I don’t know if one should laugh or cry when listening to these guys on CNBC. The cheap oil price will stimulate the economy in the second half of the year. At least they realize that the recent job report was bad. This is of course until the stocks go up on this news on Monday.
It is too bad that the market is not opened today because I would have loved to see the reaction to the weak job report.
Anyway, here are the first three articles on Google Finance.
Again, everybody is surprised and shocked. How could it be possible that the economy is slowing down when the Fed and all the other experts say that the economy is about to enter an escape velocity. Because there is no recovery just like there is no Santa. The recovery that everybody talks about is not a recovery. It is all fantasy created by cheap money or QE. Now that the Fed removed QE, it removed the fake recovery. Let me get to some quotes from these articles.
From the first article.
“U.S. employers added the fewest number of jobs in more than a year in March, which could heighten concerns over the recent slowdown in economic growth and delay an anticipated interest rate increase by the Federal Reserve.” You actually thought that the Fed was really going to raise rates.
“There’s no question that the economy is showing the negative effects of the stronger dollar and the collapse in oil prices. Corporate profits have come under pressure, and hiring has been adjusted in response.” The stronger dollar happened because everybody incorrectly believed that the economy was strong and that the Fed was going to raise rates. I thought that the collapse in oil prices was supposed to make people spend more.
“The paltry job gains could fan fears that the recent weakness in economic activity could be more fundamental rather than due to transitory factors.” It is 100 percent fundamental. The Fed has destroyed the economy by stimulating it for the last 20 years. You think the dot com bubble and 2008 crisis was an accident? It was all created by the Fed and the next crisis is in the works which is also being created by the Fed.
From the second article.
“For investors, the March jobs report means that the Federal Reserve’s first interest-rate hike could be slowly receding in the distance.” Really?
“It’s definitely a disappointing report. It really was under any estimate you could find.” Wow. Nobody predicted it. Yes, if you watch CNBC, then nobody predicted it. I follow plenty of people who have been talking about it for a long time but nobody took them seriously.
“Add the soaring dollar to the disappointing jobs report, and you have a Fed that’s unlikely to raise interest rates at its June meeting.” Just wait until the economic data gets even worse because this is just the beginning. You will get QE 4 not a rate hike.
From the third article.
In the title, it says “an Abrupt Slowdown in Hiring.” LOL. There was never any growth in true employment. All the economy was doing was adding low-paying, part-time jobs and losing high-paying, full-time jobs. Read the full job’s report, not just the headlines.
“The labor market’s yearlong streak of robust monthly job creation was broken.” It is not even worth commenting.
“Analysts blamed the punishing weather in the Northeast as well as the plunge in oil prices.” Of course.
China has just taken another dramatic step to attack the U.S. dollar. (Quickly developing story).
In an unexpected move, during last Sunday’s meeting with the IMF, the Chinese government proposed making the Yuan a global reserve currency.
And the very next day, a second meeting was conveyed on the initiative where the IMF’s Managing Director Christine Lagarde declared that “We welcome and share this objective, and we will work closely with the Chinese authorities.”
Investment Opportunity 1 – Liquidation Value Six Times the Market Cap
Sometimes when you buy an asset, whether it be a car or a piece of equipment, the value of it is what you could liquidate it for. The asset does not necessarily need to create cash flow. For example, if you go to Home Depot to buy an electrical saw, you don’t look at how much cash flow it can generate for you before you buy it.
Many times, on Wall Street, an asset needs to generate a certain amount of cash flow in order to support its valuation, unless of course, we are talking about Facebook, Twitter, or GoPro. These can trade at whatever valuations someone can dream of.
Company 1 owns an equipment fleet that it rents out to contractors during various construction projects. Because the company is incapable of satisfying investors with enough cash flow, the company’s market cap is way below its liquidation value. In other words, if the actual equipment were to be liquidated today, the shareholders would receive about 6 times more money than what the company is trading for.
Investment Opportunity 2 – Now It Looks Really Interesting
This is a new idea for Ultimate Value Finder. However, I looked at this company sometime in 2013. I studied it but decided to pass because things were just so awful that I could not make myself write about it. Fast forward to today and the company finally looks interesting.
First, the price is 70 percent cheaper which is always a good start. Second, certain segments of the company are growing while the legacy segment is declining. And third, a brand new business was launched under the company’s umbrella, and this business could become big.
Investment Opportunity 3 – Transitioning from Development to Growth
Everything in life goes through different stages: development, growth, maturity, and decline. This also applies to companies. However, investors are not interested in all the stages because they are all about making quick money. Development is not something that they want to be a part of because it requires patience, hard work, and capital. Maturity is boring, unless, of course, they are private investors getting all the cash flow. Decline is not even in their vocabulary, so let me skip that.
They want growth because growth is the heroin that keeps them up all night. Company 3 is leaving the development stage and entering the growth stage. This means that you have an opportunity to acquire shares when revenues are tiny and hold them until they grow, generating the excitement. Also, you have a lot of exhausted investors willing to sell shares after years and years of disappointment, dilution, and lack of payday.
If you are a subscriber, you already received an email with the full April issue.
It is very interesting to watch various economic data reports and how they are getting worse and worse. I mean this is on a daily basis. Today, we got durable-goods orders fall 1.4 percent.
To some people, this is no surprise because they understand that the whole economic recovery is fake. It was created by several rounds of QE which caused tremendous disallocations of capital. Now that the QE was taken away, the fake recovery is falling apart.
Others who believe that central bankers saved the economy in 2008/2009 are confused. Well, they will get more confused as the economic data continues to worsen. Then, they will be shocked when the Fed announces another round of QE which will not work either.
After running this blog for several years I decided to make a big change. I will no longer allow ANY comments. I will also not write about individual companies. If you want to ask me about any company, you can simply to email me. If you want investment ideas, you subscribe to my newsletter.
The reason why I am doing this is because I am tired of constantly being required to explain myself why I am buying this or that and getting opinions from other people about why I should not be doing something. I really do not care what other people think. I just want to buy the stocks that I want without cheerleaders telling me whether it is a good move or that I lost my mind for buying stocks for less than cash or any other thing.
So this is the time of year again. Goldgroup is approaching the price that I paid for it in 2013. As I am writing this, the stock just traded for $0.09 on the Canadian exchange. In US dollars, this translates into $0.07 which is just two pennies away from the price that I paid for it.
I am now preparing for $0.05 or $0.03 price and will buy more shares. So it looks like I will get my wish of 1 million shares.
You might say, “It will never get there because the company has more cash than the market cap.” So what? If the net cash is at X level, who said that the sellers cannot sell for 10 percent, 20 percent, or whatever percent of cash. At $0.03, the market cap will be $4.5 million. At that price, each $1,000 will get you 33,333 shares. Each $10,000 will get you 333,333 shares.
Also, today the Fed will open its mouth again. Of course, they will say the usual – we are data dependent. Yes, they will probably drop the “patient” word. Gold market will say, “Oh my God, they are impatient and data dependent, dump gold.”
Disclosure: Long GGA
With the collapse in the price of oil, Mitcham Industries has been hit pretty hard. However, the price of oil can continue to collapse. During the dark days of 2009, Mitcham’s stock reached as low as $2.43 per share. I would not be surprised if the stock traded at these prices again. Maybe, it could even trade at $1 per share. Today, Mitcham is trading for a little over $5 per share. I don’t own it.
Here is a new article on the company.
Wait a minute, I thought the economy was great. This is what the stock market keeps telling us.
MovieTickets.com is now the Largest Advance Movie Ticketing Platform in the World with 28,000 Screens
(Boca Raton, FL – March 4, 2015) – MovieTickets.com, a leading destination for the purchase of advance movie tickets, has entered into an agreement with Regal Entertainment Group (NYSE: RGC), the motion picture exhibitor operating the largest and most geographically diverse theatre circuit in the United States. Through the deal, MovieTickets.com will offer its ticketing solutions across all 572 Regal Cinemas theaters with 7,356 screens, including its three main brands: Regal Cinemas, Edwards Theatres, and United Artists Theatres.
“Our new relationship with Regal, the largest theatre circuit in the United States, establishes MovieTickets.com as the leader in the advance movie ticketing category, based on both screen count and number of movie theater chains served,” said Joel Cohen, CEO of MovieTickets.com. “The addition of over 7,300 screens significantly boosts our footprint in the domestic marketplace and magnifies the opportunities for us on a much broader scale.”
“Regal is excited about our relationship with MovieTickets.com,” said Dave Doyle, CIO at Regal Entertainment Group. “Our partnership with MovieTickets.com means greater access to the magic of movie-going at Regal and added convenience for our customers.”
In a joint statement, MovieTickets.com Co-Founders and Co-Chairmen Shari Redstone and Mitchell Rubenstein, said, “We could not be prouder to join forces with a leading exhibitor of Regal’s caliber and offer moviegoers around the nation unparalleled ticketing choices and services. As the founders of MovieTickets.com, it’s especially meaningful to see us take a leadership position with such a significant addition.”
MovieTickets.com will begin deployment of its service across Regal Cinemas, Edwards Theatres and United Artists Theatres today, with the roll-out continuing through the end of this month. With the addition of these theaters, MovieTickets.com will be providing advance movie ticketing to over 28,000 screens worldwide, becoming the largest online advance movie ticketing platform in the world.