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Alphabet, Inc. Message Board

merenkov 203 posts  |  Last Activity: 4 hours ago Member since: Jun 7, 2004
  • Reply to

    Atlanta Fed's GDPNow forecast for Q3 2015

    by merenkov Sep 17, 2015 8:00 PM

    As of October 6th, the GDPNow forecast for Q3 rose slightly to 1.1%. There are only three updates remaining over the next three weeks.

  • taocentric, who used to post here often, went into great detail regarding the overvaluation of TCS shares in December of 2013 (when TCS was trading at around $40/share), but this was the money quote:

    "So what does this all mean for the share price? In my estimation, the intrinsic value of the business is somewhere less than $15.00 per share. This implies an 11x forward EBITDA multiple (which is way too high given the growth trends) and an enterprise value of about $1.1 billion. Although, with unlevered FCF of only about $20 million, I would not be a buyer of TCS shares at $15.00. I would be a seller. At a 9x forward EBITDA multiple, the implied share price is about $10.00. Don't forget…the private equity owners and founders were sellers at $18.00 per share. Don't be the fool buying this stock here at $38. I read the Wall Street research reports issued on TCS - I will not single out any particular analysts, but suffice to say that their reports border on gross negligence."

    His posts were detailed and persuasive and actually convinced me to sell my shares with a minimal loss. With so many know-nothings posting on yahoo message boards, I think accurate, prescient posters like taocentric should be recognized.

  • Jan Hatzius, chief economist for Goldman Sachs, came out with the following note overnight:

    “…when the starting point for growth is only modestly above trend, as it probably is right now, a slowdown might halt the move toward full employment and greater inflation pressure entirely. In that case, standard monetary policy rules might justify a continuation of the current zero-rate policy for much longer, well into 2016 or potentially even beyond. In this context, it is interesting that the reduced market-implied probability of liftoff in 2015 after Friday’s weak employment report mostly translated into a higher probability of liftoff not in 2016, but in 2017!”

    And there you have it, a little glimpse of the future, because what GS wants, GS usually gets…

  • merenkov merenkov Oct 2, 2015 4:33 PM Flag

    The Fed-funds futures market is now pricing in a 30% chance of a rate increase in December. Who are you going to believe, the market or our clueless Fed officials?

  • Reply to

    142K Jobs

    by stockdude13 Oct 2, 2015 8:56 AM
    merenkov merenkov Oct 2, 2015 10:23 AM Flag

    Every single regional Fed survey from the past few weeks was filled with disappointment and despair, yet all the “experts” seem surprised that we had a horrible NFP report, lol

  • merenkov merenkov Oct 1, 2015 5:44 PM Flag

    Every few weeks you give us a new reason why Treasurys are going to crash, but it happen...

  • Reply to

    Atlanta Fed's GDPNow forecast for Q3 2015

    by merenkov Sep 17, 2015 8:00 PM
    merenkov merenkov Oct 1, 2015 3:31 PM Flag

    Although the Nowcast for Q3 rose earlier in the week to 1.8% (based on personal income data), as of October 1, the GDPNow forecast was cut in half to 0.9%, due mainly to collapsing exports. There are only four updates to the Nowcast remaining until the BEA's first official estimate for Q3 is released on October 29th.

  • Reply to

    TBT will be up next week +2

    by amit1234510 Sep 25, 2015 12:21 PM
    merenkov merenkov Sep 30, 2015 6:16 PM Flag

    Even if you thought interest rates were going to go up in a sustainable way (they're not), why wouldn't you buy something like SJB, the inverse high-yield bond fund instead of TBT? If rates did go up, the high-yield market would feel the pain too, but you'd also benefit from the time bombs that are hiding out in the high-yield bond market. For the record, SJB is up 4.5% this quarter, TBT is down 13% and TLT is up 5.1% (not counting distributions). I'm guessing people are mainly attracted to the double inverse nature of TBT, but unless you're timing is perfect, it's proven to be an excellent way for retail investors to lose their money twice as fast.

  • For anyone losing sleep over Chinese sales of US Treasurys, you might want to consider this. All together, foreign central banks own about $4.1 trillion in US Treasurys. Per the Treasury’s website, less than 4% of those holdings are in long-dated paper (maturities of 10 or more years), so that’s about $155 billion. Since the Chinese represent about 20% of total foreign ownership, one can reasonably assume they only own about $31 billion in long-dated paper (20% of $155 billion). To put that number in perspective, the Fed was buying $85 billion of Treasurys and mortgage-backed securities per month at the height of QE3…

  • KMI is no longer an MLP, but it’s still acting like one, and closely tracks the performance of the Alerian MLP Index (an index of the 50 most prominent energy MLPs; symbol is ^AMZ). If you don’t believe me, do a comparison of the charts here on yahoo for the past 6 months (you can also use AMJ as a proxy for ^AMZ).

    MLPs have historically exhibited a high correlation to major credit spread widening (and tightening) events. During the financial crisis, the yield on ^AMZ reached 15%. Currently, the yield on ^AMZ is about 8%. If the ^AMZ were to react to the current credit problems in the oil patch like it did in 2008, it would imply about another 35-40% drop in the energy MLP space. Assuming KMI continues to trade like the rest of the Alerian Index, the implications are obvious. So the question in my mind is: Are the credit problems for energy MLPs comparable to what happened in 2008 (or will they be)? If so, we still may be far away from a bottom…

  • Reply to


    by hiker200055 Sep 28, 2015 10:33 AM
    merenkov merenkov Sep 30, 2015 12:17 PM Flag

    I've long thought that Hasbro should buy Mattel, which is woefully mismanaged. Mattel seems to have a better selection of toys for girls, and Hasbro is more oriented towards boys. There would be a lot of synergy there, especially after all the current Mattel execs were fired.

  • merenkov merenkov Sep 29, 2015 11:19 PM Flag

    Indeed, that is exactly what's happening. Institutional investors and hedge funds are unloading stocks and high-yield debt and need a place to park the money while they figure out what to do next. They're now buying 3-month T-bills because yields on the 4-week T-bills are even more negative. If this keeps up, we'll eventually see negative yields on 6-month Treasurys, and so on (in Europe, a number of countries have negative yields out to 4 years or more).

  • At today's $28 price, the yield works out to around 8.3% (based on the $2.32 in dividends paid over the past 4 quarters). Historically, the yield of the Alerian Index averages about 350 basis points over the yield on 10Y treasuries. With the yield on the 10Y currently at 2.05%, the current spread is 625 basis points. The spread blew out to as high as 1200 basis points at the height of the financial crisis. If that were to happen again today, it would equate to a price of around $16.50 (this price would equate to a 14% yield, or 1200 bps over a 10Y rate of 2%). So will the credit crisis in the energy space approach the same levels we saw back during the financial crisis? That actually seems plausible to me. Other thoughts?

  • Current yield on a 3-month Treasury is -.02%. We also saw negative yields on September 18th and 22nd. Even during the Great Depression, this did not happen…

  • merenkov merenkov Sep 28, 2015 11:15 AM Flag

    Haha, 100%. Sure, sure, just like September was a sure thing...

  • Reply to

    $100 WBA Share price

    by tony2diers Sep 23, 2015 5:56 PM
    merenkov merenkov Sep 25, 2015 12:12 PM Flag

    Over the past 12 months, WBA is up over 46%, while CVS is up 24%. What are you complaining about exactly?

  • Reply to

    Long Bond not as weak as i thought it would be

    by wiscodisco02 Sep 25, 2015 10:03 AM
    merenkov merenkov Sep 25, 2015 11:49 AM Flag

    Winter is coming...

  • Per Tradeweb today:
    "The bid yield on the 1-month U.S. Treasury bill was -0.025% as of 2:55 PM EST, down 0.7 bps from yesterday’s close of -0.018%. Today’s intraday low was -0.025% while the intraday high was -0.015%. This security’s yield has closed below zero every day since September 17, 2015."
    And that, folks, is how it begins...

  • Reply to

    Atlanta Fed's GDPNow forecast for Q3 2015

    by merenkov Sep 17, 2015 8:00 PM
    merenkov merenkov Sep 24, 2015 8:02 PM Flag

    As of September 24th, the GDPNow forecast for Q3 dropped slightly to 1.4%, due mainly to weakening residential investment. There are only six updates remaining.

  • Reply to

    Yellen Almost Passes Out Giving speech

    by retired765 Sep 24, 2015 6:07 PM
    merenkov merenkov Sep 24, 2015 7:23 PM Flag

    It must be stressful trying to keep Goldman Sachs and the 1% happy. Now ask yourself why she spent so much time in her speech discussing the "theoretical" use of negative interest rate policies. Coming soon to a central bank near you...

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