Operating at the Intersection of Technology and the Capital Markets
Month: January 2023
We plan to publish content on companies we believe are fraudulent. We will focus on small-cap companies as it is easier to move the needle there versus mid-cap and large-cap companies. Case in point, when we did work on Cintas (CTAS) in 2017 nobody seemed to care that Cintas regularly overbilled customers to goose reported … Continue reading Corporate Fraud
Analysts estimate that META will grow revenues in 2023 over 2022. However, the estimates I see imply that revenue growth will be back-end loaded. We know how that usually ends. I see META struggling to generate year-over-year Revenue growth and expect for 2023 to be a down Revenue year. Zuckerberg is not an Operator. META's … Continue reading META: Where Will Growth Come From?
The sooner the Fed gets to where it is going, the sooner it may pause and observe. In addition, Treasury yields remain negative across the yield curve which is not long-term healthy for the economy. The Effective Fed Funds rate range stands at 4.25-4.50%. If the Fed believes that the upper bound should sit at … Continue reading Why The Fed Should Hike By 50 BPS
The Fed's tightening game is more than a one-trick pony. Quantitative Tightening ("QT"), is equally if not more important to monetary policy than the Fed Funds Rate. The Money Supply & QT. The Fed reduces the size of its balance sheet by selling holdings or allowing holdings to mature. Both methods result in money being … Continue reading The Money Supply & QT
The Fed's Treasury position was essentially unchanged for the week-ended January 25th while the Fed's Government agency/Mortgage-backed securities position was $15.2 billion lower over the last week. The housing market remains inflated in our view due the Fed's ZIRP policy in 2020 and 2021. Many suburban housing markets that saw residential properties trade at $200/SQFT … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
What does the U.S. hope to achieve in the Russia Ukraine conflict? What is the endgame? Russia Ukraine is a regional border war that has been off/on again for years. If you game theory this conflict out, the risk of tactical nuke deployment is real. I know, I know, Ukraine are the good guys and … Continue reading Russia Ukraine – What Is The Endgame?
Get ready for an uptick in share repurchase plan announcements. This earnings season as Technology companies issue weak guidance you can be sure that many of those companies will announce new share repurchase agreements to support stock prices. Share repurchase agreements are a waste of capital in my view. CEOs should invest in their businesses … Continue reading Weak Earnings & Buybacks
Tonight after the close Microsoft (MSFT) made our case for us, specifically that the uncertain macro environment is causing corporate buyers to take a cautious approach to spending. We told you that management teams would feature the word "cautious" during the December '22 earnings calls and Microsoft CEO Satya Nadella did just that in the … Continue reading Microsoft Made Our Case For Us
Companies are a reflection of the personalities of their founders and CEO. Is anyone surprised by the fact that Google terminated employees without notification other than automated user account deactivations? Google is a Quant-centric company founded by two Quants (Larry Page and Sergey Brin) and led by a hand-picked, data-driven, quant-centric CEO (Sundar Pichai). You … Continue reading Google Firings: Why CEO Personalities Matter
The NASDAQ Composite has had a nice little run, up more than 9% year-to-date. However, I would exercise caution ahead of Tech earnings and the Fed's January 31st / February 1st FOMC meeting. We have written on numerous occasions that we expect management teams to take a conservative approach to 2023 Revenue and EPS guidance. … Continue reading Technology Stocks Are Not Yet In The Clear
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