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faustius

faustius
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  • Weighing The Week Ahead: Will The Interest Rate Spike Pressure Stock Prices? [View article]
    I'm still trying to understand that Todd Sullivan theory that Corp. bonds are pulling up govt bonds, considering so many are 10yr Treasury +x%, or Libor +y%. Isn't that theory a case of the cart pulling the horse? Is there really any mystery why they move in lockstep?
    May 18, 2015. 10:44 PM | Likes Like |Link to Comment
  • Virtu Financial - A High Frequency Trading Company With A Clear Edge [View article]
    I would tend to agree with that. To prosecute him, I assume they would have to prove he was doing something that the entire industry isn't doing on a daily basis. However, it's a fascinating story either way.
    Apr 22, 2015. 07:42 PM | Likes Like |Link to Comment
  • Virtu Financial - A High Frequency Trading Company With A Clear Edge [View article]
    Update on the Flash crash. A single HFT trader by the name of Navinder Singh Sarao was arrested in London today for allegedly intentionally orchestrating the Flash Crash. He operated a company based out of St. Kitts and Nevis called "Nav Sarao Milking Markets Limited". That sure isn't going to help his case.

    http://bit.ly/1HsIA4Y

    HFT is a generic term that can cover lots of different activities, many of which are benign. However if a single rogue trader can destroy the world's largest markets, it's clear that serious regulation is needed.

    Placing and cancelling large orders before they were executed appears to be how the hack was performed. I know plenty of stories highlighting the problems in current systems have called out the practice as a problem area. That seems to be where changes need to be made.
    Apr 22, 2015. 12:48 AM | 1 Like Like |Link to Comment
  • The Incredible Shrinking Earnings Forecast [View article]
    For the past couple months, 52 Week forward earnings for the S&P500 were declining and nobody cared, and I was scratching my head as to why.

    For the past couple weeks, they've bottomed out and are resuming their upward trend (though still lower than their peak), and suddenly everyone is worried about them.

    Do most investors only look at forward earnings when a pundit tells them to?

    FYI, Yardeni provides a good look at forward earnings here:
    http://bit.ly/SseJSh
    Mar 30, 2015. 09:54 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Is Good Economic News Now Bad For Investors? [View article]
    Yardeni's 52 week forward EPS (updated 3/5) show they've finally bottomed and are trending up again. So I guess the question now is if we're in one of the rare earnings recessions that won't precede a severe stock market decline, or is the recent uptick a forward earnings dead cat bounce?

    The energy sector's pessimism will likely be muted by the other 90% of the S&P500 finding their energy bills have declined.
    Mar 9, 2015. 10:56 PM | 1 Like Like |Link to Comment
  • Bank Of America: An Overreaction Creates A Longer-Term Buying Opportunity [View article]
    Quote from Article:
    "Not for anything, but a neutral rating with a reduced share price target seems like double talk to me"

    Why? They reduced their target to it's current value, and rated it neutral. I would just think UBS is stating that it's fairly valued at the current price.
    Mar 3, 2015. 08:19 PM | Likes Like |Link to Comment
  • The Herd Can Be Blind [View article]
    Can you define your terms? What quantitatively differentiates "selling the rip", and being "contrarian"?
    Mar 2, 2015. 08:26 PM | Likes Like |Link to Comment
  • Amazon.com Will Probably Be Rated Junk [View article]
    I'm wondering how a predatory pricing suit could fail against AMZN, and why such suits haven't been filed.
    Feb 12, 2015. 12:18 AM | 3 Likes Like |Link to Comment
  • Weighing The Week Ahead: Time For 'Risk On'? [View article]
    Jeff, I recall numerous articles you've written in the past highlighting the utility of keeping an eye on 52 week forward earnings estimates. Per Yardeni, they have been in free-fall for weeks. True, the energy sector is responsible for most of the decline, however other sectors are either flattening, or declining as well now (Materials, Consumer Staples, and Tele Services).

    I'm not sure that the time for "risk-on" will occur until they start trending upwards again.

    http://bit.ly/SseJSh
    Feb 9, 2015. 04:31 PM | 1 Like Like |Link to Comment
  • Going Negative? [View article]
    Better that, than leave the money in an Russian bank.
    Feb 6, 2015. 10:19 PM | 1 Like Like |Link to Comment
  • Why The S&P Could Be Headed For A Correction [View article]
    Simplistic, but still useful answer: The market will rise when 52 week forward earnings are rising, and they've been tanking of late. It is finally time to get out. Get back in when they turn the corner and start rising again.

    Yardeni's open research is a good source, check figure 19:
    http://bit.ly/1BlTmUi

    Though I'm mainly commenting just so I can have a record of when I publicly stated it's time to get out.
    Jan 27, 2015. 10:03 PM | 2 Likes Like |Link to Comment
  • Cheap Oil Prices Do Not Benefit The Economy [View article]
    For the year that article is referencing, they are being taxed 6.8% of their gross. More recently, they are being taxed 5%.

    I wouldn't mind paying a 5% of gross tax rate.
    Jan 22, 2015. 07:27 PM | Likes Like |Link to Comment
  • Cheap Oil Prices Do Not Benefit The Economy [View article]
    Why not? You don't think that money will find it's way into the pockets of cruise line business analyst, or a shipping company marketing manager?

    There are far more companies that pay an oil bill than work in the oil sector, and all of them are benefiting. When every company not in the oil sector finds their business models becoming more economic, they will expand.
    Jan 19, 2015. 05:34 PM | 1 Like Like |Link to Comment
  • The Real Reason Saudis Didn't Cut Oil Production [View article]
    Research can throw out a disruptive technology at any time. The odds of this occurring only increase with higher oil prices.

    I'm still trying to figure out why Lockheed Martin's Skunk Works is so confident they're 5 years away from a 100MW fusion reactor that can fit in the bed of a pickup truck. It really looks like their announcement was premature. However, it is Skunk Works that is making the claim.

    http://lmt.co/1txrMQP

    Something like that would be a bigger deal than the internal combustion engine.
    Dec 1, 2014. 10:05 PM | 1 Like Like |Link to Comment
  • Falling Inequality = Bear Market? [View article]
    I would agree, except that it is not only labor costs that have been driving the flow of capital. Taxes and regulatory burden (financial accounting, environmental, import/export controls on inputs, etc.) can be just as significant. It just happens that those factors have been reinforcing the low costs of production in the areas capital is flowing to.

    The cost of labor case for outsourcing decreases as automation drives labor costs down. However the other costs remain, even after the robots have replaced the workforce.
    Nov 19, 2014. 11:45 PM | 1 Like Like |Link to Comment
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