Saul Sterman

The Long Case for Teva Pharmaceutical

Asif-
You can tell if it is me or not by the wording of the disclosure. This one is from me!

To the point, we don’t disclose the kind of proprietary information/analysis you have so courteously requested. Being that I consider you a valued colleague, what I will say is that the market is waiting to see what the Big Boys will do next. No one expects any of the Big Boys to give up the goose that lays the golden egg without a formidable fight.

I doubled checked the file and a forward PE of 12/13 is correct. The ratio is correct. What the actual figure is – is another story.
Best,
Saul
Disclosure: Forward PE information is the consensus of CrossProfit.com and published with permission.
www.crossprofit.com

The Consolation Prize Theory: Why Home Depot Should Profit From the Housing Slowdown

Phil- a thousand apologies. I constantly confuse you with David Philips from 10Q. Right, your Phil Davis the SA options Guru. Just tied a little string around my pinky to remember!

So you mean to say that if I were to play options my portfolio for 2006 would be up 582% instead of 58.2%! (As of today I’m 60% cash.) Honestly, I’m the type of guy that would rather be bored than rely on pills to get some shut eye. But that’s me.

Just out of curiosity, when all is said and done taking into account all the kills and loses, on a yearly basis can you consistently pull a 100-150% profit. If yes then you’re a genius. If no, to you it may be fun, to me it would mean an ulcer and isn’t worth it. I think you will agree that option trading is not for everyone.

We may have different investment approaches, but your calls are good, not to mention the timing factor.

The Consolation Prize Theory: Why Home Depot Should Profit From the Housing Slowdown

"up 70% ahead of earnings" - you wish! typo, Phil meant to say 7%. Still not bad for 3 days... Phil, did you catch ARNA? I don't think the (upcoming) good news will take it all the way to 17/18. Probably top out 15/16 range. EOM, so I don't have time to write article. Catching it's breath today at 12 but should start moving again tomorrow. (needless to say, I'm long).

America's Growing Reliance on Foreign Gasoline

Crack Spread - definition:

A petroleum refiner is caught between two markets, the raw material he must purchase and the finished products he offers for sale. The prices of each are subject to variables of supply and demand which can put refiners at risk when crude prices rise while products prices remain static or decline.

The difference between crude and products is the "crack spread."

See NYMEX site for more + options on crack spread + volatility.

66.249.93.104/search?q...;hl=en&ct=clnk...

The Consolation Prize Theory: Why Home Depot Should Profit From the Housing Slowdown

Phil-

Nice call!
I still would like a more detailed explanation as to why the market places such a high multiple on this stock. Expected Q3 losses of $0.13-0.19, no shareholder value etc.

www.marketwatch.com/Ne...;siteid=mktw&g...

Is this one of those trading spikes that you like to catch or has management really changed this time and intends on creating shareholder value?

Well done indeed…looking forward for your next call.

Nike's New Sneaks Should Give Some Lift

5 stars for the title. Great article too.

The Consolation Prize Theory: Why Home Depot Should Profit From the Housing Slowdown

Somehow I doubt that Mr. Rich with 100k set aside for remodeling, shops at Home Depot. Ask the good old common folk at HD if they’ve seen Mr. Rich lately!

Internap: Stellar Performance Already Priced In

Nice call!
I owed you a 'good word' - or two - as some of our (CrossProfit) analysts got a bit carried away with some of your previous articles. They have since learned how to disagree more politely.

Microsoft's Current Situation: Like IBM in the '80s

You missed the point and confirmed both the author’s assertion and the culture comment posted above.

No one is saying that Apple will replace MSFT today. The point is that MSFT is putting all of its eggs in one basket and every attempt to diversify has met with failure because its approach is from a monopolistic skew.

No one can build from the top down. New markets are built from the bottom up. If MSFT can repeat its success story again, then and only then will it have a new monopoly.

The “we are the biggest and best” syndrome is what cut Big Blue down to size. The same is happening to MSFT. If I didn’t care about MSFT or ‘have a bone to pick with Microsoft’ I wouldn’t bother writing about it.

Microsoft's Current Situation: Like IBM in the '80s

I agree.

Once MSFT burns through the first 20 billion, I hope they wise up before dumping the second 20.

MSFT could have bought 5 companies (like Electronic Arts) by now and start building a new empire from the bottom up. The culture problem is that they are so used to being a monopoly that they have forgotten the meaning of hard work.

Disclosure: This is my personal opinion and may not reflect the opinion of CrossProfit.com.
www.crossprofit.com

Is the U.S. Going Bankrupt?

I have always admired Eddy Elfenbein’s linguistic skill. In fact I still think Eddy is one of the best writers on SeekingAlpha. Unless this entire article is meant to be a malapropism this time Eddy has me scratching my head.

1) The math doesn’t add up. “Twice the size of national wealth” is $33 trillion.
2) There are three separate entities discussed as if they were one; private wealth, public (company) wealth and government. This is like saying that Dell isn’t in trouble because Exxon Mobil is doing very well.
3) If the hypothesis were true then the United States would be a net creditor and not a net debitor. Obviously one can not seriously combine the balance sheet with the income statement. These are two separate statements where the income statement shows the profit or loss from current operations.

Saying that a fiscal loss is not real because there are assets on the balance sheet is …. Eddy – you find the right word!

Syneron Medical: Update and Corrections To This Promising Story (ELOS)

Retail Investor-

I must confess that when writing this article I had no idea that there was such interest in Syneron. E-mails received for the most part are about all three issues being raised by Retail Investor – Subbu. I have written beforehand but have never received e-mails! I hope to answer all by the end of this weekend. (Please use faq-at-crossprofit.com and not the other e-mail addresses on the site.)

The vast majority queried the security issue which I have addressed.

Subbu raises two additional distinctively separate issues. The first pertains to demand from the consumer (in your terminology ‘retail’). The second deals with point of sale (‘wholesale’?).

As a side note I take issue with the notion that ‘baby boomer vanity’ is the prime market for Syneron’s products. I also do not care much for the phrase itself. We are all vain, baby boomer or not. Do you not shave in the morning? Do you not enjoy putting on a nice clean pressed shirt? Do you not fix your hair or look in the mirror?

For now I will say that there are several categories of discretionary spending. If I can not find a site/article that explains this I will try to find the time to write a comprehensive article covering discretionary spending. Keep in mind that during the great depression beauty salons did very well while the haberdasheries were closing one after another. There is a reason for this…too long for a comment, will have to wait for site/article.

Point of sale is short and sweet. Money is money in all cultures and throughout the history of mankind. Yes, if a Doctor can pick up an extra buck especially in a respectable professional manner you better believe that he/she will do so. Why not?

Syneron Medical: Update and Corrections To This Promising Story (ELOS)

Retail Investor-

I see you have done your homework! I didn’t want to get into the knotty details but after your last comment it would be a disservice to SA readers not to explain.

At CrossProfit when compiling data on nearly 1000 U.S. listed companies we analyze their BCP – Business Continuity Program. Truth be told, with most Israeli companies we don’t bother.

Willy-nilly most Israeli companies had a BCP in place long before 9/11. Syneron is no exception. Syneron subcontracts all manufacturing. This is one of its strengths on an ongoing basis and provides the basic structure of its BCP.

The way Syneron has structured its BCP is typical Israeli style i.e. a three prong approach.

1) Primary protocol: Manufacturing is outsourced to three Israeli companies.

2) Secondary protocol: The three sites are located in three different geographical locations within Israel. Any two out of the three have the ability to manufacture the complete product line. Syneron will confirm this.

3) Backup protocol: Syneron maintains all production files at a location other than the three Primary sites. At the drop of a hat production can be transferred to several other predetermined locations/subcontracto... (in or) out of Israel. Syneron will confirm the existence of the production files but will not disclose details of its backup protocol.

In the case of a general call up of all reserves (unlikely) Syneron could activate its Secondary protocol and combine manufacturing to two sites. There are other options as well.

In the case of: nuclear (Iran?)/chemical (Syria)/biological (?) attack (not on the table now) Syneron could turnkey its Backup protocol.

Sorry for the doomsday prognosis but you did want to know if there was any added risk due to the Middle East situation. The answer is none.

Very few Fortune 500 companies have this type of a global production capability. The Primary/Secondary/Back... structure is the best known/cost effective BCP method available. The backup protocol is confidential. Hence, we do not know where the production lines would popup should the occasion arise.

It is beyond the scope of this comment to go into the numerous BCP categories and how different sectors/companies test and update their protocols.

I should have said ‘can be done globally’ and not ‘done globally’. Thank you for noticing.

Syneron Medical: Update and Corrections To This Promising Story (ELOS)

Retail Investor-

The tense situation in Israel has no effect on ELOS. Manufacturing is done globally. Supply lines are secure.

In the odd chance of an all out ground offensive into Lebanon, the IDF would call up only a small portion of the reserves. A few younger scientists in R&D might miss a month or two at work but that would be the extent of a worst case scenario. General Management is accustomed to doubling up whenever an employee goes off to do their annual reserve duty. A war situation is no different.

Currently action is limited to sending a clear message that Israel will not tolerate the abduction of civilians or soldiers from its sovereignty. Neither would anyone else tolerate such madness.

It is a shame that the language that is most understood in the Middle East is not English, Hebrew or Arabic. Firepower is.

Syneron Medical: Update and Corrections To This Promising Story (ELOS)

Just read your posts on Retail Investor & SeekingAlpha. You may be blessed with too much foresight, that is to say your right but way ahead of time.

What puzzles me is that you mentioned in one of your blogs that Syneron needs to come out with smack on earnings or better in order to regain the Street’s confidence. I agree – so why didn’t you wait until it was obvious that they would hit Q2 expectations? The report is due out in the beginning of August and the Street usually gets around to noticing these things two weeks beforehand. Timing is important. I bought today simply because next week might be a bit into the upswing.

If you would be kind enough to compile a list of the Medical Blogs mentioned in your comment and post them either in a nested comment here or on your site, it would be much appreciated. Kindly, Saul