by Travis Johnson, Stock Gumshoe | January 24, 2013 10:06 am
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Imin at 22.85 and will double my position if it goes to 22. However I think a bottom has formed. Curious that Einhorn blundered on gmcr and aapl. I made money long on gmcr
but was always afraid to short it. Re companies have bad underwriting quarters that is usually built into the price.
If you think glre is an opportunity on dips you must think aapl is a massive opportunity now.
I think the jury’s still out on GMCR — it’s still below where it was when he famously shorted it and announced that short in the Fall of 2011, but it has certainly come back quite a bit. He and many other value investors still seem convinced that it’s at least halfway to being a fraud whose profits should be withering, but I’ve never gotten involved on either side of that argument. And yes, I do think the beating that Apple has taken is completely overdone, it’s cheap and priced as if it’s going to grow at the rate of inflation now. Though I’ve probably also been not appreciative enough of the power of investor sentiment with this stock, given the massive shareholder base and huge optimism that fueled it from $350 to $700.
The reinsurance blunders from GLRE were pretty specific and were related to a bad strategy and thesis in their trucking lines, not a natural disaster, which I think is a little unusual … and hopefully will not be repeated at quite the same scale. As long as they can be average on the underwriting most of the time I still trust Einhorn’s long-short portfolio to handily beat the usual conservative insurance portfolios, and the capital base he’s investing is big enough that the investing profits can overcome bad underwriting sometimes and, over time, make average underwriting extremely profitable. His exceptional investment record has primarily been made on company analysis and valuation work, along with a some big winning thematic bets, which makes me more comfortable in his long-term performance potential — sometimes the thematic bets will turn against him, as with the iron ore short recently, but I really admire his firm’s company valuation and forensic and investigative accounting work and think it will continue to be effective most of the time.
Glre seems on track lets hope earnings come in. The theme for glre seemed to be Eihhorn. In light of this < bad joke> any comments about the news Einhorn has been making pertaining to aapl and if he is a factor on share price?
Hi! Travis What do you think of “Bull Exchange” and their recommendations. They are currently recommending YFRM on the pink sheets and the Stock is up 30%.
Have never heard of them, but if they’re recommending YFRM they’re probably being paid to do so (it’s a $6 million company that looks like a pump-and-dump shell company at a quick glance). Probably they’ll say as much in their disclaimer. If so, they’re not actually recommending anything, they’re just promoters, and I would think little of them and ignore their promotions. As I said, I don’t know them or YFRM at all, but given my experience with similar looking situations I’d say that odds are good that if you dig under the surface a little you won’t find much to like.
Thanks Travis for your insight. I was looking at Golden Predator that you mentioned and it looks like a good buy for the future.