Jackson America

CACC: Recent Events Add to the Short Thesis

Lance,
Your suggestion is very interesting. I think that requiring (in good faith) an author to disclose his/her position is fundamental to helping readers balance an author's natural subjectivity with the inevitable other side of the argument. Sites like Seeking Alpha are fantastic because they allow investors to share their thoughts and work with the investment community. Further, these sites provide a forum for investors to present well articulated, factually-driven, negative views on stocks and sectors. Cautious investment opinions can be very helpful in highlighting investment dangers (despite the stigma associated with short selling). Feedback and comments to the author make the process even more helpful for the entire community.

However, asking authors to disclose the size of their positions takes the "intent" behind asking an author to disclose their position, to a whole new level. I also would argue that a position size is not always consistent with conviction levels, which can lead to an outcome that could actually be misleading. For example, some positions can be sized based upon daily volumes, upon sector allocations, upon strategy (quant funds may have 1000's of positions, whereas concentrated value deep value funds, may only have 10 positions), etc. Your suggestion is very interesting and I’m sure would provoke a wide variety of opinions.

CACC: An Ideal Play on the Consumer, Auto, and Credit Markets

wes- ACF was far more widely held and recognized revs based on typical portfolio accounting whereas CACC uses a level yield basis, which is IRR driven. Leaves A LOT to the imagination and A LOT of discretion. It is unfathomable that CACC has avoided the once-in-a-decade carnage of its comp group. Seems like it is a matter of time before their accounting catches up with them.

Red Flags at Typhoon Touch Technologies

Can you ever get a borrow?

CACC: An Ideal Play on the Consumer, Auto, and Credit Markets

Jackson, can you please email me directly. I'd like to discuss further. Fascinatingly scary.

Sounding the Alarm on DTS Inc.

thanks for the comments. my understanding is that Blue Ray working group has a patent pool of which DTS has contributed IP. DTS gets ~ .30 per unit across platforms and that is SIMILAR to their standard def royalty rate. What bulls miss is that DTS has ~ 92% penetration rate in SD, so will the incremental 8% TAM make a significant difference? What if the HD cycle is weaker than the SD cycle? I'm going to write a follow up tonight that hopefully will be out tomorrow.

The Sad Truth for Answers Corporation Bulls

Mark,
Thank you for your input and your points are well taken. I have disclosed that I am short ANSW so that should explain why I have chosen to post my point of view here. I also appreciate the feedback that this site provides. To your question about my concern surrounding Answers.com turning the profitability corner, my answer is a resounding “no.” First, I do not believe consensus estimates. Second, for Answers.com to grow the top line, I believe they will need to spend to do so (you point out that direct sales campaigns will increase RPM’s – direct sales people cost money), which will limit their profitability. I think that Answers.com will be CF+, but I also tried to point out that FAS 123R expense is a real cost and extremely significant for ANSW, although it’s not a cash cost. I think that the company is issuing stock to employees, and more lavishly to management, as a substitute for cash comp, which artificially boosts CFO. Further, I am modeling interest income to represent almost 50%+ of their “earnings” in 1H’07 – which surely doesn’t warrant a multiple. Recall, ANSW has ~ 11M shares out, which leads to a $143M market cap, so a few pennies of “pro forma” earnings doesn’t concern me as a short. In fact, I think there are a significant number of shareholders like yourself that believe this “turn” will represent a major catalyst, which seems odd given the fact the company has guided to be CF+ and profitable throughout 2007, and analyst estimates reflect this assumption. It is my opinion that Q1’07 profitability may actually represent a major negative event when the news hits and all of the longs ask themselves “ok, now what?” On a separate note, I would be very curious to know what metrics (queries, RPM’s, and opex) you are using to arrive at your $1.00 of EPS for 2007. Either way, I appreciate the feedback. Our differing opinions are what make the horse race.