Posted May 25, 2012 at 2:53 am
by Steven Russolillo
Billionaire investor and Dallas Mavs owner Mark Cuban “likes” Facebook, but he doesn’t love it.
In a blog post, Cuban says he has snatched up 150,000 shares of Facebook. Specifically, he says he bought 50,000 shares at $33 a pop, 50,000 at $31.97 and another 50,000 at $32.50.
But he doesn’t have any plans of holding these shares for the long term. Far from it.
“It’s a trade, not an investment,” Cuban says. “Kind of like buying a Mickey Mantle, a Hank Aaron and a Barry Bonds rookie card knowing there is a card show in town next week.”
Facebook shares closed up 3.2% at $33.03. So, he’s in the money. The stock is still down 13% from its $38 IPO price.
Facebook’s trading debut last week was marred by technical glitches at Nasdaq, prompting the exchange to delay the social network’s opening trade by about a half hour. The confusion left investors unsure of whether their orders to buy and sell shares had been fulfilled.
The Facebook IPO destroyed investor sentiment at a time when confidence was already extremely low, Cuban says.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Mark Cuban Likes Facebook, Hates What it Did to IPOs" ]
Posted May 22, 2012 at 3:08 am
by Brett Arends
There’s a saying on Wall Street: There’s no such thing as a safe investment, only one whose risks aren’t yet apparent. Investors keep learning it all over again. J.P. Morgan Chase stock, anyone? Best Buy?
How about some Greek government bonds? After all, they’re members of the euro zone now, they should be fine!
At least here you’ll know you’re gambling. And you’re getting paid for the risks.
So, in the words of Clint Eastwood’s steel-nerved Inspector “Dirty” Harry Callahan: “You’ve got to ask yourself a question. ‘Do I feel lucky?’ Well, do ya, punk?“
If you’re looking for cheap fuel, this is it. Uranium prices have collapsed 30% since the Fukushima tragedy in Japan last year. A pound of uranium traded for $140 in 2007. Today: $52.
Since Fukushima, governments have scaled back plans for new reactors. Germany is going nuke-free. But it’s not the whole story. World energy demand is expected to rise 40% over 20 years. Getting there without more nuclear reactors will be especially tough. Meanwhile, the world hardly mines enough uranium to feed the reactors that already operate. Uranium is well below replacement cost.
Uranium Participation is a Canadian closed-end fund which owns physical uranium in a warehouse, the way a gold fund owns gold. The stock, which trades under the symbol “U” on the Toronto Stock Exchange and as “URPTF” in the Pink Sheets over-the-counter market, trades for about 20% below the net asset value.
Way out in the Alaskan wilderness, in the far, far northwest, is an area known as Donlin Creek. There is gold in them thar hills. Lots of it.
Developers say they’ve found at least 34 million ounces of “proven and probable” reserves—with a gross value today of $54 billion—and there is almost certainly much more.
The Donlin Creek gold project is 50%-owned by Barrick Gold, one of the world’s largest gold-mining companies, and 50%-owned by NovaGold, a small one. At $5 and change a share, NovaGold is valued at $1.7 billion.
It will be many years—maybe eight—before Donlin Creek actually starts producing its first ounces of gold. There is many a slip between cup and lip.
Gold exploration is famously exciting for investors, and not always in a good way. In this case you are taking a flyer on production, and on the future of gold prices.
Some really smart people have joined the gamble on this stock, including hedge-fund managers Seth Klarman and John Paulson and Fidelity Investments’ star fund manager Will Danoff. Speculative, but fun.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Five Risky Plays That Could Make Your Day" ]
Posted May 21, 2012 at 4:29 pm
by Barry Goss & Brad Wajnman, Co-Founders M4 Research
Co-Contributors: Deron Desautels, Membership Manager; Heather Vale Goss, Associate Editor
Under the Education & Ideas folder inside the Vault, we have an article titled: “Why HYIPers Keep Speculating In Pork Bellies.”
In it, Barry outlines the departing wisdom he got, from a grizzled ol’ commodity trading veteran of 30 years, named Richard.
This mentor of his — for 6-months — practically dragged him back into his office by the back of his shirt collar to throw down some departing raw “money-growing secrets” as he called them.
Whether it was out of a sheer desire to instill final lessons of the game of money upon him, or just out of an ‘I owe him this much so he can pass it on’ yearning, we can’t say for sure.
However, what we do know, without question, is this:
Human psychology 301 lets us predict our foibles, one of which is that the embarrassment of our inabilities (represented by our mind fooling itself into seeing instant riches upon our doorstep) can vastly outweigh our thinking and reasoning ability to humbly ask questions.
Questions are powerful. Actually, to be more dramatic, they are cardinal to your existence. To re-quote Jeffrey Gitomer of The Sales Bible fame, with a twist:
“They are to ‘risk-capital’ [sales] as breath is to life. If you fail to ask them, you will die. If you ask them incorrectly, your death won’t be immediate, but it’s inevitable. If you ask them correctly, the answer is… a likely return ON capital [sale].”
One head-scratching question that Richard asked Barry one fine day in the summer of ’94 is:
“So why do so many people lose money trading in the markets while others consistently make hundreds of thousands — even millions — of dollars each year?”
Richard certainly had some answers to his own question. After all, when you have that much experience doing something, and doing it well, you can’t help but notice things.
And, without sounding trite or having you picture us as the proverbial strict ruler-in-the-hand teacher, if you’re spending any amount of your time or money participating in speculative, higher-risk investing vehicles (the kind, ya know, where your return is solely based off the price movement of a tradable asset, and not so much on the sustained long-term value of the asset), you’d better have eyes wide open.
Now, before we continue with our tongue-in-cheek perspective below, you should know that throughout this article, you will find links to articles and reports we’ve written that give insights and lessons learned based on our experience with investments and growing our money (or, in some cases, attempting to do so without success).
We have learned the hard way — just as you may have too — that sometimes our expectations aren’t reached; and, sometimes our worst fears come true.
That being said, you should know that we have a combined 50 years of direct experience in this industry. When you add on the wisdom of mentors long past, it probably nears 100 years’ worth of wisdom (er, “caution” is more like the word we were thinking).
Most of the time, losses boil down to a few simple sins. Simple, we say… but not so much easy to employ. Humans are humans after all, and for every old man in Las Vegas still hitting on seventeen at the BlackJack table, there will be a middle-aged woman driving ten miles out of her way to use a $.50 coupon on milk.
Yup, some people never learn. Sure, we get that at times the problems can be traced to the system, market, or trading approach itself but most of the time, in our experience, it all boils down to our own flawed and reckless human behavior.
More on that shortly…
Posted May 18, 2012 at 1:03 am
by Charles Sizemore
Suds stocks fall into one of two categories:
Megabrews with world-dominating brands — companies like Anheuser-Busch InBev (NYSE:BUD), Molson Coors Brewing Company (NYSE:TAP) and SABMiller (PINK:SBMRY).
Smaller companies that produce mostly craft beers, such as the Boston Beer Company (NYSE:SAM), the maker of the popular Sam Adams, and Craft Brew Alliance (NASDAQ:BREW), which makes smaller brands Kona and Red Hook.
Either option can make a fine investment choice, but you should understand that the rationales for buying are very different.
BUD, TAP and SBMRY essential operate a megabrand beer cartel. Their businesses are safe and relatively stable, though not particularly exciting.
They also tend to be fairly recession-resistant. If anything, consumers often trade down from more expensive craft beers to cheaper mass-market beers when times are hard. For investors just looking for consistent returns, this kind of consistency is attractive.
SAM and BREW, being smaller and nimbler, are better growth stories. SAM in particular has enjoyed fantastic earnings growth in recent years, and its niche placement as a seller of premium beers allows it to generate higher returns on equity.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Beer Stocks: Crack One Open" ]
Posted May 17, 2012 at 3:50 am
from the M4 Research team
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Posted May 14, 2012 at 3:50 am
by Robert Peck
As an ex-Wall Street Institutional Investor ranked analyst, I’ve written on many stocks and IPOs before, including: LNKD IPO (here), BankRate IPO (here), and even a piece on Facebook back in 2007 where I argued Yahoo! needed to buy Facebook (here) for $6-7b.
Importantly on Facebook, I think when one looks at the company’s potential, it’s paramount that one thinks bigger picture and longer term – this post is predicated on this.
In the essence of being succinct, below I point out my Top 5 reasons I’m bullish on Facebook long term, as well as my Top 5 concerns. There are an endless number of items for each list, but I think these items sum up the major points.
1 – Facebook is a Force Majeure @ 900m Users – Facebook dominates one of the largest forces on the Internet, Social. It clearly embodies everything we do that’s social from posting pictures, to sharing our real time thoughts, to connecting with old friends, to making new friends.
It reflects how we behave offline and exemplifies how social behaviors pervade much of what we do on a daily basis. Facebook is the king of one of human’s most basic communication needs – sharing. Further, the company has managed to expand outside its own website or app.
3 – Mobile Monetization is Just Starting – Facebook grew revenues ~45% in the most recent quarter – that’s impressive. However, what is most astounding, is that >50% of its monthly users visit the platform via a mobile device and these users haven’t been monetized yet. Facebook is just starting to monetize >50% of its user base! Imagine the lift in the financials from not only growing the users, but by merely monetizing over one-half of the current un-monetized base.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "The Facebook ($FB) IPO – the Enormous Upside Potential" ]
Posted May 4, 2012 at 1:36 am
by Jack Hough
Facebook’s initial public offering is slated for May 18, the Wall Street Journal reported Thursday. Between now and then, management will go on its “roadshow” to explain its strategy to potential investors, and excitement over the deal is likely to grow.
The IPO details suggest a valuation of $77 billion to $96 billion, and shares could easily open much higher than the offering price. So Facebook may sell for 10 times revenues or more by the time ordinary investors buy in, more than five times as expensive as the average stock.
Then again, the statistics say not to buy scratch-off lottery tickets, but states will nonetheless sell more than $30 billion worth of them this year.
For Facebook fans who care more about the “how” than the “why” or “why not”, here are some guidelines:
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "The Right Way to Buy Facebook" ]
Posted May 2, 2012 at 3:55 am
by Matt Nesto
Author and financier Stephen Weiss has published his second book, The Big Win, where the singular focus is the investing habits of so-called whales—or the super-rich. The last time he set pen to paper, in The Billion Dollar Mistake, Weiss probed the biggest blunders made by some of the best-known investors in the world and explored how we could learn from them.
This time around Weiss investigates the other side of the whale trade, as he profiles the traits and techniques that have come to define the careers of 10 super-successful investors.
“That’s the most important thing,” says Weiss, in the attached video. “You need a discipline and a strategy.”
He describes all 10 of his subjects as coming from “pretty humble roots,” which only makes their achievements that much more inspirational.
Lee Ainslie, of Maverick Capital, is among those profiled. Ainslie’s tremendously in-depth analysis, Weiss says, revealed very early that a huge opportunity existed in what we would all later come to know as outsourcing.
Weiss also commits at least two chapters to investors he considers to be pioneers: Chuck Royce, in the area of small cap value investing, and Marty Whitman, as a pioneer of stress investing.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "To Be a Whale, You Must Invest Like One: Stephen Weiss" ]
Posted May 2, 2012 at 3:01 am
by Micheal Hanson
The current market cycle is a wondrous example: As most folks capitulated and panicked in late 2008, markets recovered in V-shape fashion, with the smaller, deep value, low quality stocks (that got hit hardest) bouncing the most. As this bull matures, the switch seems to be occurring to bigger, high quality, growthy names.
Amid it all, we’ve had US debt fears, PIIGS fears, double-dip fears, housing fears, employment fears—you name it. And it’s not to say these don’t matter, but in the end, there are larger forces at work: The global economy recovering and growing in a world of greater free trade, rising production and consumption in the now collectively large Emerging Markets. Those are the big forces—the ones that matter most!
I’ve read mountains (almost literally) of highly rigorous, empirical and complex analysis on every conceivable topic about the markets in the last few years. And few or none effectively identified these big forces—the ones that matter most. They’re all caught up in the ultra-short term or far too small to matter.
Simply, more information and complexity are not key drivers of returns and never have been. And won’t ever be. More information and data is great! Yet, if you can’t use that information to determine the big important trends, well, you can have 5 analysts or 50, 10 million bucks worth of data or 10 bucks, and it’s not going to change your chances for outperformance.
What drives market outperformance? Knowing something others don’t and acting appropriately on that conviction. This is desperately difficult to do in practice, and I continue to be very proud of working for a firm that aims consistently to do this over time. Simplicity is the best—and, at this point, maybe the only—consistent way to achieve such results.
So if you can’t say what your current investing strategy is in one sentence, you may be cooked. In a world where very smart people foolishly create castles out of sand with their ever more complex strategies, you can think simple, big forces and have a tremendous competitive advantage.
[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Simplicity Is the Next Great Investing Advantage" ]
Posted April 27, 2012 at 3:02 am
by Matthew J. Belvedere
Lots of people are familiar with the NFL draft, where professional football teams swap, deal and finally pick the most promising collegiate players looking to join the league. In fact, the latest episode starts tonight.
What if you could do that for stocks?
CNBC’s “Street Signs” will be trying to do just that, beginning today. It will feature a “stock draft” where seven well-known stock pickers will play the part of NFL owners, picking and choosing among a pool of 21 popular stocks (i.e. the promising players).
For investors, what may be more telling is which stocks don’t get picked. The “drafted” picks will be tracked and monitored up to the next Super Bowl (just like players for the upcoming season). Performance will be measured on a percentage basis. So the traders may elect to pick a beaten up stock (like some techs and retailers of late) in hopes of a good bounce instead of one that is currently in good standing.
The details [continue]…