Monday, October 6, 2008

Aaron Edelheit Calls the Bottom

From his rather infrequently updated blog:

I’m calling it now. Jim Cramer, CNBC and Thestreet.com commentator and former hedge fund manager, has officially called the bottom.

[...]

I recommend that anyone waiting to invest, do so now. You rarely get a bell ringing for the sound of a bottom than as you did today.


Incidentally, for any prospective bargain hunters, the three Edelheit picks that I bought are well below the prices Edelheit recommended them: Destiny Media (OTC BB: DSNY.OB), PhotoChannel (OTC BB: PNWIF.OB), and Hemisphere GPS (TSX: HEM.TO1).


1Hemisphere is below the price where Edelheit recommended it in June of '07 on the Value Investors Club website, but it's still above the price where he recommended its predecessor company, CSI Wireless.

18 comments:

ndl11 said...

Aaron is speaking today at the Value Investing Congress. Intersting to see what he'll have to say. Awaiting reports

Albert said...

I remain highly skeptical of what AE says publicly (and, for that matter, on VIC). He released a new HEM write up there (you've probably seen it) on 8/18, and if you read the write up, you'll notice another example where he doesn't mention a single risk, or downside to the investment.

The guy may be a good investor, but he seldom allows for, or at least seldom points out, any possible downside or risk. It's always about how the stock is incredibly cheap, and how revenues and profits are set to explode. Given his relentless trumpeting of the investments, I don't see any reason to believe he'll be at all prescient when it comes to the overall movement of the market.

Albert said...

Oh, and I love your persistence in asking him questions about his fund. I'm going to go out on a limb and say he'll refuse to answer any question about it. I get the sense that his blog is very much an exercise in self-indulgence. He wants a platform to set forth his opinions on certain subjects, but doesn't really want to have to talk about anything slightly off topic.

Anonymous said...

You guys are chumps. Why *would* he answer? If you could do a 10 minute analysis of a stock you'd be ok with Aaron's writing. If you want someone to hold your hand you're likely going to have to pay for it. His picks on VIC have been outstanding.

DaveinHackensack said...

nd11,

Thanks for the reminder about that. I saw CNBC interview Carl Icahn at the VIC yesterday, but I forgot that Edelheit was scheduled to speak there.

Albert,

You're probably right that Edelheit won't answer my question about his fund. I'd understand if he didn't want to engage in off-topic discussions, but the truth is that he doesn't engage much when the discussion is on-topic either.

Albert said...

Anon-

Unfortunately, reality belies your assertions about his VIC picks. Other than his rec of HEM, which has been good, many of his other stock recommendations have (to put it mildly) underperformed.

I'm not suggesting that I need hand holding, but if you assume that the purpose of VIC is to have an above average discourse about the merits of an investment, wouldn't you think such an analysis would include BOTH catalysts as well as possible headwinds? If I say to you "Hey look, Idearc's (IAR) TTM PE ratio is 0.27, forward PE ratio is 0.4, earned 2.75/share in the last twelve months and is trading at only $0.75, is that a great deal or what? Oh, wait, should I also mention the crushing debt load it's under, and the fact that many people think the consistently declining revenues spell unavoidable bankruptcy in the next few years? According to you, I guess not.

As for answering questions on his blog, your response proves my point. He uses his blog as a self-indulgent platform for holding court, expecting people to see what he has to say, murmur in admiration, and reflect on his teachings. There's no back and forth about anything. Not much of a discussion.

Then again, I guess that's not surprising to someone like you who accuses folks of being "chumps" for talking semi-intelligently about the points AE is trying to make...

DaveinHackensack said...

Anonymous,

Just to clarify, the question I asked that Albert referred to was not about any of Edelheit's specific picks. Edelheit had already said that he won't answer questions about specific stocks on his blog, and I understand that -- as a professional money manager, he may have regulatory or other concerns that would keep him from getting that specific about his holdings on his blog. My question was whether he has seen net outflows from his fund, or if his clients are holding steady for the most part.

Anonymous said...

That question is a little intrusive also. I don't think you will find a fund manager who would discuss that or any specifics of his fund on blog comments.

Albert said...

For what it's worth, I agree with anon on that point. I doubt there are many managers in the country who are going to answer that question, or at least answer it truthfully if people ARE pulling money. As someone who has had hedge funds as clients, they would guard that information quite zealously. There is no upside to disclosing it.

Of course, that doesn't address the fact that every company recommended by AE seems (according to him) to be about to enter its Halcyon days...

DaveinHackensack said...

Albert,

I didn't think of it at first, but Cam Commerce counts as another successful Edelheit VIC recommendation.

Anonymous,

He can chose to answer or not answer any question he wants on his blog. He probably won't answer the question, but I'll let him be the judge of weather it's too intrusive or not.

DaveinHackensack said...

Edelheit added this comment to his post today:

"ok, so maybe I was wrong in this post. I’m afraid I gave into my visceral reaction to Cramer in general, who gets people as emotional as possible at the exact moment that they should try and be rational.

If you are any kind of investor now is exactly time to invest. And anyone who needs money within 5 years, is not an investor but a speculator and Cramer knows this.

I basically, think that now is one of the great moments in our lifetime to buy into the market."

Anonymous said...

Dave, from your commentary you appear to be quite a loser. Why don't you mind your own business and stop worrying about what everyone else is doing. Get a freakin' life man.

DaveinHackensack said...

Thanks for reading and commenting, Anonymous.

All the best.

Anonymous said...

I should start a blog focused on "look what dave at thehackensack said". Wouldn't that be quite interesting. Dave, bottom line...you are quite lame.

DaveinHackensack said...

Anonymous,

Start your blog and post a link to it here and I'll check it out.

“Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it!”

-- William Hutchinson Murray

Anonymous said...

Anybody have an idea what the last post on Vic Re:PNWIF says? It is restricted and I am not a member

Anonymous said...

Try becoming a member first before leaching off others.

That applies to you too David.

DaveinHackensack said...

I tried and failed, last Anon (the idea I submitted was USEG, which I have written about on this site several times -- and didn't 'leach' off of anyone, btw), but thanks for the suggestion.