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DonInSanDiego

DonInSanDiego
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  • Update: Freeport-McMoRan Updates On Its New Oil Discovery [View article]
    @ Seeking betta: Thanks for your comment. The author's $20 May 2015 PUT with a $1.30 premium implies an annualized return of 16.9 percent if not exercised. If one expects more downside in FCX over the next 6 months or so, but likes the company long-term, and is willing to own it at a net cost of $18.70, this seems like a reasonable strategy. JMHO.
    Dec 27, 2014. 12:06 AM | 1 Like Like |Link to Comment
  • First Solar's Inconvenient Truth [View article]
    Mr. Schwartz:

    Mr. Frisch has pointed to an error in which you originally overstated the volume of required recycling of CdTe by a factor of more than 1000.

    In other words, the magnitude of the recycling problem is actually less than ONE ONE-THOUSANDTH of what you thought it was when you wrote this article.

    In reply you call this "an isolated mental error" that "[h]as no bearing on the remaining calculations in the article, nor on the logic of the argument."

    Along with Mr. Frisch, I am aghast.

    And I thank Mr. Frisch for his diligence in pointing out this significant error.
    Dec 18, 2014. 01:16 AM | 4 Likes Like |Link to Comment
  • Oil & Gas Stocks: Is This Correction Over? [View article]
    There are some errors in your numbers. Here are some back-of-the-napkin numbers: World oil consumption is about 90 million barrel/day, of which the U.S. consumes about 19 million barrel/day. So 378 million barrel U.S. commercial inventory (excluding Strategic Petroleum Reserve of nearly twice that) would be about a 20 day supply.
    Oct 24, 2014. 06:05 PM | 5 Likes Like |Link to Comment
  • It Is Not Ebola That Is Out Of Control, It Is The Media [View article]
    Perhaps the media is overhyping the Ebola problem in the US, or perhaps not.

    But one thing is for sure: Until recently, the media has under-reported the now out-of-control epidemic in West Africa. One reason is that reporters (and health-care workers) increasingly fear to go there. As a result, we have murky data about what is actually happening.

    The important question is not whether the media is overhyping Ebola. The important question is whether Ebola can be brought under control in West Africa quickly. If not, there are numerous possible scenarios that are dire to varying degrees. A prudent person will at least consider some of these scenarios and attach a probability greater than zero to each of them. This has investment obvious implications.

    For example, consider this very dire imagined scenario which I posted elsewhere on SA:

    In West Africa, the situation deteriorates to the point that already-weak governments and public health systems collapse totally. Panic ensues. People try to escape through porous borders. The epidemic spreads to other densely populated African cities and towns. (Africa's population is greater than 1 billion.) Western, Chinese, and other expats panic and try to get out, as do Africans who are relatively well-off. Enterprises run by these people begin to suffer --- mines, oil and gas facilities, etc. Then Ebola fear grows in the home countries of these expats as they begin to arrive. (We see early signs of this here.) Eventually, attempts are made to quarantine the entire continent of Africa. Boat people try to get across the Mediterranean en masse (as they do already in relatively small numbers). Fearing for their lives, health professionals and others refuse to go to Africa. Shipping and air travel collapse between Africa and the rest of the world. And now hosted by millions of people, the virus possibly begins to mutate. You get the picture.

    A rational person must give some weight to this seemingly unlikely Ebola scenario, and some weight to much paler versions of it. And along with each Ebola scenario, there are a range of possible economic outcomes and effects on financial markets.

    In summary, no one can deny that there is a huge degree of uncertainty about this unprecedented Ebola outbreak. It may be a Black Swan or perhaps not. But We can reasonably expect its tremors to be felt in financial markets as long as the epidemic remains out of control.
    Oct 16, 2014. 02:28 PM | 1 Like Like |Link to Comment
  • Irrational Ebola Fears: What To Do And What Not To Do [View article]
    I think the author is much too complacent. One has to give some significant probability to the following imagined scenario:

    In West Africa, the situation deteriorates to the point that already-weak governments and public health systems collapse totally. Panic ensues. People try to escape through porous borders. The epidemic spreads to other densely populated African cities and towns. (Africa's population is greater than 1 billion.) Western and Chinese expats, and Africans who are relatively well-off, panic and try to get out. The enterprises run by these people begin to suffer --- mines, O&G facilities, etc. Ebola fear grows in the home countries of these expats as they begin to arrive. Eventually, attempts are made to quarantine the entire continent of Africa. Boat people try to get across the Mediterranean en masse (as they do already in relatively small numbers). Fearing for their lives, health professionals and volunteers from other continents refuse to go to Africa. And now hosted by millions of people, the virus possibly begins to mutate.

    In this seemingly unlikely scenario, and even much paler versions of it, what do you think the effect would be on the world economy? A rational person must give some weight to this.
    Oct 16, 2014. 12:36 PM | Likes Like |Link to Comment
  • Yes Virginia, The Market Can Go Down - Part II [View article]
    Another potentially huge headwind for the world economy and the market: The out-of-control Ebola epidemic.

    If the epidemic continues on its current trajectory, and if it should get established in Africa beyond the three West African countries, and if millions of people die, this will be like nothing we have seen in recent modern times. (One would have go back to the 1918 Spanish Flu for anything comparable.) And all of this could happen when the virus is not easily transmissible between people.

    Ebola has never been established in very large human populations before. One could imagine an even worse scenario in which it mutates and becomes easily transmissible through the air.

    In any event, if the epidemic spreads very widely in Africa, the social, economic, and political effects would be gigantic for Africa and the world. One can imagine the panic that might ensue. People (especially Westerners) would try to get out. Borders would be sealed. The rest of the world might try to quarantine the whole African continent. Already precarious African economies might collapse. Production of mines, oil, and gas might plummet. Militant groups, already rampant in several African countries, might flourish. Etc.

    One can guess the effect on investor psychology.
    Oct 2, 2014. 01:49 PM | Likes Like |Link to Comment
  • A Re-Analysis Of Gilead After Q2 Results And The Early Idelalisib Approval [View article]
    Excellent, balanced discussion. Very helpful. Thanks.
    Jul 24, 2014. 02:23 PM | Likes Like |Link to Comment
  • Several Recent Geo-Political Events That Could Threaten The Dollar's Dominance In International Trade [View article]
    Thanks for a very interesting article on an important topic that has received too little attention in the mainstream media.
    Jul 18, 2014. 04:58 PM | Likes Like |Link to Comment
  • Cabot Oil & Gas Is A Buy On Natural Gas And Oil Development Results And Price Growth [View article]
    David, thanks for the informative article.

    Any thoughts on the potential impact of:
    1. Possible new restrictive state regulation
    2. Pennsylvania lawsuits against Cabot alleging drinking water contamination?
    Jul 10, 2014. 04:57 PM | 1 Like Like |Link to Comment
  • Natural Gas Transportation: What's Taking The U.S. So Long? [View article]
    Very interesting and thought-provoking article. (However, the math in the first paragraph has serious errors and should be corrected.)
    Jun 16, 2014. 04:31 PM | Likes Like |Link to Comment
  • Micron And Memory Prices [View article]
    Russ, what are the implications for Micron if it doesn't turn out to be part of the Intel/Micron JV?
    Mar 13, 2014. 02:20 AM | Likes Like |Link to Comment
  • Micron Technology Set To Have Another Great Year [View article]
    You can probably guess where I am :)
    Feb 26, 2014. 05:20 AM | 3 Likes Like |Link to Comment
  • Near-Term Catalysts For Micron [View article]
    @Rumpel:

    I upgraded from XP to Windows 8 (now 8.1) for my non-touch desktops several months ago. I then added the Classic Shell free download, which has worked flawlessly to give the look and feel of earlier Windows.

    My impression: Win 8 is *very* solid. It also gives you entry into the touch-screen world and Win 8 apps, optionally, if you want that. I've never looked back.
    Feb 13, 2014. 06:31 PM | Likes Like |Link to Comment
  • Thoughts On The Micron Analyst Meeting [View article]
    Russ, thanks again for your insight on MU. Greatly appreciated.
    Feb 10, 2014. 04:44 PM | 3 Likes Like |Link to Comment
  • Intel Shares To Skyrocket [View article]
    @ old indie
    Re: "That would explain long term down trend for Cisco, Intel, and Microsoft."

    Below is a snapshot of results for the three companies at the start and end of the past decade.

    Rev (MM$) /S&P Core Earnings (MM $) / S&P Core Earn Per Sh

    CSCO:
    FY2004: 22,045 / 3,652 / 0.52
    FY2013: 48,607 / 10,097 / 1.88

    INTC:
    CY2003: 30,141 / 5,467 / 0.83
    CY2012: 53,341 / 11,075 / 2.15

    MSFT:
    FY2004: 36,835 / 9,042 / 0.83
    FY2013: 77,849 / 21,788 / 2.57

    The future is another matter, but do you really see a "long term down trend" over the past decade?
    Nov 21, 2013. 06:11 PM | Likes Like |Link to Comment
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