Modeling Markets

I’ve been posting some articles to SeekingAlpha recently. Here are some excerpts.

Alcatel-Lucent (ALU) has three main operating segments; Networks, S3 (Software, Services, and Solutions) and Enterprise.

Networks is the bread and butter of Alcatel-Lucent, generating over 60% of the revenue. Networks includes divisions of IP, Optics, Wireless and Wireline activities. S3 is as stated above, Software, Services and Solutions. This is mostly complementary to the Networks infrastructure and makes up about 30% of their revenues. The last 10% comes from the Enterprise segment which is communications and network solutions for business of all sizes.

In simpler terms; Networks is the raw infrastructure businesses need, S3 is the software, setup, and maintenance, and Enterprise is general communications advisory for businesses.

So why is this once high-flyer priced around $1? Negative earnings.

The rest of the ALU article can be found here.

LifeLock (LOCK), the most well known identity theft protection company had its initial public offering Wednesday. The 7% decline it experienced may only be a taste of things to come.

The rest of the LifeLock article can be found here.
I also rewrote my GLD article (same graphs, same trade, different paragraphs):

The Gold ETF (GLD) has followed the rise of gold since its inception in 2004. It is, according to ETF Database, the second largest ETF behind the S&P 500 ETF (SPY). Many investors saw this coming and profited greatly, but many came a bit late to the party and are wondering what the next move is.

The rest of the new GLD article can be found here.

This is the bullish case for google, a bearish case could easily be made as well.

A $246 billion dollar valuation for a company that nobody knew about 15 years ago. Obviously I’m referring to Google (GOOG). It might sound weird, but at least for the last year this tech behemoth hasn’t been the poster child for 21st century technology’s arrival on the scene as the new blue chippers. That title belongs to Apple (AAPL). And yes, I just linked you to Google’s stock price on Google’s own finance service. So where is Google headed? Up.

Continue reading →

There is always talk of market manipulation when it comes to oil prices. Indeed, yesterday there was an article in the Financial Times about Saudis offering up extra supply to put a lid on prices (thanks to Abnormal Returns for the pointer).

I am more inclined to believe that market forces control the price of energy. This seems like a difficult position to hold at first glance because the majority of the oil produced in the world is controlled by what is ostensibly a cartel, OPEC. However, the pressure by non-OPEC oil suppliers is increased when prices go up and oil does not have a monopoly on energy prices, despite how it might feel when filling up your car.

So today I have prepared an analysis of oil prices versus the dollar. Because a barrel of oil is denominated in dollars we expect an inverse relationship to exist. I’ll be using brent oil spot prices and the UUP index. Continue reading →