Wynn’s Tornado of Adverse Events Continues

By Dan AmossPosted September 2, 2020

Shares of casino owner Wynn Resorts Ltd., our latest short idea, continue to lag the market for very good reasons. Wynn faces a triple tornado of adverse events. These include the pandemic, the resulting economic depression and trouble for their Macau location. A rebound will surely arrive, but how large it will be is unclear. As revenues decline and debt load rises, these headwinds will continue to put downward pressure on its stock price.

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Jim Rickards’ Crash Speculator

Dan Amoss

Dan Amoss, CFA, tracks aggressive accounting and other red flags that markets miss. He’s a student of the Austrian School of economics and Daily Reckoning fan since 2000. Agora Financial relies on Dan for macro market commentary as well as profitable plays like his 2008 call to readers to buy Lehman Bros. puts, which...

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Why Retail Investors Refuse to Join the Melt-Up

By Dan AmossPosted December 11, 2019

As baby boomers approach retirement, the older demographic of investors is a headwind for U.S. equity markets due to a more conservative approach to investments. In fact, the demographic-driven rotation from stock funds to bond funds is likely to accelerate rather than reverse. In fact, more companies are now using bond offerings to build up cash reserves ahead of a potential recession.

Reopening Plays Are Priced To Perfection

By Dan AmossPosted March 17, 2021

If an investor does not have context about the financial health of a company, then that investors might believe that changes in the fortunes of a company are the only thing that determine its stock price. But, a closer look at fundamentals can determine its direction more than just positive news about the sector overall.

Bonds Remind Us That Stock Valuation Still Matters

By Dan AmossPosted March 3, 2021

Most investors are looking for a cash-on-cash return. They put their hard-earned cash into a stock and want a shot at receiving a decent-sized earnings stream or dividend stream within some reasonable amount of time. This cash-on-cash return framework reminds us of the importance of default-free government debt yields that are available. If these yields spike higher, then the willingness to hold the most speculative, lowest cash-on-cash return stocks can fall sharply.

Rapid Detonation Of Archegos Is A Stark Warning

By Dan AmossPosted March 31, 2021

In the current market environment, with investor positioning still lopsidedly bullish and highly leveraged shareholders like Archegos, it’s especially worthwhile to limit holdings to quality stocks trading at reasonable valuations. When markets become dominated by momentum traders, and value-conscious buyers are left in the dust, then the predictable result is near-vertical rallies followed by even faster crashes.

Investors Can’t Ignore Balance Sheets Forever

By Dan AmossPosted June 10, 2020

As economies reopen, revenues bounce and jobs return, many deferred payments will become due as well. Investors will soon recognize the risks of owning shares in companies that have borrowed heavily to tide themselves over. The debt burdens at companies with weak earnings fundamentals tend to squash shareholders over time. So investors should be wary of any uptick in risk aversion that could cause a stock to crash very quickly.

Airlines Need Much More Capital

By Dan AmossPosted April 29, 2020

One sector of the market suffering heavy losses is the airline industry. When taxpayer-funded payroll assistance ends, airlines must tap new sources of capital from the private sector. The longer that demand for airline travel remains far below its peak, the more cash airlines will burn and the more capital it will need. The result will be a heavy cost to shareholders.