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  • Ignore The 'Buffett Indicator' [View article]
    CAPE is not correlated with or predictive of anything. Period. It's strictly coincidental: Average investor equity allocation actually correlates much more with 10 year equity returns: but is just as much of a goose chase. Both theories fall victim to numerator-denominator fuzzy math, selective curve fitting and/or conveniently cancelling errors.
    Jun 19, 2015. 08:36 PM | Likes Like |Link to Comment
  • Saudia Arabia set to pump maximum crude, analysts predict [View news story]
    "With an increasingly compelling picture of lower oil prices over the next 10-20 years" -- I'm personally very happy with low oil prices, but 10-20 years is an extremely long time, quite a limb to go out on, unless no one actually remembers this prediction... A distinct probability over the next few hours.
    Jun 19, 2015. 07:07 PM | 11 Likes Like |Link to Comment
  • Why Dividend Growth Will Slow Down [View article]
    I am quite excited about the ETF movement. It creates an entire class of investors who would seem by nature to be long term oriented and by definition blind to firm risk, whose automaton fund managers sell stock in firms whose market cap is falling because the index is market cap weighted. Everyone wins. Those investors get their 6-9% per year. But I'm more interested in risk adjusted irrationally priced companies with good management and decent prospects. You might say no one can actually beat the market long term with the latter, but actually the ETF movement itself creates that opportunity. It's as if a huge number of people at the race track started betting on every horse using some kind of long term horse winnings formula, blind to things like age of horse, jockey, track condition, etc. It screws up the odds in favor of bookies and race mavens.
    May 23, 2015. 01:59 PM | Likes Like |Link to Comment
  • Lumber Liquidators lower after Cantor capitulates on bull call [View news story]
    Looks good at $15. Not worth the risk above that. Switching cost is very low. Product differentiation poor. Cyclical risk somewhat high.
    May 19, 2015. 11:47 AM | 4 Likes Like |Link to Comment
  • Hertz Global discloses another $30M in accounting errors [View news story]
    I'm not surprised. The company has a built-in policy to rip off consumers. They charged me for a half tank I didn't use. Check Yelp. The company is a scam.
    May 18, 2015. 08:21 AM | 2 Likes Like |Link to Comment
  • Iconix Brand Group Part 3: The Inevitability Of Diminishing Brands Value At Iconix [View article]
    Great call. I also considered ICON a few months back and didn't swing the bat because it appeared to be nothing more than a bet on the Peanuts movie. I don't think enough people are nostalgic enough about Peanuts to make the stock worth the gamble. The movie would have to be extremely well done to get people to view it in high numbers. A mediocre movie resting on the Peanuts brand laurels will be insufficient. I don't take that kind of bet.
    Apr 20, 2015. 10:11 PM | Likes Like |Link to Comment
  • OHA Investment Corporation: A BDC Trading At 30% Discount To NAV With Significant Margin Of Safety [View article]
    True, but Castex has much of it hedged through 2015. 2016 unknown. But I wager they are able to PIF 7/2016.
    Apr 16, 2015. 10:41 AM | 1 Like Like |Link to Comment
  • OHA Investment Corporation: A BDC Trading At 30% Discount To NAV With Significant Margin Of Safety [View article]
    Castex is mostly NG.
    Apr 13, 2015. 09:54 PM | Likes Like |Link to Comment
  • OHA Investment Corporation: A BDC Trading At 30% Discount To NAV With Significant Margin Of Safety [View article]
    Looks to me like OHAI hasn't been willing to pay the ATP lawyers' extortion so they took it back into bankruptcy where it could be for a long time because the case turns on the testimony of the lawyers who created the original agreement. You know lawyers can say anything. Maybe new management is more willing to settle at a higher price to avoid the legal fees or maybe they are content collecting the disgorgement while gradually writing off the ORRI knowing they will probably win in court -- eventually.
    Apr 9, 2015. 04:24 PM | Likes Like |Link to Comment
  • OHA Investment Corporation: A BDC Trading At 30% Discount To NAV With Significant Margin Of Safety [View article]
    Regarding your two major overhangs...

    1) The ATP is a lawyer's dream case. It will not be resolved anytime soon.
    2) Castex is one of their best assets states G. August on the conf call. PIF ==> 7/2016
    Apr 9, 2015. 09:34 AM | Likes Like |Link to Comment
  • The Bottom's Not In----Why This Market Is Dumber Than A Mule [View article]
    1. Major topping pattern. NO
    2. Increase in price volatility. YES
    3. Internal divergence with respect to the NYSE advance/decline line. NO
    4. Internal divergence with respect to NYSE new highs as a percentage of issues traded. NO
    5. Weekly momentum divergence(s) on the major indices. NO.
    6. Hot group melt up. YES.
    7. Weakening relative strength small/mid vs large. NO.
    8. Sentiment blow-off. MAYBE.
    9. Heavy selling of leader stocks. NO.
    10.Topping action in the relative strength leaders. Financials, YES?
    11. Flattened yield curve. NO.
    12. Low priced stocks melt up. NO.

    Many more NO than YES. Most of this checklist was mentioned in a recent Ritholtz article. He gets credit.
    Mar 26, 2015. 11:06 PM | 1 Like Like |Link to Comment
  • King Dollar And The Deflationary Growth Steamroller.  [View instapost]
    You sound like a really smart guy, so I don't really understand why you don't think commodities can't be in a bear market while companies that produce winning noncommodities are in a bull. It's simple, commodities are going down, while those companies that produce winning noncommodities are going up and are added to the indexes. Those companies that produce losing noncommodities are going down and are dropped from the indexes. Therefore the indexes go up. I agree that someday the piper calls all to go down, but don't shoot till you see the whites of their eyes.
    Mar 20, 2015. 10:42 PM | Likes Like |Link to Comment
  • Explaining Lumber Liquidators' Reckless Strategy, And Rebutting Its Claims About Deconstructive Testing [View article]
    In the end game, the loser always plays the bluff. Cut costs to the bone, deny everything, pump sales. More often it means going out in flames. But sometimes the bluff wins. There are only a few relevant questions. 1) Can the attorneys dredge up a "significant" number of people who can show they actually bought high formaldehyde flooring and show bloody noses, a cough and/or head ache? Answer: No. There will be a manageable settlement eventually. 2) Aren't reduced margin, high inventory, high legal costs and flagging sales enough to send this stock back into the teens from whence it came? Answer: Yes.
    Mar 15, 2015. 10:02 AM | 1 Like Like |Link to Comment
  • Lumber Liquidators Overpriced At $40 And Has Legitimate Risk Of Going To $0 [View article]
    Maybe technically you're correct, but from a legal point of view you have no leg to stand on. See here for case precedent: where 55,000 Katrina evacuees successfully sued and received settlement in the amount of $42 million. There were no floors to replace or inventory to write down. That was pure damages for headaches, nose bleeds and breathing difficulties.
    Mar 3, 2015. 09:18 PM | 1 Like Like |Link to Comment
  • Lumber Liquidators Overpriced At $40 And Has Legitimate Risk Of Going To $0 [View article]
    It seems about 1/4 of inventory will be written off. Usually that would be a noncash transaction followed by a heavy discount to move the inventory. Obviously the company can't sell this inventory because a) no one wants it and b) it may fall under an injunction as evidence. Not a pretty picture.
    Mar 3, 2015. 10:24 AM | 4 Likes Like |Link to Comment