Comments on: Survive, survive… http://alephblog.com/2008/10/20/survive-survive/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Fri, 25 May 2012 21:31:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: DaveinHackensackhttp://alephblog.com/2008/10/20/survive-survive/comment-page-1/#comment-19533 DaveinHackensack Fri, 24 Oct 2008 00:10:55 +0000 http://alephblog.com/?p=1048#comment-19533 <I>"Focus on companies that can survive without external financing for three years."</I> A micro cap I mentioned on my site today seems like it would fit this criterion: <a href="http://finance.yahoo.com/q?s=KSW" rel="nofollow">KSW</a>. It's a $29 million market cap HVAC contractor that has about $18 million in cash and no long-term debt, versus cumulative operating expenses over the last four quarters of about $4.3 million. The company also has a backlog of business about 1.7x its ttm revenue. “Focus on companies that can survive without external financing for three years.”

A micro cap I mentioned on my site today seems like it would fit this criterion: KSW. It’s a $29 million market cap HVAC contractor that has about $18 million in cash and no long-term debt, versus cumulative operating expenses over the last four quarters of about $4.3 million. The company also has a backlog of business about 1.7x its ttm revenue.

]]> By: David Merkelhttp://alephblog.com/2008/10/20/survive-survive/comment-page-1/#comment-19508 David Merkel Wed, 22 Oct 2008 17:13:31 +0000 http://alephblog.com/?p=1048#comment-19508 Urbandigs – don’t like Treasuries here, unless they are TIPS Mark – that reminds me of my post Liquidity and Solvency: Nonidentical Twins, Never Far from Each Other – The two are very closely related, and companies with weak balance sheets typically face both problems in a credit bear market. Urbandigs – don’t like Treasuries here, unless they are TIPS

Mark – that reminds me of my post Liquidity and Solvency: Nonidentical Twins, Never Far from Each Other – The two are very closely related, and companies with weak balance sheets typically face both problems in a credit bear market.

]]> By: Markhttp://alephblog.com/2008/10/20/survive-survive/comment-page-1/#comment-19495 Mark Tue, 21 Oct 2008 13:19:54 +0000 http://alephblog.com/?p=1048#comment-19495 Not sure if you are (or Ms Scwharz) is saying that the Fed is fighting liquitidy problems rather than insolvency problems, but I have heard this argument frequently. The problem with this is that in Bernanke's school (i.e., the Doug Diamond and Joseph Stiglitz school on financial crises) is that there is no real distinction between illiquidity and insolvency in the short run. For instance, intervening as a lender of last resort is a short-term/immediate measure by the Fed. As such, there isn't sufficient time on behalf of monetary policymakers to adequately determine insolvency, because such a determination requires more than what we see in the event of illiquidity. So, while the theoretical distinction between insolvency and illiquidity (e.g., liquidity is insufficient readily available cash to cover debt service while insolvency is the inability to cover debt at all) is a long-run consideration, Bernanke & Co are treating this as a liquidity crisis until solvency can be adequately determined. Again, not sure if this is what you were saying, but the comment got me thinking about this. Not sure if you are (or Ms Scwharz) is saying that the Fed is fighting liquitidy problems rather than insolvency problems, but I have heard this argument frequently. The problem with this is that in Bernanke’s school (i.e., the Doug Diamond and Joseph Stiglitz school on financial crises) is that there is no real distinction between illiquidity and insolvency in the short run. For instance, intervening as a lender of last resort is a short-term/immediate measure by the Fed. As such, there isn’t sufficient time on behalf of monetary policymakers to adequately determine insolvency, because such a determination requires more than what we see in the event of illiquidity. So, while the theoretical distinction between insolvency and illiquidity (e.g., liquidity is insufficient readily available cash to cover debt service while insolvency is the inability to cover debt at all) is a long-run consideration, Bernanke & Co are treating this as a liquidity crisis until solvency can be adequately determined. Again, not sure if this is what you were saying, but the comment got me thinking about this.

]]> By: UrbanDigshttp://alephblog.com/2008/10/20/survive-survive/comment-page-1/#comment-19494 UrbanDigs Tue, 21 Oct 2008 11:50:17 +0000 http://alephblog.com/?p=1048#comment-19494 how do you feel about longer term treasury yields, given the debt we have, the measures taken to stem this crisis, and the massive treasury issuance needed to fund it? 10YR at 3.86% as I write how do you feel about longer term treasury yields, given the debt we have, the measures taken to stem this crisis, and the massive treasury issuance needed to fund it?

10YR at 3.86% as I write

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