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Misho ILIEV

Misho ILIEV
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  • 10 Undervalued Bank Stocks For The Long Haul [View article]
    Whoever failed to heed my advice to invest in HBAN in April missed an opportunity to make 30+% in a relatively low risk way...

    (Sorry for the self-centered comment.)
    Dec 16, 2013. 10:16 AM | Likes Like |Link to Comment
  • Visa, MasterCard $5.7B swipe fee accord approved by judge [View news story]
    It's kind of alluring to say that the consumer is screwed.

    But the truth is, I am afraid, that if the swipe fees were lower the merchants would have kept that margin for themselves. If merchants have the market power to charge the current, arguably supra-competitive prices, why lower swipe fees would stop them from doing it still and have better profit margins?

    I see this more like a redistribution of margin between payment processor and merchant, rather than between merchant and consumer.

    Arguably the consumer suffers as merchants become less profitable and provide worse service and less shopping innovation. But then payment processors get more capital to provide better payment services. Who's to make the value judgment as to what is better - more innovative shops or top notch secure payment services...
    Dec 14, 2013. 06:17 PM | 1 Like Like |Link to Comment
  • Visa And MasterCard Remain Ridiculously Expensive With Unjustified Growth Premiums [View article]
    Indeed, I am into Visa and MA too. Both are my favorite investments and I have great confidence in their future. I also have a smaller holding in the American Express which has done quite well (very nice multiple expansion in the last 12 months - but now it's a bit too expensive to buy).
    Dec 11, 2013. 04:42 PM | Likes Like |Link to Comment
  • Visa And MasterCard Remain Ridiculously Expensive With Unjustified Growth Premiums [View article]
    Something that I REALLY like for next couple of years is Alliance Data Systems (ADS). They manage loyalty programs and do data analytics (shopping data). They are also involved in issuing some proprietary credit cards (but this I am not sure how it works in practice).

    Ads has big free cash flow and low capex. They are also a very shareholder-friendly company with significant share buy backs.

    However, ADS is a bit riskier than Visa and MasterCard. Right now it's trading at a premium.

    According to Bloomberg the current p/e is 33 while the forward p/e is 25.

    http://bloom.bg/1h0FFlB

    P/E looks a bit high but for a company with a expected earnings growth of 23% in 2014 and around 14% thereafter this doesn't seem too exaggerated.

    Still, be careful how much of your portfolio you allocate to ADS. One needs to be reasonable.
    Dec 11, 2013. 04:20 PM | Likes Like |Link to Comment
  • Shiller PE Continues To Mislead Investors, S&P 500 Is Fairly Valued In Early 2013 [View article]
    Not sure about what you say:

    - the share buy backs have already had their intended effect, i.e. reduction of the number of the shares outstanding and an increased EPS, and will not be reversed because of coming back to "normal"

    - margins and ROIC have been increasing even before the crisis and some argue that this is a secular trend

    - but even assuming that margins will decrease, as the economy picks up, revenue will increase and profits may still increase even on lower margins
    Nov 24, 2013. 05:42 PM | Likes Like |Link to Comment
  • S&P 500: Do Not Buy This Dip [View article]
    Let me just add that I see no risk for the dollar to be dethroned as a world reserve currency in the foreseeable future.
    Nov 24, 2013. 05:27 PM | 1 Like Like |Link to Comment
  • S&P 500: Do Not Buy This Dip [View article]
    "While the Fed has been expanding its balance sheet, it has done so through purchase of securities:

    Fed
    ----------------------...
    +securities | +reserves



    Bank
    ----------------------...
    -securities |
    +reserve deposits |


    For the Fed any reserves are backed by assets, and so are fully collateralized. The balance sheets of the banks have not increased; they are just exchanging one sort of asset for another, more liquid one.

    Before the crisis the economy was reliant on borrowing as a source of liquidity. If there were payments to make borrowing was easy to come by as there was a lot of elasticity (too much!) being provided by the private sector. The crisis itself was a massive swing from elasticity to discipline on the part of the private sector - suddenly no-one could borrow, and payments had to be paid "today" with no elastic rolling over to tomorrow. The havoc that this shift to discipline caused brought down some firms and would have rolled on to collapse a lot more. With everyone in the economy wanting to hold money there was little lending, and little buying of assets, leaving dishoarding as the primary way to make payments, and that would only last so long."

    This is a quote from Mr Darce Trevor-Roper, a moderator in a finance discussion forum

    (This is an attempt to draw a balance sheet - the vertical lines divide the left side, i.e. assets from the right side, i.e. liabilities)
    Nov 24, 2013. 05:20 PM | Likes Like |Link to Comment
  • S&P 500: Do Not Buy This Dip [View article]
    Iron Hamster,

    I don't mean to shock you but... the bulk of the "eurodollars" has NEVER left the US. Eurodollars are in a way notional and they are exported as deposits, i.e. purely as an accounting operation.
    Nov 24, 2013. 05:16 PM | 1 Like Like |Link to Comment
  • S&P 500: Do Not Buy This Dip [View article]
    In the end the inflation that will come after the liquidity pump might not be so rampant as some people think...
    Nov 19, 2013. 11:35 AM | 2 Likes Like |Link to Comment
  • S&P 500: Do Not Buy This Dip [View article]
    The adage "Don't fight the Fed" is a Wall Street lore.

    "Despite the unmistakeable impact that the Fed has had on markets over the years, investors have not always paid heed to the power of the Fed. Instead, they have gotten caught in bouts of excessive optimism and pessimism, often finding it difficult to see past their emotions. But investors almost always seem to come around at some point, eventually recognizing that the Fed's handiwork will have its intended effect."

    From Marcia Stigum's book "Stigum's Money Market".

    Good lick to those who want to fight the Fed!
    Nov 17, 2013. 02:34 PM | Likes Like |Link to Comment
  • The Stock Market Is Currently Overvalued And Irrational According To 2013 Nobelist [View article]
    The adage "Don't fight the Fed" is a Wall Street lore.

    "Despite the unmistakeable impact that the Fed has had on markets over the years, investors have not always paid heed to the power of the Fed. Instead, they have gotten caught in bouts of excessive optimism and pessimism, often finding it difficult to see past their emotions. But investors almost always seem to come around at some point, eventually recognizing that the Fed's handiwork will have its intended effect."

    From Marcia Stigum's book "Stigum's Money Market"

    Good lick to those who want to fight the Fed!
    Nov 17, 2013. 02:19 PM | Likes Like |Link to Comment
  • Insiders Are Selling Apple [View article]
    Let's not get TOO silly, though.

    If you bought Apple three years ago you would be 73% up by now. Which is not bad. And incidentally that's a better return than in GOOG for the same period...

    Think about it.

    It amazes me how superficially short term people think.
    Nov 9, 2013. 06:33 AM | 8 Likes Like |Link to Comment
  • Insiders Are Selling Apple [View article]
    Markus,

    Don't short Apple. I don't have a crystal ball, of course. But I can tell you that based on insider selling you can't make any conclusive judgments about the stock price movement.

    AAPL is relatively cheap, it has a huge cash pile and buy back programme, and seems to be doing reasonably well. So why should the stock price go sharply down?

    Better save your money for some more common sensed investment than gambling with an short position in Apple.
    Nov 9, 2013. 06:27 AM | 1 Like Like |Link to Comment
  • Nucor And International Paper: Early Materials Sector Prime Picks [View article]
    Mr Market's trades don't always make perfect sense...
    Nov 7, 2013. 04:23 AM | 1 Like Like |Link to Comment
  • Nucor And International Paper: Early Materials Sector Prime Picks [View article]
    The other explanation could be that cyclicals in general are under pressure because of gloomier global outlook - Eurozone cut its GDP growth forecast yesterday.

    I am reading the Financial Times only now...

    Cliffs Natural Resources is also a bit down, I guess again on fears that the positive cycle might be delayed.
    Nov 6, 2013. 11:56 AM | Likes Like |Link to Comment
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