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  • Nokia: Patent Portfolio Valuation Range Too Great To Make Nokia A Compelling Buy [View article]
    This is flawed analysis-- Nokia has close to 6 billion net cash. To call the balance sheet "a wash" suggests Navteq and Nokia's 3 billion corporate real estate portfolio has no value.
    Jun 29, 2012. 06:07 AM | Likes Like |Link to Comment
  • The Big Picture For The Week Of March 18th [View article]
    Poor title for this article.
    Mar 18, 2012. 07:31 PM | Likes Like |Link to Comment
  • Apple, Sirius, Bank Of America: A 'Simple' Way To Profit [View article]
    You said...."If I could sell one-half of an option contract I would, but that's just not the way it works."

    Sell a call with half the delta (of the 600). The profile is close, but capped.
    Mar 18, 2012. 06:36 PM | Likes Like |Link to Comment
  • Kodak: Comeback Player of the Year? [View article]
    Nice article prophet. I agree.

    You might want to check the 10K here...last I read I believe there was some equity senior to the common (almost sure). Don't forget that in your buyout calculations.
    Jun 25, 2011. 10:20 PM | Likes Like |Link to Comment
  • Post-Memorial Day Options Trades to Consider [View article]
    I have to respectfully disagree with you Rocco. I like credit spreads as well as theta works for you...but with the vix near multi year lows I think debit spreads would be much more rewarding and I prefer to be long options at this level. Studies done on long iron condors (two credit spreads) indicate the most profitable highest percentage ones are executed at elevated vix levels.

    The weekly apple 330/325 bear put spreads opened today at .15 which is a 32-1 risk/reward scenario. The aaple 345/350 bull call spread could have been bought for .20 on Friday....a 25-1 payout. With the vix and IV this low if you venture out of the money a little bit with the debit spread, you are paid a fortune.

    I enjoy your columns Rocco. Good luck.
    May 31, 2011. 11:11 PM | Likes Like |Link to Comment
  • Why did Molycorp buy Silmet in Estonia, and was it worth the money? [View instapost]
    They sold out Jack. You have been around too long to know otherwise.
    Apr 14, 2011. 05:43 AM | Likes Like |Link to Comment
  • Rare Earth Miners Take Action After China Decisions [View article]
    All of Molycorp insiders are allowed to sell restricted stock within 10 days from now....that should be pretty funny considering how much they unloaded already.

    Watch the unloading and take your cue from the insiders. They will be eager to unload. Make your bets accordingly, and after short squeeze spikes. Don't forget they have most of their production hedged for a few it does not make a difference what spot price is.

    The investors that understand the hedged MCP strategy will make a killing....because the stock will plumett
    Apr 14, 2011. 05:29 AM | 3 Likes Like |Link to Comment
  • Why I Am So Bearish: Time to Be a Deep Value Investor [View article]
    Thanks for your answer Mycroft.

    My question though was about portfolio risk, hedging high beta negative FCF against Graham-screened value. I've searched for studies on this but found none. I would imagine this would have a very positive alpha where outlooks are sideways or worse.

    Actually, if you are interested, the research I've done indicate sideways has the best alpha in the derivative market risk-adjusted. Short straddles outperform all derivative investments, in all markets, believe it or not.

    To hedge value against bearish or delta hedged high FCF flyhighers might be beneficial , and low risk at market tops...and I would not be delta neutral.

    Just my humble opinion. And check out the qnst cashflow statement while you're at it! Be well.

    Apr 6, 2011. 02:31 AM | Likes Like |Link to Comment
  • 10 Cramer Favorites That I Don't Recommend Buying [View article]
    Forgot to mention one thing Nick....most of these midcap and large cap companies net and operating margins are at all-time highs. The investing public often confuses PE's , and PEG's without consideration for margins. Historically, they are more likely to go down then up, at this level, as pricing power erodes and competition ramps up -- not to mention legislative risk.

    If a true measure of value is price to free cash flow some of these fund manager better dig into the cash statements. GMCR is very scary here
    Apr 6, 2011. 01:24 AM | 1 Like Like |Link to Comment
  • 10 Cramer Favorites That I Don't Recommend Buying [View article]
    You nailed them all Nick, good job. You forgot PCLN though.

    A great short strategy is hedging these momentum plays with short puts -- some like pcln have weeklies you can sell for $10 ATM....that is a good hedge against a short postion....lets you stay in the action without getting killed.

    Good article. Be well...and go to church.
    Apr 6, 2011. 01:03 AM | 1 Like Like |Link to Comment
  • Why I Am So Bearish: Time to Be a Deep Value Investor [View article]
    Very nice article Mycroft . Thank you .

    Would you consider hedging your FCF portfolio against the antithesis of it, a viable strategy in these market conditions? ie...Companies like gmcr and qnst, egregiously overvalued on every metric...especially considering where the cash came from.

    Apr 6, 2011. 12:36 AM | Likes Like |Link to Comment
  • Fed's Shortcut to Greatness [View article]
    Excellent article. Thank you.
    Mar 25, 2011. 10:23 PM | Likes Like |Link to Comment
  • Apple's New Subscription Rules May Clear a Path for a Kazaa Comeback [View article]
    Nice article John. I agree with you 100%.

    Are you aware if Kazaa still has spyware and malware issues as it did in the past? Thanks
    Mar 6, 2011. 07:13 PM | Likes Like |Link to Comment
  • Molycorp: A Fundamental, Psychological and Quantitative Response to Rare Earth Bears [View article]

    Since you often cite Lynas projections in your articles I'm sure you would agree Mr. Nick Curtis, Executive Director of Lynas, is an authority on the subject. He is only 53 years old.

    Two days ago Mr. Curtis sold 7 million shares of his direct stock holdings and only retained 1 million. That's not exactly a vote of confidence.

    I'd also like to point out to you something regarding the MCP secondary. Since MCP is NYSE listed they are subject to the requirements of The Security Exchange Act of 1934. Restricted securities must be held for 6 months (the lockup period) and Rule 144 conditions must be met. Rule 144 basically defines when, how and how much stock insiders can sell. Specifically the rule states securities that insiders may sell during any given 90 days may not exceed the greater of: more than 1% of the shares outstanding or , 1% of the average weekly trading volume.

    By offering the secondary, Molycorp is in effect putting to market more shares than what could have been legally sold under Rule 144... And to get demand for the offering the syndicate will discount it. They are not doing shareholders any favors.
    Feb 5, 2011. 01:47 AM | 2 Likes Like |Link to Comment
  • Molycorp: A Fundamental, Psychological and Quantitative Response to Rare Earth Bears [View article]
    Hi Jon,

    How can you double the JPM model and subtract the dilution without knowing the basis of it? Have you read the report? JPM's report was BEFORE Molycorp added two joint venture partners, Sumitomo and Hitachi. I think this is a critical point.

    Molycorp will be selling much of their rare earths well below spot price for the next 7 years. These joint venture partnerships insure it. In return for investment, these supply contracts have hedged Molycorps earnings upside. And I can infer from that a more prescient point: Molycorp believes REE's to be OVERVALUED currently. Why else would they hedge. Would a bullish gold miner hedge their forward production? Of course not.

    In my due diligence Ive referenced the US Department of Interiors Annual Geological Report. Mountain Pass Mine's mineral distribution I thought was important. The report states that the mine primarily produced Bastnasite which is a mineral composed of lanthanum and cerium. So cerium and lanthanum will be Molycorps major products....and not that it's important but they are the two cheapest and most abundant REE's.

    MCP has already entered into supply contracts with Grace for 75% of its lanthanum production for the next 5 years. Sumitomo has a supply contract for the next 7 years. MCP is hedged and it is well below spot pricing. Are you aware, according to the last 10Q MCP currently sells lanthanum for only 3.48/kg. To build a financial model based on spot pricing is risky in Molycorps case.

    Some estimate (which I disagree with) that more than half of MCP's revenue will come from magnet and NdFeB alloy production. If that is so, Hitachi and Magnequench hold all of the patents here. How much of these earnings will flow to Hitachi? I would guess a very significant amount.

    I don't for a second doubt long-term REE demand however, rare earth spot prices going parabolic are a result of a political mishap -- retribution for Japan detaining a Chinese trawler and cutting Japans supply. China has tremendous rare earth production capacity which represent significant risks projects outside of China have to consider. What do you think will happen to price when global supply comes online.

    It is also estimated that 40,000 tons of illegally mined product are smuggled out of China every year. I think it's reasonable to assume that number will increase considering the spike in price.

    Concentrations of any necessary supplies in one place (like REE in China) is concerning as it can cause price manipulation....though this is not unusual for mining. For example 86% of all Beryllium is mined in one single US mine and two Brazilian mines account for 92% of all the Niobium production in the world. I think China has overplayed their hand here and they certainly don't want any trade wars.

    Seeing that much of MCP's future REE production is already contracted out it's extremely difficult for me to fathom your EPS amount. Good luck with your position.
    Feb 4, 2011. 10:27 PM | 7 Likes Like |Link to Comment