In Summary, The Tesla Model S Is A Dirty Car [View article]
I am duly impressed with the fact that this company turned a profit, but lest we forget; their massive assembly plant was bestowed upon them for essentially nothing. Toyota and The General reconfigured the plant in the early 80's as a joint venture (remember Geo?). Since the terms of the joint venture were not disclosed, we don't know how much the plant was worth, but a facility covering 370 acres with an assembly plant spanning 88 football fields probably had to be pretty dear. The plant was shuttered in March 2010; a few months later Mr. Musk took a tour and fell in love with the plant. When asked how much he would like to pay for the plant, he said "How about $42 million?" SOLD! And the Feds will loan you most of the money! Doubtless a several hundred million dollar discount. So, as I said, I am impressed that they have turned a profit, but be careful when looking at the financial results.
Fair disclosure: I am neither long nor short TSLA at the moment, but if it runs any farther, I would not be averse to shorting it for a trade.
The big tech selloff that's occurred over the last few weeks has resulted in valuations for many large-cap names once more falling to historically low levels. Here are some trailing P/Es for prominent large-caps, none of which take into account net cash and investments: Intel (INTC): 10.6. Microsoft (MSFT): 10.3. Apple (AAPL): 13.7. Google (GOOG): 15. Cisco (CSCO): 9. IBM: 13.6. EMC: 14.7. Dell (DELL): 6. H-P (HPQ): 5.1. On the other hand, Facebook (FB) still has a trailing P/E of 64.5. [View news story]
I agree that there are some bargain valuations there, but a sinking tide still drops all boats. I am afraid this market is going to trade substantially lower, and these good names could become even greater bargains. And the only thing to do with FB is short it, or buy puts...
2 Big Reasons To Be Bullish On Chesapeake Today [View article]
Remember in the good old days, when only the Russians had czars? We've got like 3 dozen of them now, all non-elected, in charge of all sorts of new agencies. It's as if the Constitution no longer applies...
Long-term Treasury yields that continue near all-time lows even as the economic numbers improve and risk goes full-on in 2012? Look no further than Operation Twist, under which the Fed has purchased 91% of the government's 20-30 year debt issuance. What happens when the Fed stops? What happens to the Fed's balance sheet if rates rise? [View news story]
"What happens to the Fed's balance sheet if rates rise?"
Well, if you're long several hundred billion dollars (face) of T-Bills at really low rates, and then rates rise appreciably, you lose billions as far as portfolio value goes. If you don't need to sell your instruments before maturity (and I'm guessing the Fed doesn't) then it really doesn't matter. Draw your own conclusions...
Just how heated has trading in Apple (AAPL +3.8%) become? With 50.6M shares changing hands today, Apple's dollar volume was roughly $30B. For perspective, the entire NYSE has seen an average daily dollar volume of $36.6B in February. Powershares QQQ (QQQ), the ticker with today's second-highest dollar volume, only saw $4B worth of trades. (earlier) [View news story]
The NYSE did 4.3 B shares today. So the average share price on the Big Board is eight bucks? I find that hard to believe...
XPO Logistics: Q4 A Disappointment, So What's Next? [View article]
It has been said that if one wants to make a small fortune, start with a large fortune and then go into the trucking business. I could tick off dozens of reasonably well-run trucking companies over the years that went bust, and while its nice that Jacobs put his $150MM in, you will notice that the company's cash position is already half that, and that was with zero acquisitions completed. I love the optimism and enthusiasm here (and the experience), but to put this thing at $100 inside five years is taking quite a leap of faith. Good luck to all, just the same...
Fannie Mae (FNMA.OB) will go Oliver Twist like to the government for another $4.6B after making a net loss of $2.4B in Q4 and $16.9B in the whole of 2011. That's up from $14B in 2010, although Fannie estimates that it has now "reserved for the substantial majority of the remaining losses" on its pre-2009 loans. (PR .pdf) [View news story]
What I want to know is where is Frank Raines and the $165MM he collected as "bonuses" for all of the "successful" loans Fannie was making under his "expert guidance" (thanks Ms. Waters)? Since essentially ALL of that paper has come flying back in Fannie's face (pun unintended), and those profits were all bogus, why do he and his minions get to keep their ill-gotten gains?
Running Through Unilateral Greek Exit Scenarios [View article]
I remember thinking how insane the whole EZ idea was at the time (yes, I am that old). The idea that economies as strong as Germany and as weak as Greece could share a currency seemed ridiculous. If the weaker economy loses the ability to let their currency fluctuate (including the ability to print more cash when necessary), they are dead meat. Not a question of if they will fail, but when. Well, now we can see how long it takes for this to happen. Greece needs to go back to the Drachma, like now. It will hurt like hell in the interim, but it is their only possible path back to a reasonable amount of prosperity. JMO.
While AIG (AIG) has been selling assets over the past few years so it can pay back its $182B bailout, the company is once again harboring dreams of international growth, with Chairman Steve Miller saying the firm may want to one day buy a life insurer outside the U.S. and even increase its stake in AIA (AAIGF.PK). [View news story]
"International growth"???? What happened to "orderly liquidation"??? These guys were one of the PRINCIPAL reasons the entire planet's economy has been tripping over itself for going on 4 years now, and they want to GROW??? Not ONE person has done time over this set of atrocities, and the only company people that lost their jobs probably had nothing to do with the actual felonies. They get 182 big ones from Uncle Sam and now they want to go blithely on their way??? I feel nauseous...
5 Busted Tech Stocks Ready To Rally In 2012 [View article]
It is, in my opinion, very disingenuous to suggest MOTR will have a turnaround in 2012; they have been an abject management disaster, and many of their business practices border on the felonious. If this company still exists at the end of 2012 I will be shocked. Lick your wounds and take the 75 cents while you still can. I just wish it was still over a buck so I could short it...
Ford And GM Could Double While Tesla Drops In 2012 [View article]
Tesla's issue is not Tesla; it's the industry. The majors have too much money and engineering clout to not take this industry away from a company the size of TSLA. The REAL issue here is battery life and efficiency; whichever company wins that battle wins the war. Who would you put your money on? Toyota, Honda, Ford, GM or Tesla? The big 4 have a ton of cash and MASSIVE engineering muscle. Elon is a VERY smart guy, no mistake, but he has already gotten a TON of lucky breaks thus far (look up what he paid for NUMMI), and the company is still on very tenuous fiscal grounds. The company will be sexy for a while, and if they're lucky they will end up being a reasonable successful upscale niche player. That's a best-case scenario. And leave us not forget, this is NOT an industry that historically been very kind to niche players. Apologies to Ferrari, Lambo, Bentley and Rolls...
Philip Morris International Continues To Be A Smokin' Dividend Growth Stock [View article]
Funny thing about China; tha trade barriers are high, but they do seem to like joint ventures. So let's see; we won't let you sell your wares here unless you partner with a local Chinese company. And by the way, we're not really concerned about patents, copyrights or intellectual property claims. Hmmmmm.......
Coming Week's Market Movers: U.S. Credit Downgrade vs. Accelerating EU Contagion [View article]
"assuming that equity and option markets are not obliterated"
BIG assumption in this environment, and investments that large move markets all by themselves. Tough to replace Treasuries with equities on this scale.
In Summary, The Tesla Model S Is A Dirty Car [View article]
Fair disclosure: I am neither long nor short TSLA at the moment, but if it runs any farther, I would not be averse to shorting it for a trade.
The big tech selloff that's occurred over the last few weeks has resulted in valuations for many large-cap names once more falling to historically low levels. Here are some trailing P/Es for prominent large-caps, none of which take into account net cash and investments: Intel (INTC): 10.6. Microsoft (MSFT): 10.3. Apple (AAPL): 13.7. Google (GOOG): 15. Cisco (CSCO): 9. IBM: 13.6. EMC: 14.7. Dell (DELL): 6. H-P (HPQ): 5.1. On the other hand, Facebook (FB) still has a trailing P/E of 64.5. [View news story]
2 Big Reasons To Be Bullish On Chesapeake Today [View article]
Long-term Treasury yields that continue near all-time lows even as the economic numbers improve and risk goes full-on in 2012? Look no further than Operation Twist, under which the Fed has purchased 91% of the government's 20-30 year debt issuance. What happens when the Fed stops? What happens to the Fed's balance sheet if rates rise? [View news story]
Well, if you're long several hundred billion dollars (face) of T-Bills at really low rates, and then rates rise appreciably, you lose billions as far as portfolio value goes. If you don't need to sell your instruments before maturity (and I'm guessing the Fed doesn't) then it really doesn't matter. Draw your own conclusions...
Just how heated has trading in Apple (AAPL +3.8%) become? With 50.6M shares changing hands today, Apple's dollar volume was roughly $30B. For perspective, the entire NYSE has seen an average daily dollar volume of $36.6B in February. Powershares QQQ (QQQ), the ticker with today's second-highest dollar volume, only saw $4B worth of trades. (earlier) [View news story]
XPO Logistics: Q4 A Disappointment, So What's Next? [View article]
Fannie Mae (FNMA.OB) will go Oliver Twist like to the government for another $4.6B after making a net loss of $2.4B in Q4 and $16.9B in the whole of 2011. That's up from $14B in 2010, although Fannie estimates that it has now "reserved for the substantial majority of the remaining losses" on its pre-2009 loans. (PR .pdf) [View news story]
Running Through Unilateral Greek Exit Scenarios [View article]
While AIG (AIG) has been selling assets over the past few years so it can pay back its $182B bailout, the company is once again harboring dreams of international growth, with Chairman Steve Miller saying the firm may want to one day buy a life insurer outside the U.S. and even increase its stake in AIA (AAIGF.PK). [View news story]
5 Busted Tech Stocks Ready To Rally In 2012 [View article]
Bank Of America: An Attractive Play For A Diversified Long-Term Investor [View article]
I honestly believe a federal gun was proverbially held to their head. "Need some liquidity from the Fed? Here's what's going to happen first..."
Just my 2 cents; nice job on the column...
Ford And GM Could Double While Tesla Drops In 2012 [View article]
Cramer's Mad Money - The Hottest Chart In Tech (11/8/11) [View article]
Philip Morris International Continues To Be A Smokin' Dividend Growth Stock [View article]
Coming Week's Market Movers: U.S. Credit Downgrade vs. Accelerating EU Contagion [View article]
BIG assumption in this environment, and investments that large move markets all by themselves. Tough to replace Treasuries with equities on this scale.