January 7, 2019

Lessons learnt from Apple stock collapse

Apple's stock price has dropped almost 37% from its 2018 highs. Doug Kass outlines some of the lessons investors need to learn from this event.

Lessons/conclusions from $AAPL:* Be skeptical of company buybacks* Don't automatically follow the whales (even Warren Buffett's Berkshire Hathaway)* Do your own homework* Does anyone believe the S&P 2019 EPS estimates held by the consensus? 
Remember the excitement that propelled the stock to over $215/share after ASPs gapped higher in the prior quarter? 
Remember the commentary that disregarded elasticity of demand from the $AAPL heads? 
Investors should go back to textbooks and study what happens to demand of overpriced products vis a vis competition in a maturing market and a worrisome trade dispute.

via twitter

January 4, 2019

Doug Kass increases long bets

The recent stock market declines has Doug Kass interested in being long instead of short.

Some Portfolio Adjustments In the Last Few Days* I have sized up a number of individual longs during the market's recent weakness. 
I have moved from medium sized to large sized in the following longs: $GS, $CBS, $HIG, $SQ and $TWTR. 

I have moved from small sized to medium sized in the following longs: $AMZN and $GOOGL. 
I currently have zero shorts (either in the Indices or individual stocks).  

It should be clear after the last two decades of writing my Diary on Real Money Pro that I do not resemble a Perma Bear. I am, rather, a contrarian who bases his stock selection on fundamental grounds and who buys when others are fearful and shorts when others are greedy.  I continue to try to do so with analysis and full transparency.  

via twitter

November 28, 2018

China could outlast USA in a trade war

Doug Kass on the US - China trade war and differences between China and USA level of patience.

Since the Chinese/US trade dispute is on the front burner now, I wanted to repeat these thoughts from a week ago:

"I have written much about trade over the last few weeks - most recently this week's.
What follows is a great quote made in 1972 by Chinese Premier Zhou Enlai - it's something to keep in mind when listening to opinions on the subject of China/U.S. trade.
When he was asked about the impact of the French Revolution (of 1789), he replied "It is too early to tell."
That quote is from sixty years ago.
Unlike many, I believe the Chinese can outlast us in a trade war.

China is a patient civilization. The country takes the long view of history (often measured in hundreds of years)- as expressed in the witty and Oscar Wildean response above by Enlai.

While Americans are focused on 2020, the Chinese are focused on 2120! 

Hardliners in the White House and the dopes on Wall Street don't have a sense of history."

via twitter

November 19, 2018

Is there a special sauce to beat the market ?

Navigating the stock markets is not easy even though many claim to have a special secret sauce that enables retail investors to bag profits. Doug Kass tells the truth of how Retail Investors can get duped.

"The “special sauce” guys who have a special formula to beat Mr. Market. The most venomous are the “unusual call activity” crowd – a constant diet of which will end most up in the poor house. Most have little skin in the game. But, importantly, their consistent failure to memorialize the results of their recommendations is testimony to the mug’s game they use as a “hook” to snare the unsuspecting. I have contempt and little respect for those that show the “rolls” of their winners and too often ignore their trades that go to zero (e.g. out of the money calls bought on (ROKU, SQ, AAPL, TSLA, NFLX, GS) and many other high beta stocks of that ilk that have recently collapsed).

(There is no special sauce. I give these players – with limited accountability and selective disclosure – no respect at all – for basically trying to deceive the individual investor.)"

- via realinvestmentadvice