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DanielHolzman

DanielHolzman
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  • Use Market Volatility To Your Advantage [View article]
    Maybe it is the two glasses of wine, but I did not understand much in this article. For example, what does this sentence mean: "This fear has put a bid under safe haven assets such as gold, treasuries, and even VIX futures. " What bid is the author talking about?

    Or this sentence: "Rising volatility has been pushing stock prices lower and putting a bid under safe haven assets." Is the author seriously arguing that rising volatility is the CAUSE of stocks going down? Where is the evidence for this remarkable claim.

    Or these two sentences: "As of 3/13/14, the ratio stood at 104% which means that put options significantly outweigh call positions. Often times when this ratio reaches an extreme high or low, we will see a reversal as sentiment gets stretched." If the ratio is 104%, that means that for every 100 calls options, there are 104 put options. Is the author suggesting that this is an "extreme" high? Seems to me like it is very close to neutral.

    In general, as I said, I did not understand much of what the author was trying to say. Not to say I disagree, hard to disagree when I can't understand what is being said.

    Or this sentence: "CBOE Put/Call ratio has recently hit a new year-to-date high, which may indicate that bearish sentiment is peaking." It may indicate that bearish sentiment is peaking? Or it may indicate that bearish sentiment is not peaking? Exactly what does the author think the high ratio actually means?
    Mar 15 06:48 PM | Likes Like |Link to Comment
  • Caledonia Mining Is Too Cheap To Ignore [View article]
    This is a very good article, carefully thought out. I appreciate that the author has taken a clear eyed view of the potential risk and reward in this company, and has avoided the breathless enthusiasm unfortunately common in the analysis of mining companies. I agree with the conclusions, however I would emphasize to the potential investor that there is the very real potential for nationalization of the mine by Zimbabwe, which has happened before in the agricultural sector, which would likely mean total loss of investment. There is a good reason why the author has elected to value this project using a very high discount rate, and it is left to the potential investor to determine if the risk of total loss due to political issues makes this a reasonable investment.
    Mar 15 10:54 AM | Likes Like |Link to Comment
  • Tasman Metals: Europe's Future Supplier Of Critical Metals For Clean Energy? [View article]
    Mr. Hanshaw: The author's claim is that the acquisition of a graphite deposit will be beneficial to Tasman because the graphite market is likely to improve due to use of graphite in lithium ion batteries. While it is certainly true that graphite is typically used as an electrode in a lithium ion battery, there is nothing in this article that discusses the profitability of the Flinders graphite deposit apparently acquired by Tasman. As to your comment that Tasman is not in the lithium mining business, that is absolutely correct so far as I can tell. And I agree with you that it is a long way from the potential of a graphite mine to profiting from the lithium ion battery business.
    Mar 14 01:58 PM | Likes Like |Link to Comment
  • Tasman Metals: Europe's Future Supplier Of Critical Metals For Clean Energy? [View article]
    "Rare earth and graphite demand is soaring due to the increased use of lithium-ion batteries and permanent magnets."

    This topic has been discussed repeatedly on SA, often in connection with Molycorp and its Mountain Pass project in California. Recent articles have suggested that the rare earth market is very soft, with less consumption than had been anticipated. Additionally, articles on SA and elsewhere have pointed out that there is no such thing as a "rare earth" market, each element has its own market. Permanent magnets often use neodymium and samarium, not other elements.

    I found nothing in your article indicating exactly what minerals Tasman expects to extract from their project. Note that Tasman filed an updated preliminary economic assessment of their Norra Karr project in July 2013 (see http://bit.ly/O42r2X). Yet your article does not even mention this critically important piece of information that sets out the facts about the deposit, the minerals that have been found, and includes a preliminary estimate of cost to develop and operate the mine, should it be approved. I find this a bit curious, considering that you are recommending this stock, yet you fail to discuss the N1 43-101 report that is at the heart of whether this stock is a winner or a loser. Merging with a flake graphite producer is scarcely going to make any difference overall, since there is no shortage of graphite. The author may wish to comment on how the N1 43-101 report impacts his assessment of the future profitability of this venture.
    Mar 12 09:30 PM | Likes Like |Link to Comment
  • Oil Investing In 2014 And Top Ideas [View article]
    "Due to increased production by the U.S. and higher seasonal production by Saudi Arabia, the spot price of crude oil showed some stability, with an average of $3.51 per gallon, during 2013"

    So far as I know, there are 42 gallons per barrel, so at an average price of 3.51 per gallon, a barrel of oil would have averaged about $147 by your arithmetic. According to this article the average price per barrel in 2013 for Brent was $108 (http://bit.ly/N6x32E).

    Are you perhaps talking about the average price of gasoline in the United States?
    Mar 12 11:42 AM | 4 Likes Like |Link to Comment
  • Armour Continues Buybacks In A Big Way For Investors [View article]
    I am unclear exactly what the advantage is to investors that this company has elected to spend their money buying back shares. Exactly how does this create shareholder value? I understand that it reduces the number of shares, thus increasing the apparent profit per share, but how does this improve the overall profitability of the company?
    Mar 11 03:48 PM | 3 Likes Like |Link to Comment
  • Exchange Traded Debt: An Analysis [View article]
    I want to thank the author for pointing out a class of securities I was totally unfamiliar with. That said, the author should be aware that many, perhaps most readers of SA, are also unfamiliar with this particular type of security. The title of this article says "Almost Risk Free Returns". Now perhaps the author did not pick the title, maybe SA editors selected it, I do not know.

    However, with a title like that, it should come as little surprise that knowledgeable folks on SA react strongly to a title that has little to do with the article that follows. The author agrees that ETD carries with it a wide range of risks, including early call, loss of principal due to interest rate increase or default of the company, the rather exotic condition that some ETD securities apparently have no recourse ability to cease paying interest, and there are call date issues. Certainly I was not aware of these critical issues from reading the article, hence my original question as to why these securities paid so much more than T bills if they are essentially risk free, as the title implies.

    So I guess the answer is that they are far from risk free, at least as most of us understand the term risk, i.e. the chance of losing money. If the author had selected a more appropriate title, perhaps something like "ETD: An alternative to corporate bonds" I would have understood the context better.
    Mar 11 02:53 PM | Likes Like |Link to Comment
  • Exchange Traded Debt: An Analysis [View article]
    Are there any issues associated with owning an ETD in an IRA or 401K plan? Also, it is a bit difficult for me to understand how an "essentially risk free" financial instrument can have substantially higher interest payments than the equivalent T bill with no equivalent increase in risk. What am I missing here?
    Mar 11 09:08 AM | 2 Likes Like |Link to Comment
  • A Few Terrific Reasons Why This Tech Stock Is Set To Soar [View article]
    "SunEdison plans to spin off its semiconductor business through a $250 million IPO in 2014. What's even better is that the company will be maintaining partial ownership of this project."

    I don't understand this paragraph at all. You say they are going to spin off their semiconductor business, but they are going to maintain partial ownership of the project. What project are you talking about? And exactly how is spinning off the semiconductor business going to help them extract additional value from the remaining business?

    If your thesis is that SUNE is transitioning from an integrated manufacturer and installer of solar power to mainly an installer, that might make sense. But I can't quite tell from this article whether you think SUNE is better off as a vertically integrated solar company, or as a pure installer/operator.
    Mar 10 06:47 PM | 1 Like Like |Link to Comment
  • Ford Can't Stay This Cheap Forever [View article]
    So I agree that the news is very good for Ford the corporation. They make a good product, they seem to know how to market their product, and management is strong. Ford the stock clearly does not follow Ford the company, as you point out. So purchasing the stock based on good corporate news does not compute.

    You have already demonstrated that the market does not seem to be very interested in how Ford the company is doing, unless they are seeing things you are not. So when you wonder why the stock is not performing in line with the company, you are asking a very profound question, namely why is there a disconnect between corporate performance and stock performance. Clearly you are puzzled by this, as am I. The difference is that I am not buying the stock at this point, since there is little evidence that the market will be rewarding the stock price any time soon, no matter how well the corporation performs.

    This is really a psychology issue, not a financial issue. Until the market changes its opinion, it really does not seem to matter much what the corporate fundamentals are. As to when, or if, the market will change its opinion, I have no idea.
    Mar 7 12:31 PM | 7 Likes Like |Link to Comment
  • What Now For Molycorp? [View article]
    I am a bit puzzled by this article. There are numerous statements that do not appear to have any followup. I will quote a few that I think are critical to the overall financial assessment of MCP:

    "We have seen a drastic fall in the average selling price over the last year." Now this is a crucial observation, unfortunately there is no discussion about why the average selling price went down, so how can the reader connect the dots and form an opinion as to whether price is likely to continue to go down, or perhaps rebound. This is a complex issue, since MCP produces a variety of different elements, not all of which trade in lockstep.

    "The company decreased the research and development expense by more than 50% during the last year." Now is this a good or a bad thing in the opinion of the author? Clearly wasteful R&D is not a good idea, but if MCP is cutting down on critical R&D to save a penny only to waste a pound in the future, that is a bad thing.

    "At the same time, the inventories and receivables have decreased, indicating faster collection of receivables." This conclusion is not so obvious to me. An alternative explanation could be that the company is producing less undesirable product, and selling off inventory from desirable product. Some discussion about the mix of product, what is being stockpiled, what is being sold, and the effect of storage on product value would seem to be in order here.

    "The most important change in the balance sheet is the long-term debt of about $1.34 billion." Now this sounds like an important observation. Exactly what did the company do with all this debt? Buy up short term debt? Buy back stock? Invest in new plant and equipment? Purchase another company? Inquiring minds would like to know exactly what is going on with such a massive increase in long term debt.
    Mar 5 01:29 PM | 6 Likes Like |Link to Comment
  • My Top Stock Pick In The Innovative Alternative Energy Sector [View article]
    So Schwabdaq, you are saying that the molten carbonate fuel cell operates like a combined cycle natural gas power plant, which typically runs at about 45% efficiency. What is the overall efficiency of a combined cycle fuel cell? 90% seems remarkably high.
    Mar 4 10:55 PM | Likes Like |Link to Comment
  • My Top Stock Pick In The Innovative Alternative Energy Sector [View article]
    "According to the company, the energy produced is up to two times as efficient as fossil fuel plants."

    So this is the company's opinion. This is a very difficult to interpret sentence, which seems to be the heart of the thesis that this is an innovative company. Certainly it cannot be the case that the "energy produced" is twice as efficient as the equivalent energy produced by a fossil fuel plant, since an equal amount of energy from the two sources has identical energy content.

    Perhaps what this sentence implies is that the efficiency of energy production from the fuel cell is double the efficiency if you burned the biogas in a conventional plant. That would indeed be remarkable, since a typical single cycle natural gas turbine is around 30% efficient, and a combined cycle natural gas power plant is probably around 45% efficient, so to double this the fuel cell would need to be between 60% and 90% efficient. Is that really what FCEL is claiming? Or do you have a different interpretation of the meaning of this critical sentence? The following article claims that fuel cells are between 40% and 60% efficient, which would seem to run counter to the central claim of the company http://bit.ly/1crCTId.
    Mar 4 03:05 PM | 8 Likes Like |Link to Comment
  • Constructing A Hedged Portfolio Around A Tesla Position [View article]
    mgwatl, I believe you are correct, and the article may have incorrectly stated the cost. The total hedge position includes purchasing puts for $1985 and selling calls for $1640, so the net cost (exclusive of the stock purchase) for the position is $345 plus commission, which is not discussed in the article.
    Mar 3 08:52 AM | 1 Like Like |Link to Comment
  • Seadrill: A 10% High-Yield Alternative To REITs And MLPs [View article]
    Seadrill has been repeatedly discussed on SA. Some authors have argued that the modern fleet, high utilization, and increasing difficulty finding new oil deposits will keep Seadrill afloat, and the dividend is safe. Others have argued that the enormous debt load, competition from on shore (lower cost) deposits extracted using fracking, and competition from lower cost driller with older fleets puts Seadrill at risk for dividend reduction, and continued loss of share value.

    What does the author see, and why?
    Mar 2 11:48 AM | 6 Likes Like |Link to Comment
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