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Friday Randoms



  • Inspired by a chart of Prof. Sedacca showing various market bubbles over the last 30 years, I toyed around with commodity spikes to figure out where we might be in the cycle for copper, natural gas, oil and gold. Rather than charting absolute prices, I plotted "percentage appreciation". Unfortunately for "licensing reasons" I cannot show you the chart, but here are the results: the only commodity exhibiting a bubblish pattern is natural gas; next is oil, which if it were to spike like gas, is about 1/3 to ¼ of the way up; third is copper; and - much to my delight - a distant fourth is gold, which, to penetrate Toddo's brain with an annoying Friday tune, "it's only just begun". The precise results change depending on which time periods one plugs in but, regardless, the above conclusions remain fairly consistent. Bloomie users can play with the "G" function to reproduce the above.

  • Portfolio Recovery Associates (PRAA) stock has had a party over the last week on the news that they borrowed $75M dollars to accelerate their loan purchases. This - the theory goes - will increase the absolute earnings number. While the latter might prove to be true, it says nothing of the margins that the company will be able to squeeze out from these receivables. In other words, in line with the rest of the financial universe, it appears that PRAA is opting for "quantity" over "quality", a/k/a greater risk taking. In an industry dealing with "defaulted debt" the latter has its own special meaning to begin with.

  • Back in another "writing life", about 18 months ago, I recall a macro debate over the video game makers. On one side we had those who believed that the impending console rollover would be different this time, and the Electronic Arts (ERTS) of the world would not suffer, and on the other side it was. . . me who thought that there would be pain until the new hardware became established. In true Minxy fashion, all the participants in the debate were adequately frustrated. Using ERTS as the yardstick it has basically gone nowhere fast since then. However, with the new hardware flying off the shelves, I am thinking that better and more consistent times may be just around the corner for the software guys.

  • As I multi-task by writing, watching the ticks, and listening to CNBC, there is little doubt that all of a sudden the "precious ones" are getting a whole lot of face time on the tube. Have I gone Booish since the first "random" above? Hardly. But we have all learned that most secular bulls are marked by sharp, frightening corrections. So, as our fearless leader likes to say, just keep your right hand up.

  • Viacom (VIA.B) has announced that they will webcast first and second round games of March Madness. My Pavlovian "ticker association" reflex flashed HOYA and . . .? If it were not so easy Toddo might actually spare a critter-T for the first correct guess.

  • I am not the least amused by the turkey vultures perched on the balcony outside my window for the last 3 months. Perhaps they need a reminder of why they are considered "protected".

    Have a great day Minyans!! We are almost there.
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Positions in precious metals and energy names, VIA.B, PRAA; limit long HOYA
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