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VUZI OMIBs and other follow-ups +2

11:07 14-Jan-20


In the aftermath of CES, the CEO of Vuzix bought 2500 and 2250 shares at $1.97 and $1.92 on Friday and Monday, respectively.  Each purchase is adds to his stake by a little less than 1%, and it's not helping.  VUZI is currently trading at $1.83.   There is a price point where shares would become attractive to me, but all I can say for sure right now is that we haven't reached it yet.  Historically, I've been wary of Chinese competition, which is causing the current declines, but also of the market itself.

That is more true now than ever and global debt resumes its climb through record levels as a percentage of GDP.  The prior record was in 2016, when the market took a breather while debt receded.  There is no sign of it stopping now, though, which has many focused on the upcoming earnings season.  I plan to pay particular attention to index-dominating behemoths like Google and Apple in order to monitor the possibility of a market-wide long squeeze, though I still see that as unlikely for time being.  Such possibilities are why I maintain positions in companies like Ebix.  I've been consistent in pointing out India's many troubles, but the debt load there is less than in most of the rich world.  Furthermore, India's diaspora means that the situation can actually be a potential long-term benefit to the EbixCash international payment business. 

Shell deserves some renewed attention as well, with its blip above my $60 mark now over.  There is reason to think that it will continue to trade hydrocarbon volatility well, even in Mexico, despite the regime I mentioned with yesterday's Ebix MoneyGram announcement.  However, I don't have a lot of faith that the rise in natural gas (to $2.25) will continue, and thus I don't have much fear of missing out on current CVA pricing, especially since my position is already substantial.  Similarly, I'm inclined toward short-term caution with regard to building my VOD position any further, given the rise above $20, at least until we have some clarity on Brexit and Huawei, as well as tomorrow's trade deal.  Instead, the FIT arbitrage still looks like one of the best current options, despite an uncertain ITC schedule until the end of next month.  I'll be having a look at a riskier but more profitable arbitrage on (S)print too.  Invest carefully!