U.S. Energy Policy Is Responsible for Unrest in Egypt [View article]
Right. 10 years of nuclear? That is such utter garbage it makes the rest of the comment totally suspect. Nuclear could last hundreds of years before we run out, and if we use reprocessing, you multiply it by 60 times. Add in thorium and you have tens of thousands of years before fuel for nukes runs out. Add in accelerator-based and its infinite.
U.S. Energy Policy Is Responsible for Unrest in Egypt [View article]
Wrong. The US is NOT responsible for Egypt's condition. Egypt and most mideast countries were screwed up because of their own repression-filled history. Islam, dictatorships, and socialized economies are the cause of their troubles. These mideast countries can be and many are completely hosed up without any help from the US making them so. That includes Syria, Iran, Libya, etc. not to mention Iraq 1980-2003. This home-grown movement in Egypt will send Egypt from one repressed state into another one.
This is a replay of Iran 1979 and the Muslim Brotherhood knows the playbook.
We bought Egypt's comity with our foreign aid. There was a middle east war between Egypt and Israel every decade before then and we got 30 years of peace for it. bad trade? Maybe. Our "meddling" has in most cases stopped a bad country from being worse. The Islamic extremists who killed Sadat may gain from Egypt's government toppling. If you think it would be better to have Egypt untethered and more mid-east wars (caused by hatred of Israel NOT by our oil addiction), then you are quite the foreign policy rookie - which alas is what our President is, as well.
... and the final part of the 'familiar story' - people end up falsely blaming the USA for whatever happens, especially if it ends badly.
Cramer's Lightning Round - More Pain for Motricity (1/19/11) [View article]
"the world's scientific authorities. Alert them to your findings at once!" ROFLMAO - you spout off about 'scientific authorities' without (a) actually checking what the scientific authorities are really saying and (b) checking the real facts against the authorities.
To use a Wall St analogy: The IPCC as an 'authority' has all the credibility of a boiler-room pump-and-dump operation. they are 'pumping' for a political outcome, and have been dumping phony information on us with skewed and bias science.
Intrepid investigators have exposed the flawed science, but big money is involved, so the whistleblowers are called names ('deniers') and mistaken, gullible people like you get taken in.
I stated a real fact - just read the temperature readings for the last 100 years, and you find a benign rise in temperature of no more 0.6C overall and 0.4C in 50 years. Check the science and you will find that the temperature rise due to Co2 is a log-based effect, and thus another 50% rise in CO2 would do no more than the previous 50% rise - a 0.6C impact. The models predicting doom do not fit this actual data trend. hmmmm.
If you want to know the REAL state of climate science, check out climateaudit.org. They have shown that the Emperor has No Clothes when it comes to 'climate science'. Claims of catastrophe due to climate change/warming are based on the quicksand of hyperbolic extrapolation of dubious and unproven models. IThose with an ounce of responsibility will follow the trail to the ground truth ... climateaudit.org
Yeah, short coal, be my guest, whatever. But believe in the Tooth Fairy before believing that Global Warming is an imminent crisis.
Cramer's Lightning Round - More Pain for Motricity (1/19/11) [View article]
More baloney. There is no 'cooking' of the climate at the hands of man. Minor changes (less than 0.4C over 50years) in average temps are not cooking, not when that change occurs in less than 30 minutes every sunrise.
Jim Cramer Is Better Than You Think [View article]
Very clearly true. Cramer is a momo investor, he goes with the trend, so he tends to be 'high' on the ups and down on the lows - he called the 2008 crash right, but did he have a massively bullish call in March 2009? and in Feb 2000 he was talkign about stocks like QCOM that you bought and would never sell. His bullishness IMHO was a contrary indictaor. I for one did NOT get out in late 2008 when Cramer was bearish - I was buying. Worked out fine. you can get killed if you buy the momo stocks too late, it was true in every bubble we've had, and being a follower of a momo guru makes you miss profitable contrarian plays.
Whitney Tilson: Why We're Short Netflix [View article]
First, you are correct on terminology. I used the term arbitrage loosely / metaphorically - I treat a short as if it were an 'arbitrage' between what an efficient value-priced market would price the stock at and the real market is doing. You HAVE to realize that the market IS inefficient, wrong, and sometimes (during bubbles and panics) flat-out crazy, but it's a lot bigger than you and can beat you to a pulp if you bet against it. Claims that the market is efficient would have to explain the extremes of panics and bubbles, and the fact that some can consistently outperform others in the market. Shorts need to think *as if* they are in a risk 'arb'-type situation - where you are betting on the mis-pricing, not between New York and London, but between New York and idealized-rational-market - and the catalyst that closes the gap may occur some day, but it could be delayed. Thinking of it this way helps to frame the investment thesis for the short, because you need not only a valuation case, but a 'catalyst' factor that gives timing to the price change hoped for. In a lot of the shorts of the dot-com era, this might involved IPO unlock periods, cash flow, next reporting periods, etc.
Second, arbitrage is all about finding pricing IN-efficiency in the markets, so the comment about efficient market hypothesis is confusing. I don't believe in the efficient market. And if you did, hang it up, go index fund, and use your time better than sotck picking. What I do believe is that in order to beat the market, you will have to have a clearer sense of the true valuation of stocks than the market as a whole. That is hard to have except when you know a particular stock or industry real well, or when the market is in a panic (2008-2009) or bubble (1999-2000). Coincidentally, I did great in those panic and bubble times. Times like now, not-too-hot, not-too-cold, harder to beat the market as it is not at either extreme.
Third, yes, risk-free is rare in arbs, and I am well aware of risks in arbitrage, having my head almost handed to me over the Dow / Rohm & Hass buyout , for example (all's well that end's well there), it was supposed to close, then was at risk, then finally happened. If there was no risk in those situations, the reward would quickly go away as well. The market has its quirks but it can iron out many mis-pricings.
Whitney Tilson: Why We're Short Netflix [View article]
Yes, I agree but ... "If you are a short term trader then you cannot trade the stock based on fundamentals. It rarely works." ... the reality is that my best shorts were longer-term and very fundamentally-based. That is, they were worthless or worth-much-less. Technical analysis helps you get to an understanding of the supply-and-demand for the stock, since that is what drives the price, and it helps you manage your risk (eg knowing when a stock hits a resistance point). So, my point is that in shorting it is not fundamentals or technical analysis, it is that you need BOTH to succeed as a short.
Whitney Tilson: Why We're Short Netflix [View article]
An education on shorting - OK, the above comment is spreading FUD, and that comment about the dto-com bubble is so wrong, we need get some better education here about shorting. 1. I made my first million in the internet bubble, shorting stocks from 1999 to 2002. To say it wasnt obvious - well, for many smart investors who were wise to Wall St's scams and overselling, it was. And what made it profitable was PRECISELY because you had the retail trade and a bunch of institutions on the other side, buying and selling the hype. Contrarian investing is the ONLY way you can beat the market. It was obvious that many of the dot-com Icarus stocks would fall to earth. Shorting the IPO lockup expirations, shorting after GS would goose a stock with a recommendation, but most importantly, shorting companies with great stories but lousy money-losing (or fraudulent) biz models - been there, done that. Not easy, but definitely "obvious" if you apply Graham-Dodd type fundamentals to the stocks. I decided to go big on this in late Feb 2000, when PALM ended up being worth more in an IPO than its parent company was as a whole. It rang clear as a bell that price and value were disconnected. (I arb'd the PALM/COMS spread, and made money mainly from PALM falling back down.) ...and btw, if everyone was doing it from the get-go there never would have been Naz 5,000. that's the point. 2. Shorting is NEVER easy. A worthless stock I shorted jumped 20% in a gap-up opening, then proceeded to rise another 20% in one trading session. You can lose BIG, temporarily, even if you are right on the valuation. That's one good reason it's not for the faint of heart or the uncareful with money management. 3. EVERY short is a valuation short. There is no other kind. Short relies on the fact that as time goes to infinity, the stock trends towards the 'true' value. Shorting is an arbitrage, when value and price are out of whack. 4. What can go wrong? The bubble can go on, the company can grow into the mispriced valuation, the market can keep going up. 5. ... the risk-reward for shorting is upside-down (only 100% gain versus unlimited risk, whereas going long its the opposite), so your investment thesis *and* your timing needs to be on target. Because of #4 and #2, shorting requires a good understanding of technical analysis. 6. I would be wary of shorting any fundamentally healthy and growing stock, even if their valuations are too high. I recall Forbes talking about how the valuations of some networking stocks were crazy-high. Back in 1995. Included Cisco on the list. And a few others that continued on to more triples. You do NOT want to short a stock that could be 10X bigger in 5 years. (Now that thinking help put dot-coms in the stratosphere, but the difference was the dot-coms that died werent making money.) I made money shorting EBAY in 1999, but it was luck and a mistake, I got out at a small profit and just missed getting hurt badly. 7. The real money in shorting is in finding the "GTZ" or go-to-zero stocks that are losing money. Finding them is a far more profitable trade than big cap established company.
Given all this, I would suggest that NFLX is probably valuation-rich and an ok but not great short candidate. It looks like it is rolling over, and a small short (1/4 position) with wide stops (e.g. above $200) would make most sense if you want a position, and extend position if thesis is 'confirmed' with margins falling and lower price. Still, the short case is marginal IMHO, because NFLX does have opptys to still grow profitably and catch up to its price over time.
DVD Rental Market Remains Brutally Commoditized [View article]
Interesting. A couple of takeaways, as questions: 1. Where else can the kiosk model work like DVD rentals? Maybe someone will try the Starbucks coffee-as-kiosk? 2. Why isnt the online rental more commoditized or fragmented? eg movies.com, owned by comcast, doesnt try renting themselves - they direct to Netflix? Why not get into that biz and compete?
Job Growth Disappoints but Outlook Is Improving [View article]
one place to begin in the critique of how erroneous the high tax rates of the 1950s were is to look at the total %age of GDP that was taxed. It was under 9%. In effect, the high tax rates had loopholes enough that the rich practiced tax avoidance.
When Kennedy lower tax rates, the tax avoidance was reduced - revenues went up. When Reagan lowered the top rate from 70% to 50%, same thing - revenues went up. When taxes were lowered to top rate of 28% - same thing again. We lowered rates and revenue didnt go down. The 'laffer curve' peak is a proven fact and is below 50%. As it is, we are pushing the limits when you have combined state and federal above 50% for top earners in NY state.
We need a single low, flat rate of 15-20% on all income. Anything above that is simply economic sado-masochism that harms our economy without real purpose or benefit.
Job Growth Disappoints but Outlook Is Improving [View article]
Actually, what he describes is the US Federal Govt prior to the New Deal. Federal Govt spending as a portion of the overall GDP was around 3% of GDP. Then it went to 20% of GDP under FDR and never looked back.
The US was fairly successful with a tiny Federal Govt from 1865 to 1929, average growth of 7% and went from a backwater to the world's #1 economy.
U.S. Energy Policy Is Responsible for Unrest in Egypt [View article]
Nucelar is a 'renewable'.
U.S. Energy Policy Is Responsible for Unrest in Egypt [View article]
This is like blaming a random snow storm on Global Warming.
U.S. Energy Policy Is Responsible for Unrest in Egypt [View article]
This is a replay of Iran 1979 and the Muslim Brotherhood knows the playbook.
We bought Egypt's comity with our foreign aid. There was a middle east war between Egypt and Israel every decade before then and we got 30 years of peace for it. bad trade? Maybe. Our "meddling" has in most cases stopped a bad country from being worse. The Islamic extremists who killed Sadat may gain from Egypt's government toppling. If you think it would be better to have Egypt untethered and more mid-east wars (caused by hatred of Israel NOT by our oil addiction), then you are quite the foreign policy rookie - which alas is what our President is, as well.
... and the final part of the 'familiar story' - people end up falsely blaming the USA for whatever happens, especially if it ends badly.
Cramer's Lightning Round - More Pain for Motricity (1/19/11) [View article]
To use a Wall St analogy: The IPCC as an 'authority' has all the credibility of a boiler-room pump-and-dump operation. they are 'pumping' for a political outcome, and have been dumping phony information on us with skewed and bias science.
Intrepid investigators have exposed the flawed science, but big money is involved, so the whistleblowers are called names ('deniers') and mistaken, gullible people like you get taken in.
I stated a real fact - just read the temperature readings for the last 100 years, and you find a benign rise in temperature of no more 0.6C overall and 0.4C in 50 years. Check the science and you will find that the temperature rise due to Co2 is a log-based effect, and thus another 50% rise in CO2 would do no more than the previous 50% rise - a 0.6C impact. The models predicting doom do not fit this actual data trend. hmmmm.
If you want to know the REAL state of climate science, check out climateaudit.org. They have shown that the Emperor has No Clothes when it comes to 'climate science'. Claims of catastrophe due to climate change/warming are based on the quicksand of hyperbolic extrapolation of dubious and unproven models. IThose with an ounce of responsibility will follow the trail to the ground truth ...
climateaudit.org
Yeah, short coal, be my guest, whatever. But believe in the Tooth Fairy before believing that Global Warming is an imminent crisis.
Cramer's Lightning Round - More Pain for Motricity (1/19/11) [View article]
Jim Cramer Is Better Than You Think [View article]
Cramer's Lightning Round - More Pain for Motricity (1/19/11) [View article]
Whitney Tilson: Why We're Short Netflix [View article]
Second, arbitrage is all about finding pricing IN-efficiency in the markets, so the comment about efficient market hypothesis is confusing. I don't believe in the efficient market. And if you did, hang it up, go index fund, and use your time better than sotck picking. What I do believe is that in order to beat the market, you will have to have a clearer sense of the true valuation of stocks than the market as a whole. That is hard to have except when you know a particular stock or industry real well, or when the market is in a panic (2008-2009) or bubble (1999-2000). Coincidentally, I did great in those panic and bubble times. Times like now, not-too-hot, not-too-cold, harder to beat the market as it is not at either extreme.
Third, yes, risk-free is rare in arbs, and I am well aware of risks in arbitrage, having my head almost handed to me over the Dow / Rohm & Hass buyout , for example (all's well that end's well there), it was supposed to close, then was at risk, then finally happened. If there was no risk in those situations, the reward would quickly go away as well. The market has its quirks but it can iron out many mis-pricings.
Whitney Tilson: Why We're Short Netflix [View article]
Whitney Tilson: Why We're Short Netflix [View article]
1. I made my first million in the internet bubble, shorting stocks from 1999 to 2002. To say it wasnt obvious - well, for many smart investors who were wise to Wall St's scams and overselling, it was. And what made it profitable was PRECISELY because you had the retail trade and a bunch of institutions on the other side, buying and selling the hype. Contrarian investing is the ONLY way you can beat the market. It was obvious that many of the dot-com Icarus stocks would fall to earth. Shorting the IPO lockup expirations, shorting after GS would goose a stock with a recommendation, but most importantly, shorting companies with great stories but lousy money-losing (or fraudulent) biz models - been there, done that. Not easy, but definitely "obvious" if you apply Graham-Dodd type fundamentals to the stocks. I decided to go big on this in late Feb 2000, when PALM ended up being worth more in an IPO than its parent company was as a whole. It rang clear as a bell that price and value were disconnected. (I arb'd the PALM/COMS spread, and made money mainly from PALM falling back down.) ...and btw, if everyone was doing it from the get-go there never would have been Naz 5,000. that's the point.
2. Shorting is NEVER easy. A worthless stock I shorted jumped 20% in a gap-up opening, then proceeded to rise another 20% in one trading session. You can lose BIG, temporarily, even if you are right on the valuation. That's one good reason it's not for the faint of heart or the uncareful with money management.
3. EVERY short is a valuation short. There is no other kind. Short relies on the fact that as time goes to infinity, the stock trends towards the 'true' value. Shorting is an arbitrage, when value and price are out of whack.
4. What can go wrong? The bubble can go on, the company can grow into the mispriced valuation, the market can keep going up.
5. ... the risk-reward for shorting is upside-down (only 100% gain versus unlimited risk, whereas going long its the opposite), so your investment thesis *and* your timing needs to be on target. Because of #4 and #2, shorting requires a good understanding of technical analysis.
6. I would be wary of shorting any fundamentally healthy and growing stock, even if their valuations are too high. I recall Forbes talking about how the valuations of some networking stocks were crazy-high. Back in 1995. Included Cisco on the list. And a few others that continued on to more triples. You do NOT want to short a stock that could be 10X bigger in 5 years. (Now that thinking help put dot-coms in the stratosphere, but the difference was the dot-coms that died werent making money.)
I made money shorting EBAY in 1999, but it was luck and a mistake, I got out at a small profit and just missed getting hurt badly.
7. The real money in shorting is in finding the "GTZ" or go-to-zero stocks that are losing money. Finding them is a far more profitable trade than big cap established company.
Given all this, I would suggest that NFLX is probably valuation-rich and an ok but not great short candidate. It looks like it is rolling over, and a small short (1/4 position) with wide stops (e.g. above $200) would make most sense if you want a position, and extend position if thesis is 'confirmed' with margins falling and lower price. Still, the short case is marginal IMHO, because NFLX does have opptys to still grow profitably and catch up to its price over time.
DVD Rental Market Remains Brutally Commoditized [View article]
1. Where else can the kiosk model work like DVD rentals? Maybe someone will try the Starbucks coffee-as-kiosk?
2. Why isnt the online rental more commoditized or fragmented?
eg movies.com, owned by comcast, doesnt try renting themselves - they direct to Netflix? Why not get into that biz and compete?
Job Growth Disappoints but Outlook Is Improving [View article]
Job Growth Disappoints but Outlook Is Improving [View article]
Yes, we need a Constitutional Amendment that limits Federal Govt spending to less than 15% of GDP.
Do that and we can devise a simple, efficient low-rate tax system to pay for it without any deficits.
All we have to give up is wasteful and fraudulent and misguided massive Government spending.
Job Growth Disappoints but Outlook Is Improving [View article]
When Kennedy lower tax rates, the tax avoidance was reduced - revenues went up.
When Reagan lowered the top rate from 70% to 50%, same thing - revenues went up. When taxes were lowered to top rate of 28% - same thing again. We lowered rates and revenue didnt go down. The 'laffer curve' peak is a proven fact and is below 50%. As it is, we are pushing the limits when you have combined state and federal above 50% for top earners in NY state.
We need a single low, flat rate of 15-20% on all income.
Anything above that is simply economic sado-masochism that harms our economy without real purpose or benefit.
Job Growth Disappoints but Outlook Is Improving [View article]
The US was fairly successful with a tiny Federal Govt from 1865 to 1929, average growth of 7% and went from a backwater to the world's #1 economy.