IntenseDebate - Sivaram

15 years ago @ Can Turtles Fly? A Con... - Donald Coxe Unplugged · 0 replies · +1 points

PART V :(

Dave: "That has been my idea with AYSI, though the stock has taken a beating recently. "

Good luck with your investment. It's way too small and too risky for me and I'm not bullish on commodities anyway (although your company doesn't necessarily need a bullish environment since it seems more like a better technology). I'm just a newbie with a few years experience but I suspect it is better to make macro bets with mid-cap or lage-cap firms, whereas microcaps are perhaps better for value investing or growth investing. Macro should be wind at the back of these tiny companies rather than being dependent on it (assuming your company makes it throug hthis rough period, I think your company sounds more like one that depends more on its product/technology to be adopted rather than the macro scenario per se.)

15 years ago @ Can Turtles Fly? A Con... - Donald Coxe Unplugged · 0 replies · +1 points

PART IV

The bad, though, is that this may keep a lid on agricultural prices. My understanding of history is that that is exactly what has happened. There is far greater demand for food now than 50 years ago (population bigger, purchasing power more, etc) yet many soft commodities have done terribly and many are near all-time lows. One of the reasons is that agricultural land is plentiful (even if it isn't harvested in an envrionmentally friendly manner eg. clear cutting forests for farming) and labour is cheap in poor countries. This has led to almost continuous deflation in soft commodities over time. In fact, prices are likely artificially kept up due to subsidies. If subsidies in America, Canada, and Europe on agriculture was removed, it is likely that prices would drop and many farmers in America, Canada and Europe would go bankrupt. (Similarly if OPEC disbanded, oil prices will drop.) So it's not an easy call.

Having said all that, the increasing availability of agricultural lands (if my thinking is correct) may be good for some companies. Equipment manufacturers, fertilizer companies, etc will do well even if agricultural commodities go nowhere.

CONTINUED :(

15 years ago @ Can Turtles Fly? A Con... - Donald Coxe Unplugged · 0 replies · +1 points

PART III

Dave: "It may be increasingly expensive to access deep water oil deposits, for example, but there's no shortage of arable land in the world (and there have been some big recent deals putting more of that land in the hands of first world companies). "

This can be good and it can be bad. The good is that it opens up new investment opportunities that are not part of hte consensus. Wall Street was all over oil, copper, and the like but you still don't see too many talking about agriculture.

CONTINUED :(

15 years ago @ Can Turtles Fly? A Con... - Donald Coxe Unplugged · 0 replies · +1 points

PART II

Dave: "That said, I think the secular bulls are still right on the supply side when it comes to oil and minerals, and on the demand side, assuming the global economy recovers."

I don't buy it but we'll see. I know you don't share my view so no point going into it in details but to repeat, some of what is thought to be scarce may not be at higer price. And some of what is scarce is due to inefficiency. I remember reading 2 or 3 years ago about the inefficiency of China's oil use. For instance, a large number of factories kept diesel generators as backup because their power grid wasn't realiable. This obviously is highly inefficient. If even half of these stop wasting diesel fuel, not to mention if China also removes the subsidies for fuels, oil consumption will not increase as much as anyone thinks even if China grows (not at 10% but say 6%.)

15 years ago @ Can Turtles Fly? A Con... - Donald Coxe Unplugged · 0 replies · +1 points

(Another shortcoming with this msg board system: no easy way to quote :( ...grr hate the post length... I might really have to switch this board system...)

Dave: "Coxe isnt alone among commodity bulls in not anticipating the impact of the financial crisis on commodities. Even folks like Jim Rogers, who were short financials, didn't anticipate that. "

I think the mistake they made was their reliance on the decoupling theory.

CONTINUED...

15 years ago @ Can Turtles Fly? A Con... - Will Warburg Pincus en... · 0 replies · +1 points

I haven't looked at the details but I think there is a insurance relationship between the muni bond business and the rest. In other words, it is likely that if muni bond business has excess capital, it may be funnelled into the structured finance product business. I highly doubt that MBIA would have been able to separate without entering some relationship where excess capital from muni bond is transferred to the rest of the company. I say this because the argument last year about the split was that you couldn't just take all the money and junk the toxic business (this would be kind of like GM putting all its good assets on one side and giving it to the shareholder, while the bondholders end up responible for the bad stuff.)

I don't follow MBIA closely and haven't looked to see if they filed anything detailing their plan (if not they may disclose more details during their upcoming earnings call.) I think shareholders will always have the problems with the structured finance product insurance and we can't really escape. What the split can do is to lower the cost of capital and increase customer confidence. Anyway, that's how I look at it.

15 years ago @ Can Turtles Fly? A Con... - The unfolding saga of ... · 0 replies · +1 points

Yeah this is one crazy case. Fortunately, after I wrote that news broke that he has been located in Virginia and served with a civil action (still no criminal accusation.)

This is not to downplay your loss but, in 10 years, I'll bet you'll remember how you were indirectly part of one of the largest bank frauds than the actual loss you took on EMAG. Speaking in hindsight, it's surreal how you bet on a takeover that was financed by a potentially fraudulent bank. (This sort of reminds me of one of the stocks I was tracking in Japan that turned out ot be run by some organized criminals. Good thing I never invested ;) )

15 years ago @ Can Turtles Fly? A Con... - SEC accuses Stanford F... · 0 replies · +1 points

yes...that was bizarre... I have never seen such a massive sell-off followed by a quick recovery with no news... Unfortunately, if the SEC accusations are correct, these guys are criminals and it wouldn't surprise me if they were manipulating EMAG, as well as anything else that they touch...

One sad thing about this story is that, unlike Madoff, this is a bank. At least the Madoff investors were professionals, wealthy, and/or sophisticated and knew of the risks--not the risk of fraud but the risk of investing in hedge funds. With the SIBL case, we have an average person off the street possibly keeping their savings in this bank, or investing in a CD, or whatever else the bank offered. There may be countless small businesses that deal wtih this bank being thrown off the cliff as well. Hopefully FDIC will cover the losses for retail investors but it is possible that an average person loses money :(

15 years ago @ Can Turtles Fly? A Con... - SEC accuses Stanford F... · 0 replies · +1 points

Yeah, we are both newbies and in the same boat but the key thing is to keep the probability up and perhaps distribue the capital across multiple deals. Things like this happen and we sort of have to get used to it (not that it's a good feeling.) Although there were some warning signs, fraud cannot be detected and anything could have happened at any point in time. I mean, the SIBL thing is crazy. It may end up being one of the largest frauds in American history. The bank could have collapsed literally right after you bought EMAG. Too bad the news didn't leak out before that but oh well...

I have been looking at Westaff (WSTF), which is being bought out by the end of next month, and I have been avoiding it because the company may end up bankrupt if the deal fails. It's tempting but too risky.

15 years ago @ Can Turtles Fly? A Con... - Book Summary: The Wall... · 0 replies · +1 points

I haven't read any of his other books but I find him very arrogant. Whenver you see him talk, I always get the impression that he thinks he knows more than he does. He is also the type that seems to be in it for the money more than anything... I could be mistaken given how I don't follow his writings but that's my impression...

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