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  • Frontline - Another Earnings Surprise On 8-29? [View article]
    Jonathan - From the chart you present, I see that FRO's so-called book value is roughly such as to yield P/B = 1, after today's close ($3.27).

    Please forgive such a basic question, but (to begin with): is the $256m of cash and ST investments IN ADDITION to the BV of $221m? I would have thought cash, etc., would be on the balance sheet as a (smallish) part of BV. And, where does Frontline's debt figure into all this?

    Again, I realize that the accounting concepts behind BV are hard to apply, eg. how to value the ships: based on expected net income stream OR sale value in a depressed market in bankruptcy, etc.?

    (There was a recent series of rather chumpish articles on FRO, on SA, which assumed the latter, and concluded FRO was an utter bust.)

    HOWEVER, and finally ready for my question: can I (as a long-suffering long) take any comfort in the thought that, today, even on a break-up basis, FRO's cash + STI + NET assets (BV) come out to quite a bit more than the closing share price?

    Thanks for the article, and for coming back so honestly after a shockingly awful earnings announcement.
    Aug 29 09:05 PM | 1 Like Like |Link to Comment
  • Unveiling The Value Of Vale [View article]
    There is also the little matter of the ("double-taxation") tax case, brought by the Brazilian government. As you know, Vale lost at the 2 lower levels, and there seems to have been nothing yet from the Supreme court, or even when they might opine. The only hopeful word, last May, was that Vale did not have to put down a garnishable deposit.

    Back of envelope math suggests a further (maximum) $4.70 hit to the PPS if the case goes against VALE. Of course, some of this is already discounted in the PPS, but we have no real idea what probablity weights the markets have attached to the possible outcomes at this point.

    As against this, if the Supremes should rule against the government, there should be a nice little pop.

    In the current environment, it's hard to imagine any government, even one so rabidly anti-business as the Brazilian, loading yet another crippling blow on the likes of Vale (and the ruling affects many other Brazilian mutli-nationals too), but you never know. Maybe the verdict has been delayed for political reasons of just this sort?
    Aug 28 07:10 PM | 2 Likes Like |Link to Comment
  • Manchester United: It Takes A Brit To Explain Why America Has Been Fooled [View article]
    Tom - thanks for your most interesting perspectives (this from someone who, when you were born, had already been a Spurs supporter for 10 years). The year after you were born, my all-time hero, Jimmy Greaves, was drunkenly weaving his way from White Hart Lane down to Upton Park, to score in his debut, as he invariably did. Peters was with Spurs by then, I'm sure you know.

    Back on point, I agree that MANU seems a better short than even FB or AMZN - but how do we know whether, should ManU fall on hard(er) times, some new Mansour/Abramovich-like group won't emerge to buy the hapless Glazers out for cheap? Are you quite sure that Jose won't fancy it when the old bugger finally retires to his horse farm? These by-no-means-unlikely scenarios would blow us shorts out into the Pennines.
    Aug 27 02:55 PM | 1 Like Like |Link to Comment
  • inContact: Has Fidelity Uncovered Another Sassy Stock? [View article] .
    Another Fidelity fund, FIDELITY MAGELLAN FUND, also has a holding but only 10% or so the size of FIDELITY SELECT PORTFOLIOS - SOFTWARE & COMPUTER SERVICE's which was 6.81% as of 5/31/2012. BNY Mellon, Vanguard and other well-known funds and institutions are substantial investors.

    From latest results announcement: "GAAP net loss for quarter ended June 30, 2012 was $1.7 million, or ($0.04) per share, as compared to a net loss of $2.1 million, or ($0.06) per share for the same period in 2011. This decrease in net results is primarily due to increased revenues. "

    High gross margins, and revenue growth versus 2011, but no indication of when likely profitable. Shares up 5% today - due to this very article??
    Aug 23 03:11 PM | Likes Like |Link to Comment
  • More on Velti's Q2: The company expects Q3 revenue of $60M-$64M and 2012 revenue of $285M-$296M, in-line with Street estimates of $61.1M and $290.9M. Adjusted EBITDA is expected to grow to $8.5M-$10.5M in Q4 from Q2's $6.2M. Net cash, a concern following Velti's Q1 report, grew by $5.1M. However, DSOs came in at a steep 266 days, down only slightly Q/Q. VELT +18.5%. Together with Millennial Media's strong Q2 report, the results could bode well for Google's mobile ad business. (PR[View news story]
    Their "business model" is performance-based payments. The software is supplied, and payment mostly depends on the measured "output" of the campaign, which can take 5-9 months (according to their IR).

    What we longs have to hope is that they're not exaggerating these potential receivables, but time will sure enough tell.
    Aug 14 11:51 AM | Likes Like |Link to Comment
  • MBIA (MBI +16.2%) continues to add to gains following this morning's earnings call in which CEO Joe Brown vowed to fight BofA (BAC) "all the way." Damages to MBIA from unpaid mortgage putbacks are nearly $5B, Brown contends. [View news story]
    Hi MexCom - while I am "on your side" (long BAC), I do not like this argument. If I buy a bag of oranges and 2 of them turn out rotten, the store ought not to ask me to return the whole bag, they should just refund for the 2 rotters, because no part of my payment was counterfeit.

    Now, it would be different if the orange stand at Safeway had a disclaimer, something like: "Automated packing processes sometimes cannot discriminate between good and bad items. We have set the price to discount (ie. expect) 10% rotters, so don't come bitching about the odd bad one or two. If you've got 50% rotters, come see us, before consuming any, but even better would be to look at the damn things before buying."

    I've no idea whether CMO or MBS auto-packaging has that kind of contract-clause built in, but I would think it did, and that massive organizations like AIG, MBIA, FNMA, etc., etc., would understand this only too well. Some of the lives of some of the people are going to go bad, and their mortgages with them, even when the entire economy does NOT tank on a scale not seen since the 1930s.

    The argument I would like to see BofA making (and prevailing in) is that the much-inflated rate of rotters in their "bags" was systemically caused, and was not a function of the automated packaging process.

    If the government suddenly forced the supermarkets to buy truckloads of crap oranges (from "disadvantaged" producers), or forced them to store all oranges in damp, mildew-filled government storage units (for "QC" purposes), or completely gaffed the packaging processes, so that rotters could no longer be filtered at all, then it would make little sense for the consumers of fruit (MBIA) to sue the Safeways (BofA).

    And it is exactly this latter kind of world that we lived in during 2004-2008, when Greenspan deliberately stopped interest rates rising as they normally would have in an upswing, and the legislators and governments insisted everyone with a pulse must have a mortgage and a house of their own.

    Why is it all BAC’s fault, all of a sudden? THIS should be the argument, and boldly stated – not yours.
    Aug 9 04:12 PM | 4 Likes Like |Link to Comment
  • Chimera Investment Updates The Extent Of Its Problems, Promises To Keep Paying A Dividend [View article]
    Tim - first, thanks for the article, much appreciated.

    In your final paragraph, you state that EBV was 2.76 as of 6/19/2012 but, in the same sentence, you link to a Chimera document whose headline states BV as 3.03, as of that same date.

    Seems to me that if BV is really 3.03 they ought to be generating more than 0.36 of annual dividend ("only" about 11.88%).

    Although PPS of 2.35 seems incredibly cheap for a BV of 3.03, yet this company just doesn't give one the feeling of confidence one wants to make an investment. The Radio Shack of the mReit sector?
    Aug 7 04:35 PM | Likes Like |Link to Comment
  • Dear Facebook, It Could Really Be This Simple [View article]
    Hi Todd - as you say, FB has done the hard part of getting "everyone" in, so it's hard to imagine another company getting a critical mass of people to leave (which individual would defect to a competitor, to look alone at his own photos?). I mean: look at the trouble even a Google+ has.

    Sure, the imposition of fees, for all but basic services, would require some marketing and managing. Could FB manage to sell increases in service and content for fees? "Hey, folks, we need a little money to run this thing, pay for the servers. Then we won't need to do creepy things on the sly any more, and the whole deal will become much more transparent. Try us, you'll like us."

    Who knows, they seem astoundingly inept for a company running such a popular site.
    Aug 4 09:34 PM | Likes Like |Link to Comment
  • Dear Facebook, It Could Really Be This Simple [View article]
    jcobalt - lucky for me I carefully trudged through all the tiresome comments to make sure no one had already made my point for me - which you have!

    Even if it was only $5 per year for the annual membership, with somewhere between 500,000 and 1Bn users, that would be $1-$2 per outstanding share per year. Then they could give up doing the stuff that creeps everyone out.

    Could someone please explain to this old simpleton why FB doesn't simply charge a membership fee? And sure, it could be graduated from $1 to $20, with levels of service. With all that new revenue they could start providing content that would keep everyone coming back - kinda like Yahoo does, say.
    Aug 4 03:33 PM | 1 Like Like |Link to Comment
  • AIG is looking to repurchase a significant amount of its stock from the government, the WSJ reports, in a move that could reduce the government's 61% stake to below 50% by the autumn but would then bring greater Fed oversight. The Treasury and NY Fed have so far made a profit of $14B on the bailout of AIG, and that could top $18B by the fall.  [View news story]
    Oh, come now. With 300m population, and (generously) 200m taxpayers, that's a $90 check, even just on a per-capita basis. If it were done in proportion to recent income or dividend tax payments, you might get well into 3 figures. Better than the BAC dividend, I can tell you.
    Aug 2 04:02 PM | Likes Like |Link to Comment
  • Continued Chinese Oversupply Of Steel Makes Steelmakers A Risky Investment [View article]
    The missing data point in this article seems to be transport unit costs. Steel is heavy and bulky. If steel can really be produced in and transported from Central China to Kansas or Germany or Delhi or Moscow (substitute your own locations) cheaper than it can be produced in those latter locations, then steel companies in ALL the countries cited in the article are going to be SOL.

    But is that the case? Since so many countries have so many steel-producing operations, isn't it going to be more a matter of efficient regional segmentation, and who is most nimble in surviving in that kind of environment?

    Isn't it more likely that the steel plants in China that are now over-producing relative to local demand will either (a) reduce production to match (sufficiently) local demand, or (b) go out of business for lack of profit?

    In either case, whereas I agree that things don't look that great for MT in the short-term, is there really any more of a medium/long term problem than there ever was? Are steel transport unit costs over vast oceans now coming down? Just thinking aloud you can probably tell!
    Jul 31 08:44 PM | 1 Like Like |Link to Comment
  • More on Vale (VALE): Q2 misses badly as net profit slides nearly 60% Y/Y as lower iron-ore prices offset record output. Operating revenue for the quarter also tumbled 21% to $12.2B. Shares -2% AH.  [View news story]
    HH - judging from your comment about Vale's mining interests OUTSIDE Brazil, I am not sure you have fully grasped the issue in the tax case. The government proposed that companies like Vale should pay hefty domestic profit tax ON TOP OF the taxes they already paid to foreign governments, and that such tax bills would be backdated through 2010. Although Vale has clearly stated that they expect ultimately to prevail, in the courts, against the "double-taxation" threat, this still does not fill me with the confidence to buy MORE, since I have seen a calculation that VALE might fairly be around $13 should the government prevail 100%.

    Regarding FRO, thanks for your comments. Yes, it is my worst performer too, by a great distance (av cost $9 and a year of dead money). And, yes, I know Frontline is Fredriksen's first-born, but he is no sentimentalist, and I understood that the Nov 2011 deal with SFL and Frontline 2012 involved FRO virtually having an upside limit on profits beyond which they would be taken and paid to one or other of those companies (the details seem to have slipped my aged brain). Thanks for the 2.85 tip, I had not found the balls to buy more since the mid-6's.
    Jul 26 01:47 PM | Likes Like |Link to Comment
  • More on Vale (VALE): Q2 misses badly as net profit slides nearly 60% Y/Y as lower iron-ore prices offset record output. Operating revenue for the quarter also tumbled 21% to $12.2B. Shares -2% AH.  [View news story]
    HH - Thanks for your comments above, informative as always.

    Have you heard any kind of news, analysis or comment about the still-pending tax case before the Brazilian Supreme Court? Worry about this (essentially the old double-taxation issue) case going against Vale is holding me back from buying more VALE.

    I would also love to know your opinion of FRO these days, after the Frontline 2012 split, and the limits placed on the possible profitability of old Frontline. You do not seem to comment on FRO anymore, but if you ever have time, I would be most interested to hear...
    Jul 25 07:33 PM | Likes Like |Link to Comment
  • Questions following Apple's (AAPL) FQ3: 1) Is Samsung's Galaxy S III having a big impact on international iPhone sales?  2) How much is the iPhone shortfall the result of iPhone 4 users, who have begun to see their contracts end, viewing the 4S as an incremental upgrade, and (unlike 3GS users) preferring to wait? 3) Do the results further motivate Apple to reach iPhone deals with China Mobile, NTT DoCoMo, and other missing carriers? Nasdaq futures -0.9% overnight. (more) (transcript)  [View news story]
    True, but a year ago the stock was in the 350-400 range. 20% on that is only 420-480. You could argue it was undervalued a year ago, but I think even AAPL longs, like yours truly, suspect it will be hard to get back to 640 until killer features of the iPhone5 or the TV become apparent, not just rumor.
    Jul 25 01:42 AM | Likes Like |Link to Comment
  • They Just Don't Get Exelon, And They Are Confusing You Too [View article]
    Zvi - Morningstar's Proj. Yield is NOT to be trusted. Check out AAPL and FTE right now, just for 2 examples. These are major stocks, there can be no excuse. I tried writing to the site's published contact email address - no response of any kind.

    When I want to know what the current dividend yield is, I go to As you can see with above 2 examples, they are aware that Euros are not the same things as dollars, and that Apple announced a forthcoming dividend. These are only examples, there are other errors.
    Jul 16 09:31 AM | 3 Likes Like |Link to Comment