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bakermre

bakermre
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  • Oil Likely To Signal Next Market Correction, Eventually [View article]
    America prospers on cheap(er) energy, historically. As far back as 1957 an oil price spike preceded the 1958 recession. The 1972-'73 oil squeeze and embargo also caused a stock market malaise, with low prices in large caps and high dividend yields as the USA lumbered through a time of stagflation. An oil price spike in '79 - 1980, Iran crisis, with sudden dollar decline all hurt Carter and led to Reagan's election as a recession followed. The recovery cycle really didn't get going until later in '83 and into 1984, when most businesses prospered a lot. A brief 1991-'92 recession following the first Gulf War and oil price spike helped elect Clinton, who had the good fortune of lower/stable oil prices until 2000, when they again shot up, Bush managed a narrow election win and then 9/11 hit the USA, with a recession following the Dot-Com bubble bursting. Every event, in hind-sight was predictable from oil price/supply movements. It looks like 2015 into 2016 will see oil prices rise again as the value of the US $ slowly declines. A recessionary trend should follow in 14 to 18 months (mid- 2016 to winter 2017) if this model holds. The black-swan events remain as the powder-kegs of Russia vs. Ukraine; Saudi in Somalia; Syria/Iraq ISIS; and Iran embargo lifting/stalemate issues are spreading. All could force the oil price higher (or lower) sooner in 2015. It is an uncertain future right now and only a matter of when and how it will be set off, time-wise. So, watch the oil price, that's the key barometer to near-term changes: storms or blue skies ahead. If oil stays at continued low levels, with an Iran settlement, a longer term USA prosperity cycle is likely. An oil price-spike, due to chaos or war escalation will clearly induce the next recession. Omens for higher oil prices are not very encouraging for 2016.
    Apr 15, 2015. 01:07 PM | 2 Likes Like |Link to Comment
  • National Oilwell Varco - Finally Time To Buy [View article]
    The quality of comments on this article speak well for the thoughtful investors following NOV. We should all stay on this page, share our thoughts and follow up with this author (Investdelone); again I say: "Well done"!
    Apr 8, 2015. 12:27 PM | Likes Like |Link to Comment
  • Axalta Coating Systems Is An Easy Long-Term Consideration [View article]
    For comparisons, look at Sherwin Williams and Valspar, both doing quite well. Benjamin Moore paints are also in the same league. The old Duco Paint line of DuPont was always known for quality, buttressed by DuPont's excellent basic leadership position in raw materials such as Titanium Dioxide and pigments. That this fine quality name should be sloughed off in a fire sale to Carlyle is very very sad; yet, like the Phoenix it is, Axalta shall rise from the ashes to greater glory.
    I agree, this is an exceptional buy story.
    Apr 8, 2015. 12:09 PM | 1 Like Like |Link to Comment
  • AT&T Tests Pricing Tiers, Avoids Buying Content [View article]
    As a business, T has hovered between $30 and $35/share for three years. It is no wonder that it has to pay 5.6% to shareholders to keep itself from falling out of bed, the most of any mega-cap stock. Since being kicked off the Dow index its future looks very uncertain, unless its Direct TV take over and similar moves add something better to its growth prospects. For the moment, I am afraid of T falling off it's cliff position, but am holding some DTV as a hedge. How about the rest of you fellow readers? (P.S. My family has held AT&T for 3 generations, through depressions and booms, now we are completely out!).
    Apr 7, 2015. 06:38 PM | Likes Like |Link to Comment
  • An Open Letter To Ann Weismann: Why Is CREW Writing Letters To Congress? [View article]
    Dear Icahn1;

    I do carefully read what you write. My case against HLF is more fundamental. The basic economics just don't compute. Buffett sold out his XOM and COP positions when the oil price was on the skids, during 2014. True, he never shorts a stock, just sells when he sees greater forces active outside his own circle of control. You haven't dealt with 2015 realities when you state HLF cash flows were $500 million positive in 2014 vs, 2013; alas that's ancient history. The world is a very different place in 2015. Look at Venezuela, Brazil, Argentina, even China. Is HLF spewing growing $ cash flow in these markets? If not, why not? With 80% of HLF sales in markets under a serious $ malaise, how can you project such a rosy scenario for 2015 vs. 2014? How can you speak so authoritatively for Soros moves? Are you two now partners, sharing in this game of short squeeze?
    Apr 4, 2015. 11:09 PM | 4 Likes Like |Link to Comment
  • Warren Buffett Increases Berkshire Hathaway's Stake In IBM - Let's Analyze It [View article]
    Buffett has an advantage none of us (relatively poor) retail investors can match: huge government influence and the ear of government when he wants it to suit his needs. That is how he shapes events and focuses outcomes beyond any logical analysis we could hope to concoct to guide us. Case in point is Burlington Northern Santa Fee RR. Since Buffett met with Obama on July 14, 2010, his trains have profited mightily, hauling crude oil while pipelines are overloaded or simply blocked. Behind the oracle of Omaha is a crafty and very shrewd market maker who rarely bets on less than 99.9% sure things, with overwhelming odds in his favour. He saw the looming oil market price fiasco ahead and got out of XOM and COP; bouncing most of the proceeds into IBM. This guy knows what is coming and gets ahead of the curve in ways we can only hope to follow, months later. Very few investors are as shrewd politically as Warren; it's always his ace up his sleeve! Wisely, he never reveals this aspect of his winning formula in his letters. The latest tip is his secretive move into Deere (DE); worth a follow-up to profits ahead. The logic of this big move will only appear months or years later.
    Mar 31, 2015. 01:32 PM | 3 Likes Like |Link to Comment
  • National Oilwell Varco - Finally Time To Buy [View article]
    The market is somewhat irrational, as always, and it seems to feel oil prices will decline further. Iranian prospects are a big wild card. If a settlement does come, more oil will flood onto overloaded markets. Storage is beginning to get overwhelmed. In my view, this storm cloud will not pass much before July 1.
    NOV has spme more down-side, to maybe $42 to $40, due to emotional market over-reaction. Fundamentals are good, while emotions much more uncertain.
    Mar 30, 2015. 06:39 PM | 1 Like Like |Link to Comment
  • John DeSimone: Tragic Hero Or Fall Guy? [View article]
    The business case for HLF remains the same as before: Is it a viable business? Does the serial recruitment of an vast army of distributors and dealers every year, year after year, with 90% turn over, sound like a sustainable, solid business model? I would really like to have some serious debate on these types of fundamentals, rather than speculation on the evident pump and dump economics of stock market run ups and subsequent dives in the share prices; based upon what looks like gaming the system. Who eventually consumes these proffered products, besides the "distributors" and their immediate circle of family or neighbors? Have they any real nutritional value comparable to their price? The fundamentals of this scheme look more like an Enron or similar telecom/dot-com hyped-up promotional conjuring trick of years gone by. How, Mr. Ichan, is this one different?
    Mar 24, 2015. 03:35 PM | 3 Likes Like |Link to Comment
  • An Open Letter To Ann Weismann: Why Is CREW Writing Letters To Congress? [View article]
    Icahn1 says that 80% of HLF sales are overseas; presumably external to the USA. The US $ is on an upward value tear vs. all other major and most minor foreign currencies. How can HLF justify its reported profits in such markets as Venezuela, Brazil, Latin America, even Europe and Asia when the foreign currencies it earns are falling in value? How can such a business exporting ever more costly products into markets where imported goods are increasingly more costly in local terms prosper and grow? I have spent over 45 years in international trade. I don't live in the USA. Where I live (Canada) people are cutting back on imports from the USA as our Canadian $ falls in value and where US goods we used to buy when 1 CAD = $1 US now cost CAD 1.28 per US $1 or more. Markets all over the world react similarly. The logic is that HLF is not a viable long term business model and must be losing intrinsic value. Quite apart from all the bitter personal claims and counter claims by Ichan and Ackman, the business accounting numbers simply don't add up. When the other shoe drops and reports from international markets must be given, I see a sharp fall in profits ahead. It is no surprise that the CEO of HLF had his pay cut; profits are falling sharply! This is not a growing, booming business; it is overvalued and the shorts have recognized this looming fact. How, Mr. Ichan, do you square these realities? Where does profit growth arise? Do you favor increasing HLF executive pay? When Buffett saw similar numbers looming on XOM and COP he sold short; he didn't quarrel with the longs! Forget about Mr. Ackman, get out now and buy HLF in a year or two when the shares reflect more realistic economic value. They may be worth $20 in 2017; not $42.I suspect George Soros has already figured this out; how about you?
    Mar 22, 2015. 12:07 AM | Likes Like |Link to Comment
  • Spike In Ad Hominem Attacks Proves Ackman Is On To Herbalife [View article]
    AS STATED BEFORE, LET'S JUST LOOK AT THE BUSINESS MODEL: Is it viable in such places as Venezuela? In Latin America? How about several other international markets where the US $ has soared higher by the week and Herbal Life must convert local national sales back into $. Has anyone been able to give accurate sales through figures for the last two years, based upon final consuming final customers consumption? The model seems clearly focused upon only sales to distributors, (middlemen), never to final consumers. Imagine if Ford, GM, Honda and Toyota only reported sales to their dealers and never gave accurate reports on sales through to final customers? Can you imagine the status of the USA auto industry if the dealer turn-over was over 90% each year? THE BASICS JUST DON'T ADD UP! Forget the tennis match or bike race between Ackman and Ichan; this business model is not to be believed! Once its customer base (gullible distributor wanna-be's) get the message, the mass market demand for these products and faint hopes of profit bonanzas from the dealer-consumers who buy this dreamer's elixir of life, will start to decline. Just like hoola-hoops, when the spin doesn't work anymore and those conned into playing give up, the game is over. Snake oil used to sell quite well in 1880 out west, until the west was won over to better alternatives to health and wealth. Getting the truth out will speed its demise. HLF is no real business; it's just 21st Century snake oil. HLF: circle the wagons!
    Mar 21, 2015. 10:19 PM | 6 Likes Like |Link to Comment
  • ModernGraham Quarterly Valuation Of Deere & Company [View article]
    I have owned DE when its price was over $90 and sold there, since it appears to be dead money for another 18 months. I love Deere, its people and ethics; yet the commodity cycle is really against it for the next 2 seasons. Just like global warming, climate change and death, eventually they will all get us all; but when?
    So, I watch the price of grains and commodity futures. I see how CP Rail and CNR are slowly moving the enormous glut of grain out of western Canadian storage. I watch the BDI index, lower than ever and the BDI:S&P 500 ratio at 0.28, lower than it has been in decades, even lower than 2001-2. I look for springtime east of the Rockies as one of the harshest winters of the 21st Century fades, asking: "Where is that promise of global warmth when we need it?" Patience is the hardest thing to activate in a dynamic go-go investment world.
    Yet patience and waiting for the right time to move and to buy-in is essential.
    Mar 20, 2015. 10:40 PM | 2 Likes Like |Link to Comment
  • Buffett Financial Analysis Template: Chicago Bridge And Iron Company [View article]
    If Buffett still has the 10,701,110 shares of CBI he held on 12/31/2014 his paper loss on 1/31/2015 was about $370 million+. As of today, he has regained around $140 million on the same portfolio; but still has a paper loss of about $230 million.
    I never underestimate this guy, so, assuming he still has kept his 10 million shares, it looks like they are going to recover. Buffett hates to sell any share at a loss!
    So, by that logic. I'd expect CB&I to be a reasonably good speculation for some capital gains. A recovery to $60 is quite likely, assuming no more economic distress in other facets of the CB&I order book. Oil is not that big a factor; they have demonstrated an ability to spread their risks pretty well these past 100 years.
    Mar 20, 2015. 06:05 PM | 2 Likes Like |Link to Comment
  • Why I Bought More Herbalife Puts Today [View article]
    The only court that matters at the end of this saga is the market. Is HLF a viable business model in the market at these valuations? Evidence is that it is starting to lose ground in its foreign markets as the US$ raises and local currencies, in which it must trade, fall. Venezuela and several Latin American countries are examples of strong downward pressure on margins, sales returns and prices to distributors. Time will tell in this court, no matter how the Federal and State Courts decide in the USA. Word for the day is: BE PATIENT! HLF is a sick company; the outlook for this patient is not good.
    Mar 18, 2015. 01:50 PM | 2 Likes Like |Link to Comment
  • Herbalife +5.3%; shareholder lawsuit dismissed [View news story]
    The huge verdict of the Market has yet to be seen. Venezuela, where are you? Does HLF really sell anything to anybody except its (duped) distributors? What, in fact, sort of stuff does HLF actually sell? No my friends, the jury is still out in the court of public opinion and in the market. If it smells like a skunk and looks like a rat it may be neither; but it still stinks as a viable business. I am still short, although in the rigged USA financial world I may be duped, as well. Carefully examune Ackman's thesis. It is not a phony story, it is well researched and worthy of reward. Court rulings can be set aside; keep the faith! New York is next for the next round.
    Mar 17, 2015. 07:11 PM | 6 Likes Like |Link to Comment
  • Chicago Bridge & Iron Reports Strong Q4 Results And 2015 Guidance [View article]
    CBI has been known to me since 1959. It always had a wide spread of customers across many industries. The oil business is 5% of their trade; believe it. It is a wonderful business at a marvelous price! (So says Buffett).
    Feb 25, 2015. 08:33 PM | Likes Like |Link to Comment
COMMENTS STATS
120 Comments
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