Yes, the "time to get excited about investing" is AFTER a 4 year old bull market propped up by central bank money creation, as indexes hit new highs. The last time I was excited by investing was in Q1 2009.
Just wondering why you think commodity stocks will continue to under-perform the broader market. Commodities and the broader market are integrally tied even though the timing of their moves may be out of sync. A slowdown in China will surely cause other economies to slow in sympathy. Commodity stocks have been falling for some time now as you point out. Meanwhile the broader market has been going in the opposite direction, reaching new highs lately. I would think that commodites have been front-running a broader economic decline that has begun and has yet to be reflected in the broader equity markets.
It seems hard to believe that after under-performing for the last two years, commodities would continue under-performing for years to come.
Amazon Earnings Broadly As Expected [View article]
Lynch was also a big believer in PEG ratio and generally looked for companies with P/E ratios lower than their growth rates (ie. PEG<1). Amazon's current PEG is meaningless because TTM earnings are still negative, but even based on next year earnings estimates, the PEG is closer to 4, hardly good value
Amazon Earnings Broadly As Expected [View article]
Paulo,
One thing I haven't seen anyone pick up on yet - the CFO mentioned a one-time tax credit received in Jan, and sure enough if you look at the income tax line of earnings statement it is positive (ie. contributes to higher net income). I don't recall the exact number of the credit but it was over $40 million. Take that out and they just make the low-ball expectation of $0.09.
Amazon.com Long-Term Earnings Model And Estimates [View article]
The gross margin % is clearly meaningless but I do sort of see an argument for using absolute gross margin $$ as a substitute for revenue, since it puts 1P and 3P on equal footing.
Amazon.com Long-Term Earnings Model And Estimates [View article]
I just watched an interview with Gene Munster regarding Amazon's upcoming earnings report. He said this Q won't be so much about the margins as the "hope" of margin improvement, and then went on to say owning it for the long term is a "no-brainer".
Shares of gold miners are mixed after Deutsche Bank's Jorge Beristain cuts price targets for several North American gold producers, warning that some may need to raise capital by selling new stock. Newmont Mining (NEM +0.2%) is cut to Sell from Hold with a $24 price target (from $40), while Barrick (ABX -1.7%) and Kinross (KGC +2.5%) are reduced to Hold from Buy (I, II). Goldcorp (GG +2.2%) is kept at Hold. [View news story]
I'm sure the new price targets will be as useful as the previous ones.
Amazon.com Q1 2013 Earnings Preview And Earnings Model [View article]
I know I shouldn't be but I continue to be astounded at these analysts raising price targets while lowering EPS estimates, not just for current year but the following year as well. You can call some of the current spending "investment" if you want but if it really met the definition it would be capital, not expense hitting the bottom line. So my question is where is the discount in the models that yield these price targets? The discount that these "investments" don't lead to the revenue and margin growth anticipated. Price targets seem to imply its almost a given.
Massive Discounting Hits The Larger Kindle Fire [View article]
A report from the field:
I saw this morning (in Toronto, Canada) that a local cell phone service provider was offering a free Kindle Paper-White eReader with every new phone purchased with a 3 yr contract. Makes you wonder how well these things are selling.
Why Gold, Silver And Mining Stocks Are Headed Lower [View article]
Then I congratulate you on a good call - sorry haven't read your previous articles.
However I think you may be overextended on that call now, particularly with regard to precious metal equities that have been in decline for 2 years now. I think in a stable or even slightly declining gold price environment, the equities will do well as they are priced for significantly lower commodity prices which I don't see happening given central banks determination to fight deflation.
What It Really Costs To Mine Gold: The Iamgold Edition [View article]
I agree that taxes need to be taken into account when assessing the ultimate profitability of a company but not in the measure of cost per ounce. This obscures rather than sheds light on the true cost of mining an ounce.
In addition the taxes you refer to charged on top-line sales, royalties, etc. are not included in that income tax line. These are counted as part of cash costs at all the miners. Income taxes are just that, taxes on net income. Please check IAG's financial notes for discussion of taxes.
As far as companies sometimes reporting losses and still paying taxes, this is true but is really only a timing difference due to different rules re deductibility of certain expenses for financial reporting. Ultimately, over the full course of a companies life, income taxes paid will be based on net income before taxes at the average combined rate of all tax jurisdictions where the company operates.
Using the KGC example you gave, if and when Kinross ultimately sold the assets that gave rise to the write-down and the $1.5B loss, you would then see the tax effect. If they sold the assets at the new lower BV they would then have a real loss (compared to the price paid on acquisition) that could be deducted from income for tax purposes, even though there would be no accounting loss (since they already wrote down the asset). If on the other hand they sold the assets at the same price they originally had paid, there would be no real gain for tax purposes but they would have an accounting gain equal to the total of all the write-downs they previously took.
What It Really Costs To Mine Gold: The Iamgold Edition [View article]
I don't understand why you continue to include income taxes in your calculation of total cost per ounce mined. This is a meaningless measure and does not help to understand the true cost of mining since income tax is a residual expense that goes to $0 when the average price of gold sales equal the cost per ounce to mine (ie. no income).
Could you explain your rationale for using this measure?
Arne Alsin's #1 Pick: Amazon.com [View article]
... even though the company itself reiterates in every 10-K that operating margin is a more meaningful measure of the business than gross margin.
Arne Alsin's #1 Pick: Amazon.com [View article]
A cynical, cranky old man.
The Commodity Boom Is Over [View article]
Just wondering why you think commodity stocks will continue to under-perform the broader market. Commodities and the broader market are integrally tied even though the timing of their moves may be out of sync. A slowdown in China will surely cause other economies to slow in sympathy. Commodity stocks have been falling for some time now as you point out. Meanwhile the broader market has been going in the opposite direction, reaching new highs lately. I would think that commodites have been front-running a broader economic decline that has begun and has yet to be reflected in the broader equity markets.
It seems hard to believe that after under-performing for the last two years, commodities would continue under-performing for years to come.
Amazon Earnings Broadly As Expected [View article]
Amazon's current PEG is meaningless because TTM earnings are still negative, but even based on next year earnings estimates, the PEG is closer to 4, hardly good value
Amazon Earnings Broadly As Expected [View article]
Amazon Earnings Broadly As Expected [View article]
One thing I haven't seen anyone pick up on yet - the CFO mentioned a one-time tax credit received in Jan, and sure enough if you look at the income tax line of earnings statement it is positive (ie. contributes to higher net income). I don't recall the exact number of the credit but it was over $40 million. Take that out and they just make the low-ball expectation of $0.09.
Amazon.com Long-Term Earnings Model And Estimates [View article]
Amazon.com Long-Term Earnings Model And Estimates [View article]
There's a very high price on hope these days.
Shares of gold miners are mixed after Deutsche Bank's Jorge Beristain cuts price targets for several North American gold producers, warning that some may need to raise capital by selling new stock. Newmont Mining (NEM +0.2%) is cut to Sell from Hold with a $24 price target (from $40), while Barrick (ABX -1.7%) and Kinross (KGC +2.5%) are reduced to Hold from Buy (I, II). Goldcorp (GG +2.2%) is kept at Hold. [View news story]
Amazon.com Q1 2013 Earnings Preview And Earnings Model [View article]
Why Gold, Silver And Mining Stocks Are Headed Lower [View article]
Massive Discounting Hits The Larger Kindle Fire [View article]
I saw this morning (in Toronto, Canada) that a local cell phone service provider was offering a free Kindle Paper-White eReader with every new phone purchased with a 3 yr contract. Makes you wonder how well these things are selling.
Why Gold, Silver And Mining Stocks Are Headed Lower [View article]
However I think you may be overextended on that call now, particularly with regard to precious metal equities that have been in decline for 2 years now. I think in a stable or even slightly declining gold price environment, the equities will do well as they are priced for significantly lower commodity prices which I don't see happening given central banks determination to fight deflation.
What It Really Costs To Mine Gold: The Iamgold Edition [View article]
In addition the taxes you refer to charged on top-line sales, royalties, etc. are not included in that income tax line. These are counted as part of cash costs at all the miners. Income taxes are just that, taxes on net income. Please check IAG's financial notes for discussion of taxes.
As far as companies sometimes reporting losses and still paying taxes, this is true but is really only a timing difference due to different rules re deductibility of certain expenses for financial reporting. Ultimately, over the full course of a companies life, income taxes paid will be based on net income before taxes at the average combined rate of all tax jurisdictions where the company operates.
Using the KGC example you gave, if and when Kinross ultimately sold the assets that gave rise to the write-down and the $1.5B loss, you would then see the tax effect. If they sold the assets at the new lower BV they would then have a real loss (compared to the price paid on acquisition) that could be deducted from income for tax purposes, even though there would be no accounting loss (since they already wrote down the asset). If on the other hand they sold the assets at the same price they originally had paid, there would be no real gain for tax purposes but they would have an accounting gain equal to the total of all the write-downs they previously took.
What It Really Costs To Mine Gold: The Iamgold Edition [View article]
Could you explain your rationale for using this measure?