the energy comeback no one is noticing

Two weeks ago, I flew to my old stomping grounds in Houston and visited seven energy companies in three days. The mood around town and in corporate offices was far more upbeat than my last few trips down there, and not just because the Rockets were in the midst of pulling off one of the biggest comebacks in NBA playoffs history.

Despite what you might have heard, the oil business is rebounding.

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uber is a $50 billion edsel

Uber-mania just keeps growing. Last week, we learned its valuation has risen to an unbelievable $50 billion.

I know I sound like a voice in the wilderness but FIFTY BILLION!? Seriously? That is absolutely insane. Hell, it was insane $40 billion dollars ago. I don’t even know what to call it now. Uber will never, and I mean never justify that number.

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i feel bill ackman’s pain

With his billion dollar battle royale against Herbalife entering its fourth year, Bill Ackman is starting to sound a bit punchy. Last week, during an Interview for Bloomberg TV, he likened short-selling to “brain damage” and declared “there are easier ways to make money.”

All I can say is: I feel your pain, Bill!

I don’t bet against powerful corporations with billions in market cap. By and large, the companies I short are beaten down and headed for bankruptcy. But the stocks of sickly firms can stay just as stubbornly high as Herbalife’s has, and they often spike higher for brief spurts even as their underlying businesses erode. Living through these rallies might not cause brain damage, but it’s definitely a major headache.

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my five most outrageous company visits (plus one)

As the manager of my hedge fund, I’ve traveled around the country and met with thousands of CEOs, CFOs and other top executives in their corporate offices. Name any business complex or office park west of the Mississippi and there’s a good chance I’ve been there at some point over the last 30 years. Often, if I’m invested in a company or I’m particularly intrigued by its business, I’ll stop through to speak with its managers multiple times.

Most of these interviews are cordial but brief and to the point. Some, however, have been a little wacky. I list my top 5 most outrageous company visits in my latest piece for CNBC.com. Click here if you’d like to read it.

All five visits are also featured in Dead Companies Walking, but one of the weirdest business trips I’ve ever taken didn’t make it into the book or the CNBC article, so I figured I’d offer it here as an outtake.

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could this be the beginning of the end of the social media mania?

I’m kicking myself for not following my instincts and shorting Yelp (YELP) before it announced utterly rancid earnings last Thursday. For years, the only thing that has mystified me more than Yelp’s business model has been its enduring popularity with Wall Street. As I type, I’m looking at a pile of recent analyst reports with absurd price targets for the company. I like to save these kinds of laughably optimistic reports. It’s a hobby of mine. I’ve still got a glowing buy recommendation for Enron dated only days before the energy behemoth imploded.

For all my doubts about Yelp and other social media stocks, there’s a good reason I have not shorted any of them up to now. It’s just too risky to bet against companies in the midst of a secular mania–and make no mistake, that is exactly what has lifted Yelp, Twitter, LinkedIn and their ilk to stupidly large valuations that they will almost certainly never live up to.

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i would still buy exxon over apple

[note: an earlier version of this post originally appeared on my Yahoo! Finance page.]

A few months ago, Apple (AAPL) posted one of the greatest quarterly beats in the history of capitalism and its market cap–already the world’s largest–officially doubled the size of the next closest company, a little energy outfit you might have heard of called Exxon (XOM). Nonetheless, I wrote a piece for CNBC.com at the time saying that if I had to choose between the two stocks to buy and hold for the next twenty years, I would pick up my iPad, log into my brokerage account and order a whole bunch of XOM.

With both companies releasing earnings this week, it seems like a good time to revisit that call. Apple annihilated analysts’ expectations again on Monday. Exxon also beat, but its profits were off by almost 50 percent and its stock has been the second worst performer in the Dow, down 5 percent since New Year’s Day and over 13 percent in the last 12 months. The oil giant has even ceded the number two spot in market cap to Microsoft for the time being.

So, have I changed my mind? Do I now think AAPL is a better buy than XOM? The short answer is: no. The long answer is: absolutely not.

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bottom of the barrel: is it time to go bargain hunting in the oil patch?

[note: this post originally appeared on my Yahoo! Finance contributor page.]

Last week, I spent three days in New York City at the annual IPAA (Independent Petroleum Association of America) Conference. Like most people, I’ve been leery of energy stocks in recent months. But I left the conference with a different mentality.

As unlikely as it seems, it might be time to go bargain hunting in the oil patch.

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the wall street-washington complex is alive and well

Apologies for the sporadic blogging of late. I’ve been travelling a fair amount and I also wrote a piece for CNBC.com on the Five Ways to Spot a Dead Company Walking.

Two important and closely connected events took place in the world of finance since my last post. First, former Fed chair Ben Bernanke announced that he was taking a job as an “advisor” at the massive hedge fund Citadel Group. Then the stock of Goldman Sachs hit $200 for the first time since January of 2008. You might not think these things are related, but to me, they’re inextricably linked–and extremely dispiriting.

More than half a century ago, President Eisenhower warned the nation about the burgeoning Military-Industrial Complex. That monstrous public-private hybrid now sucks up more than half of all discretionary spending. But these recent events prove that the Wall Street-Washington Complex might be even more dangerous.

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don’t tax you, don’t tax me, tax the guy behind the tree

Just in time for tax day, I wrote a post on my Yahoo! Finance contributor page about the biggest tax mistake you can make as an investor. Put simply, the spread between short- and long-term capital gains tax rates is so giant now, you’re better of lighting your wallet on fire than taking profits on investments you’ve held for less than a year. At least all that burning cash might be pretty to look at.

Speaking of taxes and stupid ideas, the New York Times asked a bunch of experts about the worst tax breaks. Their answers should be familiar to regular readers of this blog. I’ve written on just about all of them at some point.

We will be hearing a lot about tax reform in the months ahead, as every presidential candidate will crow about their plans to rein in, reduce, and simplify our country’s insanely complex tax code. The chances that any of these ideas will amount to anything but empty promises on the campaign trail are close to nonexistent, of course, but it can’t hurt to dream, can it?

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Interest Rates Must Go Up

[note: this post originally appeared on my Yahoo! Finance contributor page]

For the past few weeks, Wall Street pundits and prognosticators have been loudly citing every hint of bad economic news as a reason the Fed shouldn’t follow through with its pledge to boost interest rates. “Corporate earnings are down!” they’ve shouted. “Job growth is decelerating! Inflation dropped to zero again! We can’t raise rates in this environment!”

It’s time to stop listening to these market Cassandras. We not only should raise rates, we must raise rates.

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