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jakeliss

jakeliss
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  • Herbalife Could Damn Well Be The Next MBIA [View article]
    The Susan Peterson video is pretty damning isn't it? Really strikes to the core of what Ackman is talking about.

    Anyone long HLF should keep this in mind: HLF making money and reporting great results/growth is NOT mutually exclusive from this being a pyramid scheme. That's the point Ackman keeps trying to make. Take a step back from the numbers and the share price and it becomes completely clear what HLF really is. That doesn't mean the price won't keep climbing and a lot of shorts will lose money (myself included, via puts). But what it does mean is that sooner or later, the chickens come home to roost. Hard to say when HLF will run out of people to sell this scheme too, but it will happen. Ackman may turn out to me completely wrong about his timing of the short, he may never profit from it, but in the big picture he is exactly right.
    Nov 26, 2013. 10:20 PM | 1 Like Like |Link to Comment
  • Herbalife Could Damn Well Be The Next MBIA [View article]
    The only people who "get" the business model are people who don't "get" macro and micro economics.
    Nov 26, 2013. 08:33 PM | 2 Likes Like |Link to Comment
  • Herbalife Could Damn Well Be The Next MBIA [View article]
    You're absolutely right. If it took 6 years for Ackman to be proven correct, and his position only allows for 5, it doesn't matter that he was right. That's true about any position in anything. You can find a stock that has the best value fundamentals around, then watch it go lower. Anyone short is in the same boat. Margin requirements or decaying time value will always catch up to you.
    Nov 26, 2013. 08:33 PM | 1 Like Like |Link to Comment
  • Herbalife Could Damn Well Be The Next MBIA [View article]
    Ok he's not short, I get it. Does that make him incorrect in his assessment? I don't assign value to someone's opinion based on how confident they are in it. I assign value based on my assessment of their position and the case laid out. QTR may not be short, but he is right.
    Nov 26, 2013. 08:31 PM | 3 Likes Like |Link to Comment
  • Herbalife Could Damn Well Be The Next MBIA [View article]
    That's what is so fascinating about the long side of the trade. The biggest argument against Ackman seems to be that his trade has not paid off yet. That doesn't make him wrong. How long were stocks overpriced for in the last two bubbles? How many smart people lost money calling the top too early? Market timing is a cruel mistress.
    Nov 26, 2013. 08:31 PM | 2 Likes Like |Link to Comment
  • Herbalife Could Damn Well Be The Next MBIA [View article]
    Great points, a few thoughts of my own:

    1) I agree, it would be surprising if this was anything but Ackman's own speculation.
    2) HLF could definitely change their business model into a legitimate one if forced by regulators. In that case their stock would certainly not go to 0. The problem for them is they could no longer mask the fact that they sell an overpriced commodity product. Bye bye profit.
    3) This really seems to be a separate issue from the overall business model. It gets lumped in because its a negative situation, but there is no indication that HLF did anything wrong there. I don't think they have bogus financials, I think they have a bogus business model.
    4) In all fairness, nobody liked JCPenny except my mom in 1996
    Nov 26, 2013. 08:29 PM | Likes Like |Link to Comment
  • Workday Is Pricey At Even 2015 Revenue [View article]
    New follower of WDAY just starting my own DD. Any longs out there who could explain why WDAY commands such a massively high P/S ratio. It blows the doors off of most other growth stocks by that metric. What makes WDAY worth it?
    Nov 26, 2013. 08:28 PM | Likes Like |Link to Comment
  • Herbalife trades higher as Ackman underwhelms [View news story]
    MTM does not make a paper loss a real loss. Your brokerage account is also MTM!
    Nov 22, 2013. 01:55 PM | Likes Like |Link to Comment
  • Herbalife: Pyramid Scheme Or Goldmine? [View article]
    Bernie Madoff had good cash flow
    Nov 22, 2013. 01:35 PM | 2 Likes Like |Link to Comment
  • NQ Mobile Posts Record Revenues: Strong Growth Provides Investors With The Potential For Massive Gains [View article]
    What's fascinating to me about this whole debate is this faux moral outrage at guys like MW or TORO. If you have any clue how to manage capital, or do any sort of critical thinking whatsoever, you read everything with the motives of the author in mind. Of course MW is going to be over the top in its accusations and of course the attempts to debunk are going to come from the parties with the most skin in the game. Face it, each person's individual conclusions about what a stock "should" be worth are about as meaningful as, to borrow a great line from Dr. Manhattan, a picture of oxygen to a drowning man. The only thing that matters is being on the right side when the selling/buying pressure overwhelms. My opinion is that if you're going to have some skin in this game, it makes very little sense to be long. NOT because I think what MW wrote was 100% correct. It's pretty obvious it was not. But come on, how seriously can one take a research article that quotes Big Daddy Kane songs or whatever CB's reference of the month is. What I take away from the situation is the following:

    1) There is a notable short seller trashing this stock because they want it to go to zero.
    2) They wrote an over the top report laying out their case.
    3) The report was likely exaggerated, but they did make some very poignant observations about this company which made a whole lot of people sell or go short.
    4) Though their past successes were with reverse merger companies (which NQ is not) one would have to assume that a short like MW would at the least select whoever they felt the best target for these allegations would be. For them it would be illogical to do otherwise.
    5) There have been many responses to the report from parties who have a vested interest in NQ. This did not conclusively end the debate (a fact proven by the current share price).
    6) Management took certain steps to prove allegations wrong. This did not conclusively end the debate (again, see the share price)

    My opinion is that the potential negative catalysts grossly outweigh the positive going forward. The way NQ has set up its business made it a very easy target for MW. It doesn't matter how legit they really are, the fact is MW chose them because they saw a good target. The plummeting share price reflected the general consensus of MW's accusations. The share price responded positively to certain research that came out in response, and also to certain management actions. However this positive response was far smaller in magnitude than the reaction to MW's initial report. NQ reported excellent earnings, still not enough of a catalyst. In regards to their actual products, I have to say I am not generally impressed. Not that I think they don't exist, or don't work, more that they are pretty run of the mill apps. It's easy to throw industry buzzwords (platform!), but the fact is that anyone who really believes in this company ought to also believe in their products. Not just that they work, but that they are different and better than the competition. That's how money is really made. I cannot see where NQ really does this (and please chime in if you have a strong opinion on the products). Thus far the best catalyst on the positive side seems to be the simple fact that NQ is not an outright fraud like MW says it is. Ok, great. But it sure seems like this was already proven, then NQ reported great earnings, then, well, its still quite a bit off where we were pre-MW right?

    I believe that all of the positive price action deriving from the "debunking" of MW's initial claims has already been reflected in the current price. If this stock is to go higher, it needs a real catalyst. Right now it is priced for exactly what it is. It is a company having operations/relations/f... murky enough where a short seller picked it apart very easily, and their accusations were treated seriously enough by the market to drive the price way down. It is also murky enough where a lot of well thought out research in rebuttal has not swayed the market's opinion back to the same extent. So the reality is the current price probably isn't too far off from fair value given the data out there. It reflects quite well the overall consensus about which side of this debate is closer to the truth. If there were going to be any sort of catalyst to get it going in one direction or the other, any betting man ought to be laying his money on the negative side. The products are simply not innovative or differentiable enough to give them that spark. The operations and earnings simply haven't inspired the street post-MW. The researched rebuttals of MW also haven't had the desired impact. That's why I am short NQ, and you should be too.Personally I own long term puts so I can avoid the daily volatility. If you're neither, well, you're missing all the fun.
    Nov 19, 2013. 08:07 PM | 1 Like Like |Link to Comment
  • NQ's U.S. Veneer: Withholding Facts, Conned Men And A Convicted Racketeer [View article]
    I think there is a huge point that gets missed amid all the mudslinging between two sides of a passionate debate. If I were long NQ, and some 3rd party made very dramatic accusations which threatened my position, I would be TERRIFIED by how the company's management handled it. Set aside all the numbers, pictures, videos, reports etc. If NQ is what they claim to be, why on earth would they react in such a defensive manner? Anyone with a head on their shoulders knows you need to take a MW report with a grain of salt, they have a very clearly stated intention with each one. It is in their interest to be dramatic, it should be expected. Perhaps NQ is not the outright fraud that MW/CB claims it to be. But if anyone really thinks this company is some kind of tech all star they must be delusional. Does the potential that they are not as bad as MW says make this a good company? It seems every rebuttal to MW focuses on the fact that they really aren't a total fraud with no revenue. I'd love to see someone take a crack at why anything about this business is worthy of capital, other than it may not actually be a fraud.
    Nov 13, 2013. 06:12 PM | 3 Likes Like |Link to Comment
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