Monday, February 7, 2011


I have a high conviction on a YHOO long based on the extremely appealing sum of the parts, the emerging and rapidly growing Chinese opportunity (AliPay) and the relatively dysfunctional company management that makes Yahoo! vulnerable to a takeover or dismemberment.

The number of Americans who are not in the labor force but who want a job now rose by another 431,000 in January -- the total now stands at 6.65 million people. If these Americans were in the labor force (and were looking for a job), the unemployment rate would go from 9% to 12.8%. This is an element of screwflation, and it holds broad economic and political ramifications and represents one of the principal challenges to the self-sustaining economic thesis that has served as the foundation of the bull market.

The food fights and civil unrest occurring around the world are a natural reaction to screwflation. If the Fed Chairman isn't careful and the trends in commodity price inflation continue, food fights could occur on our shore.

long YHOO

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