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fnoobler

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  • Why We're Poorer: Inflation And Deflation Are Now Globalized [View article]
    I'm honored, but if your team is DEA I'm not really cut out for it and I don't think Special Agent fnoobler would last very long.
    Dec 19, 2014. 02:54 AM | Likes Like |Link to Comment
  • Why We're Poorer: Inflation And Deflation Are Now Globalized [View article]
    I think the strong dollar, the weak oil price, Russia's problems (possibly), and the fact that oil and currency hedges have counterparties, are likely to send financial sector share prices down, though I can't say when. Given a serious enough problem, I think we'll see bailouts, easy money or more QE. I'm not the first to comment along those lines, but the risk does not look priced in to "Select Sector Financial Slct Str SPDR Fd (NYSEARCA:XLF)" http://bit.ly/1zDgmzT (google.com). The holdings are on http://yhoo.it/1zDgmzV (yahoo.com). Three of the top four I believe are generally liked by value investors (Berkshire Hathaway, Wells Fargo and Bank of America Corporation), but even so I think the share price chart shows too much confidence, with the price of $24.79 not much under the recent five-year high of 20.50 - 25.07.

    I also checked SPDR KBW Bank (ETF) (NYSEARCA:KBE on http://bit.ly/1zDgpeT
    (google.com) and it's also not far below it's five-year peak.

    Jefferies, the financial arm of Leucadia (LUK - I'm long LUK) recently reported a quarterly loss (press release - http://bit.ly/1zDgpeX ). Part of that was due to the bankruptcy of Danish shipping-fuel supplier OW Bunker A/S, which according to Reuters' http://reut.rs/1zDgpeZ was the result of fraud and the difficulty of risk-management when prices move sharply. Jefferies also blamed volatility in other areas. That's just to illustrate how big moves can affect financial companies, although it's hard to quantiy the effect before it happens.

    I'm only warning about risks, and I lack the certainty of the author of this:
    "Shale Oil 2015 = Subprime Mortgages 2008" by Andrew Hoffman, December 1st, 2014 http://bit.ly/1zDgmQc . I don't share the author's general pessimism about the US economy. Cheap oil is good for consumers. Having unconventional oil & gas is better than depending on the Middle East and other sources. Not long ago there was concern in much of Europe about the gas supply from Russia being cut. The U.S. doesn't have that problem, or Russia's problem of over-dependence on selling oil. Like real-estate, you want some O&G production in the economy but it can go "boom-bust" with too much borrowing.
    Dec 19, 2014. 02:33 AM | Likes Like |Link to Comment
  • Why We're Poorer: Inflation And Deflation Are Now Globalized [View article]
    There's quite a lot of comment around mentioning slow growth in China. I don't trust their figures so I check their power consumption. If you can find "China's power consumption accelerates in Oct", there doesn't seem to be too much of a problem in that area.
    Another issue I came across is, Glencore expect more demand than supply for copper and zinc. It looks like they used assumptions to favor the result, for things like major mines with production problems or problems getting licences, etc., so it doesn't look like a likely-case forecast. A good source for that kind of thing is Mineweb.com.
    Although they are important issues, I don't see those two as mattering as much as the dollar denominated debt in emerging markets. Issues affect other issues, though.
    Dec 13, 2014. 11:32 AM | Likes Like |Link to Comment
  • Why We're Poorer: Inflation And Deflation Are Now Globalized [View article]
    With the low oil price, it's worth asking if the oil companies' hedges are safe, or if there's much counterparty risk. I found a piece titled "Plummeting oil prices could destroy the banks that are holding trillions in commodity derivatives". The piece is short of figures and sources, so I can't assume it's right. Still, the hedges must have counter parties, so I'm guessing there's some risk of counterparty failure. Then there's the risk of one falling domino setting off others.
    Dec 12, 2014. 12:19 AM | Likes Like |Link to Comment
  • Server Acceleration: Altera FPGAs Vs. Nvidia GPUs [View article]
    My problem with NVDA is that people have a limited capacity for processing visual information. I can't prove that limited long term prospects for NVDA are a logical consequence of that, but I regard it as a risk until I see good enough evidence or argument against it. I cant see any limit to machine-to-machine data traffic or the analysis of the data generated.

    I'm long Altera.
    Dec 11, 2014. 08:50 PM | Likes Like |Link to Comment
  • Server Acceleration: Altera FPGAs Vs. Nvidia GPUs [View article]
    Thanks from me as well.
    Dec 10, 2014. 08:41 PM | Likes Like |Link to Comment
  • Verizon seeing margin pressure, higher disconnects [View news story]
    It's also bad in the UK, in my experience. O2 mobile broadband only works in the middle of the night. Vodafone directed me to a forum where I was warned about terms and conditions when I posted two separate problems as two separate problems (which were never resolved) . Before that, Three Mobile's call center had me use all my Windows restore points so I had to reinstall windows.
    Dec 9, 2014. 07:09 PM | Likes Like |Link to Comment
  • Why We're Poorer: Inflation And Deflation Are Now Globalized [View article]
    If you find this article:
    "Emerging markets fearing US dollar, yields, China trifecta"
    it has figures from the BIS for dollar denominated debt in emerging markets. The article stresses yields rather than exchange rates, but I'd be worried if I owed money in a strengthening foreign currency even if the yield eased a little.
    The figures are about two to three trillion USD. To put that into some kind of perspective, the web page for the US National debt clock gives nearly $18 trillion.
    Dec 8, 2014. 10:50 PM | 1 Like Like |Link to Comment
  • Why Now Is The Time To Sell Texas Instruments [View article]
    According to Morningstar http://bit.ly/1tJPAzS Price/Cash Flow is 15.5. On their ratios page http://bit.ly/1tJPxEb free cash flow has grown over the past few years (in total and per share), although if you look at the operating cash flow from 2004 I don't think there's a clear trend. I bought TXN on the Microchip scare, just before results, and I intend to hold. Like many companies, they could be affected by currency issues but those are something I've said enough about already.
    Dec 2, 2014. 06:57 PM | Likes Like |Link to Comment
  • Server Acceleration: Altera FPGAs Vs. Nvidia GPUs [View article]
    There will be some impact on Altera's results from the strong dollar. They list the risk:

    "Fluctuation in foreign currency exchange rates"

    but there hasn't been much effect in recent years. Also, it looks like they don't hedge. From the 2013 Annual Report:

    "Impact of Foreign Currency and Inflation

    We have international operations and incur expenditures in currencies other than U.S. dollars. For non-U.S. subsidiaries and branches, foreign currency
    transaction gains and losses and the impact of the remeasurement of local currency assets and liabilities into U.S. dollars in 2013, 2012 and 2011 were not significant. We do not enter into foreign exchange transactions for trading or speculative purposes."

    About distributors, they "bear all risks related to the ownership and sale of the products, including credit loss, inventory shrinkage and theft and foreign currency fluctuations."

    From "Note 17: Segment and Geographic Information"

    (thousands)
    U.S. $ 288,936
    Japan 269,907
    China 503,127
    Other 670,602

    That's sales to OEMs and distributors, which "may be different from the geographic locations of our end customers".

    I've mentioned all that because of the risk of a flight from weak currencies to the dollar, which I've mentioned here and there since Nov 3.
    Dec 2, 2014. 06:37 PM | Likes Like |Link to Comment
  • Server Acceleration: Altera FPGAs Vs. Nvidia GPUs [View article]
    Thanks for writing that, the title is exactly what I wanted to read about. I took Nvidia's comments to mean that FPGAs weren't scalable, which I think is more or less your interpretation. The claim about FPGAs being hard to program was clear enough, though.

    I'm not expert on this, but parallel-processing provided by FPGAs and GPUs seems good for Artificial Neural Networks (ANNs). Recent advances under headings like deep learning and deep networks have improved AI (artificial intelligence) in vision and natural language understanding. In computing tech, small areas can become big areas, like mobile taking off, and Bill Gates thought the Internet didn't matter much. It seems at least possible that ANNs could grow to something big. But, for FPGAs and GPUs in ANNs, there's competition with IBM developing something like purpose-built ANNs on a chip. I've a rotten memory and I hope I haven't said all that before.

    Articles I'd still like to see are "Is the programmable imperative real?" and something about good pattern vs bad pattern in semiconductor lithography, because if regular patterns are easier for smaller nodes it might benefit FPGAs, but that's speculative because I don't understand the subject much. Both, especially the second, are quite technical and maybe too much to hope for.
    Dec 2, 2014. 06:07 PM | Likes Like |Link to Comment
  • SunEdison: Emerging Solar Powerhouse [View article]
    "Solar panel nanotechnology is essentially the same as semiconductor nanotechnology, which means that solar panels, like computer chips, improve at an exponential rate."

    I have to admit I'm not expert on this, but I think that while maybe there's some similarity in the math and the physics, much of Moore's Law has come about from shrinking the size of transistors, which doesn't apply to solar panels. The link given http://bit.ly/1vDbcDA states the law in terms of production and shipments, which suggests to me that economies of scale dominate, as for many products, whereas Moore's Law is a function of time and depends more on R&D. I don't deny that R&D plays it's part in solar, for example the JV in Herbclouds' comment. I'm willing to learn if I'm wrong about this.

    The link goes on to say that panel costs are becoming a less significant part of the total cost, which includes inverters, racking and wiring, and the labor of installation. Because efficiency can't possibly improve to over 100%,
    there's a practical limit to the power per square meter or per dollar when associated costs are included, whereas I don't think there aren't equivalent limits for how much computing power you could put into a $1,000 notebook for example. (I looked at Wikipedia's Limits of Computation http://bit.ly/1vDbeLw but it's all about black holes and earth-size computers.)
    Dec 1, 2014. 08:06 PM | 1 Like Like |Link to Comment
  • Warning Signs Mount For Solar Lease/PPA Holding Companies [View article]
    I think your comment was probably meant for the author, but I'll just mention that the same chart is in the link I gave, http://read.bi/1thKUls with some technical analysis (find "broken out of the massive inverse head-and-shoulders"). I look at fundamentals rather than TA for stocks, and I'm not really qualified to comment on it's significance here.

    This is probably getting off-topic, but some other writing by John Mauldin reminded me that Germany wanted its gold back from the U.S. and gave up after getting very little of it. If other countries want their gold back and don't get it, I really don't know what if any effect that would have on the dollar.
    Nov 26, 2014. 10:09 PM | Likes Like |Link to Comment
  • Warning Signs Mount For Solar Lease/PPA Holding Companies [View article]
    About "SUNE being speculative", I think we agree, really, it's just I tend to see stocks as speculative more than other investors. I appreciate management's transformation of the old wafer-making MEMC, but I see SUNE as speculative compared to some companies with growing free cash flow and more cash than liabilities (lazy balance sheets, to some). I think innovation has created risk and opportunity in the energy sector, but when I start writing about that, I don't know when to stop.
    Nov 26, 2014. 09:52 PM | Likes Like |Link to Comment
  • Warning Signs Mount For Solar Lease/PPA Holding Companies [View article]
    About the strong dollar, there's likely to be a lot of dollar denominated debt in emerging markets, and I think the most under-appreciated factor is the possibility of a country reaching a tipping point where feedback applies, like this: Default or the fear of it causes the local currency to fall, making it harder to pay the interest and principal when loans are in US dollars and earnings are in the local currency (risks between other currency pairs could also cause problems). The falling local currency then makes it harder to repay the debt, making default more likely.

    Something like that happened in the 1990s, see "1997 Asian financial crisis" (Wikipedia) http://bit.ly/137cU0c
    The Asian crisis came after a crisis in Mexico and was followed by crisis in Russia and Argentina. There are differences between then and now, for example primary producers then had been weakened by falling commodity prices throughout the 1980s. The crises did not stop a tech boom on NASDAQ.

    The Bank For International Settlements has commented on the risk posed by QE, and the problems they expect to be caused by the end of QE. Janet Yellen has disputed their views quite vigorously. "Is the Federal Reserve Creating the Next "Great Recession"?" by Robert W. Merry, September 19, 2014 (nationalinterest.org)
    http://bit.ly/1thKU57

    That's only about the U.S., but there could also be international effects. This year-old piece has a discussion about how QE would cause U.S. investors to invest overseas, in Latin America, Africa and Asia where interest rates were higher. They don't give figures, though.

    "Why the Fed’s Low Interest Rates Are Driving Dollars Abroad" by Paul Solman, December 18, 2013 (pbs.org)
    http://to.pbs.org/1thKU58

    This is one of many blog pieces about currency wars:

    "Japan Fires Another Shot in Global Currency War" Oct 31, 2014 (blogs.wsj.com)
    http://on.wsj.com/1thKU5a

    This covers the consequences:

    "THE WORLD'S ECONOMIC CRISIS IN OVERVIEW" by John Mauldin, November 06, 2014 (theinternationalchron...
    http://bit.ly/1thKXxG

    I expect the author knows much more about it than I do, but I don't share his certainty about a crisis. I'm only warning of a risk that investors can consider if they want to.

    It isn't easy to find numbers for dollar denominated debt. For Indonesia I found $292.1 billion of "offshore debt", after text about dollar-denominated corporate debt and foreign-owned government bonds, in "Indonesia: US Fed Impact on USDIDR" by Shayne Heffernan, November 22, 2014 (livetradingnews.com)
    http://bit.ly/1thKUlq

    The World Bank's debt data is not up to date, at least the 2014 International Debt Statistics for Brazil only go up to 2012.
    http://bit.ly/1thKXxK

    While trying to hunt down some figures, googling "fragile eight economies" got me back to John Mauldin, with
    "The US Dollar Plays The Villain In The Emerging Markets Horror Story" Oct. 27, 2014 (businessinsider.com)
    http://read.bi/1thKUls

    While related problems are hitting the news, the 'worst-case' risk seems to be fairly under-the-radar for now.

    It's hard to predict the global economy, but I think it's easier to prepare for risks, to limit the damage if they materialize. I've made some adjustments to my portfolio but I have not sold every company I like that happens to have some emerging or 'fragile' market exposure. I hold some SUNE but I regard them as fairly speculative.
    Nov 25, 2014. 09:19 PM | Likes Like |Link to Comment
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