In macro driven portfolio changes, I have now sold the bulk of my yahoo shares (eating the short term gains) and moved all the resulting funds into oil tanker stocks.
While I remain an aggressive believer in the net media macro, yahoo’s valuation seems more correct here and buyers take on significant execution risk around their panama ad platform.
On a tip from one of my smartest hedge fund friends, I started looking at a number of players in the oil rig leasing business. I love this sector as a protected bet on oil which I’m bullish on long term for many reaons including a falling dollar.
These companies remind me of home builders in the mid and late 90’s who traded at low multiples despite huge growth.
Companies like global santafe, hercules offshore and diamond offshore all trade for 5-6 multiples with earnings growing at 20-50 pct. obviously, many investors must not expect these companies to sustain this growth (similar to 90’s homebuilders).
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