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Aaron Ashcraft

Aaron Ashcraft
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  • Spectrum Pharmaceuticals Falls Hard With No Logical Explanation [View article]
    Aha, another SPPI short. Eventually you are gonna pay a huge penalty for being short!
    Aug 21, 2012. 07:59 AM | Likes Like |Link to Comment
  • Spectrum Pharmaceuticals Falls Hard With No Logical Explanation [View article]
    Ho hum, another meaningless comment from one of the many SPPI short sellers.
    Aug 21, 2012. 07:58 AM | Likes Like |Link to Comment
  • Spain: A Very Different Fiscal Crisis [View article]
    nesos01: There is not an answer for your question. Job protection, annual pay increases, etc. vary from one union to another. Strongest unions are for government workers but even government worker union benefits vary from one state to another.
    May 30, 2012. 10:26 AM | Likes Like |Link to Comment
  • Bank Of America: Another Opportunity To Buy Low Now [View article]
    Good catch. srspa77 is probably or at least might be just another short seller trashing a stock and hoping price will go lower!
    May 28, 2012. 04:09 PM | Likes Like |Link to Comment
  • Bank Of America: Another Opportunity To Buy Low Now [View article]
    @srspa77: If you think it will go down to $6.00 per share, suggest you write Jan 2013 naked $6 puts, collect the premium of about $.65 per share. If the stock is put to you at expiration, you will own the stock at $6.00 less the premium, or $5.35 per share. If stock is over $6.00 per share at expiration, you stick the $.65 per share in your pocket.
    May 28, 2012. 02:05 PM | Likes Like |Link to Comment
  • Spain: A Very Different Fiscal Crisis [View article]
    @nesos01. So that you better understand the system in the USA: When you go to work for a company in the USA, you are given a job description, monthly (or hourly) pay rates, working hours, paid holidays and a description of corporate personnel policies. It is NOT a contract. Every corporate personnel policy statement I have seen includes a paragraph that tells the employee that his employment is at the convenience of the employer; that an employee can be laid off or terminated at the discretion of the employer.

    If you are laid off or because the employer decided to eliminate your job, you get NOTHING, even if you have worked for the company for 20 years! There is NO REQUIREMENT to pay severance.

    If my friend (the Software Architect) worked for the company for 10 years and got laid off, he would get NOTHING from the employer. A laid off worker MAY qualify for state unemployment compensation (which is quite meager, by the way); if he is fired for reasonable cause (poor job performance), he may not even be eligible to receive unemployment from the State fund!

    As a practical matter, employers sometimes offer a small severance package (e.g., perhaps $2,000- $10,000) from the employer in order to avoid an employee lawsuit, claiming, for example, discrimination. In order to receive the $2,000, the employee must sign a general release from all liabilities from the company.

    A consequence of this system is that people tend to work pretty hard, in most cases. If they need the money, 99% of the people will show up at the appointed hour and put in an honest day's work, because they know if they don't work hard, they can be terminated for poor performance.

    This system is obviously far different than Spain, but a happy consequence is that it makes for a friendly environment for entrepreneurs and for people to invest in start up companies.The system encourages high worker productivity; t also encourages people to think about creating their own company where they can have the security of being an owner rather than an employee who might get fired or laid off.
    May 27, 2012. 03:52 PM | 1 Like Like |Link to Comment
  • Spain: A Very Different Fiscal Crisis [View article]
    To clarify: "In 22 states in the USA . . .helped states to attract new capital investments. . ." This is not just a dream: these states now have auto assembly plants from BMW, Mercedes, Nissan & Toyota. In addition, Boeing is moving much of their aircraft assembly from unionized Washington state to a "Right to Work" state.

    These new investments in assembly lines & associated management created MANY THOUSANDS of jobs.

    I know you may not like it very much, but despite the fact that there are auto assembly plants in Spain, new investments have been lagging very badly. This lag (in my opinion) is caused by what investors see as a hostile environment for employers, a consequence of Spain's labor laws.

    Just a side note: the strong Spanish economy of 2001-2009 was fostered by the housing boom. Both of us know that Spain overbuilt: reports I have read indicate there are now 800,000 unsold housing units in Spain; ridiculous government construction projects (new airports in isolated towns; enormous opera houses in small cities that will never attract an opera crowd to name just a couple of the most egregious government projects that added to government deficits). It appears very likely that it will be many many years before important new construction occurs.

    Spain desperately needs to find other alternatives to increase investment and create jobs. In my opinion, current labor laws must be changed before foreign or local investors will consider new investments in Spain - investments that are ESSENTIAL to bring new jobs and start the economic motor working again.

    Ireland also went through a very tough period because of a housing bubble. Because Ireland has labor laws that are friendly to investors AND a very low tax rate, economic recovery is beginning in that country. I sincerely hope it will also occur in Spain.
    May 26, 2012. 04:31 PM | Likes Like |Link to Comment
  • Spain: A Very Different Fiscal Crisis [View article]
    @nesos. Thank you for helping me understand the law.
    Please understand that in other countries,(including USA) the employer has the upper hand; employees are hired "at the will of the employer:" There are no contracts, no obligatory severance pay except in rare cases where the employee is in very high demand and negotiates an individual contract with the employer.

    In unionized companies (perhaps 25-30% of USA private employees), rules are probably more similar to Spain.

    In 22 states in the USA, there are "Right to Work" laws which assure employers that they can start up a company without fear that the labor force will be unionized so long as the employer maintains good relationships & a good sense of cooperation with the workforce. This has helped these states to attract new capital investments, increased employment. Further, annual pay increases are at the option of the employer and typically based on individual company profits and productivity of individual employees.

    Providing a flexible environment for employers is an important component in attracting capital investment necessary to assure economic growth (e.g., Google/Facebook). Flexible labor laws help to foster entrepreneurship, risk taking, new investment in a country.

    In an earlier life, I served as Exec. VP of a non unionized company with 1,500 employees, and later was CEO of a company with 800 employees. Both companies had excellent employee/employer relationships, a cooperative work environment: we recognized that a company cannot thrive unless we had talented employees committed to the success of the company. Both companies were highly profitable and employees were handsomely rewarded for their efforts; in both companies, we instituted optional employees savings/retirement plans funded with 67% employee/33% employer contributions.

    You probably will not like my conclusion, but I believe future growth of the Spanish economy will depend upon adopting flexible labor laws that are friendly to employers. In my opinion, laws which require employees be on contract after 6 months should be eliminated. More flexible labor laws would clearly reduce the "churn" of temporary employees to avoid penalties of having contract employees; further, I believe more friendly labor laws would help to reduce the growing problem of underground/black market employees paid in cash (and who do not pay income tax).

    Just my opinion.
    May 26, 2012. 03:36 AM | Likes Like |Link to Comment
  • Spain: A Very Different Fiscal Crisis [View article]
    @nesos. Please help me understand the law.
    I have a friend who is a software architect for a financial services firm. He has been on a contract for 10 years, currently makes ~50,000 euros per year. He is highly regarded and a very productive employee. If he is laid off because of business conditions, how much would be his severance pay?
    May 25, 2012. 05:59 AM | Likes Like |Link to Comment
  • Spain: A Very Different Fiscal Crisis [View article]
    @nesos01. ..."people can be hired with a temporary contract up to 3 years." Then I cannot understand why a good friend of mine went to work for a chain dental clinic as a receptionist. Every six months, she was terminated at one clinic, then sent to another clinic (each clinic is a separate legal entity).

    1. You only have to pay 2 years of salary? Oh my, what a great deal for the employer!
    2. 20 days per year? Do you mean you can lay people off for 20 days per year but you have to take them back on payroll? Further, you ONLY have to pay 1 year salary? What a bargain!
    3. "disciplinary firing: no severance at all"
    Proving this is difficult except in the most egregious circumstances to the point that most companies choose to just pay the severance and getting on, rather than facing legal fees and possible loss of the court case.

    Taking either my description or yours, WHY would any company want to invest in Spain and face these penalties? Better to invest in Poland, Albania, etc where you can adjust your work force to circumstances WITH NO PENALTY. Result? Poland, Albania are growing, Spain? collapsing.

    BTW, good friend of mine is a software architect, making ~50,000 euros per year. Under your description, if laid off, company has to pay him 100,000 euros for staying at home . . .

    Then you wonder why the underground economy is thriving and unemployment is 24.4%, college grads fleeing from the country because there are no jobs.
    Do you think labor laws should be changed in an effort to make Spain more hospitable to foreign investment? What, if anything, should be done?
    May 25, 2012. 05:33 AM | 1 Like Like |Link to Comment
  • Spain: A Very Different Fiscal Crisis [View article]
    Spain is its own worst enemy:
    1) When you sign a mortgage for your home purchase, it is a lifetime obligation, even after repossession. Only relief you get is when the bank sells the home-selling price deducted from your mortgage.
    2) Spanish laws do not provide for personal bankruptcy. As a consequence, loans in #1 are on the books of banks as assets-they will NEVER be collected in 99% of the cases. Therefore, bank financials are highly questionable.
    3) Spanish labor law written by labor unions. If hired as a contract employee after 6 months, it is almost impossible to lay off or fire an employee. If laid off/fired, employer must pay from 33% to 42.5% of annual salary in severance pay, multiplied by years of service. e.g., 10 years service = severance of 4.25 years (or 3.3 years) pay-paid by employer.

    A consequence of #3 is that contract employees don't work very hard, hence productivity is low. #3 applies to any employer that has 15 or more employees.

    Why is there so little new investment in Spain? Why is the under gound labor market thriving? Why is there 24% unemployment????? Why is there 50% unemployment for workers 25 and under? Why are there so many new homes/ apts vacant? Why do high potential/aspiring college grads emigrate to UK, Germany, Poland, Australia, Canada? ddddduuuuuuhhhhh. I dunno.

    BTW I am retired USA citizen living in Barcelona. Probably should keep my mouth shut because I am a guest in Spain. That said, the Rajoy government desperately needs to change a bunch of laws - very very difficult with the strangle hold of the Labor Unions and a cultural sense that workers MUST be protected against terrible capitalists. Rajoy would be well advised to listen to outside perspectives, but along with all other politicians, he probably can't listen or he will lose campaign donations from the labor unions.

    I don't want to be overly cynical, but it seems USA is increasingly determined to follow Spain into oblivion with politicians beholden to union campaign donations and a corrupt system of consultants paid to whisper in the ear of Congressmen for special favors. Politicos then pass laws that destroy the free market system.

    A not so gentle reminder: a free market system made America strong,

    I will be fascinated to read replies to my commentary.
    May 24, 2012. 08:22 AM | 2 Likes Like |Link to Comment
  • Though many tech names are selling off following Dell's (DELL -17.8%) FQ1 miss, Apple (AAPL +0.5%) is outperforming again. The iPad is undoubtedly the biggest culprit behind the tablet cannibalization partly blamed for Dell's weak notebook sales, and the fact Dell suggests this trend is also affecting enterprise sales a bit has to be spooking investors. Meanwhile, it's reported a court-suggested meeting between Apple and Samsung's (SSNLF.PK) CEOs "yielded no compromise."  [View news story]
    Suggest SA contributors use spell check! Thouh is spelled THOUGH. On the central issue, I read today that MSFT is coming out with AAPL compatible 8.0 in November. With MSFT available, commercialization of iPad becomes choice of business!!! Viva AAPL!
    May 24, 2012. 05:27 AM | Likes Like |Link to Comment
  • A Put Strategy That Minimizes The Risk Of Getting Into Bank Of America [View article]
    Colin: Just one more thing: the ONLY reason I have held on to the 1200 BAC shares is that I believe in 2-3 years the stock will be at $15 or more and that it will be paying a decent dividend. I do not lie awake at night worrying about it since it is a small portion of my portfolio.

    If you don't want to deal with options, that's just fine. However, for those of us who sell puts regularly and have done very well with them, please don't go on a tirade and say we are stupid. If I am stupid for selling puts, I like being stupid because I have made far more money that way than I otherwise would have. I had three round trips on writing AAPL puts in one week, and put a few thousand in the bank as a consequence. I don't often hold them to expiration.

    As of today, I have written put contracts in my portfolio for MCD, YUM, MRK, GS & BAC. I am not making money on all of them but I am not concerned at all.
    May 23, 2012. 03:38 PM | Likes Like |Link to Comment
  • A Put Strategy That Minimizes The Risk Of Getting Into Bank Of America [View article]
    Colin: I own 1200 shares of BAC. I paid too much for it. Purpose of writing puts was to offset a bit of the loss I have in the shares. If the stock sells at $12 in January, I will make a lot of money, plus the time premium I have in the put contract. I HAVE FAR MORE RISK IN THE 1200 SHARES THAT I OWN THAN IN THE PUT CONTRACT for an additional 1,000 shares. I don't know what will happen with BAC between now and January: YOU ALSO DO NOT KNOW. For me, I believe the stock will sell for more than $5.26-probably it will be selling for $7, $8, $9. Chances of it going to zero are (IMO) are nil. For me, writing 10 puts was a very conservative move. You may disagree-I could care less. I am very happy you are not managing my portfolio.
    May 23, 2012. 03:27 PM | Likes Like |Link to Comment
  • The public launch of CKE Restaurants - owner of burger chains Carl's Jr. and Hardee's - doesn't appear set to pose an imminent threat to McDonald's (MCD +0.1%) due to the pile of challenges at the cash-strapped company. Funds from the IPO are already earmarked for paying off debt, instead of going to upgrade company-owned restaurants in near-desperate need of a facelift.  [View news story]
    Loved Carl's Jr. when we lived in CA; now live in Spain and CKE restaurants are nowhere to be seen. Growth in the fast food business is in the international market where YUM and MCD already have a strong position and plans for continued growth in outlets in China, India, Africa, etc. CKE? Might be DOA since it has limited growth potential.
    May 22, 2012. 12:12 PM | Likes Like |Link to Comment