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thepartyisover

thepartyisover
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  • Does Microsoft Still Deserve Apple's PE? [View article]
    The P/E of Microsoft is taking into account a large one-time writedown. Adjusted for that, Microsoft is selling more like a P/E of 10 or 11 so your argument is completely wrong..
    Sep 14 11:49 AM | 7 Likes Like |Link to Comment
  • Summers And Krugman On Bubbles And The Great Stagnation [View article]
    It took a lot of courage to write this article since it flies in the face of conventional wisdom. I'm not sure I agree with the claim that high stock prices leads to low inflation but it is thought provoking.

    Let's assume you are correct. High stock prices leads to low inflation and thus, the inverse, low stock prices leads to high inflation must also be true. The argument would be based on the fact that capital going into stock prices is not circulating in the economy and therefore not creating wage inflation or commodity inflation. Perhaps there is some truth to that but the argument is weak if you consider that if the capital was never created at all, the economy and the stock market would both be weaker.

    Conventional wisdom is that the yield on risky assets is a function of the risk free rate and some risk premium. If long term risk free rates are being pushed down by QE purchases, then the yields of risky assets are also being pushed down (and therefore risky asset prices rise).

    Like all other risky assets, human capital has a risky yield. By lowering the risk free asset yield, the price for human capital rises and the yield follows the risk free asset yield lower. If all else was equal, I think QE would be creating inflation.

    Unfortunately, all else is not equal. There are huge deflationary forces in the economy today. The internet is a large deflationary force in the labor market.

    The SKH hypothesis states that for full employment, the natural interest rate is negative. The unfortunate conclusion is that the yield for marginal human capital might also be negative. Indeed, you can see this on seeking alpha (which is on the internet) and where there are so many articles that are a waste of time (thus showing the yield for human capital is negative). Perhaps my comment is no different.
    Nov 26 11:56 AM | 3 Likes Like |Link to Comment
  • Allied Nevada Is Not A Walking Dead [View article]
    Ben's point about including taxes and interest in the all in costs were more related to interest than taxes. Creating new metrics to evaluate reality are fine, so long as they are accurately representing reality. While he may or may not be correct in other metrics, I did find his article to be more objective and less biased than yours.
    Nov 15 07:56 PM | 3 Likes Like |Link to Comment
  • Apple Faces A Problem And Increasing Prices Will Make It Worse [View article]
    I think what this article fails to realize is that Apple can temporarily increase prices when the phone is initially released and then lower prices back down after a quarter or so. By doing so, Apple would be able to sell quantity as well as get higher margins. If Apple does follow such a strategy, I think it would actually benefit consumers that value time highly as they would be able to purchase one on day one without spending a day in line.

    Pricing power and brand values are closely related. Apple has the most valuable brand in the world and a monopoly on the iPhone/iOS. Google doesn't have pricing power in the smartphone world, and neither do their commodity phone producers.
    Apr 15 08:21 AM | 1 Like Like |Link to Comment
  • Don't Judge Berkshire Hathaway By Its Book Value Cover [View article]
    "Forbes even calls BRK.A a hedge fund"

    That's not true. Buffett actually did run a hedge fund in the 50's and 60's before he was running Berkshire.
    Mar 12 03:44 PM | 1 Like Like |Link to Comment
  • Summers And Krugman On Bubbles And The Great Stagnation [View article]
    You should read Buffett's article on inflation and earnings. This should shed some light for you..

    http://cnnmon.ie/XQzC98

    Interest rates and inflation have historically been tied to the hip. If you are claiming that high stock prices lead to low inflation, you have it flipped as its actually the opposite. Low inflation leads to low interest rates which lead to high asset prices.

    I don't want to be mean but your arguments are not logical and show either that you lack the education in finance or that you are not reasonable. I hope it is the former as that can be fixed.
    Nov 26 02:38 PM | 1 Like Like |Link to Comment
  • Allied Nevada Is Not A Walking Dead [View article]
    Ben's point about including taxes and interest in the all in costs were more related to interest than taxes. Creating new metrics to evaluate reality are fine, so long as they are accurately representing reality. While he may or may not be correct in other metrics, I did find his article to be more objective and less biased than yours.
    Nov 15 07:56 PM | 1 Like Like |Link to Comment
  • Allied Nevada's Debt Load: The Consequences, Opportunity, And Risk [View article]
    Nice job. How much is ANV affected by the price of silver vs the price of gold given the increase in silver production?
    Nov 10 02:24 PM | 1 Like Like |Link to Comment
  • Microsoft's Make Or Break Moment [View article]
    The title of this article is somewhat wrong. Windows is only one of the four pillars of microsoft (office, windows, server, xbox).

    if windows 8 is a complete disaster, the company should be able to stand on the other three pillars so the title really should be "Window's make or break moment"
    Aug 20 10:47 AM | 1 Like Like |Link to Comment
  • Apple: A Value Stock With Numerous Growth Kickers [View article]
    Apple is actually outperforming by more than the chart in your article suggests as the 3.05 div went ex as well.
    Feb 10 06:02 PM | Likes Like |Link to Comment
  • Summers And Krugman On Bubbles And The Great Stagnation [View article]
    First, I'll apologize. I did not fully understand your article and did not realize that you were looking so far back in time. My understanding is post Fed and based on Buffett's article, which I'd still recommend.

    I will re-read your article and see if I can make sense of the data / conclusion.
    Nov 26 04:13 PM | Likes Like |Link to Comment
  • Allied Nevada's Debt Load: The Consequences, Opportunity, And Risk [View article]
    Its true that all gold miners, explorers and producers otherwise, are subject to the price of gold but I think Ben's point though is that ANV is much more sensitive to the price of gold given that its cost is right around the price of gold and the company has a deadly amount of debt.
    Nov 13 11:09 AM | Likes Like |Link to Comment
  • Apple's Earnings Mediocrity [View article]
    Apple could easily cure its margin compression by changing its pricing strategy. Early adopter? Pay a higher price the first month and then lower it. The phone would probably still be in short supply.

    Personally, I hope Apple's shares go lower in the short run so that the company can buy back more shares at a lower price and improve metrics for the long run.
    Oct 29 05:12 PM | Likes Like |Link to Comment
  • Carl Icahn Spells The End Of An Era At Apple [View article]
    Apple doesn't create its own P/E. Market participant expectations create Apple's P/E. While the P/E is more akin to that of a retailer than that of a technology leader, these days most market participants are not "investors" and have no idea how to value companies.

    "many cling to the notion that the market will see the error of its way and cause a tremendous surge in share price." Isn't that what we've been seeing?

    "Cash adds nothing to P/E. If anything, it diminishes the level and serves to curb share price " I agree, cash adds nothing to P/E but there are a lot of people using one factor valuation metrics (i.e. P/E) to compare companies to evaluate relative attractiveness. While P/E is a good measure of value, if a company has significant amounts of cash that it is returning to shareholders, the P/E is overstated as each share bought back increases the earnings of each remaining share.
    Aug 13 11:15 PM | Likes Like |Link to Comment
  • Carl Icahn Spells The End Of An Era At Apple [View article]
    Its not fair to apply the P/E of a retailer to a company that has profit margins the size of apple's. Additionally, net of cash, the P/E multiplier is in the single digits. It may be true that Icahn is in it "for the cash" but that doesn't make his argument that Apple is undervalued wrong.
    Aug 13 05:39 PM | Likes Like |Link to Comment
COMMENTS STATS
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