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Entries from April 2017

Will Trump Be The Next Ronald Reagan?

April 29th, 2017 · Comments Off on Will Trump Be The Next Ronald Reagan?

Can Trump do a Reagan? We have to wait for further details of his tax plan and see what survives Congress. However, we have to point out that there are some important historical differences which makes a repeat of the Reagan years much less likely. And this is even if you believe that tax cuts […]

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Tags: Economic Policy · Fiscal policy

The Limits Of Free Money

April 29th, 2017 · Comments Off on The Limits Of Free Money

Investors have been much more savvy about how economies behave under excess savings than many policy makers and observers. While investors piled on and made a killing, many policy makers have overly worried about the risks of accelerating inflation and the state of public finances. That doesn’t mean the near free money that a savings […]

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Tags: Economic Policy · Fiscal policy

Boom Time For Liberals

April 29th, 2017 · Comments Off on Boom Time For Liberals

The existence of excess savings over investment produces an economy that works differently. It basically enables the public sector to increase spending for free. This is most visible in the deleveraging stage after the burst of an asset bubble, where policy vice becomes virtue and public releveraging needs to compensate private deleveraging. But some of […]

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Tags: Economic Policy · Fiscal policy

Cypress 3.0 Is Working And Has A Lot Of Leverage Remaining

April 29th, 2017 · Comments Off on Cypress 3.0 Is Working And Has A Lot Of Leverage Remaining

Cypress is reinventing itself into Cypress 3.0, a shift from commodity memory production to a company providing integrated solutions. This shift should re-accelerate growth. For the next three years, most of the financial improvements are likely to come from leverage in the business model. That leverage came first from reducing inventories and will now come […]

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Tags: CY

For Finisar And Others, The Optical Network Selloff Seems To Be Largely Optical

April 23rd, 2017 · Comments Off on For Finisar And Others, The Optical Network Selloff Seems To Be Largely Optical

A big selloff in optical networking stocks doesn’t seem to be based on hard facts. It mostly seems related to unconfirmed concerns about a China slowdown, but this seems a matter of timing, the demand is still likely to materialize. Meanwhile, some of the companies, like Finisar, have been slaughtered too briskly, ignoring cheap valuations […]

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Tags: FNSR

The Great Unwinding

April 23rd, 2017 · Comments Off on The Great Unwinding

The Fed (and other central banks) has amassed a great amount of assets, bloating its balance sheet. The Fed has started signaling to the markets that it is considering starting to unwind some of this. How did the Fed get here and what are the risks of this unwinding of its bloated balance sheet? We’ll […]

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Tags: Monetary policy

Play The Chinese Steel Cycle With ArcelorMittal

April 19th, 2017 · Comments Off on Play The Chinese Steel Cycle With ArcelorMittal

The steel sector is plagued by price swings that are to a great extent produced by China, alternating acceleration and slowdown of demand. While it’s difficult to get the timing exactly right these cycles are tradable. Longer-term, though, we continue to be firm on ArcelorMittal; the uptrend is still intact. Play The Chinese Steel Cycle […]

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Tags: MT

Is Amazon Cornering Yet Another Platform?

April 19th, 2017 · Comments Off on Is Amazon Cornering Yet Another Platform?

Amazon seems to be on an inexorable rising path. The main reason for this is that management keeps relentlessly focused on the long-term building technologies and platforms that can be leveraged. With the development of voice control devices, AMZN seems to have developed yet another platform with substantial leverage. Is Amazon Cornering Yet Another Platform?

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Tags: AMZN

What Will Keep The Rally Going?

April 18th, 2017 · Comments Off on What Will Keep The Rally Going?

The market rally has stalled on diminished outlook for a Trump reflation and a surprising softening in US economic data. It’s understandable, given the length of the rally and the stretched valuations. But it’s difficult to see any clear catalyst propelling stocks higher in the near future, this is more a market for stock pickers […]

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Tags: The Markets

Destiny Media Is Like A Late-Stage Biotech Company, But One With Limited Downside

April 17th, 2017 · Comments Off on Destiny Media Is Like A Late-Stage Biotech Company, But One With Limited Downside

Destiny Media has a stable core in the form of a profitable product that is growing again, limiting the downside to the stock price. They have another product in development which addresses a much bigger market, but this is not yet good enough and needs further work. Given the limited downside and considerable upside, what […]

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Tags: DSNY