  • Put Players Hope Diana Shipping Will Continue to Sink 
    yup they shorted DSX on uncertainty... but they will need to cover
    Dec 30, 2010. 02:52 PM | Likes Like
  • 10 Bold Predictions for 2011, Part 2  [View article]
    the first 1-2 months of 2011 will be bullish... after that I cannot predict
    Dec 30, 2010. 01:48 AM | Likes Like |Link to Comment
  • Home prices are taking a double-dip and may "bounce along the bottom" for a while, but never fear - the government may be starting another housing bubble. Most federal high-risk mortgages have been quietly shifted to the FHA - which just announced its intention to push nearly half its home purchase volume into subprime territory by 2014-2017, essentially a guarantee to put taxpayers at risk again.   [View news story]
    The FHA will hold all the junk. Later they will be packaged and sold to the highest bidders like PIMCO. The US citizen is once again getting smacked by Obama socialism.
    Nov 30, 2010. 08:30 PM | 5 Likes Like |Link to Comment
  • Huge Call Action in Electronic Arts  [View article]
    ERTS at $15 and under is fair risk / reward to possibly trade to $20.
    Nov 24, 2010. 01:44 AM | Likes Like |Link to Comment
  • Tightening oversight: America's 19 stress-test banks are headed for another capital review for "adverse" circumstances by early 2011, under conditions set by the Fed. The central bank also laid out guidelines for those firms that want to return cash to shareholders through dividend hikes or buybacks, to determine whether they hold sufficient capital to do so.   [View news story]
    another mark-to-fantasy exercise
    Nov 17, 2010. 04:19 PM | Likes Like |Link to Comment
  • After yesterday's sharp spike in silver, and news that CME Group will raise margin requirements for COMEX silver futures, some equally sharp profit-taking: silver -7%, back under $27. Other metals: gold -1%, platinum -3.7%, palladium -5.6%, copper -1.6%.   [View news story]
    Dommodities need a months rest and the rise in the USDollar will pressure the price of commodities downward.
    Nov 10, 2010. 01:39 PM | 1 Like Like |Link to Comment
  • The Dollar Recovery, On Script  [View article]
    Look at the currency exchange rates. The foreign currencies AUD RMB YEN etc are all weaker against the dollar. Dollar rise is predicated by the world not just the US.
    Nov 8, 2010. 03:07 PM | Likes Like |Link to Comment
  • With a $1.1B capital hole it needs to fill by the end of the year, Bank of America (BAC) may make up the shortfall by paying some employee bonuses in stock instead of cash. Considering that shares are trading at a low, employees may not be averse to getting paid in stock that could significantly appreciate.   [View news story]
    How about BAC pay employees in IOUs like CA?

    Shouldn't companies be outlawed from using stock as payment?
    Nov 8, 2010. 03:00 PM | 3 Likes Like |Link to Comment
  • Hedge funds raise their bullish bets on oil, to the highest level in more than four years; net-long positions climbed to a record. "It’s all about the dollar being debased," says one trader.   [View news story]
    Hedge funds talking their book as they sell their oil futures contracts.
    Nov 8, 2010. 01:55 PM | 3 Likes Like |Link to Comment
  • “Easier financial conditions will promote economic growth,” Bernanke writes in defense of QE2, but Peter Boockvar says that people are no better off if inflation is an equal byproduct. S&P 500 is up 14.4% since Bernanke's Aug. 27 speech, but the CRB index is up 15.5%, highlighting "the fallacy of [the Fed's] wealth effect goal."   [View news story]
    Bernanke is owned by his friends at the FED.
    Nov 4, 2010. 03:15 PM | 3 Likes Like |Link to Comment
  • Monetary Policy Easing Is Nothing to Fear  [View article]
    US citizens did not need QE2. However, the primary dealers of the FED gladly welcome the profits from QE2. Those employees of the dealers will certainly prosper.
    Nov 4, 2010. 02:46 PM | 2 Likes Like |Link to Comment
  • QE Proving a Success, But Emerging Markets Respond  [View article]
    The reality of QE2 is that emerging economies are totally against it. Brazil and China and Australia have already enacted policies to curb inflation... knowing that inflation is at inappropriate levels for the current stage of their economic cycle. Paying exorbitant product prices, commodity prices and creating excess businesses leads to disaster when growth contracts. Other countries are familiar with the results of the US housing debacle.

    The US is basically using the FED to create export demand... i.e. sell the emerging markets the goods the US produces when the prices are at their peak(generate the highest profit margins). Also, weaken the dollar so exported US goods/services are more competitive. And US companies' use of foreign goods/services are expensive. PROTECTIONISM!

    Expect worldwide protectionist measures to be enacted immediately.
    Nov 4, 2010. 02:37 PM | 2 Likes Like |Link to Comment
  • Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months, and food makers and retailers including McDonald's (MCD), Kellogg (K) and Kroger (KR) are signaling that they will try to pass along more of the higher costs for ingredients to consumers in spite of the weak economy.   [View news story]
    Will the rich spend more because of QE2? Will the rich sell stocks or spend because their portfolios or IRAs look better?

    They won't. And I won't spend more either.
    Nov 4, 2010. 02:33 PM | 3 Likes Like |Link to Comment