Deep Value's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/204873/comments http://seekingalpha.com/article/177982-seeking-high-alpha-low-beta-countries-part-i?source=feed#comment-805272 805272
In my opinion, any market timing criticism grossly misses the point.

Great article, can't wait for Part 2!]]> Mon, 14 Dec 2009 13:08:35 -0500
In my opinion, any market timing criticism grossly misses the point.

Great article, can't wait for Part 2!]]> http://seekingalpha.com/article/118177-opportunities-in-a-high-correlation-world?source=feed#comment-419723 419723

On Feb 03 03:38 PM Chris B wrote:

> In 1999, I saw that the tech bubble was about to burst, but I held
> onto my one remaining stock, Wal Mart, based on the following assumptions:
>
>
> a) Unlike the tech stocks, WMT had a reasonable PE, so it would hold
> its price even as the tech sector, and only the tech sector, collapsed.
>
>
> b) As investors fled technology, their money would flow into high-quality
> stocks.
>
> Well, as everyone knows, WMT never again reached its high near $70.
> Investors sold WMT down to the $40's to cover their tech losses,
> and few new buyers stepped forward because tech had wiped them out.
> Meanwhile, new money didn't flow into different sectors of the stock
> market, it flowed into cash!
>
> In hindsight, I should have seen the ENTIRE MARKET as one sector
> in investors' portfolios, competing with cash, real estate, currencies,
> commodities, commercial paper, treasuries, private businesses, property,
> etc. I should have thought of market participants not as a fickle
> herd bouncing from sector to sector in the stock market, but as short
> sellers caught in a squeeze, retirees who had lost future income,
> or leveraged index buyers/sellers. When things go badly, they simply
> hit the "sell" button on their browser. Selling out is much easier
> to do now than it was 30 years ago!
>
> Thus, anything that can be bought or sold through your online broker
> is correlated, perhaps irrationally. For investors who want to protect
> their portfolio balances, that leaves few options. Hedge funds and
> short ETF's have multiplied in the last 10 years, but their shortcomings
> are becoming obvious. Even commodity ETF's have failed to preserve
> value this time around. The reason: they all have a "sell" button.
> Soon, treasury and gold investors will learn this lesson, as they
> too have sell buttons now.
>
> Thus, if you want portfolio or income stability, buy a rent house
> (and don't overpay), a timber tract, a professional education, or
> a CD ladder. The illiquidity of these investments is what makes them
> less correlated with the more liquid securities market.]]> Mon, 09 Mar 2009 17:11:38 -0400

On Feb 03 03:38 PM Chris B wrote:

> In 1999, I saw that the tech bubble was about to burst, but I held
> onto my one remaining stock, Wal Mart, based on the following assumptions:
>
>
> a) Unlike the tech stocks, WMT had a reasonable PE, so it would hold
> its price even as the tech sector, and only the tech sector, collapsed.
>
>
> b) As investors fled technology, their money would flow into high-quality
> stocks.
>
> Well, as everyone knows, WMT never again reached its high near $70.
> Investors sold WMT down to the $40's to cover their tech losses,
> and few new buyers stepped forward because tech had wiped them out.
> Meanwhile, new money didn't flow into different sectors of the stock
> market, it flowed into cash!
>
> In hindsight, I should have seen the ENTIRE MARKET as one sector
> in investors' portfolios, competing with cash, real estate, currencies,
> commodities, commercial paper, treasuries, private businesses, property,
> etc. I should have thought of market participants not as a fickle
> herd bouncing from sector to sector in the stock market, but as short
> sellers caught in a squeeze, retirees who had lost future income,
> or leveraged index buyers/sellers. When things go badly, they simply
> hit the "sell" button on their browser. Selling out is much easier
> to do now than it was 30 years ago!
>
> Thus, anything that can be bought or sold through your online broker
> is correlated, perhaps irrationally. For investors who want to protect
> their portfolio balances, that leaves few options. Hedge funds and
> short ETF's have multiplied in the last 10 years, but their shortcomings
> are becoming obvious. Even commodity ETF's have failed to preserve
> value this time around. The reason: they all have a "sell" button.
> Soon, treasury and gold investors will learn this lesson, as they
> too have sell buttons now.
>
> Thus, if you want portfolio or income stability, buy a rent house
> (and don't overpay), a timber tract, a professional education, or
> a CD ladder. The illiquidity of these investments is what makes them
> less correlated with the more liquid securities market.]]> http://seekingalpha.com/article/124606-an-explanation-for-monetary-inflation-and-a-new-low?source=feed#comment-419142 419142

On Mar 07 10:35 AM Matt L wrote:

> Gold is not a useless metal. It is resistant to corrosion, a good
> conductor of electricity, and is ductile and malleable. That makes
> it useful in the electronics industry for electrical contacts. It
> also is a good reflector of infrared and visible light and radio
> waves, which is why it is used to shield satellites and in protective
> faceplates. And people seem to like jewelry made of gold.
>
> While it's value as a currency is a reason for holding gold, to say
> it's "useless" is completely false. If it wasn't valued as a form
> of currency, it would still have value as a useful metal.]]> Mon, 09 Mar 2009 11:04:24 -0400

On Mar 07 10:35 AM Matt L wrote:

> Gold is not a useless metal. It is resistant to corrosion, a good
> conductor of electricity, and is ductile and malleable. That makes
> it useful in the electronics industry for electrical contacts. It
> also is a good reflector of infrared and visible light and radio
> waves, which is why it is used to shield satellites and in protective
> faceplates. And people seem to like jewelry made of gold.
>
> While it's value as a currency is a reason for holding gold, to say
> it's "useless" is completely false. If it wasn't valued as a form
> of currency, it would still have value as a useful metal.]]> http://seekingalpha.com/article/124606-an-explanation-for-monetary-inflation-and-a-new-low?source=feed#comment-416693 416693 - Warren Buffett

So basically you measure inflation by the price movements of one commodity, gold. An otherwise useless metal that derives its value from an age old tradition dating back to when gold was actually a currency.

What you are doing, in a sence, is valuing currency by how much gold it can buy. (If that were true, gold mining stocks would be valued at infinate multiples. The more gold people buy the less their money is worth). Pretty much negating the reasoning behind getting off the gold standard in the first place.

The price of gold is only what people are willing to pay for it. Gold is no longer a currency. It has no inherent value. Don't be the last one the figure that out.]]> Fri, 06 Mar 2009 18:35:29 -0500 - Warren Buffett

So basically you measure inflation by the price movements of one commodity, gold. An otherwise useless metal that derives its value from an age old tradition dating back to when gold was actually a currency.

What you are doing, in a sence, is valuing currency by how much gold it can buy. (If that were true, gold mining stocks would be valued at infinate multiples. The more gold people buy the less their money is worth). Pretty much negating the reasoning behind getting off the gold standard in the first place.

The price of gold is only what people are willing to pay for it. Gold is no longer a currency. It has no inherent value. Don't be the last one the figure that out.]]> http://seekingalpha.com/article/98661-irrational-arbitrage-spread-dow-chemical-s-acquisition-of-rohm-haas?source=feed#comment-330076 330076 Mon, 15 Dec 2008 12:59:25 -0500 http://seekingalpha.com/article/91230-brand-names-important-but-not-key-to-investment-decisions?source=feed#comment-231712 231712
Isn't a company's brand or any other 'qualitative' measure only as significant as the quantitative evidence of its existence. In other words, a company with a strong brand should have higher margins than a company with a weak brand. If not, that company must not have a strong brand if it doesn't translate into pricing power.

True or no?]]> Fri, 15 Aug 2008 23:20:25 -0400
Isn't a company's brand or any other 'qualitative' measure only as significant as the quantitative evidence of its existence. In other words, a company with a strong brand should have higher margins than a company with a weak brand. If not, that company must not have a strong brand if it doesn't translate into pricing power.

True or no?]]> http://seekingalpha.com/article/86104-sunpower-beaten-up-to-buying-opportunity-levels?source=feed#comment-211336 211336 Tue, 22 Jul 2008 08:14:45 -0400 http://seekingalpha.com/article/82184-countrywide-potential-short-squeeze-in-the-offing?source=feed#comment-191970 191970 Tue, 24 Jun 2008 14:24:17 -0400 http://seekingalpha.com/article/81538-could-ebay-be-a-microsoft-takeover-target?source=feed#comment-186647 186647 Mon, 16 Jun 2008 16:31:53 -0400 http://seekingalpha.com/article/81538-could-ebay-be-a-microsoft-takeover-target?source=feed#comment-186645 186645
Nobody's going to buy Word or Powerpoint anymore.

What MSFT needs is enough search Ad Rev. to make their Device Mesh model (same as cloud computing) profitable. Hense the deal with HPQ but it won't be enough. MSFT needs YHOO for the AD Rev. And they won't be buying something just to buy something.

They need search to keep their apps from becoming obsolete. MSFT offered to buy YHOO's search because they need the daily eyeballs it attracts.]]> Mon, 16 Jun 2008 16:27:26 -0400
Nobody's going to buy Word or Powerpoint anymore.

What MSFT needs is enough search Ad Rev. to make their Device Mesh model (same as cloud computing) profitable. Hense the deal with HPQ but it won't be enough. MSFT needs YHOO for the AD Rev. And they won't be buying something just to buy something.

They need search to keep their apps from becoming obsolete. MSFT offered to buy YHOO's search because they need the daily eyeballs it attracts.]]> http://seekingalpha.com/article/79867-dividend-analysis-bank-of-america-corp?source=feed#comment-186189 186189 Mon, 16 Jun 2008 01:34:04 -0400 http://seekingalpha.com/article/81408-can-yahoo-s-yang-survive-as-ceo?source=feed#comment-186182 186182
Jerry Yang is officially unemployed.]]> Mon, 16 Jun 2008 01:11:19 -0400
Jerry Yang is officially unemployed.]]> http://seekingalpha.com/article/79867-dividend-analysis-bank-of-america-corp?source=feed#comment-180335 180335
Do high earnings yields scare you too?

quicktake.morningstar....]]> Fri, 06 Jun 2008 10:40:47 -0400
Do high earnings yields scare you too?

quicktake.morningstar....]]> http://seekingalpha.com/article/78235-bank-of-america-better-than-treasuries?source=feed#comment-180051 180051
I totally agree. I would rather see BAC cut dividends than issue preferred stock. It's kind of like a "heads, existing shareholders lose a little... tails, existing shareholders lose a lot" deal. If BAC makes a spectacular turn around, shares get diluted. If the housing/credit markets keep sh*tting the bed we're stuck with an extremely high fixed cost.]]> Thu, 05 Jun 2008 23:00:22 -0400
I totally agree. I would rather see BAC cut dividends than issue preferred stock. It's kind of like a "heads, existing shareholders lose a little... tails, existing shareholders lose a lot" deal. If BAC makes a spectacular turn around, shares get diluted. If the housing/credit markets keep sh*tting the bed we're stuck with an extremely high fixed cost.]]> http://seekingalpha.com/article/80147-what-is-countrywide-s-lending-operation-worth?source=feed#comment-180035 180035
CFC is trading at only a 10% spread on the deal value but I believe BAC in trading at about 50% of it's intrinsic value.]]> Thu, 05 Jun 2008 22:18:32 -0400
CFC is trading at only a 10% spread on the deal value but I believe BAC in trading at about 50% of it's intrinsic value.]]> http://seekingalpha.com/article/79867-dividend-analysis-bank-of-america-corp?source=feed#comment-178730 178730
I am disturbed by your analysis. If you think BAC is worth $25/share why do you own it? You also say that you think the dividend is safe. So basically, if you’re right, you will have a safe and secure dividend at just under a 10% yield. Do you think the market would allow such a deal? And if so, would you still be confident in the yield?

Also, your analysis uses historic numbers to estimate a valuation with no consideration for the complex reorganizations taking place as we speak and those to come in the near future. A purely quantitative analysis of a company obviously operating in an abnormal micro and maco-economic environment is irrelevant at best and at worst arguably irresponsible.

Morningstar's DCF model values BAC at more than twice the value your model suggests. So if you really do own BAC, for your sake, I hope Morningstar knows something you don’t. ]]> Tue, 03 Jun 2008 16:11:54 -0400
I am disturbed by your analysis. If you think BAC is worth $25/share why do you own it? You also say that you think the dividend is safe. So basically, if you’re right, you will have a safe and secure dividend at just under a 10% yield. Do you think the market would allow such a deal? And if so, would you still be confident in the yield?

Also, your analysis uses historic numbers to estimate a valuation with no consideration for the complex reorganizations taking place as we speak and those to come in the near future. A purely quantitative analysis of a company obviously operating in an abnormal micro and maco-economic environment is irrelevant at best and at worst arguably irresponsible.

Morningstar's DCF model values BAC at more than twice the value your model suggests. So if you really do own BAC, for your sake, I hope Morningstar knows something you don’t. ]]>