Jake Berzon
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Latest Comments37 Comments
A Few Reasons to Buy Yen
General Electric: Genuine Risk of Collapse?
Time to Start Nibbling on Corning
> I am a big fan of Corning as well and have been holding their stocks
> for a while.
>
> But as we all know, in last downturn, Corning stock hits a $1. Why
> this time you think it can't go lower than $10?
>
I agree that this may not be the lowest bottom of this market and that stocks could head lower from here. I also agree that GLW may go lower with the market. However, you must also consider that in 2002, when it traded at a low of $1.1, GLW was a much different business than it is today, both in volume and in product diversity. For example, 6 years ago, LCD TVs, were barely a factor for glass substrate demand. Today, they account for half of it and this isn't going to go away! Going into the last bear market, Corning was a growth story and trading at exorbitant valuations. This time around, it is a classic value play. It's in a much better position from the point of view of debt and profitability, as well and look at it's tangible book value. Can its stock drop further? Sure. Will it go to $1? There are certainly people out there looking at the charts and thinking about it. From the fundamentals view point, it is highly unlikely, though.
On Nov 03 11:56 AM JackaLoupe wrote:
> How out-of-it do you have to be to characterize Corning--the inventor
> of FiberOptics that rode that wave of cross-country (and ocean) laying
> of cable a decade ago--as so-called "low tech" company about to go
> out of business? He must be confusing the company with the stock--while,
> moreover, remaining clueless over the rest of Corning's business.
Try reading my blog more carefully. I characterized Corning as "Corning is an amazingly agile 157 year old company that most of us still remember as brand name housewares low tech company that during the last recession seemed destined to go out of business. Today's Corning is that no more, but a completely transformed high tech powerhouse, a leading maker of glass substrates used by the electronics industry and fiber optic equipment used by the telecommunications industry, with an important environmental technologies business, a profitable life sciences business, as well as additional small, but promising businesses."
It is a former low tech cookware company. It brilliantly transformed itself into a high tech company. Following that transformation it lost money for almost 4 straight years and certainly in 2002 was looking destined to go out of business, trading as low as $1.1/share. So, what's your beef?
Time to Start Nibbling on Corning
On Nov 03 07:07 AM skwestorange wrote:
> This article could be strengthened with a discussion of expectations
> for revenue, earnings and and margins in the three businesses cited.
> The qualitative discussion does not provide any objective support
> for the contention that GLW is undervalued and could be bought here.
> Further the article itself lays out the case for margin compression.
ADM: The Way to Play the Agriculture Commodities Game
I wouldn't fret over fuel prices dropping recently. Ethanol is a gas additive mandated by law to reduce pollution in many states. Renewable fuels are also mandated by the U.S. Energy Independence and Security Act of 2007. Retail prices of biofuels are only very loosely tied to the price of oil based fuels. They are much more a function of government imposed demand and input costs.
Today, corn is the input of choice for ethanol production and ADM has access to plenty of corn at the same prices as last year (they hedge). If corn goes out of favor, it would be relatively easy for them to convert production to other renewable inputs, like switch grass.
The bottom line is, when you can pick up such a quality stock at its tangible asset value, you do it!
Capitalize on Water Shortages With Grain ETFs
Valero Energy: The Price of Oil
Why nor take a more analytical approach by first looking at oil appreciation in terms of a basket of currencies, then build real worldwide oil supply and demand curves and use those to estimate price change contribution due to this. The result translated back into $ would give you a much better estimate of the equilibrium price of oil without with speculation factor removed. Yes, it is much more work, but the result will at least be believable...
GE: Nuclear Growth Galore
Thank you for your price update on the cost of Nuclear Power Plants. Unfortunately, the article does not mention how these costs break down and it is not clear whether these costs include real estate, regulatory process, time value of money and etc. It is also unclear what portion of the FPL Group's $12 billion estimate for a GE power plant would go to GE. My article assumed that GE can benefit to the tune of $5 billion a quarter in revenue over the long term from new nuclear power plant design ins. This still appears to be a valid assumption, based on this article. Here is a link: online.wsj.com/article...
JPMorgan, Bear Stearns: More Smoke from Wall Street
Two Great American Companies
O Canada, O EnCana (duh!)
I realize that the "miserable" Q1 performance is expected to be short term. Whatever the excuse, whether paper loss or operational, the company still didn't post the numbers as expected. There is a large downside risk, if they miss again for whatever reason. And as gas and oil prices continue to skyrocket, consumers in North America are cutting back. I am convinced that EnCana businesses will not be able to grow as fast as expected.
Thus, this was the right time for me to lock in the gains.
Regarding taxes, the break is for incomes under $65,100, for joint filers. Because of our particular situation, I anticipate that almost all of our income this year will come from capital gains and my intention is to take gains only up to this limit.
Hope this clarifies things.
P.S. I enjoy writing about my personal stock selections. My goal is to produce readable and interesting pieces. However, I do not do complete brain dumps or full stock analysis and have no interest in inducing anyone to buy or sell stocks.
Buying CurrencyShares Canadian Dollar ETF as Loonie Falls Below Dollar
In either case, price inflation will migrate from the wholesale level to the retail level on a much bigger scale. This will not translate into wage inflation, and the consumer will get squeezed 'till it really hurts.
This will cause a bigger than ever anticipated default rate by consumers on credit cards, which will cause a major market decline across the board (30%+ is quite possible). I think various actions by the Congress and the Fed could delay this past year end, but I do not think that anything that they do (perhaps, short of switching from a market economy to a planned economy) can avoid it in 2009.
But that's just my crystal ball...
A Few Reasons to Buy Yen
Not that this has any relevance to Japan and Yen, but to set the record straight, I have never poisoned any rabbits. I wrote a couple of Bugs Bunny type of short stories, were I cast myself in the role of Elmer Fudd.
Thanks,
Jake
P.S. Send my best regards to Ken. He would never ask you to post this, if it was a matter of "3 people"...
A Few Reasons to Buy Yen
First of all, I would like to thank you for thoroughly studying my blog on odessapage.com/new (even if your goal was to twist my words around). Once again, I would like to remind you that I do not recommended anything to anyone. YTD, I have, in fact, saw some opportunities and purchased Brady (up 10% as of this writing), Pentair (up 19%), GE (down 3%) and added to my Cigna position (down 11% on the added portion and up overall), among others. I have also opined that JP Morgan stock price will benefit at the expense of Bear Stearns. It did significantly the day after I wrote that article, but I did not purchase it, because my Fisher Investments portfolio had too many financials in it as it was, even though JPM was not one of them. Both of my recent currency trades are also up since purchase. This year I have also sold PDS at a more than 35% profit, which I held for 5 months, KG, which went up almost 16% in 6 days that I held it. In this portfolio, so far this year, I am comfortably beating the S&P 500, as I also did last year. I have also gotten rid of 17 of the 69 stocks that Fisher Investment purchased for the account they were managing.
As far as the run up in stocks over the past two months, even with that S&P 500 is still down 12% since its peak in September. Now, please keep in mind, that my basic strategy is to buy on dips of individual high quality stocks in the "right" industries and sell those stocks when they run up. Thus being a net seller is mostly a function of the stocks I have bought having reached my targets for them and not seeing as many opportunities for new buys.
Now, as far as my two tongue and cheek writings about the rabbits - I don't expect everyone to understand or enjoy my humor and to read everything that I write. There are sufficient number of others who "get it" and enjoy it!
Thanks,
Jake
P.S. Please allow me to simply ignore your silly comments on the article that you did not read, because it was "too long."
A Few Reasons to Buy Yen
Firstly, judging by your statements, you appear to be acting as an agent for Fisher Investments. As such, you must be aware of the fact that Fisher Investments is taking legal action against me over a review article I wrote about them: www.odessapage.com/new... . To others, I would suggest that this fact by itself is sufficient to discredit Ken Fisher and disregard Fisher Investments.
Secondly, I am not "recommending stocks" or anything else for that matter. I am not (and do not pretend to be) either a financial adviser or a stock analyst. I am a writer and comment on my personal market moves. Unfortunately, this year, I have been additionally burdened with having to get out of the 69 positions that Fisher Investments put me in. I have gradually done just that over the past three months and expect this process to take another 12 - 18 months to complete. (For various reasons I do not comment on these trades.)
My view is that markets will come down from their current levels this year, which is why I have been a net seller of stocks since August of 2007. The last three trades I wrote about have been a sale of PDS and iShare purchases of Canadian and Japanese currencies. To say that I "keep recommending stocks" after reading my blog, would, at best, be a drastic misrepresentation. On the other hand, even the worst markets for stocks, sometimes present great buying opportunities. When I see what I think to be one of these, I try to take advantage. More times than not I have turned out to be right.
Now, as far as Yen and Japan are concerned. I have been following them continually since my days at Hitachi - something like 14 years now, but only decided that it was time to invest in Japan recently. (Seeking Alpha posted my original article on Japan on 11/8/07 here: seekingalpha.com/artic... ). In it I wrote: "In the past quarter, Japanese currency began decoupling from the US$, appreciating 8% since June." It went up more than another 15% until the middle of March and I only made my recent Yen purchase after it corrected close to 8% from that high and hit a support level. Thus, contrary to your claims, nothing in my actions "assumes that the dollar will keep weakening because it has been weakening."
In both my Canadian currency (FXC) and Japanese currency (FXY) articles I plainly state that I am making these purchases to diversify some of my cash holdings away from $US and not as an "investment"... Is it a coin flip? Perhaps, but I like to think of it as insurance (or hedge) instead. In any case, at least I will stand some chance of having coins to flip, in case the next US president will do what Mr. Bush should have done at the start of his presidency.
One last note, Bob. I enjoy healthy arguments and welcome folks pointing out inaccuracies, oversimplifications, poor assumptions and etc. in my articles, however if you intend to misrepresent what I say and twist my words around, please do us both a favor and stay away.
Sincerely,
Jake