Sunday, May 29, 2011
05/29/11 Sometimes A Great Notion
That's three in a row- Defiance, The Deer Hunter, and this one- directed by Paul Newman, no less. All released in the seventies.
We Boomers have something our parents did not- a collection of films and movies instantly accessible via the 'net able to reconnect each of us to our past, and to each other.
What lies ahead? Great things. If nothing else, the financial tsunami of '08 swept away the detritus of the Me Generation, allowing us to rebuild a society on the values we surely learned from our parents and teachers. Discarded for a time during the anti-establishment revolution, newly (re)discovered as we accept the mantle of leadership. Once in awhile, rediscovered via celluloid.
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Heads-up, 2nd's been knockin' back the sauce again! ;)
ReplyDeleteJB, yeah I often think that the Chinese "King of the Hill" moment may turn into the Japanese experience.
ReplyDeleteWho knows maybe the Mayans really do have it right with with Dec 21, 2012 date with destiny. There certainly are a lot of strange natural occurrences going on and in increasing frequency.
All of which makes me ponder this, I have purchased David's bottle of Nadurra today, so do I keep it till one of the criteria are met or do I enjoy it till the winner becomes known?
If I decide to enjoy it now, what is the best way to drink it? TIA
cp- Here's to you!
ReplyDeletet3d- It's the only Scotch I drink straight up.
T3d - The way it looks 2012-Dec seems just about right. What's your current thinking on MDW?
ReplyDeleteHope everyone is enjoying the long weekend. Time to fire up the blender here!
ReplyDeleteWell, I can't say the bulls are off to a great start this Monday.
ReplyDeleteBut I know the bears are going to lose the war.
The world's changing.
ReplyDeleteBusiness models are changing. Life models are changing.
Nadurra - I bet it's good on the rocks, too.
ReplyDeleteThree Gorges - Can you believe that China built the world's largest hydroelectric project for just $23B? Our annual military budget alone is $500B! Think of what could be accomplished with that amount of capital if we weren't so busy dropping bombs on people's heads....
ReplyDeleteCP- CADC...The new board member has a pretty solid history. I wonder if she will be enough to add some legitimacy to the issue.
ReplyDeleteMs. Wang brings nearly 20 years of experience as an accomplished cross border investment banking and private equity executive. Most recently she served as Senior Vice President of Oaktree Capital (Hong Kong) Limited, a U.S. private equity investment fund focused on mid-market opportunities worldwide, where she was the head of the Beijing office and responsible for deal sourcing, execution, portfolio monitoring and formulating the fund's investment strategy in China. Prior to Oaktree, she served as Director of Real Estate Financings of Credit Suisse (Hong Kong) Limited, where she was responsible for execution and origination of debt and equity financings in China's real estate sector. Prior to Credit Suisse, Ms. Wang held various management level positions with Agilent Technologies, a spin-off of Hewlett Packard, where she was responsible for Agilent's investments in the communication and semiconductor industries, as well as for leading due diligence, deal structuring and negotiation of M&A transactions in the electronics, communications and life science industries.
ReplyDeleteMs. Wang received her M.B.A. from Harvard Business School, and Bachelor of Business Administration in Risk Management and Finance from the College of Insurance in New York. Ms. Wang is a U.S. citizen and is fluent in English and Mandarin.
"Think of what could be accomplished with that amount of capital if we weren't so busy dropping bombs on people's heads...."
ReplyDeleteThe latest fiasco is that NATO planes mistakenly bomb two houses containing only women and children, killing 14. The U.S. General in charge has issued an apology.
Afghanistan for location of above.
ReplyDeleteMark, yes those are some pretty big guns for a concrete construction company. I don't know though, it's either really, really good (as in too good?), or they're preparing to exit stage left? I think they're preparing to exit and take remaining shareholder value with them (let it collapse) then go for a relist in China.
ReplyDeleteIt's all about not having legal or financial obligations to US shareholders, which from what I can tell they don't, the very same option so many other Chinese companies seem to be exercising. "Oops, we didn't provide a 10K, oops, we transferred all the cash to another shell. Oops our auditor quit, or we fired him b/c we chose not to share our books.
These big guns may have been hired in order to bring someone onboard capable of navigating the waters.
Considering they don't reside in the US, probably cannot be extradited, all of their assets are held only through contract (definition of VIE structure, same as Enron's strategy), I just don't see how these folks have any legal obligations whatsoever to US shareholders. Shareholders own no direct equity, cancel the unenforceable contracts and poof, gone!
http://www.alpern.com/Article-GAAP_Change.php
Not that these guys would do that of course because they're honest, right? Well, they've got a business to run and there seems to be a growing trend in the Chinese listings....
Good points CP- If that's the case, Ms. Wang better be set up for life, otherwise, she's through.
ReplyDeletehttp://www.businessinsider.com/jim-rogers-water-crisis-china-2011-5
ReplyDeleteJim Rogers says water is China's biggest problem.
Guys- Don't get left behind by the revolution taking place.
ReplyDelete(a) The economy is recovering. Look beyond the negativity to our own version of the Roaring Twenties.
(b) The much-anticipated aging of the Boomer generation is here. Rather than retire quietly to the beaches of Florida, Boomers have elected to continue working, not least due to life expectancies now in triple digits.
The revolution will not be televised.
ReplyDeleteWe'll be blogging (more likely, chatting in a virtual cafe) likely for the next 50-60 years.
ReplyDeleteIn the WIR, BC says "This week, US economic data definitely shows an ongoing worsening picture, with weakening in demand and a slowdown in production." Party pooper?
ReplyDeleteI think if a China play is what you're interested in, there are better ways to get involved, such as IMAX or VE. The shorts have plenty of ammunition now and the only way these little small caps are going to remain listed is if they have the patience to persevere and prove themselves, which seems to be more expensive than perhaps can be justified. It's questionable enough to have dampened spirits enough till there's blood running in the streets.
ReplyDeleteSo there's that phrase that just screams "BUY!", however I've also read that Chinese authorities have frowned upon the VIE structure, made it so that foreign ownership is difficult without it, and now they've been chasing away hot money (inflationary) by increasing bank reserve requirements and inserting these kinds of barriers.
Yeah, for some strange reason one or two of these beaten down Chinese small caps can pop up 60% in a few hours but I always wonder why? Some big shorts decides to cover his position and take his 100000% gain?
The rules are bizarre, from my perspective.
"water is China's biggest problem."
ReplyDeleteVE is one way to play that theme.
http://www.bbc.co.uk/news/world-europe-13592208
ReplyDelete"Germany pledges to end all nuclear power by 2022."
"US economic data definitely shows an ongoing worsening picture"
ReplyDeleteThat's been my impression as well, not exactly sure as to why though aside from some "disappointing" economic news. I think it's real, doesn't mean it won't resolve though.
End of QE - This is perhaps more important in terms of which direction the dollar is heading, which looks like by design not over 76. It could pop up to say 78 on some euro event, and we all know how the market would respond. I'm playing it by ear, but the chart for gold seems to indicate $1600 is in the cards by Labor day and if that's going to happen then either it holds the long term support or it quickly moves to the 144SMA providing an entry opportunity, then reverses to the upside. My sights remain set on $1600 by Labor Day until further notice, to me that means a lower dollar and of course higher commodities/equities as well.
I've had more success navigating without the benefit of BC's observations, he's so often wrong I'm not sure how he makes money. A stopped clock is correct only twice a day.
I just try to put my trust in the charts and take those lumps instead. Yeah, a pullback in the near future isn't what I want but I'm prepared should that happen as well.
Lately foreign market charts have been looking pretty sad to me as well. Who knows, always gotta have contingency plans in place.
"Germany pledges to end all nuclear power by 2022."
ReplyDeleteI think that's all priced into CCJ, etc.... Japan and most of Asia along with India really don't have any alternative if their economies are going to remain on the projected path. Unfortunately the only thing I can imagine throwing nuclear off track is if a game changing technology appears.
I think the next couple of days are really going to set the stage in terms of PM's.
ReplyDeleteSpeaking of game changing technologies, can you guys imagine WM ever becoming an electric utility? They handle a literal mountain of stuff that could be burned for creating energy if a viable game changer mechanism could be devised.
ReplyDelete"US economic data definitely shows an ongoing worsening picture"
ReplyDeleteThe current evidence says its true.
http://screencast.com/t/UOXLS9LrutFd
Kyle, do not really have any thoughts on MDW, but think the opp is similar to RBY and ECUXF.
Just back from vacation in Colorado / Utah. Wouldn't know the economy was in bad shape based on my travels. Some decent deals, but no signs of desperation and the good restaurants were lined up out the door.
ReplyDeleteHere's the real meat of why I believe markets will go higher over the next year or two at least:
Global equity markets are facing headwinds from a few directions these days. Earlier this month, evidence of a cyclical slowdown weighed on cyclicals and commodities. Now, growing sovereign credit concerns are having a chilling effect on most major markets.
Solid earnings and reasonable valuations should help bolster the S&P 500 against economic slowing. Even if earnings flatline, the index is on pace to deliver $92 per share profits over the next four quarters, leaving the market at just over 14 times; a seven percent earnings
yield. S&P earnings yield nearly 2.2 percent more than 10--year, triple-B corporate bonds; its widest spread in memory.
If the macro picture just stabilizes, let alone get's somewhat better, people will refocus on how well companies are doing and bid prices up.
And Q1 earnings are now complete with the following results. Hard to see the market going down as long as revenues and estimates are growing strongly and being raised. Rising estimates = rising stock prices:
ReplyDeleteS&P 500 reporting is virtually complete, with 98% of companies having provided Q1 results:
A solid 68% beat on earnings, raising the consensus estimate of quarterly earnings growth for the index to 19% from an initial estimate of 12%. A healthy 66% beat on revenues, which raised the estimate of revenue growth to 9%
from the initial consensus estimate of 7%.
With all due respect, I think it's clear we have yet to find an economist and/or trader who is able to tell us where the stock indexes are headed.
ReplyDeleteIn addition, I know how fallible I am when it comes to even the simple things in life. How often have I thought I had something planned out/figured out, only to have to say '----! I forgot all about some x factor.' We can't trade on one person's opinion.
I still think we see a +250 move on the DJIA.
ReplyDelete2nd said, "With all due respect, I think it's clear we have yet to find an economist and/or trader who is able to tell us where the stock indexes are headed."
ReplyDeleteBB said, "Rising estimates = rising stock prices:" along with a well reasoned bull argument. If big institutional buyers buy into it it will be an impetus for higher prices.
I also think that the faltering global markets have help money flows to the US and will probably continue. The big ST wild cards are how the market reacts to the end of QE2, if it ends, and the US debt overhang which is clearly unsustainable.
Said another way, I think BB points are cogent and the main point is not if the forecast is right but if "Big Money" buys into this type of forecast/thinking they will drive prices higher.
A market at 14 x's has historical given very positive results for the next 3 years.
Any way good observations by both of you as there are alot of crosscurrents in the markets right now. I intend to play defense and trade selectively until we get more clarity. We are all different, fortunately the market allows for many different approaches which can lead to success for us all.
"I think it's clear we have yet to find an economist and/or trader who is able to tell us where the stock indexes are headed."
ReplyDeleteI have been right all along! Just no one listens to me. Not even myself.
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