David Lentz

Total Rating:
+2 / 0

351 Comments

    • Sat Nov 15th 09:50 AM | Rating: +1 0
      Commented on:
      Amazon, Apple, Google: Buying on the Way Down
      Averaging in as one approaches a bottom is not a Bad Thing, not even an especially Risky Thing.

      But determining approximately WHEN a bottom is at hand is A Very Risky Business.

      Consider that IF this is truly the collapse of a global credit bubble, and not merely a housing bubble, that the bubble may still be inflating and has not yet exploded. Numbers of the amount Total Credit (government+corporate+... seem to show that it is still expanding, despite the gratuitous implosion of a lot of toxic debt and shrinkage of portions of the debt markets. Apparently, Ben Bernanke and other central bankers, intent on inflating our way out of deflation, have been creating credit at a sufficient rate to create a net expansion of the credit bubble. A pity that most of the credit they have created is being hoarded by those who got the bail-outs.

      Imagine if, just as the housing industry is approaching a bottom -- say, sometime in the summer of 2009 as various mortgage restructuring programs build up a head of steam -- and housing prices are within 10% of having bottomed, suppose that the credit bubble finally pops. The most likely sign of that at this point would be a cascading series of sovereign defaults, with the USofA somewhere along the chain.

      What do you think AAPL, GOOG and AMZN will be trading for at THAT point? And how long will poor Fred have to hang onto his purchases until they are breaking even? The only way Fred's scheme works is if we have a V-shaped recession, and if we are somewhere close to the inflection point. We could easily have neither of those things be true.

      Granted, this is a worst-case scenario. But a better way to attempt value-based investing is by following the tenets of Ben Graham, the way Warren Buffett has tried to do so over the years. That methodology is a MUCH better way to pick entry points for purchases during troubled times.
      View article »
    • Fri Nov 14th 09:42 AM | Rating: 0 0
      Commented on:
      When the Going Gets Tough, the Tough Play Defense
      Say, Roger -- any thoughts on the apparent lack of letting the air out of the credit bubble? If this bear market is due to the "collapse" of a ginormous credit bubble, then we ought to be seeing some shrinkage in the total debt outstanding, should we not?

      I've seen some disturbing stuff that indicates the debt-to-GDP ratio was still rising as late as August. Now possibly, this is due to the GDP imploding faster than the debt, but the numbers seem to indicate that the Fed+Treasury are pumping out new credit at a sufficient rate so as to keep the totals rising in absolute terms.

      I'm wondering if you have seen anything similar (or anything that contradicts this, which just seems insane to me), and if so, what you make of it?
      View article »
    • Thu Nov 13th 10:17 AM | Rating: 0 0
      Commented on:
      More Uncertainty? Try Ultra ETFs
      But if the markets do not like uncertainty, then they should be pretty pleased, as it seems certain that we are all going to hell in a handbasket, with equities continuing lower and lower. Seems perfectly predictable to me. The (short) markets should be ecstatic.

      :-)
      View article »
    • Thu Nov 13th 10:12 AM | Rating: +1 0
      Commented on:
      Risks Remain, But iPhone's Fundamentals Should Help Apple Surpass Expectations - RBC Analyst
      Ranchr -- I agree most emphatically. Here in the Ohio Valley, I visited the Keystone Apple Store a couple of days after the new Macbook roll-out. The rest of the (upscale) mall was deserted, with the Apple Store being the only place with any customers at all.

      That said, the traffic at this particular Apple Store on that particular day was the lowest I have ever seen, with about 2/3 to 3/4 of the floor space being unoccupied (as opposed to the 10%-20% that is the norm). Not many were exiting the store with purchases. I plan to check again on Black Friday.

      My guess is that Apple will see a modest (25%, maybe 35% worst-case) drop off in sales volume on a year-over-year basis in the next two quarters. That will move it even farther away from the rest of the consumer electronics field, as nearly all of the rest are going to be struggling to turn a profit. And I suspect that Apple's emphasis on the consumer, rather than the corporate markets, is going to serve them well, as I doubt that ANY corporations are going to be refreshing their PCs for a couple of years. Consumers will do the irrational thing and blow their last paycheck (literally) on iPhones. HPQ is gonna get hurt, big-time. And Dell just might be extinguished.
      View article »
    • Wed Nov 12th 09:24 AM | Rating: 0 0
      Commented on:
      General Electric Moves On Down the Largest Company List
      An interesting additional thing to have shown would have been the percentage change in their market caps. Without looking, I'm fairly confident that the market cap of every company listed is smaller today than it was a year ago.

      If one looks at these in terms of industry groups (financials, manufacturing, consumer staples, etc), there is a clear rotation. Again, this isn;t exactly news either, but it's a nice way to quantify the sector rotation.
      View article »
    • Tue Nov 11th 11:05 AM | Rating: 0 0
      Commented on:
      Will Apple's Q1 2009 Revenue Estimates Be a Blowout?
      ummm ... I see no mention of the reports of a 20%-30% reduction in Macbook orders to manufacturers.

      Maybe robust iPhone sales can propel the comply to exceed analysts expectations.

      Prolly a Good Idea to hang around a local Apple Store over Thanksgiving weekend and see how many people are exiting the store with new purchases.

      Rampant enthusiasm for stocks -- any stock -- tends to tell me that we have a long way lower to fall.

      Full disclosure -- I may be buying a couple of new Macs in January, depending on what they announce at MacExpo and what the pricing is like.
      View article »
    • Wed Nov 5th 10:32 AM | Rating: 0 0
      Commented on:
      Triple-Levered ETFs: Bomb Shelters, or Bomb-Making Kits?
      You can buy options on the leveraged ETFs and crank your risk to the moon ...
      View article »
    • Tue Oct 28th 08:28 AM | Rating: 0 0
      Commented on:
      Apple Could Crush Competitors With a $99 iPhone
      While I am certain that cheaper iPhones are in the future (just review the history of iPod pricing), it is not in Apple's game book to pump out lowball products. There wasn't an $800 Macbook, and the Mac mini, the cheapest Mac available, is cheap only when you consider the package you are getting for the money. In terms of absolute dollars, the mini is a lot more than the $300 and $400 junque PCs you see at places like Wal-Mart, that are matched in price only by their ability to do work.

      When you figure out how Apple can make 30% margins on a $99 iPhone, then you will see it happen -- but chances are, Apple will figure out how to do that before you do.

      I know that they will NOT get there by stripping out functionality.
      View article »
    • Thu Oct 16th 11:02 AM | Rating: 0 0
      Commented on:
      Final Presidential Debate: The Wurzelbacher Falls
      "If Joe’s not in hiding..." -- heck, for Joe to get as much attention as he got last night, he is probably locked in a trunk somewhere so as to prevent his actually endorsing one candidate or the other.
      View article »
    • Thu Oct 16th 10:56 AM | Rating: 0 0
      Commented on:
      Gold Has Significantly Outperformed: Can This Continue Indefinitely?
      OTOH, this morning's action in gold and consumer prices would seem to show ALL the "inflation" scare talk to be utter nonsense. We are in a full-scale deflation, and gold will plummet, just like any other commodity.

      Gold is of zero value as a hedge against deflation.
      View article »
    • Thu Oct 16th 10:03 AM | Rating: 0 0
      Commented on:
      How Low Will Apple Go?
      While I am certain that the coming quarterly financials will be another blowout number, the stock price reflects the future, not the past. I visited the local Apple store yesterday, to check out the new notebooks, and while there were people buying them, the place was emptier than I have ever seen it before. While in the past, the available floor space is usually AT LEAST 50% occupied by customers (or wannabe customers), and usually more like 75%, yesterday it was well under 25%.

      Don't count on the Christmas quarter being anything at all like the preceding 3 quarters, and the one after that will be worse still. I like AAPL, but there's no point in foolish expectations. I'll buy in when I see consumers returning to the stores.

      Also, the lowball earnings guidance should set new lows -- it will be interesting to see how Oppenheimer pitches the guidance next week.
      View article »
    • Thu Oct 9th 09:33 AM | Rating: 0 0
      Commented on:
      Deflation Changes the Rules
      But-but-but ...
      how could Google buy AT&T and still keep its corporate motto?
      View article »
    • Wed Oct 8th 12:21 PM | Rating: 0 0
      Commented on:
      Awaiting Apple Earnings and Guidance
      One last thing when contemplating taking Apple private -- there are not many investments for that amount of money that return in the range of 25%-30% (Reuters reports Apple's return on equity to be 27% for the last 12 months).
      View article »
    • Wed Oct 8th 11:58 AM | Rating: 0 0
      Commented on:
      Awaiting Apple Earnings and Guidance
      The precise wording on forward guidance will be really interesting. I suspect it is being sliced and diced a thousand different ways right now. The other thing that will be interesting is whether or not Steve Jobs attends the earnings webcast -- usually he does not, unless there is something that is viewed as of major strategic importance to the company to be discussed.

      If the stock were to fall to the $60 regime, there is the potential of taking the company private via a debt-leveraged stock buyback scheme or (because debt is pretty hard to come by in this economy) via a consortium of well-heeled investors + the (in a quarter or two) $30+B in cash within the company. I can see Steve Jobs, Bill Gates, Larry Ellison, and other Silicon Valley billionaires kicking in enough to do this.

      Apple is a tremendous generator of profits, and would be an outstanding thing to have as one's private company in an uncertain world. Seems like billionaires, watching their equity holdings shrivel and wither, might want to take cheap, profitable companies private. Maybe even Warren Buffett might overcome his aversion to tech companies if the price was right.

      If the economy ever improves, they can always sell them back to the public at huge profits in a future IPO.
      View article »
    • Wed Oct 8th 11:33 AM | Rating: 0 0
      Commented on:
      Awaiting Apple Earnings and Guidance
      Roger -- I believe the earnings announcement is scheduled for 10/21 -- that's about a week after the expected/rumored new product intro on 10/14.
      View article »
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