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  • 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
  • Ride The Coming Tsunami In Mobile Advertising With Velti [View article]
    Off - please provide evidence (sources) for your references to:

    (1) Velti and SMS pornography, and the link between the latter and the documented receivables-collections issues
    (2) Team Detroit switching from Velti to Augme (no observable effect on AUGT PPS, nor any press announcement)
    (3) the alleged customer service failures.

    Or are you yourself starting these rumors? In the light of your previous comments in other threads, it's hard not to see you as an AUGT troll.

    Nothing wrong with pumping AUGT, it's just that you provide no evidence that might bear on the "strange" PPS behavior of VELT, which is the subject of this page. The glassdoor reviews are certainly chilling, but almost all seem to have 2010 and 2011 dates, when Velti may well have been over-staffed (hard to imagine a Greek company overstaffing, eh?)
    Jul 15 02:15 PM | Likes Like |Link to Comment
  • 4 Reasons To Like China [View article]
    Alex, you know I secretly agree with your "better places" (less risky). I think I made a mistake even messing with these ETFs, and only wish I had topped up my AAPL and AIS (now ATRS) instead, a year ago. Diversification can get you into trouble.

    However, I would not sell now, with such a large upside in prospect, relative to the downside amounts and probabilities. Actually, I feel much the same way about VNM again, but <i>that</i> country even leaves China in the dust for corrupt (still higher profits-tax rate)!

    All I'm saying is that corruption (dishonest accounting) is no reason to wash your hands of an investment, strange as it may sound. This is a sophisticated point, and even someone like Cramer (at least on the show) just waves his hands "nonono".

    Accounting standards are largely a PUBLIC good. In the end, the private costs (lower stock prices) of crooked accounting, to companies, are too high, and they will pay up for accredited auditing services, as many Chinese companies already do.
    Jul 12 01:44 PM | Likes Like |Link to Comment
  • 4 Reasons To Like China [View article]
    Alex_G: I'm always very sceptical of this blanket argument against the equities of corrupt companies. Why so?

    Well, it certainly is NOT because I don't believe insiders are skimming profits. Of course, they are. Corruption in the Chinese economy is like maggots in the body of a dead cat on the road, making the carcase heave and dance as if still alive.

    But this skim is essentially like a proportional profits tax. It's there the day you buy, and it's still there the day you sell, and the price discounts it at ALL times.

    Only if you believe that the proportional skim rate is INCREASING secularly (ie. through time) could your approach have any interest to an investor. But, then, in the end, no Chinese-listed company would ever announce any earnings, they would all be skimmed. No one would buy and there would be no more pigeons to be plucked.

    If the carnival is only in town for a day before moving on, the carnies can pluck the marks to death, but if the carnival is always in town, the plucking rate has to settle down to an equlibrium, because the carnies are businessmen, not chumps.

    So I agree with the author. There's not much downside to Chinese equities right now, and a fair amount of upside. But I've only the stomach for ETFs such as ECNS or CHIQ, because you never know whether the accountants in any one company are like the itinerant carnies.
    Jul 12 01:12 AM | 1 Like Like |Link to Comment
  • Bank of America (BAC) could lose a $480M revenue stream (3% of 2011 earnings), says Matthew O'Connor, thanks to expected new rules requiring banks process debit card transactions in the order they occur rather than from largest to smallest. Several big banks have already changed, but BofA - among others - hasn't, and continues to enjoy the easy money.  [View news story]
    Netrilix - thanks for the explanation! You would think a bank would charge customers according to the costs they impose on the bank, which would simply be the number of days overdrawn multiplied by an overdraft interest rate (with suitable compounding). That's the way it works with a brokerage account that rolls over into margin. Why not the same for a checking account?

    These penalty charges for going .01 over the balance seem more like a parent scolding a child, and it's astonishing (and upsetting) that competition doesn't impose a better discipline on the Banks, even in the heavily regulated environment under which we suffer.
    Jul 11 01:09 PM | 2 Likes Like |Link to Comment
  • Bank of America (BAC) could lose a $480M revenue stream (3% of 2011 earnings), says Matthew O'Connor, thanks to expected new rules requiring banks process debit card transactions in the order they occur rather than from largest to smallest. Several big banks have already changed, but BofA - among others - hasn't, and continues to enjoy the easy money.  [View news story]
    I followed all the links SA offered and am still no clearer how the order of processing affects the Banks' incomes, in particular how customers are hurt.

    Since davidingeorgia and robgra are clearly butt-hurt about it, perhaps they (or someone else) can explain? Thanks...
    Jul 11 08:20 AM | 2 Likes Like |Link to Comment
  • Stocks That Avoid Unrecoverable Foreign Dividend Withholding In Tax Deferred Accounts [View article]
    Contrary to the info in the article, about 15% was deducted from my April VALE div, received in a non-retirement Fidelity account. A Vale rep assured me it would have been just the same in a retirement account.
    Jul 9 01:42 AM | Likes Like |Link to Comment
  • Annaly Capital Management: Buy Or Sell? [View article]
    Er, yes, actually. There might be media where such shenanigans play out, but to be doing this on SA, where the impact is utterly minimal, the 2 shorts must have wood-shavings for brains, hence would be great contra-indicators.

    Well, at least that was the thought that occurred. For whatever it's worth, I just sold out of my NLY at 16.75. Just feel that all these mREITs have had a damn fine run-up, and will shortly be available cheaper (quite aside from the ex-div game).
    Jun 29 12:14 AM | 1 Like Like |Link to Comment
  • Some Fallacies About Mortgage REITs - And Why They're Ideal For Income Investors [View article]
    Jack - great pleasure to read such a well-written, fresh, insightful article on this topic on SA. Since you're obviously a great deal more knowledgeable than most of the contributors in this space, I venture to ask:

    Do you have any insight into why the PPSs of most mREITs have increased so dramatically in the last few months, and why even the extension of Op Twist (which you would think would depress the all-important spread between short and long(er) rates) seems not to have knocked them down?
    Jun 26 09:08 AM | Likes Like |Link to Comment
  • Vale S.A.: This Global Mining Giant Is Overdue For A Nice Bounce [View article]
    Any news on the tax case brought by the Brazilian government against domestic companies with foreign income? Yes, Vale won the last round on the need for a large deposit until the judicial process concluded, and the company has stated it is confident of ultimate victory, but I have seen no cogent analysis, from neutral parties, of the likely outcome.

    The above worry is the big reason I don't buy more Vale stock, because a judgement against them (ie. paying back- and future taxes, even on profits already taxed abroad) would surely put a BIG dent in the PPS.
    Jun 19 06:44 AM | 1 Like Like |Link to Comment
  • More on Teva (TEVA) 2012 guidance: The EPS of forecast of $5.30-$5.40 is below prior guidance of $5.48-$5.68; revenue prediction of $20B-$21B is below $22B prior. Teva's Europe outlook has been affected by over $1B. If there are businesses that don't fit, "we'll be looking to divest," says CEO Jeremy Levin.  [View news story]
    This is a news item. Why don't you follow the links provided if you want more detail? You could also read the many articles on TEVA.

    The more comments like this I read here, the more I understand the (low) standard of many of the articles.

    The one excellent feature SA has is these short pithy news items, with references. In addition, the writer always writes well, and does not fall prey to the grade-school grammar, spelling and punctuation errors that plague most of the other material.
    May 25 01:49 AM | Likes Like |Link to Comment