Dan AmossDan 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 gained 462% as the stock fell from $45 to $12. And he called American Airlines’ bankruptcy long before the Chapter 11 filing, telling readers to short the stock, which tanked from $6 to just 26 cents.

Formerly, he was investment adviser to one of the top small-cap mutual funds in the country. He grew up on a semi-working small farm that his great-grandfather bought in 1907, learning thrift and the value of hard work through generations. 

This informs his drive to seek truth and expose frauds and promotions that suck in investors. He cut his teeth in finance interviewing management teams in “roadshows” and so knows the kind of BS they sell.

His bottom-up investing style focuses on management strategy, return on capital and the truth (and lies) buried in financial statements.

Fun and Games with EBITDA

When credit markets seized up during the February-March market panic, CVNA shares crashed due to its inability to produce used car loans at a sustainable level. In a very capital-intensive business, having enough cash flow is key. Using one accounting metric in a misleading way is necessary to constantly reinforce a narrative of unlimited demand for cars to maintain excitement in the stock.

Why Australia’s Housing Bubble is Critical to its Economy

As is the case in the U.S. housing market, many Australian homeowners who are having difficulty affording their mortgages have had relief from payment deferrals. Yet the banks who are granting these deferrals are still accounting for these loans as performing loans. Once deferral periods end, it will result in defaults and foreclosures as well as many rental vacancies. This will be especially critical for an economy that’s become far too dependent on frothy housing market bubbles.

Why Carvana is Not the Next Amazon

One key to distinguishing the failure of a company that truly has the potential to mimic a younger Amazon is whether or not that company’s business model is easily copied. Carvana’s model is much more capital-intensive than a young Amazon was, and any number of catalysts could break the Carvana stock bubble in the coming weeks. That’s why we are holding a bearish option position in the portfolio.

Project Prophesy September Portfolio Update

The stock market has continued its historic run since our last update in early August. Most stocks continue rising at astounding rates, ignoring the reality that large chunks of the global economy are being sustained by government stimulus programs. We still like gold stocks and think certain areas of the market, like high-dividend stocks, could have strong rallies to catch up with the rest of the market. For now, read on as Dan gives guidance on all the open positions in the portfolio, including one position being moved from a buy to a hold.

Wynn’s Tornado of Adverse Events Continues

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.

A Peek at the Project Prophesy Model for Gold

When government bonds are yielding close to 0%, and the governments that have issued those bonds are promising to rapidly boost the supply of new bonds, then gold starts to look much more appealing to investors. While paper currencies fail when they are excessively abused by governments and central banks, gold is the ultimate “infinite duration” asset.