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Finance 0
“Folly For The Ages”: After Buying Back 63 Million Shares At $83, Hess Just Sold 25 Million Shares At $39
Having long mocked the sheer idiocy of using organic cash or worse, debt proceeds, to fund buybacks just so management can eke out a few more million in equity-linked compensation while activists enjoy a few extra points in P&L on the back of naive bondholders managing ‘other people’s money’, we were delighted to see the buyback bubble begin to burst in the middle of 2015 starting with Michael Kors (as detailed in “When Stock Buybacks Go Horribly Wrong”) and Monsanto (“When Buybacks Fail…”), when each respective stock plunged far below the average buyback price. But nothing compares to what... -
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4 Hot Semiconductors For Your Portfolio
Investors looking to add exposure in the semiconductor industry have a lot of choices.Recent market weakness is creating value in companies that will outperform in the long run. The iShares PHLX Semiconductor ETF (SOXX – ETF report) is down over 10% this year, with some of the major holdings such as Intel (INTC – Analyst Report) and Qualcom (QCOM – Analyst Report) dragging it down. However, within the sector, there are a variety of performing stocks that are being sold in sympathy with the large struggling companies.Focusing specifically on the Semiconductor Analog and Mixed Industry could be beneficial after imp... -
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Does The Model X Ramp Spell Long Term Trouble For Tesla?
Model X Sales Ramp If you read the news and analysis about Tesla Motors (TSLA), there is widespread doom and gloom, especially about the Model X sales ramp. The Model X is no doubt a complicated vehicle and Tesla has had a lot of trouble producing the vehicle. It brought seat production in-house because suppliers couldn’t make a seat to Tesla specifications. The manufacturer for the mechanism for the Falcon Wing door couldn’t deliver and is currently being sued. In spite of all this Tesla managed over 200 deliveries (actual sales, they produced more) of the car last year and is currently expecting the order backlog to clear... -
Finance 0
Bridgewater Responds, Calls WSJ Article “Sensationalist Mis-characterization”
Employees at the world’s largest hedge fund, Bridgewater Associates, are apparently on a path to vote between Ray Dalio, 66, the firm’s founder and spiritual leader, and Greg Jensen, 42, co-CEO who oversees Bridgewater’s research and trading and is the heir apparent to the noncorrelated investing throne. At issue appears to be a violation of a founding principle laid down by Dalio. In a statement sent to ValueWalk late Friday afternoon, both Dalio and Jensen disputed the characterizations made in the original Wall Street Journal report and said this radical process is what drives success. Core Bridgewater principle violated as heir ... -
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Eric Coffin’s 2016 Predictions, Inferences And Wild Assed Guesses
It’s been a wild month, and a busy one. It’s convention season in Vancouver and elsewhere. I’m finishing this issue at conference number four for me in the past 10 days. That will be it for a month though so things should get back on track. This is a long double issue. I’d recommend a pot of coffee. I’ve laid out my thoughts on what I think several markets and commodities will do this year. That gives me a chance to be wrong on multiple levels. It’s very much a mixed message. I’m probably most comfortable about gold in the near term since I’m not comfortable about the upside of just about anything else until we see how a major... -
Finance 0
Bearish Rally Falls Short Of Expectations 01-30-16
Last week, I discussed the boost the market received as the BOJ made an unexpected move into negative interest rate territory combined with end of the month buying by portfolio managers. To wit: “However, the announcement by the Bank of Japan (BOJ) to implement negative interest rates in a desperate last attempt to boost economic growth in Japan was only the catalyst that ignited the bulls. The “fuel” for the buying came from the end of the month portfolio buying by fund managers.” But more importantly, was the push higher by stocks that I have been discussing with you over the last couple of weeks. To wit: “Over the last few w... -
Finance 0
EC Why The Bulls Will Get Slaughtered
Well, they got that right. Detecting that “parts of the U.S. jobs report for January seem fishy”, MarketWatch offered this pictorial summary: Needless to say, none of that stink was detected by Steve Liesman and his band of Jobs Friday half-wits who bloviate on bubblevision after each release. This time the BLS report actually showed the US economy lost 2.989 million jobs between December and January. Yet Moody’s Keynesian pitchman, Mark Zandi described it as “perfect” Yes, the BLS always uses a big seasonal adjustment (SA) in January——so that’s how they got the positive headline number. But the point is th... -
Finance 0
Here’s Why The Utilities Are A Buy Right Now
The Utility sector is at a crossroads after the release of the new emission standards by the U.S. Environmental Protection Agency (EPA) last August. The finalized version of the Clean Power Plan calls for CO2 reduction of 28% by 2025 and 32% by 2030, from 2005 levels. The beginning of the New Year turned out to be a nightmare for investors. China-led weaknesses in the international markets and continuously falling oil prices have resulted in a 5.5% decline in the value of Dow and a 6.9% fall for the S&P 500 in January. The sell-off in the markets has made a further rate hike in March almost impossible. The gyrations in the market enhance ... -
Finance 0
Smelling The Recession
There is little evidence that the USA is in recession – except in the goods producing sectors and business sales which are marginally in a decline. Even in the contracting goods producing sectors, the recession evidence is far from overwhelming. What triggered this post is continued unwavering assertions by some that the USA is NOT in a recession. Understanding the data, historical movements and data gathering/methodologies – the wise pundit would not assert anything with conviction at this time. Looking at manufacturing’s historical movements, manufacturing can be growing, flat or declining going into a recession.One cann...
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