sikiliza's Blog

Understanding Gold Price Movements

sikiliza — Sun, 14 Apr 2013 12:56:28 GMT

This is from a close associate and fellow investor and explains very succintly why gold prices have been behaving in an unpredictable pattern in recent months

The are some common misconceptions on gold price formation:

1) The emphasis on mine supply is misplaced; it has very little impact on the gold price.

Andrew Mason resigned less than an hour ago and he was humble in his assessment of his shortomings and the mistakes he made. That said, he made out really good at the IPO and will likely not ever have to worry about making rent. [See his farewell email below] Groupon as a business was flawed from the start. When I first heard of it along with others like LivingSocial, I expected a platform that would aggregate and organize all the deals, co...

What I have learned in the last 12 months

sikiliza — Sat, 02 Jun 2012 20:52:21 GMT

Same time last year something about the markets spooked me. I pulled my retirement account out of equities and into money market funds and wound down two thirds of my most volatile long positions in my investment account. There was smoke in the air and soon enough, the fires followed. I did get back in though.

That said, I realized that macro factors are fully front...

The story of Leapfrog: Baby Apple

sikiliza — Sat, 26 May 2012 19:10:31 GMT

It’s one thing to watch customers enjoy the products they are fond of but it’s quite another for them to make videos of themselves using those products and ponder the possibility of investing in the company that makes the products they love so much.

That’s the story of Leapfrog, a company whose edutainment products are so popular with kids that that their mothers post videos on YouTube of their children playin...

Margin Stanley and the 40 Thieves

sikiliza — Fri, 25 May 2012 12:50:24 GMT

During the era during which the the collection of stories known as One Thousand and One Nights was written, if you were a storyteller, you had to come up with an endless stream of stories otherwise you would lose your head, literally. People got really creative and came up with some of the most fascinating tales that humanity has ever countered.

Therein ends our analogy. In the case of Margin Stanley, greed an...

The Greek IPO

sikiliza — Thu, 17 May 2012 14:16:47 GMT

The only way out of Greece's current quagmire is to have an IPO on the FTSE with parallel listings on the NYSE and the DAX. This would not only mean that all major investment and retirement funds including CalPers are allotted shares but also that by being publicly listed, Greece would be insured against certain collapse.

They could have JPM run the book for a change (Morgan Stanley and Goldman have had the li...

Facebook Shares Worth at least $1000

sikiliza — Wed, 16 May 2012 10:51:07 GMT

The decade's most exciting IPO is underway and this might prove to be the biggest investing opportunity in our lifetime. Per our relative valuation model, it's clear that Facebook stock is currently grossly undervalued. Here's why:

Facebook users represent a cross-section of the planet in pretty much the same way that the Chinese population does i.e. a small percentage of high networth individuals, a growing m...

Dimon's Cunning

sikiliza — Sat, 12 May 2012 00:40:26 GMT

There are many ways to skin this JPM cat but I will wager you that there is way more than meets they eye. If for one it's actually true that JPM lost $2B they probably came out with it to forestall future panic if what they lost is just the tip of the iceberg.

There's a different theory however. In March, JPM announced a $15B buy-back program with $12B earmarked for 2012. Further, they announced an increase in...

Days of our Lies

sikiliza — Wed, 02 May 2012 13:06:53 GMT

This year is proving to be quite interesting as the days go by. As an investor, I find myself continually having to dig through growing piles of hard-to-believe news stories, economic data, earnings reports and macroeconomic trends just get a little smidgen of the truth.

What I have found without doubt is that the level of obfuscation and subterfuge currently going on through the Mainstream Media as well as...

My Biggest Investing Regret

sikiliza — Thu, 29 Mar 2012 10:40:35 GMT

Peter Lynch in his seminal book, One up on Wall Street harps on the need to invest in stocks that you are already familiar with; stocks representing companies whose products you use on a regular basis. He also alludes to discovering Hanes’ L’Eggs brand through his wife, who happened to love the stockings that the company sold.

Well, for me, the one that got away was Nu Skin Enterprises (NUS), a multi-level s...

Netflix might be losing it

sikiliza — Wed, 07 Mar 2012 15:11:18 GMT

Someone please explain to me why doing a deal with the cable companies would be a good thing for Netflix.

Netflix is going to shoot itself in the foot again. Agreed that the cable companies hold a lot of sway when it comes to locking in customers at high switching costs and that they hold the keys to the garden but to go ahead and negotiate a deal with them is almost a death knell for Netflix. For one, if Ne...

Does Proximity to Silicon Valley Guarantee Success?

sikiliza — Wed, 15 Feb 2012 17:16:20 GMT

It seems like there might be something in the water around the San Francisco Bay Area. A very casual look at a few technology failures in the last few years seems to point to an inverse correlation, spurious though it may seem, between proximity to Silicon Valley and the probability of failure or near-failure.

Here's a quick list:

Nokia - located in Keilani...

An Investor's Conscience and Corporate Insanity

sikiliza — Tue, 14 Feb 2012 01:49:59 GMT

As an investor, I consider myself a part owner of the companies in which I invest, never mind the fact that I may be holding only a millionth of the market value. As such, I feel the need to act responsibly and own companies that I would be proud showing off to my kids, grandkids and neighbors alike.

In the increasingly cut-throat world we live in today, I find the challenge of uncovering respectable,...

Tired of All This Dividend Talk

sikiliza — Tue, 07 Feb 2012 15:31:45 GMT

There has been a lot of talk lately about how investors are chasing yields and how dividend stocks are now in bubble territory as a result. The WSJ had an article comparing dividend stocks and bonds and Morgan Housel in his recent article titled

The S&P 500 is up over 6.9% YTD, commodities trending up led by Silver at 20.5%+, Orange Juice at 19.7% and gold up 10.3%. With unemployment down to 8.3% and Initial and continuing jobless claims beating expectations positively, it seems like a good year. Yet, even though my investments have performed really well, I have a sense of foreboding. It’s that feeling you get when you think you are being stalked, the hairs on the back of your...

It's Payback Time

sikiliza — Mon, 30 Jan 2012 17:19:06 GMT

You’ve got to love a company that takes your vanity, your voyeuristic and wanna-be tendencies and turns them into cold, hard cash. And that in a few short years, during an economic recession.

I love the business

Some estimates put FB’s net income for 2011 at $1.5B, a 39% margin, which would be higher than any net margin that...

Tech IPOs – A Cautionary Tale

sikiliza — Thu, 19 Jan 2012 16:09:44 GMT

A quick look at the performance of 2011 tech IPOs to date indicates that an investor was better served looking elsewhere, even indexing, in the intervening period.Maybe now might be a good time to pick and choose those stocks that one feels might have a compelling story. Maybe. The dismal performance of these IPOs even given a volatile and largely disappointing market last year tells it all.

The average loss o...

GE is Really a Mutual Fund

sikiliza — Wed, 18 Jan 2012 15:25:25 GMT

My friend Derek reckons that there is no way one could analyze and value GE if they had all the numbers they needed to do so. This company is in so many industries and sectors, it's really a mutual fund from an investment perspective. The company gathers all this capital and then proceeds to invest it in a set of unrelated businesses in for purposes of diversification while earning a return.

A lot of sit...

Gold, Gold, Everywhere but Not an Ounce to Spare

sikiliza — Thu, 29 Dec 2011 14:23:43 GMT

There has been a great deal of brouhaha lately about gold, whether it’s entering bear territory and where it’s headed in the next year or so. To make things even more interesting, everyone I talk to seems to own gold in one form or another. Without trying to predict a crash or anything of the sort, this whole situation reminds me of the technology boom, the mortgage boom etc. where even the waitress at the local dive bar seemed to have a profoun...

My Predictions for 2012

sikiliza — Wed, 28 Dec 2011 17:53:01 GMT

The coming election year portends nothing but gloom with forecasts of a respite from losses for real estate investors, continued punishment for overly optimistic hedge fund managers (Paulson comes to mind here) and increased opportunities for the teachers’ pension funds to continue being the target for ill-conceived IPOs. Most of the problems of 2011 remain unresolved and Europe still does not seem to have quite gotten over its issues even...