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  • Nordstrom Continues To Grow  [View article]
    Indeed. Also same store sales helped by the sheer number of new stores that comp higher because their first year is often 80% of a mature store. I believe this accounts for over 2% of the comp.
    Feb 27, 2015. 01:10 PM | Likes Like |Link to Comment
  • U.S. Silica misses by $0.02, beats on revenue  [View news story]
    They're in trouble. Bad debt, no visibility. This is going to take a while to clear out. Might be worth a shot when PE gets sub-10. Lots of risk right now.
    Feb 24, 2015. 06:20 PM | 4 Likes Like |Link to Comment
  • Nordstrom Looks Very Expensive Here  [View article]
    I disagree with your analysis. I ran a DCF and assumed 8% NOPLAT growth, $800m annual capex and working capital to grow proportional to revenue and the same WACC you used and got $95. My explicit forecast period was 10 years and perpetuity growth was 3.5%. Few things: your 5 year forecast is too short, you seem to be excluding the dividends and using the book value of equity is flawed. Valuations are necessary because carrying values are at historical costs less depreciation plus do not reflect the sum of the parts of the company. If we should use book values valuations would be simple: assets less liabilities would equal the value. This is not the case so we normally used DCF. Further, Nordstrom is aggressively opening Racks, investing in ecommerce, going to Canada and opening in a full line store in Manhattan. Opex is up because of aggressive expansion not because of any problems with the business.
    Feb 3, 2015. 02:15 AM | Likes Like |Link to Comment
  • Frontline Surges On Activity In Tanker Market - Is The Company A Good Buy?  [View article]
    You folks are really going to the long end of the risk curve with Fro. November's conference call was as terse as they come. Contango won't last forever. Fro has no money to invest in the business. They better make a boat load of money because w/ $1 billion in debt they are going to need it. How do you justify an EV of $3.3 billion. You would need to see at least $150 m profit this year and a 5-6% growth rate in perpetuity. 1 new ship and oil storage forever isn't a realistic formula. Sell.
    Jan 24, 2015. 02:27 AM | 1 Like Like |Link to Comment
  • $60: Not A Reasonable Price For Oil  [View article]
    Agreed. This is the same argument made by the gold bugs: cost of production, blah blah blah, reduced output, blah blah blah, increased prices. Nothing new, this is the traditional view. I'll take the wait and see approach and invest in other sectors for the time being.
    Dec 18, 2014. 02:01 AM | 1 Like Like |Link to Comment
  • Daily State Of The Markets: Forget Oil, Is It All About Russia Now?  [View article]
    Very good article. Yellen is not concerned about Russia and that's good enough for me. I'm long this market and will continue to stay put.
    Dec 18, 2014. 01:52 AM | Likes Like |Link to Comment
  • More Upside Than Downside In Oil  [View article]
    Higher interest rates decrease inflation in general and certainly for oil exporting nations. But I digress.

    This article is a joke. Go back to their article on June 3rd when they called for more oil upside. I believe they saw downside of only $3-$5. Must have forgot the zero. Keep towing the census line you'll be right eventually.
    Dec 18, 2014. 01:43 AM | Likes Like |Link to Comment
  • Why Halliburton Stock Is A Good Investment Opportunity  [View article]
    Great article. Thank you for writing. I can't buy any oil or energy services equity right now. Yes, they are inexpensive but way too much uncertainty with oil prices. Would wait until oil settles and then make a buy. Oil at $65 would eliminate much of the marginal exploration in the US and I assume elsewhere casting doubt on those earning growth forecasts.
    Nov 22, 2014. 02:26 AM | 1 Like Like |Link to Comment
  • Sell-Off Coming - Prepare Accordingly  [View article]
    Good article, I commend you for the time, energy and thought. Couple of things. We tend to give too much emphasis to recent events, in this case the specter of the Great Recession. Your chart showing margins to GDP doesn't support the assertion that inflation hurts margins, look at the late 70's when both are rising. Margins and Roic are rising because of deferred investment, lower interest expense and technological changes.

    The discount rate, WACC, is tied to the 10 year and lower than average but if the economy supported higher rates wouldn't we have higher growth/cash flows?

    Don't miss this rally.
    Nov 13, 2014. 01:41 AM | Likes Like |Link to Comment
  • Turkey delivers big rate hike to defend currency  [View news story]
    I can. Inflation is about 7.5%; GDP growth is sub 3%; public debt is low at 35% of GDP and unemployment is 10%. So not your typical crisis scenario. But problem is the net private foreign debt is $200 billion (1/4 of GDP) and the current account deficit is 7%. Without dollars they can't service the debt and more immediately finance the trade deficit. The problem would correct thru a naturally devalued currency but that would drive up inflation (particularly energy) and hurt foreign debtors. Which would further erode the exchange rate and around we go.
    This might work. I think the fear is increasing unemployment and political instability but their good debt position probably gives them some wiggle room if need be. However, you really need to understand their economy if you plan on investing. Headline investing is silly.
    But the bottom line is they can't grow at these interest rates so they need to address the structural issues. Good luck I say. I'll keep my money else where.
    Jan 28, 2014. 10:29 PM | 6 Likes Like |Link to Comment
  • Obamacare's got an age problem  [View news story]
    Not sure if there is an economic incentive to pull out from the exchange. Individual policies both in and out of the exchange must provide essential health benefits. So a bare bones outside the exchange just isn't going to fly. Given there are no subsides outside the exchange and very limited underwriting the only game in town is the exchange. Unless of course you want to focus only on group plans which don't play in the exchange anyway.

    However, I agree with a previous comment that the young will wait until 3/31. Better plans equal more cost. But after this first year I really do think choice and a level playing field plus a larger base will reduce cost trend. But we have to be realistic.
    Jan 14, 2014. 10:34 PM | Likes Like |Link to Comment
  • General Electric Continues To Remake Itself  [View article]
    Do you think they are going bankrupt? The author seems to advocate more debt with his talk of dividends and buy backs and complaints about falling ROE brought about by deleveraging.

    In any event, they are a bank with Ge Capital loaning about $400 million out to consumers and industrial clients.There will be an ipo this year to partially divest them of the consumer finance component.
    Jan 9, 2014. 01:55 AM | Likes Like |Link to Comment
  • Macy's to close stores, lay off 2.5K; up 5% AH  [View news story]
    Well I would say we care more about growth in the company's return on invested capital than growth in revenue, especially for a well established retailer. Closing stores when you have too many drives up returns and as an investor I applaud the move. As a person, I regret the loss in presumably well paying middle class jobs. This action tells us nothing about growth prospects.
    Jan 8, 2014. 10:06 PM | Likes Like |Link to Comment
  • Is The U.S. Bankrupt?  [View article]

    I appreciate your service to our country. However, I do not agree with you.

    Inflation is the rising of all prices, including wages, equities, nominal interest rates, gas and groceries. Yes it hurts idle cash balances but raises your income and home value. Do you want deflation? Why would you ever buy anything today if the price is cheaper tomorrow? All those fancy robots would be out of a job. And that is what everything is all about - maximizing production so we all have the highest standard of living.

    Why would I want an economy based on a yellow rock? That is a ludicrous as fiat money, right? Name a country that has survived on the gold standard?

    We do agree that there is a need for a more modern workforce with the skills to meet 21st century job requirements. So lets make sure we are spending on that please.
    Dec 21, 2013. 01:01 AM | 9 Likes Like |Link to Comment
  • Is The U.S. Bankrupt?  [View article]

    Look at you, swiping the Unions because they raise the standard of living for millions. We may have many problems but fair wages in exchange for one's labor isn't one of them.
    Dec 21, 2013. 12:38 AM | 8 Likes Like |Link to Comment