The (not) unthinkable has happened (USEC)

July 28, 2009
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Remember what I said about the dangers of event-driven trading? USEC has been denied the loan guarantee for their centrifuge enrichment plant construction, for reasons of concerns about commercial viability (which is unusual because the technology is already in useĀ  by other uranium enrichers) . As a result, the company seems to be making good […]

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“Do what you love and the money will follow” (Options)

July 23, 2009

How many times have we heard the above advice? Usually, it gets people to burn through their savings by starting ill-fated businesses, but that is not the only thing to love. We Fructivores love buying and selling at the right price. The right price is when a security is fairly valued, since at that point […]

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Calling the government’s bluff (USEC)

July 16, 2009

Event driven trading is never as simple as people think. The concept is simple enough: identify an event that is likely to change the price of a stock, determine the price of a stock after the event does or does not occur, determine the probability of the event occurring, and take a position accordingly. Of […]

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Inside every investor is a yield hog (Windstream)

July 14, 2009

Every financial panic needs a good person to blame. This one can be blamed on securitizers and financial derivatives engineers; the one before on deluded dot-com investors, the one before (the junk bond collapse) on frenzied, ill-advised mergers, and the one before that (the Latin American debt crisis) on the oil crisis. I’ve skipped the […]

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Capital One, Part Two

July 8, 2009

The deeper I get into investing, the more I find my interests are aligned with those of our corporate overlords. Thus, even though a piece of legislation is objectively progressive and fair, I also have to view it in terms of how it tilts the power away from the fat cats. Such is the case […]

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A test of management competence (Capital One? Seriously?)

July 7, 2009

Benjamin Graham wrote in Security Analysis thatĀ  there are few tests of management competence and none of them scientific. This was in the 1951 edition of his book, and in almost 60 years there have been few improvements. One reasonable test, however, is management’s opportunism and understanding of the broad economic climate. Although “proactive” is […]

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