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Cherry Picker

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  • 2012 Materials And Pharma Stock Picks From J.P. Morgan [View article]
    Earnings forecasts for commodity price dependent businesses are notoriously unreliable.
    Dec 17 03:30 PM | 1 Like Like |Link to Comment
  • Natural Gas: Fundamentals Remain Extremely Bearish [View article]
    Your math is good. The problem is that you have focused on crude versus nat gas in your analysis. Only about 2% of our electricity is generated by crude. Now if you had mentioned the movement away from coal powered electricity towards nat gas you'd have a better argument, but then your math would be of little use.
    Dec 17 03:26 PM | 1 Like Like |Link to Comment
  • 20 Tech Stocks With Bullish Short Trends [View article]
    Agree somewhat. I would slightly differentiate software from hardware companies. PC and component makers have done well over the years as technology advanced and video, speed and computing capabilities got better and better. It's now hard to imagine the technological leaps of the past repeating and causing equipment to become outdated after two or three years regardless of serviceability. On the other hand, software (and some hardware) companies will be battling over cloud market share. Will the cloud buyout frenzy last?
    Dec 17 03:09 PM | Likes Like |Link to Comment
  • Salesforce.com Buys Social Performance Platform Rypple [View article]
    I have no doubt that the company believes this acquisition will improve its ability to provide customers with something new, but profits appear to be illusive irrespective of how fast the company grows and continues to add to its product offerings. Being good at selling a product but not so good at making money isn't an investment strategy most thoughtful investors are attracted by.
    Dec 16 08:52 PM | Likes Like |Link to Comment
  • The Brazilian prosecutor who filed a 20B reais ($10.8B) lawsuit against Chevron (CVX) and Transocean (RIG) now says he’s seeking a “permanent” ban on their operations in the country. Previous fines in the millions of reais against other oil companies haven’t been enough to discourage accidents, he says, so "Brazil has to change the paradigm from millions to billions."  [View news story]
    This is protectionism under the guise of environmentalism. Punish the internationals to the point that no one is willing to take the chance of investing in exploration and production so that the quasi-state owned Petrobras can have the playing field to itself.
    Dec 15 04:51 PM | 4 Likes Like |Link to Comment
  • Why 2012 Does Not Look Promising For Petrobras [View article]
    Developing and bringing ultra-deepwater wells to production is going to be a very challenging and cash flow intensive gamble. Owning huge offshore reserves and tapping them for production are two different animals. Down 34% YTD, the market appears to understand this.
    Dec 14 04:32 PM | Likes Like |Link to Comment
  • Recent Developments In China Make Caterpillar A Stronger Buy [View article]
    CAT is a fine company, but as of late, its stock has been underperforming the market and seems headed towards my $80 target. Adroit traders could profit from buying the dip, but the trend of late has not been your friend.
    Dec 14 04:24 PM | Likes Like |Link to Comment
  • Caterpillar Has A Date With $110 Per Share [View article]
    As I've stated elsewhere, CAT will see $80 before it sees new highs. YTD, the company has struggled to keep pace with the S&P. Nothing against this fine company, but this is the wrong point in the cycle to be putting money to work with CAT.
    Dec 14 04:22 PM | Likes Like |Link to Comment
  • 8 Pertinent Factors In The Crude Complex [View article]
    I've made more money in this sector over the years than in any two sectors combined. For the first time in a long time, I've turned bearish on the entire sector. It feels odd to be on the short side and making money, but for the short term, I don't see how crude prices can sustain current levels short of hostilities with Iran. The chances of that happening are slim and none, but of fear of that happening can move markets. Meanwhile, I'll take my chances and stay short.
    Dec 8 08:46 PM | 1 Like Like |Link to Comment
  • The pressure got to Italian welfare minister Elsa Fornero who broke down in tears at a press conference announcing pension reforms, including a raise in the retirement age and the scrapping of cost of living adjustments for many. Of note is the austerity measures were all loaded into an emergency decree, meaning they go into effect before parliamentary approval.  [View news story]
    Some good ideas there. One thing I think our society fails to address is the squandering of billions on healthcare for individuals approaching the ends of their lives. The medical establishment insists on us spending unconscionable amounts on keeping the terminally ill alive a few more months. Fine if the individual has the means, but not so good if the public pays the tab. The cost of nursing homes is absurdly high. Surely there is a more cost effective way. The average nursing home is charging $7K a month to provide granny a room, feed her gruel, and to change her Depends. The public pays for much of this. Does this make sense? There must be a compassionate more cost effective way.
    Dec 4 09:29 PM | 3 Likes Like |Link to Comment
  • The pressure got to Italian welfare minister Elsa Fornero who broke down in tears at a press conference announcing pension reforms, including a raise in the retirement age and the scrapping of cost of living adjustments for many. Of note is the austerity measures were all loaded into an emergency decree, meaning they go into effect before parliamentary approval.  [View news story]
    I'm trying to figure out what all these 65+ year-old people are going to do for a living. Do you want them driving your buses and piloting jumbo jets? Some people age well, others do not. Are there that many Walmart Greeter type jobs to go around? This just stifles employment at the other end of the spectrum. Cut Medicare and do away with Social Security. Eventually our streets will look like Delhi's. I suppose we could put our old out on ice flows and let them float out to sea. The trend appears to be that an ever shrinking group makes policy based on their own best interests. Sort of like figuring out who gets the life boats on the Titanic. Ayn Rand must be applauding from the grave. Democracy is wonderful, but fixing the planet with a sustainable solution is damn difficult when the mantra is "every man for himself." Civilization as we know it is convulsing. The youth of today resent the old for hogging up all the wealth and entitlements. They can hate them tomorrow for hogging up all the jobs and not dropping dead.
    Dec 4 08:52 PM | 6 Likes Like |Link to Comment
  • SAP Finally Buys SuccessFactors - But Is It Too Late? [View article]
    CRM is subject to the same risks although Benioff has so far embraced and welcomed management from his acquisitions into the fold. A smart move from my point of view. Still, the company faces the same hurdles as with any acquisition. Each acquisition brings high expectations, but in time some turn out to be bad investments. Benioff is betting on the social media craze to help drive his relentless sales effort.

    "The good news is that the SaaS/Cloud movement is just starting to gain broad-based acceptance and SAP has time to take advantage of the market momentum."
    Dec 4 04:06 PM | Likes Like |Link to Comment
  • Recent Developments In China Make Caterpillar A Stronger Buy [View article]
    CAT is a deep cyclical near the peak of a very long run. Looking at capital expenditure plans going forward, it is clear that CAT will be investing heavily for the future. Ignore forecasts farther out than 1 year. I think CAT stock is in the process of recognizing a slowdown looming in the future. Equipment with a long life turns over more slowly when the order book has to contend with more big project completions and fewer global mega deals being booked.

    Marine, energy and mining markets will likely go into a slowdown as the fast and furious growth of the past few years abates. I wouldn't be surprised to see CAT dip towards a trailing PE of 10 should its order book lose steam. I expect support near $80 to be tested long before old highs are revisited.
    Dec 2 05:26 PM | 2 Likes Like |Link to Comment
  • Salesforce.com - The Best Short Available? [View article]
    I hope you're right--however I believe that senior management at Salesforce is putting on an all court press to attempt to keep CRM from falling further (as of 11/29/11). Forbes appears to have been putting out a steady stream of pro-Salesforce mentions of late that look more like edited press releases from the company than news articles. One of CRM's favorite touts (Cramer) seems to be a bit more cautious on the company as of late.

    CFO Graham Smith has more or less put his reputation on the line at the Robert W. Baird & Co. tech conference today by reassuring that 3rd quarter numbers were a blip and that his revised forecast for the 4th quarter should put everyone's concerns to rest.

    Either the company is very nervous about continuing weakness in CRM stock and/or they are confident that 4th quarter earnings will put concerns to rest.

    Smith was quoted by the WSJ as saying: "...there was a "slight shift" in the growth trend in the quarter, but attributed most of the calculated change to "noise" in the numbers.

    He also said that the fact the company raised its fourth-quarter guidance was further proof sales were stronger than analysts had estimated in the third quarter.

    "If you know enough about our subscription model, clearly Q4 is influenced by new business in Q3," said Smith. "And if you think about it, we raised our guidance for Q4. Well, how could we raise guidance for Q4 if we had doubts about Q3?" http://on.wsj.com/t9eSDv

    Indeed, the stock's relative performance today was weak on light volume with every intraday attempt at a rally overwhelmed by selling. Having sold CRM short months ago, I tend to believe that management is feeling the heat and wonder what impact a downward trend in stock price would have on the company's incentive compensation program and how this would affect the morale of its salesforce?
    Nov 30 12:07 AM | Likes Like |Link to Comment
  • Wellington Is Decreasing Its Stake In These 7 Stocks [View article]
    Agree on BP. The perception that BP is a tainted stock has kept its stock price at a bargain level. Although it will be some time before the entire cost of the Macondo disaster is known, once there is certainty, BP stock will likely rise relative to its peers. I expect a meaningful increase in the current dividend within the next 12 months which should help support and elevate the share price.
    Nov 29 06:58 PM | Likes Like |Link to Comment
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