SMW Wrote: ------------------------------------------------------- > LPoulin133 Wrote: > -------------------------------------------------- > ----- > > IMO, the key factor to keep in mind is that you > > don’t get paid on valuations, you get paid on > > price. Tilson’s NFLX short is a good example - > he > > could’ve been 100% right, but that didn’t > matter. > > > > I think that’s a great point. Tilson got his face > ripped off shorting Netflix. While I agree with > him on all his points on why NFLX was overvalued, > he was shorting a business that has had pretty > good fundamentals and has been run efficiently. +10 on both posts. Tilson did get nuts blown off by NFLX even though his analysis was 99% based on factual evidence. A few emotional arguments in that article but still great research.
They can’t all be winners. Some will fail. Some will start to fail and then get bought up at numbers higher than they deserve. Dangerous, dangerous.
Confirmation bias http://www.institutionalinvestor.com/banking_capital_markets/Articles/2785873/Internet-Bubble-20-Has-Formed-and-It-Wont-Last-Forever.html?p=2
I still don’t know about going short tech stocks. The risk/return profile just doesn’t seem favorable. If the stocks go down, you can earn what, 20%? 30%? But what if you are wrong and Facebook and friends double in value? It just seems like an unreasonably risky thing to do, unless you know some dirty secret that no one else does.
Shorting internet stocks is a great way to transfer wealth from the older generation to the younger generation.
I’m not thinking of doing it now, hell, I’m not thinking of doing it in the 16 month time frame they lay out in the article. Just pointing to the structural shift occuring.
Markets can stay irrational longer than you can stay solvent. It’s easy to be right on the direction, but the timing is 90% of the game.
I`m taking this as a sign that irrational exuberance has taken over in tech once again… Booze at Work Makes a Comeback at Silicon Valley Firms http://www.bloomberg.com/news/2011-03-13/booze-makes-comeback-in-workplace-with-silicon-valley-twist.html
former trader Wrote: ------------------------------------------------------- > Markets can stay irrational longer than you can > stay solvent. It’s easy to be right on the > direction, but the timing is 90% of the game. Love this quote, use it at least once a month when someone has a good idea but is too trigger happy. Case-in-point; colleague thinks nuclear is a good bullish play after the current events, legged into it today – uh oh, reactor 4 blew up get ready to have your d!ck blown off tomorrow. I like the trade (China/France nuclear dependency) but the timing might be another week away.
That presumes that fears about nuclear reactors and regulatory and popular opinion is somehow irrational. These fears may turn out to be unwarranted (i.e. the reactor may not end up exploding), but they don’t really seem irrational.
From what I gather, there’s like a 90% chance that the nuclear plant situation will be contained and 10% chance of everything exploding. So, *probably* everything will be ok, other than the damage that has already been done. However, the improbable but possible worst case scenario is contributing to investor panic. From what I read anyway.
bchadwick Wrote: ------------------------------------------------------- > That presumes that fears about nuclear reactors > and regulatory and popular opinion is somehow > irrational. These fears may turn out to be > unwarranted (i.e. the reactor may not end up > exploding), but they don’t really seem irrational. the three-mile island incident was not a major event. following three mile island, no new nuclear plants have been constructed in north america for over 30 years. before three mile island, nuclear was considered god’s gift to man. the only reason why interest for nuclear has spiked once again is due to demand and a lack of understanding about how to extract oil/gas from shale. i’m not an energy expert, but i’ve read studies where nuclear energy including all externalities is actually more expensive than natural gas power generation (and that was with nat gas at $6-7 NYMEX, not $4…)
I don’t think it’s irrational to think that whether or not the Japanese plants go BOOM, regulators and the general population will decide they don’t want these things hanging around. The three main issues with nuclear energy are 1) risk of meltdowns, 2) what to do with nuclear waste, and 3) the possibility of nuclear fuel getting redirected towards terrorist (e.g. al Qaida) or state (e.g. Iranian) hands. The meltdown risk (and to some extent the waste issue) has been argued by the pro-nuclear group that if we just engineer things well enough, it’s really not an issue. Chernyobl is dismissed as Russian incompetence/drunkenness/corruption leading to shoddy work. Three mile island is dismissed as “a learning experience that wasn’t too risky.” But if the Japanese can’t get the engineering right, then it’s really arguable that no one can. One can say, “but who could have known that there’d be a big earthquake and a tsunami,” but with four or more reactors at risk of going critical, and also in a country known for severe earthquakes and tsunamis, one can see this as an event that will make everyone think twice or more about building plants. One thing that is sure to happen is that plants - if they are allowed at all (which I think will happen) - will become more expensive to produce, and other alternate energies will become at least marginally more attractive. So, yes, the plummeting uranium prices, and uranium miner stocks don’t sound irrational to me. At some point, they will overshoot and try to bounce, because current power plants probably can’t be shut down overnight, but stock values represent a long stream of earnings, and those future earnings just went down substantially.
Were the plants damaged by the tsunami or the earthquake. If the former, wouldn’t it have been safer just to have put them on the other coast in Japan where they are unlikely to get hit by waves?
The reactor vessels are fine. The issue is that the pumps that provide water for cooling are not working. Power supply is one problem: the reactor is offline so cannot provide local power. The electricity grid has been ravaged by the tsunami, so you can’t get power from coal plants elsewhere, batteries did work, but only for 8 hours, when they need to be recharged. Backup diesel generators (a 3rd level of backup) were inundated by salt water and apparently aren’t working. Now, in a meltdown, there is a basin that can withstand temperatures of something like 6000 C. The only materials that can withstand that kind of temperature are ceramics, but ceramics are brittle, and might have been damaged by the earthquake. Under normal conditions, a worst case analysis would be to let the core melt down and accumulate in the ceramic, then pour lead and concrete over it. But if the earthquake has cracked the ceramic basin and the core does melt down, then it really is the China syndrome… or maybe the Argentina Syndrome from their perspective.
bchadwick Wrote: ------------------------------------------------------- > Under normal conditions, a worst case analysis > would be to let the core melt down and accumulate > in the ceramic, then pour lead and concrete over > it. But if the earthquake has cracked the ceramic > basin and the core does melt down, then it really > is the China syndrome… or maybe the Argentina > Syndrome from their perspective. i bet that’s your favourite movie… 
bchadwick Wrote: ------------------------------------------------------- > That presumes that fears about nuclear reactors and regulatory and popular opinion is somehow irrational. These fears may turn out to be unwarranted (i.e. the reactor may not end up exploding), but they don’t really seem irrational. Zee germans agree and are shutting down 7 plants (temporarily, but maybe for good). http://www.reuters.com/article/2011/03/15/germany-nuclear-idUSLDE72E17620110315
MattLikesAnalysis Wrote: ------------------------------------------------------- m not an energy expert, but i’ve read studies > where nuclear energy including all externalities > is actually more expensive than natural gas power > generation (and that was with nat gas at $6-7 > NYMEX, not $4…) New nukes are estimated to have a levelized cost around $90-100/MWh, and with new CC’s having heat rates below 6, gas will have to go a long way before nukes become economically competitive. Regarding the original topic, most of these tech companies are well run, with solid fundamentals and products. They may be overvalued (AAPL almost certainly is), but there are plenty of sh1tty, poorly run companies out there to short.
I’m going to go with the bullish theme. Even if there is a criticality incident and the place blows to radioactive smithereens it will not kill nuclear. Developing nations just have too many mouths to feed to give up the chance of cheap electricity. Rather they’ll just build in more safety features and build on as before. The way I see it, if a 40 year old reactor can survive a 9.0 earthquake, multiple aftershocks, and a tsunami without a total meltdown, it’s pretty good.