Our Cold Cutting Edge
We do a bit of warm additive baking here also. We’d learn two new tricks per day for steaming bread from the oven.
-StockJaw portfolio Action-
Chop Chop Who’s Not There?
FRESH PORTFOLIO CUTS
What’d they grind up and ram into your buy? “You’re calling that a BUY? No GE bologna–just the Boeing thank you.”
UPDATE; 1-17-18: STOCKjAW BLOWS-UP Huntsman calls. A day from expiration we attempted to exercise our call options in Huntsman International. Things had changed for selling call options on the trading platform. We attempted to buy the shares. Human error sold the calls, rather than exercising the contract.
OUTCOME: Total Return HUN 1-19-18 call options 84.7%, or 0.80%CAGR. Perhaps the Huntsman move dies here, no really we’re back to the option chains. However, the recent share price move may have priced calls too high just now. The technicals have shifted, in that shares are now overbought, and under “distribution.” Distribution is selling and no one knows where that ends.
UPDATE: 1-4-18: (NYSE: BABA) StockJaw takes gains in BABA. Sell; $185.65. The chart of Alibaba is a classic train-wreck. Every SMA(simple moving average) has been violated, the 10d, 50d, and 200d. And then it simply leaped above them all on spiking volume. We took half of our long-term bet off. We’ll be back–we yet hold half.
StockJaw takes profits in Alibaba(BABA). We intend to “Trade around a core position” with Alibaba.
N e w adds to Our Portfolio: Huntsman International call options(HUN 2.10, 1-19, $30.00 strike), Alibaba–BABA,
Even newer cuts–Netflix, Brinks–huh?
Small risk/re-balance shaves–Amazon, Facebook.
UPDATE; 10-10-17: Last week we sold our remaining piece of a long-term NFLX position. By rule of thumb and volatility, we’d taken profits, ultimately too early. The stock simply continued climbing, leaving us with a strong yet partial piece. Time to punt. We sold out at $191.02sh., netting an 89%, total return. NFLX remains on our watch list, too expensive on merits, and too expensive in this elevated market. Love Reed Hastings, the thesis, but pass for just now.
Netflix–(NASDAQ: NFLX) IT, Internet & Direct Marketing.
Netflix owns by far the largest glowing data ball in streaming and video.
N e t f l i x Is doing apostle’s work. It carries the shocking light of choice out deep and ever deeper into the entertainment darkness. NFLX continues to lead the world in streaming video on demand–SVOD. With founder Reed Hastings driving Netflix has become a household name and gone world-wide. NFLX’s data ball leads the industry–way. Read our extensive coverage of NFLX in “Pirates of Coax. Cannon Fire.”
Flashing global last year, Netflix is building internet coverage and speeds in places such as Sao Palo, Brazil. Build it and we’ll beam it. Now here’s your new credit card so you can subscribe. Changes to net neutrality may undercut the NFLX thesis. That possibility is big. We’re staying, for now. Great conference calls. Clear, direct, and non-promotional.
Our cost basis: $100.99.
StockJaw.com Conference Call Rating: 4 Stars.
NFLX sets the standard for great calls. Netflix’s calls are video yo, and smooth. Stay tuned for CEO Reed Hastings’ follow-up comments, which automatically follow the Q&A. He’s mischievous–“Sorry about the volatility,” Reed once chirped with a grin.
Netflix Investor Relations:
Now 0.0% or our portfolio.
UPDATE: 11-01-17…………………………………..StockJaw Exits Brinks. Shareholder selling gaps shares down nearly 9%, then below a flattened 50-day moving average. This Q3, ’17 earnings price cascade in our opinion clearly displays the unhealthy level of shareholder expectation for BCO. That’s shareholder sentiment. On the fundamental side, Q3 shows Brinks’ stepped-up growth is real and their business is growing in all segments. Brinks’ growth is both global(operating presence in 100 countries) and also balanced, 50/50 organic vs. by acquisition. GAAP revenue up 12%y/y. On the downside, shareholders sold this quarter with crazed abandon and they remain arms-crossed sullen.
We love the mutt, but we’ll let someone else feed him for a while. What happened with BCO? What technical heal might bring us snapping back? Savor all in our “Think Tank. Back From the Bunker Report.”
Brinks–(NYSE: BCO) Industrial, Commercial Services.
“I know what you’re thinking…”
B r i n k s is precisely who you think they are–the 157 year-old security company. Brinks is an international player in secure transportation of cash and other valuables, a cash processor, and other cash management services. Out of three main players, Brinks is the dominant player in three of the ten international categories within which they operate. Brinks is second in the remaining seven.
Read our launch piece on Brinks:
“What to say when a 157 year-old gets serious.”
0% of Total Equities Held.
Our cost basis: $75.51.
Sold at $75.85.
StockJaw Conference Call Rating: 4 Stars.
Great. Super clear. Good slides. Brinks is an easy to understand company/industry and they tell it straight.
Brinks Investor Relations:
We are Always looking
Conference Call Ratings
Good calls make great buys possible.
When you can’t understand what your company is saying, you’re screwed.
Which companies help.
Which companies hide.
StockJaw’s new “CCR’s” provide any readers with a single rating for earnings conference calls. Are calls easy to follow(4 Stars), or a morass of info meant to mislead(1 Star)? Many calls can be difficult to understand, or less then fully forthcoming. Industry jargon and acronyms abound. Some simply tell it like it is–Netflix is the best. Amazon is aloof and often mute. Our rating system is 1-4 Stars, with 4 being the easiest to understand, 1 being nearly opaque. Some companies are inherently hard or even impossible to understand, thus uninvestable. Master Limited Partnerships(MLP’s) and Morgan Stanley are the worst.
StockJaw believes it is necessary to understand the businesses within which your chosen companies operate. Investors want companies that are shareholder friendly. If management doesn’t take its’ earnings calls seriously, they don’t take their shareholder base seriously. If you can’t or don’t understand the business, you don’t know your holdings. Kaboom. That’s why we rate them.
“Crooked Hours Report.”
T h e entire strategy of investing is to be there when it’s good, and be gone before it’s not. That means identifying potential threats in advance. Long-term investing calls for long-term looking. Companies operate according to business models, and planned growth paths. Cracks eventually appear in every model or plan, even for our very best businesses and companies. The “Crooked Hours Report” has arrived. When cracks form in otherwise bullet-proof business models/growth paths, such paths become crooked, and harder to achieve.
Solely watching for problems within your companies is not enough. Anticipation of problems is key. Our report is designed as a bullet-point list of exactly what to watch, and look for. Quickly learning and acting upon formative events, prior to price moves, is what investing is all about. That’s why StockJaw now launches our
“Crooked Hours Report.”
The MACRO Picture
Crooked Hours Report–Macro.
I n our opinion government intervention remains the single largest threat to the majority of our portfolio–Amazon, Facebook, Alphabet, and Alibaba. The Economist(Nov. 4, ’17) reports that between 1970-1999, U.S. anti-trust regulators averaged 16 lawsuits per year. Between 2000-2014 their average dropped to 3, a greater that 80% reduction.
Any legislative attempt to regulate these uber-powerful companies will likely result from an event raising congressional “concern,” followed by public outcry. For example, the streaming of a murder on FB Live resulted in palpable public concern and a flurry of sensational news accounts. Everyone witnessed the upset. Yet FB Live also provided clear and damning footage of a police shooting many yet feel was criminal. As of now, people find far more benefit than concern. That’s good, and we think a more stable and lasting view. But things change. Attitudes shift. When the public begins to view these four companies as a threat–which they will–regulation won’t be far behind.
However, any legislative attempt to regulate AMZN, FB, or GOOGL/GOOG, could prove very difficult. Can you imagine the legal teams any of these companies would build? Think U.S. vs. Microsoft. When the U.S. attorney threatened legal action, Microsoft’s unspoken response was “bite me,” and Bill Gates meant it. MSFT proceeded to fight the entire federal government to an embarrassing frustrating draw. Fed prosecutors hate losing more than doing nothing.
Donald Trump routinely speaks with a pro-business tone. Nonetheless, he has already clashed personally over Twitter with Jeff Bezos–AMZN, referring to the company as a monopoly. Bezos did not reply diplomatically, and humiliation is never a solid strategy. Similar statements have been directed at Facebook, in particular focusing on the streaming of homicide on FB Live, Russian election interference via FB, the general rise of fake news, and the “echo chamber” effect on public perception. Many call it a “utility,” along with Google search.
If people start doing this over FB, Alphabet, or AMZN, regulation can’t be far away.
The senate has already cooked a legislative intervention they call the “Honest Ads Act.” On November 1,’17 top executives from Alphabet, Facebook, and Twitter testified before members of the U.S. Senate. These high-profile hearings focused on Russian use of these three platforms to interfere in U.S. elections. “This is the national security challenge of the 21st. Century” commented Lindsey Graham(R-South Carolina.) Federal prosecutors are like lions. They test the water by targeting the slow and weak first. That means Twitter.
Wins in big cases launch political careers. Think Rudy Guiliani–fed prosecutor and multi-term NYC mayor. Amazon, Alphabet, and Facebook, sit in the government’s cross-hairs on a daily basis, as obvious targets but hyper-dangerous to attack. Depending on what these companies do, that balance could shift at any time.
Alphabet’s current anti-trust concerns lie in Europe. The EU has already sued and fined Alphabet $2.6b. They have also sued Apple for $15b. Alibaba operates solely at the whim of the PRC and it’s shifting political directives. All of the above rank as leading concerns to the ongoing success of these four massive companies, and thus our stake in each.
“Where’re the headphones?
Thanks for reading. Keep looking.
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