Owen

Total Rating:
+5 / -11

130 Comments

    • Tue Nov 18th 09:12 AM | Rating: 0 0
      Commented on:
      Yang Steps Down as Yahoo's Valuation Ebb and Flow Continues
      This is good news. Now if only Jerry can pay shareholders the $23 Billion that he cost them over the past year, it would be perfect.

      Managers who care more about protecting their pet company than about serving the interests of their shareholders are a net liability. It's hard not to develop an emotional connection with the company you run, especially if you founded it, but once it is clear that this emotion clouds your vision and makes you act irrationally, it is time for the board of directors to act, and act fast.
      View article »
    • Mon Nov 17th 17:19 PM | Rating: +2 0
      Commented on:
      John Hussman: The Market Is Not in Uncharted Territory
      I read John Hussman's commentary on his funds' web site on a regular basis. He is one of the few money managers (and analysts) who can rightly claim, "Told you so!"

      His strategy of holding high quality stocks, combined with hedging against market revaluation using SPX Put options has paid off handsomely this year, making his fund one of the most successful in the industry. This is even more impressive considering it has lower risk than the market.
      View article »
    • Thu Nov 13th 14:53 PM | Rating: 0 0
      Commented on:
      The Treasury's $10B 30-year bond sale draws a yield of just 4.31% - the lowest ever - as buyers show little interest. Indirect bidders, including foreign central banks, bought 18% of the offer, down from 43% at the last sale.
      Low yield means high demand. If buyers really had little interest, the bond prices would be lower, driving the yields higher. Time to review your bond basics.
      View news story »
    • Tue Nov 11th 17:30 PM | Rating: 0 0
      Commented on:
      Comparing Valuations in China and the U.S.
      Where do you get the P/E figure of 20.21 for the S&P? I'm looking at this week's issue of Standard & Poor's newsletter. Based on their figures, the current (today's close) level for the S&P500 is trading at a P/E of 12.3 using 2008's earnings, and a P/E of 9.6 using 2009 consensus estimates. Your figure of 20.21 implies earnings of $44.40, almost half of what the most pessimistic analysts see. Where does this number come from?
      View article »
    • Tue Nov 11th 14:43 PM | Rating: +1 0
      Commented on:
      What's Happening to the Fed Funds?
      The Fed tries to control short term rates by having the NY Fed act as a market-maker in the overnight repo market. As any market maker can tell you, this works well when volumes are small compared to the MM's pool of liquidity, but falls apart once volumes exceed their short-term internal capital resources.

      Daily balancing and weekly Bill auctions keep the NY Fed well supplied, but during a single day, a sudden inflow of tens of billions of securities tendered can easily shift the actual rate by several basis points away from the target rate. Remember, the Fed is a very large market participant, but it is just one among many other large players.
      View article »
    • Tue Nov 11th 11:00 AM | Rating: 0 -5
      Commented on:
      Tuesday Outlook: Commodities, Emerging Markets
      YR Dog,

      Yes, I must be The Insider Shill who drove up the entire market 5% on large volume after the close on Friday. I am also Jack the Ripper and the Easter Bunny.

      Stupidity always hits a nerve with me. I can assure you that if I had access to insider information which I could lawfully use, I would use it without hesitation.
      View article »
    • Tue Nov 11th 10:02 AM | Rating: 0 0
      Commented on:
      Stocks vs. Bonds: An Update for the Current Market
      JasonC,

      Stone Fox Capital was talking about the _earnings_ yield of the S&P, not the dividend yield. Based on which estimates you pick for this year's earnings, the S&P is earning between 8 and 11%, corresponding to a P/E between 9 and 12.

      The equity risk premium measures the difference between the earnings yield of equities and the yield on bonds. In most cases, risk-free treasuries are used for the calculation, but triple-B can be used as well, and even with the current high yields for corporate bonds, equity is still offers a substantial yield advantage.
      View article »
    • Tue Nov 11th 07:43 AM | Rating: +2 0
      Commented on:
      Overstock.com's New Disclosures Show Company Financial Reports Were a 'Joke'
      Over two years ago, the activist fund manager Manuel Asensio told the world that Overstock.com was cooking the books. Did the SEC listen to him? Yes; they fined him for spreading rumours to manipulate stocks for the purpose of short selling.

      People don't want the truth. We close our eyes, shut our ears, and hope for the party to go on as long as possible. That's why we are now spending more resources on hunting down naked short sellers than catching crooked executives.
      View article »
    • Tue Nov 11th 07:28 AM | Rating: 0 -6
      Commented on:
      Tuesday Outlook: Commodities, Emerging Markets
      We have laws against trading US securities based on non-public information about these companies to which the insider trader has access. There is, however, no law against trading such securities based on advance knowledge of the actions of a foreign government. It is perfectly legitimate under US law for people close to the Chinese or any other foreign government to use such government information for their advantage in trading US securities.

      It may be "crap", as you call it, but it's part of the game. Insiders are not there for you to "trust" (or mistrust); they are there to make money off you. They play under exactly the same set of rules as you do, but armed with more information than you have. Live with it or find a new profession.
      View article »
    • Mon Nov 10th 09:22 AM | Rating: 0 0
      Commented on:
      Stocks vs. Bonds: An Update for the Current Market
      Good article!

      Most of us, however, cannot issue CDSs or write Puts on corporate paper, and liquidity on options for the ETFs you mention is dismal. Are there other ways to take advantage of the high premiums for insuring bonds?
      View article »
    • Fri Nov 7th 11:57 AM | Rating: 0 0
      Commented on:
      VIX's Double Jump
      The VIX index itself already measures relative volatility in percentage points, so absolute changes to it are more meaningful than percentage changes.

      How many other instances were there when the VIX index jumped 16 points in two days? In addition to yesterday, this happened recently between 20 and 22 of October, and in the two days leading up to Aug. 6, 1990, when it jumped from 20 to 36.
      View article »
    • Mon Nov 3rd 12:43 PM | Rating: 0 0
      Commented on:
      The Markets: Comedy or Tragedy?
      If the overnight inter-Shylock interest rate drops below a pound of flesh, we'll be in for a pleasant midsummer night's dream, and all will be well that ends well.
      View article »
    • Wed Oct 29th 17:19 PM | Rating: 0 0
      Commented on:
      Valero Energy's Insane Valuation
      Among the 18 analysts following VLO, the average earnings estimate for 2009 is $4.29 per share, giving it a P/E of 4. But even if the company makes only one third of what they earned in 2007--that's right, 67% lower, below the most pessimistic estimate--they're still at a P/E of under 7.

      But even more surprising is the fact that VLO trades at 40% below its tangible net assets. They have $22 billion ($42 a share) in refining equipment, not even counting inventories. If the company were to liquidate tomorrow, shareholders would get over $35 a share. Companies like XOM or BP would be delighted to buy those refineries at carrying cost.


      Disclosure: Long VLO.
      View article »
    • Sun Oct 26th 20:47 PM | Rating: 0 0
      Commented on:
      Think the Dow's Decline Has Been Bad? Check Out the Nikkei
      investor88, are you for real, or just pulling our leg?

      Two weeks ago curbs-in was telling us how the Chinese government is actively trying to poison all Americans, last week he was convinced that all bids on eBay are by shills, and that we'll all be dead before this crisis is over.

      You've been here long enough to know this character, and if not--soon you'll see his response here, with my name mentioned every other sentence--that should make this even more evident. Seriously, you're better off taking advice from a Magic 8-Ball.

      If Curbs-in really believed the Nikkei or the DJIA are dropping to 4000, he would have taken a short position in both and now be merrily counting his fortunes. No; he's the guy at the street corner with the beard and the cardboard sign telling us that Armageddon and the End times are upon us, and lest we repent we are all doomed. He's not interested in making money, but in being heard. The more attention you give him, the more of these doomsday prophecies we'll be hearing.
      View article »
    • Thu Oct 23rd 13:41 PM | Rating: 0 0
      Commented on:
      Is It Time to Bottom Fish?
      Since November, the US market has lost about $5 Trillion of shareholder value. So based on that anonymous journalist, Wall Street employees received about $15 Trillion in bonuses, or an average of $50 million each--including every junior analyst, assistant broker or floor sweeper. This number is bigger than the US GDP; where did this windfall come from? I guess it's good news, as it means the GDP has doubled.

      Does that journalist have basic math skills? For that matter, do you? Last month you advised us to "not be clever". You are clearly following your own advice.
      View article »
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