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  • Bill Gross: Going To The Dogs [View article]
    > I do believe the next generation is likely to feature narrower margins than the last, however.

    That may be. Also, the historically the tech went through a bubble in 1998-2000, so that must be factored in into that 20yr average 26 p/e.
    Mar 18, 2015. 07:32 AM | 1 Like Like |Link to Comment
  • Bill Gross: Going To The Dogs [View article]
    Yes, the likes of Kimberly Clark or Kraft Foods. The Utilities' current trailing p/e is 19.9x while their average 20yr average is 15x. Given the super low rates and their average yield at 3.5% these multiples seem justified, for now.

    Technology companies, by contrast, sport a 19.3x trailing p/e, while their 20yr average is 26x. Unless one argues for a secular downward trend on tech's profit growth, this seems an undervalued sector.
    Mar 17, 2015. 06:19 PM | 3 Likes Like |Link to Comment
  • Bill Gross: Going To The Dogs [View article]
    Buying high quality stocks with low p/e may be, in the short term, a bad idea if these are high dividend yield stocks. In the last five years they have been considered a proxy for high quality bonds, thus the dead for them was high and therefore their valuation is most stretched relative to other stocks. With the prospect of higher interest rates, the value of these stocks is at risk of falling more then other types of stocks. So beware!

    Of course, long-term (5-10 years) this is undoubtedly a good investment. But given the widespread short-term views and the shake psychology of most investors, it is better to choose something that is likely to outperform in the next 12-24 months.
    Mar 15, 2015. 05:27 PM | 5 Likes Like |Link to Comment
  • Priceline Is The Best Deal In The Market [View article]
    Why would there be a pop after the jobs report? Priceline gets the bulk of its profits outside of the US.

    Plus the positive jobs report means rate hikes, hence a strong dollar, hence smaller profits in dollar terms for a company that earns mainly in euros.
    Mar 8, 2015. 06:37 PM | 2 Likes Like |Link to Comment
  • Long-Overdue Major Stock Selloff Still Looms [View article]
    I'd recommend to the author to have a look at JP Morgan's Asset Management Guid to Markets here:

    This will give him at least some more credible data about where the US stock market, the S&P 500 companies, and the US economy as a whole stand.

    The picture is much less scary than he portrays it.
    Mar 8, 2015. 03:39 PM | 2 Likes Like |Link to Comment
  • Time To Sell Visa [View article]
    > the Fed and other central banks will never admit that QE and ZIRP are not a sustainable cure for the world's problems

    I don't believe for a second that that is what the Fed thought. QE serves as a boost to the private sector consumption and investment. There is never a guarantee that the private sector will react. It's like pushing on a string.

    The thing is that it has indeed worked. And now there will even be a mild tightening. I don't see how can the Fed admit that it was a mistake when the US did not fall into a Great Depression II, which was quite likely to happen otherwise.
    Mar 5, 2015. 06:59 AM | 1 Like Like |Link to Comment
  • Can U.S. Equity Still Deliver If The Fed Hikes? [View article]
    No, actually the Fed considers the economy pretty robust. What stops them from hiking is mostly the QE in Japan and in the Eurozone.
    Mar 1, 2015. 01:34 PM | Likes Like |Link to Comment
  • Time To Sell Visa [View article]
    > Read Minsky -- We are in the ponzi phase.

    I cannot comment on Visa. But your macroeconomic reasoning is simply a naive post-crisis trauma. It is a pity how many people, suffering from the same syndrome, missed an opportunity to enter stocks in 2009-2010.

    Not quite sure you have carefully read Minsky, either.
    Mar 1, 2015. 07:17 AM | 5 Likes Like |Link to Comment
  • Priceline Is The Best Deal In The Market [View article]
    I agree, the article is overly optimistic. There is quite some risks for Priceline, hence the valuation. It is not at all obvious why should PCLN reach $1500 in the next 12 months, let alone trade currently at that price.

    The outlook for Q1 in dollar terms isn't brilliant (gross booking growth of 2%-9%). Let's not forget that a trillion-euro QE is about to start in Europe and the dollar might strengthen further. It is true that sooner or later the FX will move in the opposite direction providing a nice tailwind for PCLN, but that may be 12-24 months away from now.

    Not to mention that ultimately PCLN is an internet business where things can potentially change fast by something we cannot even imagine at this stage. Even without a disruptive new technology, priceline is in a very competitive environment. True, it has outmanoeuvred its competition for several years on end but what's the guarantee this will go on.

    So I would say Priceline is a reasonably good bet but not exactly an undervalued stock.

    I doubled down at $1000 a few weeks ago as the plunge seemed exaggerated. But it seems reasonably valued at $1200. As a matter of precaution I might be looking to offload the newly added lot if the stock reaches $1250-75 in the near term.
    Feb 22, 2015. 08:50 AM | Likes Like |Link to Comment
  • Priceline's Mixed Bag Earnings Appease Investors [View article]
    > Still, gross bookings are expected to rise by between 17% and 24%, which may signal an acceleration.

    A bit tendentious: this is only international gross bookings and on a constant currency basis. In US dollars this is expected to translate into 2% and 9% in US dollars. US gross booking is expected to grow by 0 to 9%. Comfortingly, international bookings makes nearly 90% of revenue.
    Feb 22, 2015. 08:37 AM | Likes Like |Link to Comment
  • Priceline +7.3% after earnings beat [View news story]
    If I read their Press Release of today correctly they expect quite a sharp deceleration in the 1Q 2015 in dollar terms, though in local currency it's fine.

    "The Priceline Group said it was targeting the following for 1st quarter 2015:
    • Year-over-year increase in total gross travel bookings of approximately 2% - 9% (an increase of
    approximately 14% - 21% on a local currency basis).
    • Year-over-year increase in international gross travel bookings of approximately 3% - 10% (an increase of
    approximately 17% - 24% on a local currency basis).
    • Year-over-year increase in domestic gross travel bookings of approximately 0% - 5%.
    • Year-over-year increase in revenue of approximately 4% - 11%.
    • Year-over-year increase in gross profit of approximately 9% - 16% (an increase of approximately 21% -
    28% on a local currency basis).
    • Adjusted EBITDA of approximately $475 million to $510 million.
    • Non-GAAP net income per diluted share between $7.20 and $7.75."
    Feb 19, 2015. 10:43 AM | 1 Like Like |Link to Comment
  • Premarket Gainers / Losers as of 9:10 am [View news story]
    Priceline - very solid results. Looks looks a bit wimpy on a dollar basis, but on a local currency basis even outlook is cool!
    Feb 19, 2015. 09:19 AM | Likes Like |Link to Comment
  • My Priceline Fourth-Quarter Earnings Prediction [View article]
    > I believe the American consumer put their money to work in traveling during the fourth quarter at Priceline thanks to the drop in gasoline prices.

    Around 75% of PCLN's revenues come from outside the US. The current exchange rate euro/dollar doesn't help much. But PCLN's valuation has dropped so much in the last 12 months that it is relatively easy to surprise investors positively and therefore the most likely move today will be upwards.
    Feb 19, 2015. 03:59 AM | Likes Like |Link to Comment
  • Buffett ups IBM/SU/DE stakes, exits XOM/COP, enters QSR/FOXA [View news story]
    And was getting the 3% dividend while holding it.
    Feb 18, 2015. 04:08 AM | Likes Like |Link to Comment
  • Buffett ups IBM/SU/DE stakes, exits XOM/COP, enters QSR/FOXA [View news story]
    I was also buying FOXA last year and now it's more than 5% of my portfolio.

    Great investors think alike ;-)
    Feb 18, 2015. 03:01 AM | Likes Like |Link to Comment