WC Whiner's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/725/comments http://seekingalpha.com/article/25890-chipotle-mexican-grill-a-close-look?source=feed#comment-80992 80992
Decent analysis overall. CMG's product may be a pale, flavorless and overpriced equivalent of my local burrito smorgasboard, but east of the Rockies, that may well be enough. One note: Mexican food is eaten by Mexicans in Mexico. The burrito is American, like Chow Mein and the fortune cookie. Call it 'Tex-Mex' or more accurately, 'Southwestern', since the US Southwest is where it's at home.

If Rubio's had CMG's management, I'd bet on their concept first. As they don't, betting on the old MCD hands may work out okay.

FD: no position, long or short]]> Sat, 03 Feb 2007 02:49:35 -0500
Decent analysis overall. CMG's product may be a pale, flavorless and overpriced equivalent of my local burrito smorgasboard, but east of the Rockies, that may well be enough. One note: Mexican food is eaten by Mexicans in Mexico. The burrito is American, like Chow Mein and the fortune cookie. Call it 'Tex-Mex' or more accurately, 'Southwestern', since the US Southwest is where it's at home.

If Rubio's had CMG's management, I'd bet on their concept first. As they don't, betting on the old MCD hands may work out okay.

FD: no position, long or short]]> http://seekingalpha.com/article/24397-cornerstone-cefs-what-s-in-a-return?source=feed#comment-80187 80187
FD: no position in CUBA (I can't get shares to short), short CRF, short CLM

Crossposted to the original blogs.marketwatch.com/...]]> Wed, 17 Jan 2007 14:13:29 -0500
FD: no position in CUBA (I can't get shares to short), short CRF, short CLM

Crossposted to the original blogs.marketwatch.com/...]]> http://seekingalpha.com/article/23629-so-what-if-gm-relies-on-overseas-markets?source=feed#comment-79698 79698
When UAL went into bankruptcy in 1994, the union actually played white knight and saved it from the bondholders. When it declared bankruptcy again a couple years back, it wiped out the ESOP that had saved management before. No union with half a brain and any sense of realpolitik will play white knight for management again, and the UAW is nothing if not cognizant of its power and limitations.

Don't think bankruptcy is Wagoner's trump card -- it's the UAW's.

FD: short GM

crossposted to controlledgreed]]> Sun, 07 Jan 2007 12:50:03 -0500
When UAL went into bankruptcy in 1994, the union actually played white knight and saved it from the bondholders. When it declared bankruptcy again a couple years back, it wiped out the ESOP that had saved management before. No union with half a brain and any sense of realpolitik will play white knight for management again, and the UAW is nothing if not cognizant of its power and limitations.

Don't think bankruptcy is Wagoner's trump card -- it's the UAW's.

FD: short GM

crossposted to controlledgreed]]> http://seekingalpha.com/article/23276-intel-speeds-ahead-of-advanced-micro-devices?source=feed#comment-79649 79649
There is that one AMD billboard down the 101 South, and a few bus-stop posters, but on television I see nothing of theirs at all.

I don't know what you're watching. What am I missing?]]> Thu, 04 Jan 2007 20:24:35 -0500
There is that one AMD billboard down the 101 South, and a few bus-stop posters, but on television I see nothing of theirs at all.

I don't know what you're watching. What am I missing?]]> http://seekingalpha.com/article/23365-cara-s-stock-of-the-year-for-2007-crystallex?source=feed#comment-79619 79619
That said, if I were to buy a single junior rather than a basket (and I don't see the point of not diversifying), it would probably be Greystar instead. Doing business in Columbia is no picnic, I grant, and GSL's deposit is at best half the size of Las Cristinas. However, there is essentially zero "Bolivarian" risk, and GSL's market cap is one-third of KRY's, which has outperformed by ~50% the last couple months.

Risk matters, as does valuation.

Crossposted to billcara.]]> Thu, 04 Jan 2007 00:15:40 -0500
That said, if I were to buy a single junior rather than a basket (and I don't see the point of not diversifying), it would probably be Greystar instead. Doing business in Columbia is no picnic, I grant, and GSL's deposit is at best half the size of Las Cristinas. However, there is essentially zero "Bolivarian" risk, and GSL's market cap is one-third of KRY's, which has outperformed by ~50% the last couple months.

Risk matters, as does valuation.

Crossposted to billcara.]]> http://seekingalpha.com/article/23276-intel-speeds-ahead-of-advanced-micro-devices?source=feed#comment-79513 79513
Crossposted to rawgreed.]]> Mon, 01 Jan 2007 13:32:25 -0500
Crossposted to rawgreed.]]> http://seekingalpha.com/article/23215-molson-coors-like-watching-beer-dry?source=feed#comment-79482 79482
Don't get me wrong, it was a nice call for a US-only mandate, since SAB and InBev are listed in London and Brussels, respectively. Beating BUD is outperformance, for which congratulations. Still, your profit isn't company specific if the whole sector moves, and it did.

Cf bigcharts.marketwatch....;symb=tap&comp...

Crossposted to your site.]]> Sat, 30 Dec 2006 13:14:10 -0500
Don't get me wrong, it was a nice call for a US-only mandate, since SAB and InBev are listed in London and Brussels, respectively. Beating BUD is outperformance, for which congratulations. Still, your profit isn't company specific if the whole sector moves, and it did.

Cf bigcharts.marketwatch....;symb=tap&comp...

Crossposted to your site.]]> http://seekingalpha.com/article/21424-merrill-short-sandisk-due-to-nand-oversupply?source=feed#comment-76935 76935
I'll assume that was your shorthand for hybrid drives in Vista laptops and eventual USB-flash RAM upgrade. The latter is an upgrade market, so it won't bite in 2007. It is my estimate that the former comes nowhere near the expected hole between capacity and demand in CY2007, but I would love to see your models if you're willing to post.]]> Thu, 30 Nov 2006 16:30:38 -0500
I'll assume that was your shorthand for hybrid drives in Vista laptops and eventual USB-flash RAM upgrade. The latter is an upgrade market, so it won't bite in 2007. It is my estimate that the former comes nowhere near the expected hole between capacity and demand in CY2007, but I would love to see your models if you're willing to post.]]> http://seekingalpha.com/article/21424-merrill-short-sandisk-due-to-nand-oversupply?source=feed#comment-76851 76851
As for the stock price, we'll see. I am short, but then I've been short since before the earnings announcement that tanked SNDK in the first place. Cf chip.seekingalpha.com/... That post was at $50, so I've tacked on 15% just holding the short I entered at ~$60. I can give those 15% back if I missed something and still be happy, though that will have been an error should it occur.

Time tells, as ever.]]> Wed, 29 Nov 2006 16:41:49 -0500
As for the stock price, we'll see. I am short, but then I've been short since before the earnings announcement that tanked SNDK in the first place. Cf chip.seekingalpha.com/... That post was at $50, so I've tacked on 15% just holding the short I entered at ~$60. I can give those 15% back if I missed something and still be happy, though that will have been an error should it occur.

Time tells, as ever.]]> http://seekingalpha.com/article/20796-h-q-life-science-hold-on-its-time-is-coming?source=feed#comment-75173 75173
One, unlike your interlocutor AI, you fail to mention that a fixed payout can lead to return-of-capital. When a closed-end fund returns capital, that is no longer a "dividend". You're just getting your own money back. You don't pay tax on it (nor should you -- imagine paying ordinary income tax on every bank withdrawal). All it does is reduce the fund's assets under management, as it is forced to sell holdings to return capital to investors. This is not, normally, a good thing. However, though I am almost loathe to note it, fixed-payout policies can have one salutary effect. Braindead yield buyers have a nasty tendency to start investing in them as if they were bonds whose "yield" were an actual coupon. The result can be rather preposterous premiums to NAV (cf CRF). A cynic might buy into any closed-end fund trading at a discount with a fixed-payout policy and hope that a few among them fall prey to this affliction.

Two, you do not mention fees. HQL charges 167 bps, vs BBH's 70 and IBB's 50 bps.

Now, I *like* HQL and its sister fund, HQH. At times I have used them for exposure, especially when they had double-digit discounts and I felt biotechs were unloved an potentially due for runs. I can even see investing in the hopes of being bailed out by the braindead yield constituency. However, to recommend them as serious investment vehicles over their alternatives without mentioning fees or the phrase "return of capital" strikes me as irresponsible, at best.]]> Fri, 17 Nov 2006 01:47:34 -0500
One, unlike your interlocutor AI, you fail to mention that a fixed payout can lead to return-of-capital. When a closed-end fund returns capital, that is no longer a "dividend". You're just getting your own money back. You don't pay tax on it (nor should you -- imagine paying ordinary income tax on every bank withdrawal). All it does is reduce the fund's assets under management, as it is forced to sell holdings to return capital to investors. This is not, normally, a good thing. However, though I am almost loathe to note it, fixed-payout policies can have one salutary effect. Braindead yield buyers have a nasty tendency to start investing in them as if they were bonds whose "yield" were an actual coupon. The result can be rather preposterous premiums to NAV (cf CRF). A cynic might buy into any closed-end fund trading at a discount with a fixed-payout policy and hope that a few among them fall prey to this affliction.

Two, you do not mention fees. HQL charges 167 bps, vs BBH's 70 and IBB's 50 bps.

Now, I *like* HQL and its sister fund, HQH. At times I have used them for exposure, especially when they had double-digit discounts and I felt biotechs were unloved an potentially due for runs. I can even see investing in the hopes of being bailed out by the braindead yield constituency. However, to recommend them as serious investment vehicles over their alternatives without mentioning fees or the phrase "return of capital" strikes me as irresponsible, at best.]]> http://seekingalpha.com/article/20760-cisco-s-stock-buybacks-enough-already?source=feed#comment-75076 75076 Thu, 16 Nov 2006 12:56:34 -0500 http://seekingalpha.com/article/20183-international-securities-exchange-launches-natural-gas-index?source=feed#comment-73819 73819
Buy at-the-money calls. Sell at-the-money puts. Voila, you are long index futures. Index futures are like an ETF, except better. One, you don't pay fees, aside from commissions (and the ISE tightens markets like nobody's business). Two, you conserve margin, meaning you get favorable (implied) financing and even make interest on any cash balance you hold, as long as your broker doesn't suck. Three, at cocktail parties, you get to tell strangers that you have a synthetic long futures position in an index.

ETFs are great when you can buy VTI for 7 bps. Something like this I guarantee will charge you 40, at which point there is no reason to own it.]]> Wed, 08 Nov 2006 19:31:04 -0500
Buy at-the-money calls. Sell at-the-money puts. Voila, you are long index futures. Index futures are like an ETF, except better. One, you don't pay fees, aside from commissions (and the ISE tightens markets like nobody's business). Two, you conserve margin, meaning you get favorable (implied) financing and even make interest on any cash balance you hold, as long as your broker doesn't suck. Three, at cocktail parties, you get to tell strangers that you have a synthetic long futures position in an index.

ETFs are great when you can buy VTI for 7 bps. Something like this I guarantee will charge you 40, at which point there is no reason to own it.]]> http://seekingalpha.com/article/19543-housing-sector-recession-will-last-a-while-won-t-cause-full-blown-recession?source=feed#comment-72524 72524
I agree with your moderate stance; just as adding mortgage equity withdrawals didn't overheat the economy the last few years, ceasing them need not overcool it. However, it seems likely that it will act as a drag on production for a while.]]> Mon, 30 Oct 2006 15:29:01 -0500
I agree with your moderate stance; just as adding mortgage equity withdrawals didn't overheat the economy the last few years, ceasing them need not overcool it. However, it seems likely that it will act as a drag on production for a while.]]> http://seekingalpha.com/article/19458-deflating-housing-bubble-comfy-landing-for-equities?source=feed#comment-72496 72496 www.bignose.org/blog/i... The numbers are lower than you think; there are ~2M for-sale-only vacancies, but that's up from 1.6M just two quarters back. That's a half-million homes that either have to be priced to sell or that will absorb mortgage payments for a while. The former drives down residential housing, the latter drives down consumption. Not a single owner need default to affect production.

For historical US MEW data, click through to photos1.blogger.com/he...
The numbers are pretty darned big. If MEW has been running at ~$1 trillion a year, and if half that has been going into consumption, then flat housing and rates are going to chop a half-trillion US$ off consumption, again affecting production.

Builders are going to have to discount to move inventory, but the -10% YoY is misleading. Prices haven't dropped much yet, but the sales mix changed drastically in the last year, with about 5% less share for the West and 5% more for the South.

I do have a few less bearish notes, mind you. I do not see catastrophe. For one thing, Social Security doesn't even have a problem with decent productivity or just a little immigration. It'll be 2040 or '50 before there is an issue even if neither materializes. Medical care is an issue, but it isn't an unfunded liability either -- we can change the laws any time. The only question is how much of future production we spend on it. As with retirement, that's a problem that takes care of itself on the societal level.

The US, in short, is not GM.]]> Mon, 30 Oct 2006 12:38:10 -0500 www.bignose.org/blog/i... The numbers are lower than you think; there are ~2M for-sale-only vacancies, but that's up from 1.6M just two quarters back. That's a half-million homes that either have to be priced to sell or that will absorb mortgage payments for a while. The former drives down residential housing, the latter drives down consumption. Not a single owner need default to affect production.

For historical US MEW data, click through to photos1.blogger.com/he...
The numbers are pretty darned big. If MEW has been running at ~$1 trillion a year, and if half that has been going into consumption, then flat housing and rates are going to chop a half-trillion US$ off consumption, again affecting production.

Builders are going to have to discount to move inventory, but the -10% YoY is misleading. Prices haven't dropped much yet, but the sales mix changed drastically in the last year, with about 5% less share for the West and 5% more for the South.

I do have a few less bearish notes, mind you. I do not see catastrophe. For one thing, Social Security doesn't even have a problem with decent productivity or just a little immigration. It'll be 2040 or '50 before there is an issue even if neither materializes. Medical care is an issue, but it isn't an unfunded liability either -- we can change the laws any time. The only question is how much of future production we spend on it. As with retirement, that's a problem that takes care of itself on the societal level.

The US, in short, is not GM.]]> http://seekingalpha.com/article/19458-deflating-housing-bubble-comfy-landing-for-equities?source=feed#comment-72378 72378
The '70s build saw subsequent real housing prices drop ~1% a year from '79-'84. Late '80s equity withdrawals were followed by a drop in real housing prices of ~2% a year from '90-'94. Correlation is not causation, but if past is prologue, housing will flatten (or even drop) in nominal terms and sink in real terms.

I would not be shocked if in that environment equities continue to perform. During both previous housing corrections, the S&P did ~5% better than cash. Of course, between those corrections and since '95, it gave you ~10% over bills.]]> Sun, 29 Oct 2006 13:38:37 -0500
The '70s build saw subsequent real housing prices drop ~1% a year from '79-'84. Late '80s equity withdrawals were followed by a drop in real housing prices of ~2% a year from '90-'94. Correlation is not causation, but if past is prologue, housing will flatten (or even drop) in nominal terms and sink in real terms.

I would not be shocked if in that environment equities continue to perform. During both previous housing corrections, the S&P did ~5% better than cash. Of course, between those corrections and since '95, it gave you ~10% over bills.]]> http://seekingalpha.com/article/19092-sandisk-will-get-last-laugh-against-analyst-models?source=feed#comment-71822 71822
FD: I did not give you that lone one-star rating, but I can't be bothered to give you a counterbalancing five. I'll give you the worst rating of all: an indifferent shrug.]]> Wed, 25 Oct 2006 01:40:50 -0400
FD: I did not give you that lone one-star rating, but I can't be bothered to give you a counterbalancing five. I'll give you the worst rating of all: an indifferent shrug.]]> http://seekingalpha.com/article/19129-currency-harvest-etf-another-potential-low-beta-strategy?source=feed#comment-71776 71776
Carry works great, brilliantly in fact -- until it doesn't.

What happens then is left as an exercise for the reader.

FD: currently (and uncomfortably) short the carry trade via Yen/$ calls. At least they're cheap.]]> Tue, 24 Oct 2006 17:17:48 -0400
Carry works great, brilliantly in fact -- until it doesn't.

What happens then is left as an exercise for the reader.

FD: currently (and uncomfortably) short the carry trade via Yen/$ calls. At least they're cheap.]]> http://seekingalpha.com/article/18974-oil-inventories-on-the-rise-where-s-the-shortage?source=feed#comment-71471 71471
FD: I am long vol, short delta in the energy complex.]]> Sun, 22 Oct 2006 19:02:43 -0400
FD: I am long vol, short delta in the energy complex.]]> http://seekingalpha.com/article/18920-getting-ready-to-go-long-sandisk?source=feed#comment-71277 71277
Yeah, the avalanche of chips from expansion of capacity generally is what had me worried in the first place. All else equal at $40, I cover; at $50, I haven't, at least not until I see more economic data.

The OMB isn't even on my radar. CAT's 2% seems less unlikely than the purported consensus number, though my bet as I said is lower. I expect the spin to be "just wait for Q4!" If wrong, I'll cover more than just the SNDK short.]]> Sat, 21 Oct 2006 13:48:24 -0400
Yeah, the avalanche of chips from expansion of capacity generally is what had me worried in the first place. All else equal at $40, I cover; at $50, I haven't, at least not until I see more economic data.

The OMB isn't even on my radar. CAT's 2% seems less unlikely than the purported consensus number, though my bet as I said is lower. I expect the spin to be "just wait for Q4!" If wrong, I'll cover more than just the SNDK short.]]> http://seekingalpha.com/article/18920-getting-ready-to-go-long-sandisk?source=feed#comment-71138 71138 Fri, 20 Oct 2006 18:13:27 -0400 http://seekingalpha.com/article/18920-getting-ready-to-go-long-sandisk?source=feed#comment-71137 71137
FD: still short. I shall consider covering if 06Q3 GDP, out in exactly a week, is unexpectedly strong. I am looking for ]]> Fri, 20 Oct 2006 18:11:24 -0400
FD: still short. I shall consider covering if 06Q3 GDP, out in exactly a week, is unexpectedly strong. I am looking for ]]> http://seekingalpha.com/article/18617-time-to-go-long-electricity?source=feed#comment-70625 70625 Wed, 18 Oct 2006 02:57:51 -0400 http://seekingalpha.com/article/18606-orleans-homebuilders-discount-looks-enticing?source=feed#comment-70624 70624
OHB is ~2x debt/equity, two or so times a normal homebuilder.]]> Wed, 18 Oct 2006 02:56:48 -0400
OHB is ~2x debt/equity, two or so times a normal homebuilder.]]> http://seekingalpha.com/article/18629-water-huge-potential-over-the-next-10-years?source=feed#comment-70622 70622
Try to learn the word "fees" before your next post.

PHO's: 70 bps.]]> Wed, 18 Oct 2006 02:48:37 -0400
Try to learn the word "fees" before your next post.

PHO's: 70 bps.]]> http://seekingalpha.com/article/18644-good-time-to-buy-vix-call-options?source=feed#comment-70620 70620
Buying a boatload of el-cheapo calls and puts on some indexes seems the best bet.

It's what I've been doing.

FD: I am often wrong.]]> Wed, 18 Oct 2006 02:45:38 -0400
Buying a boatload of el-cheapo calls and puts on some indexes seems the best bet.

It's what I've been doing.

FD: I am often wrong.]]> http://seekingalpha.com/article/18551-e-trade-in-the-free-trade-era?source=feed#comment-70387 70387
I fired them immediately, no great shock. I have been very happy with their replacement, Interactive Brokers. Yeah, they have an inactivity fee, but their minimum headline commissions are $1. Even versus BrownCo's old $5, it's really, really hard to go wrong with that. Also, if they don't trade something (nothing that's not DTC-eligible, say), they won't take it. No weird, Kafkaesque runaround.

If ET were available as a single-stock future, I'd be short.]]> Mon, 16 Oct 2006 23:31:33 -0400
I fired them immediately, no great shock. I have been very happy with their replacement, Interactive Brokers. Yeah, they have an inactivity fee, but their minimum headline commissions are $1. Even versus BrownCo's old $5, it's really, really hard to go wrong with that. Also, if they don't trade something (nothing that's not DTC-eligible, say), they won't take it. No weird, Kafkaesque runaround.

If ET were available as a single-stock future, I'd be short.]]> http://seekingalpha.com/article/18365-time-to-start-looking-beyond-the-housing-slump?source=feed#comment-69658 69658 phx.corporate-ir.net/p...;c=112195&ID=9...

Normally, homebuilders in troughs are analyzed by book values, since earnings drop so hard, like CTX's. In a normal trough, you buy homebuilders when their prices are at or below three-quarters of book value. The ISE homebuilder index sports a book multiple around 1.4 right now, and that discounts the chance of future writedowns.

Sure, the downside risk is lower now. The easy money on the short side has been made. Still, I see it unlikely the residential housing market has seen the end of its bad news. You won't see me go long until the data turn positive, or until book multiples get much cheaper. I don't like looking at 50% downsides if bad news flow continues.]]> Fri, 13 Oct 2006 01:24:15 -0400 phx.corporate-ir.net/p...;c=112195&ID=9...

Normally, homebuilders in troughs are analyzed by book values, since earnings drop so hard, like CTX's. In a normal trough, you buy homebuilders when their prices are at or below three-quarters of book value. The ISE homebuilder index sports a book multiple around 1.4 right now, and that discounts the chance of future writedowns.

Sure, the downside risk is lower now. The easy money on the short side has been made. Still, I see it unlikely the residential housing market has seen the end of its bad news. You won't see me go long until the data turn positive, or until book multiples get much cheaper. I don't like looking at 50% downsides if bad news flow continues.]]> http://seekingalpha.com/article/18266-the-case-for-bonds-and-the-problem-with-bond-etfs?source=feed#comment-69417 69417
That said, I am puzzled by your throwaway comment that, "foreign currency, precious metals, emerging markets, commodities, and short positions" were "safely out of the hands of retail investors" before ETFs came along. Even if you restrict yourself strictly to exchange-traded managed vehicles, the closed-end fund industry had delivered things like GIM (inception 1988, non-US sovereign debt, hence a currency and relative-rate play), ASA (inception 1958, not a typo, gold), EMF (inception 1987, emerging markets), PEO (inception 1929, again no typo, oil) and AMO (inception 1994, does a little short-selling).

What seems different to me is not availability, but marketing.]]> Wed, 11 Oct 2006 13:45:37 -0400
That said, I am puzzled by your throwaway comment that, "foreign currency, precious metals, emerging markets, commodities, and short positions" were "safely out of the hands of retail investors" before ETFs came along. Even if you restrict yourself strictly to exchange-traded managed vehicles, the closed-end fund industry had delivered things like GIM (inception 1988, non-US sovereign debt, hence a currency and relative-rate play), ASA (inception 1958, not a typo, gold), EMF (inception 1987, emerging markets), PEO (inception 1929, again no typo, oil) and AMO (inception 1994, does a little short-selling).

What seems different to me is not availability, but marketing.]]> http://seekingalpha.com/article/17967-with-the-gm-merger-a-no-go-what-kerkorian-s-next-move?source=feed#comment-68430 68430 Thu, 05 Oct 2006 19:48:10 -0400 http://seekingalpha.com/article/17968-hyperactive-starbucks-traders-need-to-switch-to-decaf?source=feed#comment-68428 68428
Covered calls are only a hedge if you're CalPERS.]]> Thu, 05 Oct 2006 19:46:59 -0400
Covered calls are only a hedge if you're CalPERS.]]>