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GaltMachine

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  • Weighing The Week Ahead: Yellen Takes The Stage [View article]
    The CastLight IPO on Friday was an insanity:

    http://bit.ly/1ocLksm
    "At this price, the company had a $1.4 billion valuation. But, what’s more staggering, is that at $13 million in 2013 revenue – it lost $62 million on the year – the company is being priced at a 107-times revenue (not earnings). To reiterate, not since 2000 when companies like WebVan and Pets.com were the topic of investor interest have valuations like this been seen in the sector.

    As of the close of trading, Castlight was up 149 percent at $39.80 per share, suggesting that the markets agree with Dion rather than Pressman. The stock continues to rise in after hours trading."

    As of that close, that's more than 230 times revenue!
    Mar 16, 2014. 12:42 PM | Likes Like |Link to Comment
  • U.S. to relinquish control of Web-domain manager [View news story]
    First paragraph of that article:

    "Now that the web has established itself as essential across the globe, the need for international oversight is stronger than ever."

    It is? Really?
    Mar 16, 2014. 12:30 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Yellen Takes The Stage [View article]
    Jeff,

    Curious as to your opinion on how companies are able to grow earnings so nicely when revenues barely move:

    http://bit.ly/1cN0Zgn
    "The earnings season is almost over, with results from 496 S&P 500 members already out. Total earnings for these companies are up +9.2% from the same period last year, with 64.3% beating earnings expectations with a median surprise of +2.4%. Total revenues for these companies are barely in the positive, up only +0.7%, with 56.0% beating revenue expectations with a median surprise of 0.6%."

    When you factor in the rate of inflation on the top line it looks like it is actually negative growth on a real basis. Is that a sign of deflation?

    Thank you.
    Mar 16, 2014. 11:54 AM | Likes Like |Link to Comment
  • Frannie investors find a friend in Sen. Toomey [View news story]
    Intriguing statement. When is the right time to enter this in your opinion?

    "Make Whole" relative to what?

    I don't follow either of these but the plunge in both really got my value antennae up :)
    Mar 11, 2014. 04:49 PM | 1 Like Like |Link to Comment
  • Chinese exports unexpectedly plunge, inflation eases [View news story]
    Holy crap that's a $50 billion dollar swing!

    "China swung to a trade deficit of $22.98B last month from a surplus of $31.86B in January and vs forecasts of $14.50B."
    Mar 9, 2014. 03:10 PM | 1 Like Like |Link to Comment
  • The Housing Market May Be Starting To Crash [View article]
    Dave,

    I just tend to read everybody's stuff and make up my own mind based upon the data rather than the interpretation of the data based upon a pre-determined opinion of my own or the author writing the piece.

    I had the same thought when I read Bill's explanation on the purchase activity: he presents a supposition that supports what he believes rather than what actually is happening and then provides no way to check the veracity of his premise. How does he know that small lenders are under-represented?

    It is much more challenging to see both sides of the argument but I think it is worthwhile to understand both sides of any issue equally well - it definitely helps in the argument refutement department :)
    Feb 26, 2014. 02:31 PM | 2 Likes Like |Link to Comment
  • The Housing Market May Be Starting To Crash [View article]
    What I also found fascinating about this morning's report is the actual, NSA level of sales which was 34k versus 32k for January last year. In an economy as large as ours that just seems like an incredibly tiny number.

    Amazingly 2k more homes at this level is almost a 10% increase! So the number sounds impressive even though it probably falls in the realm of measurement error. So the lesson is another example of fun with statistics and how they can be used to create a story that just isn't there yet.

    From Calculated Risk:

    http://bit.ly/1frV80x
    "In January 2014 (red column), 34 thousand new homes were sold (NSA). Last year 32 thousand homes were also sold in January. The high for January was 92 thousand in 2005, and the low for January was 213 thousand in 2011."
    Feb 26, 2014. 01:52 PM | 1 Like Like |Link to Comment
  • The Housing Market May Be Starting To Crash [View article]
    Dave,

    Using ZeroHedge is like a dog whistle for a lot of people - they hear what they want to hear.

    I suggest Calculated Risk and Bill McBride as a more balanced source with the same info:

    http://bit.ly/1frUD6C
    MBA: Mortgage Purchase Index lowest since 1995
    by Bill McBride on 2/26/2014 07:01:00 AM

    His explanation of for the weakness presents an interesting perspective:

    "The 4-week average of the purchase index is now down about 16% from a year ago - and the weekly purchase index is at the lowest level since 1995.

    The purchase index is probably understating purchase activity because small lenders tend to focus on purchases, and those small lenders are underrepresented in the purchase index - but this is still very weak."
    Feb 26, 2014. 01:46 PM | 6 Likes Like |Link to Comment
  • Tesla's New Markets: Pricing Utopia [View article]
    TFTF,

    I had no idea what the quote meant so I thought I was providing a public service in providing an explanation since I have never seen that phrase before :)

    Sadly being dense I am not sure I still quite understand the context for the quote. Is it that you can't trust anything Wallstreet says because of their innate conflicts?

    Thanks if nothing else, I always enjoy a new piece of historical knowledge.

    :)
    Feb 26, 2014. 01:37 PM | 1 Like Like |Link to Comment
  • Tesla's New Markets: Pricing Utopia [View article]
    http://bit.ly/1dzguDx
    "Honi soit qui mal y pense"
    (pronounced: [ɔni swa ki mal i pɛ̃s]) is an Anglo-Norman phrase, loosely meaning: "Shamed be he who thinks evil of it." Archaic spellings include "Honi soit quy mal y pense," and "Hony soyt qe mal y pense," and various other phoneticizations. It is the motto of the British chivalric Order of the Garter. In Modern French it is rendered as "Honni soit qui mal y pense" (the past participle of the modern verb honnir being honni).[1] It is also written at the end of the manuscript Sir Gawain and the Green Knight but it appears to have been a later addition.[2]

    Its literal translation from Old French is "Shame be to him who thinks evil of it."[3] It is sometimes re-interpreted as "Evil be to him who evil thinks."[4]
    Feb 26, 2014. 10:07 AM | 2 Likes Like |Link to Comment
  • Gotta be the weather; Richmond Fed Index dives in February [View news story]
    Well in theory, markets are a discounting mechanism, which means they are supposed to look ahead rather than behind or concurrently so this suggests that the "market" expects a strengthening of the economy in the months ahead.

    I agree that the FED makes it very difficult to separate the "natural" operation of the market versus the current "managed" market. Tough to find a comparable period of market history to compare the current period to given almost 6 years of ZIRP!

    Who would have possibly believed that we would still have a zero interest policy in 2014 back in 2008/09? Not me :)
    Feb 25, 2014. 11:04 AM | Likes Like |Link to Comment
  • The polar vortex is a perfect storm for railroad stocks, J.P. Morgan says [View news story]
    Funny that this cold weather was being blamed for the slowing of rail traffic:

    http://bit.ly/1nWdOVv
    "Rail Traffic is Starting to Soften
    By Cullen Roche · Comments (3) · Friday, February 21st, 2014

    The latest reading on rail traffic is showing some fairly substantial softening. The weekly reading in intermodal traffic came in at -5.7% which brings the 12 week moving average to just 1.7%. That’s the weakest reading since the middle of last year. On the whole, this is much more consistent with the muddle through economic environment we’ve been seeing."
    Feb 22, 2014. 09:34 AM | 1 Like Like |Link to Comment
  • Existing home sales hit 18-month low [View news story]
    bbro,

    That's part of the picture but the bigger issue is the total cost of owning has been going up a lot over the past year so the direction/trend of sales appears to be impacted by this. Affordability does affect total overall sales.

    Diana Olick covers it here:

    http://cnb.cx/1nTyddM
    Cost of owning a home is spiking in 2014
    Text Size
    Published: Thursday, 20 Feb 2014 | 10:24 AM ET
    By: Diana Olick | CNBC Real Estate Reporter

    In an analysis of housing affordability, RealtyTrac found that the estimated monthly house payment for a median-priced, three-bedroom home purchased at the end of 2013 was a whopping 21 percent higher than it was at the end of 2012 in more than 300 U.S. counties. That includes mortgage, insurance, taxes, maintenance and the subtracted income tax benefit.

    (Read more: Spring thaw may not heat up this housing market)

    The rise is the result of higher home prices and higher mortgage rates. RealtyTrac used a 30-year fixed-rate mortgage with an interest rate of 4.46 percent and a 20 percent down payment. That is versus a 3.35 percent interest rate the previous year.

    Some metro regions, especially in California and parts of Michigan, saw monthly house payments rise about 50 percent from a year ago.

    (Read more: Home builder sentiment index logs sharpest drop ever)

    "Home prices were boosted by cash buyers in 2013, and as the cash buyers move out of the market in 2014, the buyers left are not going to be able to afford the home prices as readily in some of these markets," added Blomquist.
    Feb 21, 2014. 10:48 AM | 2 Likes Like |Link to Comment
  • Philly Fed blames weather for February plunge [View news story]
    So I guess that means when and if we ever get global warming it will be really good for the US economy :)
    Feb 20, 2014. 10:42 AM | 2 Likes Like |Link to Comment
  • Gotta be the weather; housing starts dive [View news story]
    Doesn't the seasonal adjustment take this into account?

    The prior weather is a known factor and it obviously is used to calculate an estimate to come up with consensus numbers so these guys must really suck at their jobs :)
    Feb 19, 2014. 08:39 AM | Likes Like |Link to Comment
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