Vitaliy Katsenelson's blog

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Crony Capitalism and the Oracle of Omaha





I never thought a visit to Omaha would trigger an appreciation of the role Icahn and other activist investors play in corporate America.

 
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The Apple Brand





probability that Apple will introduce a brand new product category in the near future is incredibly high

 
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Homophobic Arbitrage





In investing you have opportunities that open up because dogmatic investors say “I don’t do ... ”

 
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The Fed Model and Profit Margins





I vividly remember how low interest rates and the Fed Model were used as propaganda tool in the late ’90s to justify the stock market’s “this time is different” sky-high valuation

 
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Microsoft Hell





As a value investor I used to spend a great deal of time in Microsoft hell. No More!

 
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Jesse Livermore: Parallels Between 1920s and Today





There are lot of similarities between the 1920s and today.  In fact Livermore’s quote says it all: “There is never anything new on Wall Street, because speculation is as old as the hills.”   1924-1929 bull market was rigged by stock manipulators.   Ninety-some years later the market is still (or at least is perceived to be) rigged by ...

 
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Are We There Yet?





One of the problems with QE is that the Fed is forcing people to buy riskier investments than they otherwise would have. The immorality of their actions aside, they create a significant psychological mismatch between assets and their holders. Stocks are in weak hands, insuring one great stampede for the chairs when the music stops.

 
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We Are Still Going Sideways





 I read that Rich Bernstein, former chief investment strategist at Merrill Lynch, is very optimistic about US stocks; he believes we are at a point similar to where the market was in 1982 – at the beginning of the 1982-2000 secular bull.  After you’ve gone through my slides, you’ll understand why it is so hard for me to share Rich’s excitement.

 
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Two Contradictory Thoughts About Elections





The partisan politics of this country is simply insane.

 
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Thoughts from VALUEx Vail 2012 Conference





Here are my thoughts from the VALUEx Vail conference. The idea for this conference came to me when I attended VALUEx Zurich, organized by Guy Spier and John Mihaljevic in February 2011 (you can register for VALUEx Zurich 2013, here). The thought of spending three days learning and sharing ideas with smart, like-minded value investors felt instantly right. Investing on some level is a never-ending pursuit to get better. Most of us are locked up in air-conditioned offices where we learn through reading SEC filings, magazines, blogs, etc.

 
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Seek out people who disagree with you; The budget deficit is a stimulus; China = post-bubble Japan?





 I am back from Buffett’s Omaha.  Every year I come back feeling supercharged for the year ahead.  This year was no different.  From morning till night I had the pleasure of sharing and debating ideas with investors from all over the world.  Though I did not plan it this way, the first day I had dinner with value investors/friends from the UK, on the second from Germany, and on the third from Spain.  I have at least a dozen stock ideas to research and new thoughts to process. 

 
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Warning for an Eager Facebook Investor (my shortest article, ever!)





Here is a thought for an eager Facebook investor: Google revenue - $40 billion; market capitalization $200 billion (plus $40 billion of cash).  Facebook revenue $4 billion; market capitalization $100 billion. So Facebook has to grow revenue 10x for you to double your money.  Good luck!

 
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Bubbles





I have to confess, I am tired of writing "structured" articles, the ones where I have to limit my thoughts to 800 words.  So with this one I am taking a break.  This is an unstructured stream of thought, in no particular sequence.  

 
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Not Buying Best Buy





 Best Buy’s CEO Brian Dunn did a courageous and proper thing for shareholders by resigning.  He was not the right person to lead Best Buy into battle against online-only competitors that use Best Buy’s spacious and beautiful stores as the showroom for their products.  To make things even worse, smart cell phones make comparison shopping so much easier nowadays, and structurally, Best Buy cannot have lower prices than its online competitors.  Its stores also lack the breadth of selection of Amazon and they are at a permanent, competitive cost disadvantage.&nbs

 
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Billish. Bearish. Brokish!





Though the market keeps raging to the upside, I keep seeing bearish signs in market sentiment – the VIX is hitting multi-year lows, 

 
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