Is Kodak at risk? [Archive] - Rangefinderforum.com

bmattock

03-10-2009, 13:09

Kodak is in danger. However, I also believe that they will survive as an independent corporation. As such, I have purchased Kodak stock. I had been considering it for some time. Last week, believing the bottom of the market for Kodak was near, I purchased. It has gone down even more since then, but I was buying for the long haul. I'll ignore it and see where it sits in ten years - if Kodak is still around, hopefully my investment will have done good things for me.

Bob Michaels

03-10-2009, 14:53

Kodak has 2.15bio in cash, and 1.3b in debt. On top of that they were profitable last year...

Add to that they generated almost US$ 1/2 billion in cash for the most recent quarter. They are using that to reduce debt and repurchase stock. Step back and think about a company who believes that it's stock is such a good deal that they are buying it themselves.

I will not quibble with Moody's bond ratings but only say there is some real great yields on lower rated debt.

bmattock

03-10-2009, 15:12

Add to that they generated almost US$ 1/2 billion in cash for the most recent quarter. They are using that to reduce debt and repurchase stock. Step back and think about a company who believes that it's stock is such a good deal that they are buying it themselves.

I will not quibble with Moody's bond ratings but only say there is some real great yields on lower rated debt.

Guess who just bought a lot of Kodak stock?

http://www.bloomberg.com/apps/news?pid=20601103&sid=ae5ayfK67YxY&refer=us

sooner

03-10-2009, 15:19

Bill, I find your investment in Kodak stock ironic, considering you are always beating the drum that film is dying if not quite dead. Personally, I got burned buying Kodak stock back in '99 when I foolishly took charge of my government IRA account, thinking it was a solid blue chip. Ha ha. It's entirely possible they are ready for a turnaround, and I know they have some industrial divisions that do well. But I would hold off if only because I think Kodak digital cameras still suck. And, these days there are plenty of other cheap stocks out there.....John.

ItsReallyDarren

03-10-2009, 15:21

Guess who just bought a lot of Kodak stock?

http://www.bloomberg.com/apps/news?pid=20601103&sid=ae5ayfK67YxY&refer=us

Here's hoping for a Microsoft film rangefinder! :p

That'll show Epson!

climbing_vine

03-10-2009, 15:27

I'll quibble with Moody's ratings. They're worse than throwing darts except for the few instances where they have solid, truthful insider information. The present conflagration (banks insolvent, to the score of hundreds of billions of dollars, rated AAA by Moody's and the other agencies to the bitter end) says about all that needs to be said. It's okay to say it out loud Bob. :)

bmattock

03-10-2009, 15:30

Bill, I find your investment in Kodak stock ironic, considering you are always beating the drum that film is dying if not quite dead.

Kodak is moving rapidly away from being a film company. I don't know if they woke up quickly enough or are moving fast enough, but they are trying.

And I don't 'beat the drum', I report the facts.

Personally, I got burned buying Kodak stock back in '99 when I foolishly took charge of my government IRA account, thinking it was a solid blue chip. Ha ha. It's entirely possible they are ready for a turnaround, and I know they have some industrial divisions that do well. But I would hold off if only because I think Kodak digital cameras still suck.

I don't think their digital cameras are that great either. But they have a deep wellspring of patents that pay handsome royalties, and they make some awesome image sensors - as used in all the Hasselblads and large-size digital cameras. Nobody can even touch them there. They are still lead the nation in the number of patents filed each year, they've got some incredibly bright and inventive scientists working for them.

And, these days there are plenty of other cheap stocks out there.....John.

One at a time. I'm also looking at some of them, but have limited discretionary funds to invest. Kodak was step one for me.

Pickett Wilson

03-10-2009, 15:36

Unfortunately, Kodak has a history of announcing everything is going great until they pull the plug (B&W paper for one example).

Robert Lai

03-10-2009, 16:01

Al Patterson

03-10-2009, 16:12

Rob-F

03-10-2009, 16:27

Al: "Ferroequinologist." Just free associating: iron horse? Are you into steam locomotives?

bmattock

03-10-2009, 16:30

I'm looking at Ford and my local bank. Kodak has been on my watch list, but I'm not yet convinced they are moving fast enough in the right direction. But 100 shares of EK wouldn't break me.

Yep, we're thinking the same. I went EK before F. It was a coin toss on which one to buy first.

Trius

03-10-2009, 16:36

they've got some incredibly bright and inventive scientists working for them

Bingo. Whether the suits on State Street can translate that into commercial success is another question. Thank God Pickett Wilson isn't one of them. In that case you could wave goodbye to your investment.

chris00nj

03-10-2009, 18:40

Kodak is neither great nor going to fail immediately. Film actually keeps them afloat, but it is shrinking.

From their 10-K, before other charges and expenses:

Their digital group lost $177 million. In 2006, they lost $206MM
Their film group made a profit of $196 million. In '06, they made $316MM. So their digital group has always sucked, but their moneymaker is dying. Anyone wonder why they put out Ektar 100? Their cameras are geared toward the low end of the market and face a lot of competition whereas they only had a couple competitors in the film production. It doesn't take a rocket scientist to see they have a long term strategy problem.

In the short term, they will be okay. Cash flow is key to survival, not income. It sounds confusing unless you know how our accounting system works regarding things like depreciation and impared assets.

bmattock

03-10-2009, 19:04

Their digital group lost $177 million. In 2006, they lost $206MM
Their film group made a profit of $196 million. In '06, they made $316MM.

We've been through this before. Anyone who believes that is not capable of reading a balance sheet. They lost money in film - they made it look like they made money in film by taking a non-GAAP depreciation on their physical plant and other accounting tricks that can't be repeated year on year. The biggest category percentage drop WAS from the film group.

However, believe what you wish, I'm not going to revisit that nonsensical argument with BEMs again. I can read a balance sheet, and that is why I made the investment.

Merkin

03-10-2009, 19:10

Unfortunately, Kodak has a history of announcing everything is going great until they pull the plug (B&W paper for one example).

I think kodak pulling the plug on black and white paper was probably a smart move for both kodak and photographers. Sure, there is a little bit less choice in the market, but it was many people's last choice. There are other companies, notably ilford, that make better paper than kodak. On the other hand, lots of people still use kodak chemistry, color paper, and film. Kodak is in a position where they can't do everything they used to do, so they are focused on doing what they do the best, such as high-end sensors and film. The new Kodak Ektar has just come out in 120, their c41 black and white film is (imho) superior to ilford's, and myself and a number of other people i have talked to have a feeling that you will still be able to get tri-x when you can't get any other film. Personally, I wouldn't be surprised if they made at least one more master reel of kodachrome, as it seems that the premature report of its demise has initiated somewhat of a kodachrome renaissance. You can't swing a dead cat around the internet without hitting someone talking about using kodachrome. If kodak drops anything out of their lineup of film and film related products in the next couple years, it will probably be some of their chemistry, or perhaps some of their less popular films.

Al Patterson

03-10-2009, 19:18

Al: "Ferroequinologist." Just free associating: iron horse? Are you into steam locomotives?

That is correct sir. I've been shooting steam engines at various tourist railroads for 15 years or so.

bmattock

03-10-2009, 19:26

That is correct sir. I've been shooting steam engines at various tourist railroads for 15 years or so.

The term was also used in a recent episode of 'Psych'. I'm not a fan of the show - in fact, seldom watch TV except for 'House' and the Cartoon Network's Adult Swim, but I happened to catch that one.

chris00nj

03-10-2009, 20:12

We've been through this before. Anyone who believes that is not capable of reading a balance sheet. They lost money in film - they made it look like they made money in film by taking a non-GAAP depreciation on their physical plant and other accounting tricks that can't be repeated year on year. The biggest category percentage drop WAS from the film group.

However, believe what you wish, I'm not going to revisit that nonsensical argument with BEMs again. I can read a balance sheet, and that is why I made the investment.

I just took a look at their 10-K for the first time, so I don't think i've been through it before. Any charges are made on an income statement not a balance sheet.

The group had a large decline, but it made money versus losing money in the digital group.

Despite any benefits gain from the change in depreciation, they had a large decline in the film group, but it was still profitable whether you look at it from an accounting standpoint or a cashflow standpoint.

I don't think buying EK at $2.30 is a bad thing. Options go for that. I don't think it's going to go to $0. However, in order to regrow the company to the point of sustained profitability it's going to have to reconcile an declining film group and an unprofitable digital group.

bmattock

03-10-2009, 20:19

I don't think buying EK at $2.30 is a bad thing. Options go for that. I don't think it's going to go to $0. However, in order to regrow the company to the point of sustained profitability it's going to have to reconcile an declining film group and an unprofitable digital group.

I bought a bit higher, didn't quite judge the bottom, but then I wasn't trying to (just hoping I might have). I bought as an investment, long term. I'm a contrarian investor but I buy and hold. Time will tell if my decision was wise or not.

chris00nj

03-11-2009, 12:48

I thought a stock was only a 'penny stock' when it hit the delisting limits on NASDAQ, NYSE, etc?

In any case, you are right about limited downside. And frankly, buying one share of Google would not make me as happy as the equivalent in EK.

Hard to say - but it doesn't matter. I may revisit and buy more, once I've made the rounds of my primary picks (which requires time for me to earn more money to set aside discretionary funds). I'm buying to hold, so what EK does or does not do between now and 2019 doesn't concern me much as long as it stays in business.

A "penny stock" is generally considered any stock under $5. The allure is that if the stock goes from $2 to $4 you double your money and could happen faster than a stock goes from $50 to $100. However, under normal circumstances, the stock is at $2 for a reason (usually high amounts of debt interest in comparison to their gross profit) and tends to go lower. However, this is NOT a normal time, and overall market fear is pushing stocks down much lower. GE is even at $8!

bmattock

03-11-2009, 13:07

A "penny stock" is generally considered any stock under $5.

Interesting - I really thought it was stocks under a dollar that traded on the 'pinksheets'. I remember reading the 'Penny Stock News' back in the halcyon days before the S&L Crisis, when I thought someday I'd be a gozillionaire.

The allure is that if the stock goes from $2 to $4 you double your money and could happen faster than a stock goes from $50 to $100.

Well, yes. It seems more likely that a stock would go from $2 to $4 than from $200 to $400 in a short period of time.

However, under normal circumstances, the stock is at $2 for a reason (usually high amounts of debt interest in comparison to their gross profit) and tends to go lower.

Yes, that is my opinion as well. The market in general tends to value stocks correctly over a long period of time.

However, this is NOT a normal time, and overall market fear is pushing stocks down much lower. GE is even at $8!

I agree that market fear is driving stock prices like never before. That seems like an opportunity to me. If people want to be driven by fear, I can't stop them - but I can bet against them. I'm an optimist on America. I think we'll be OK. It might end up being a new political and financial landscape, not like it was before, but still OK.

bmattock

03-11-2009, 16:29

We could have a "Mad Max" future of course, but there is no way to plan for that.

Well, there is...and I do...but let's not talk about that here. Makes people upset.

Al Patterson

03-11-2009, 17:18

One could buy 1,000 shares of a dollar stock, and if it goes up 25 to 30%, take out your originl investment and ride the rest for years or to zero. No different than playing the lottery $20 a week really.

larmarv916

03-11-2009, 21:39

If you really want to help any company in the USA, UK, Old Europe, Japan. or OZ-NZ. The single best thing you can do is buy "product" not stock. The problem will be now and for sometime a total lack of earnings due to lack of consumer spending. This is what every "consumer" product company is facing.

Also if you buy product...like film batteries, chemicals, Printers, paper, ink cart's, filters, or any other camera related product you will be helping the cash flow...bottom line earnings. That is what will make it possible for all these companies from Leica to Epson and Kodak to stay afloat. Kodak has been making bad decisions for over 40 years. These problems accumulate and now comes crunch time. Corporate "Bonds" and "commerical paper" are the highest risk fixed income tools around. The entire recovery depends on earnings from consumer spending....not bailing out banks or government spending on programs that will not actually.

Also if you spend or vote with your wallett you will also be the winner in the event the company vanishes. You will have film, chemicals, paper in the freezer for years. So keep buying something every week. Target the level you need and then keep trickling in orders or buy in bulk every month. the key here is steady spending that is comfortable...you are the recovery.

The fact that Kodak killed Kodachrome is not our fault but rather they priced themselves out of the market years ago. And yes I have been working as a investment advisor for over 25 years to many large funds and public groups.
Bad things are excellerating and losing companies like Kodak is again helping the snowball of unemployment and mortgage defaluts, credit card defaluts swell. So support the companies and products you like with your spending it makes a massive difference...for Kodak it is most likely to late.

Best Regards.....Laurance

amhildreth

03-12-2009, 04:53

I'd like to see Kodak stick around. I've always liked Tmax film, scrounge all of the Royal 400 110 film they can throw at me, and they are still a presence (albeit a smaller one) here in Rochester. Besides - if they ever shut down, I'd miss the smell of Blix that wafts through my backyard every morning.

- Andy

Pickett Wilson

03-12-2009, 05:09

I was reading an article this morning, can't remember where right now, that had EK listed as one of the top 10 companies most likely to fail.

My observation over time is that Kodak is trying to aggressively move into the future while keeping one foot in the past. I think their long range success might depend on some short range pain by letting go of that past completely. At this point, I'm not convinced they have the money to burn in doing that.

40oz

03-12-2009, 05:43

I don't know where I remember reading it, but the article listed Kodak as one of the top 10 companies to rule the universe. Again, I don't know where I read it, but I'm repeating it here anyway.

Pickett Wilson

03-12-2009, 06:02

40oz, it was just a story on Moody's most likely default list. I read a lot of stuff. Can't remember exactly where I read it.

Faintandfuzzy

03-12-2009, 06:52

Moody's has lost virtually all credibility for rating all the bundled subprime mortgage derivatives (CDOs) "AAA". Now they are trying to regain credibility by exposing the names of 15% of the bottom of the list of "at risk" companies.

Once a liar, always a liar.

Do your own homework.

I did my homework. The financial statements show Kodak's cash position and debt position. It isn't a matter of lying....it's a matter of being able to read.

Now if for some reason you are claiming those cash/debt positions are false, please provide your proof. If you can't, please stop with the accusitory posts backed by nothing but vacuous opinion.

Ahmed Poltroon

03-12-2009, 06:55

All long hauls end in the cemetery.

Kodak is in danger. However, I also believe that they will survive as an independent corporation. As such, I have purchased Kodak stock. I had been considering it for some time. Last week, believing the bottom of the market for Kodak was near, I purchased. It has gone down even more since then, but I was buying for the long haul. I'll ignore it and see where it sits in ten years - if Kodak is still around, hopefully my investment will have done good things for me.

bmattock

03-12-2009, 07:12

All long hauls end in the cemetery.

Memento mori, baby.

bmattock

03-12-2009, 07:25

I was reading an article this morning, can't remember where right now, that had EK listed as one of the top 10 companies most likely to fail.

The list was of companies most likely to default on their bond obligations.

Pickett Wilson

03-12-2009, 07:34

Yes. Whatever story I was reading was linking bond defaults to potential failure.

JohnTF

03-12-2009, 09:22

Inter-relationships are a bear, I was hearing (rumor of course) that the failure of the Ritz chain, and the $24 million they owe Nikon is a problem for Nikon, and may be related to recent price increases there? Perhaps a stretch?

I wonder if Ritz owes Kodak?

Seem to be more ways to fail than succeed?

May have to resort to "Spanish Pipe Dream" by John Prine.

Regards, John

bmattock

03-12-2009, 09:35

I wonder if Ritz owes Kodak?

http://delawarebankruptcy.foxrothschild.com/tags/ritz-camera-bankruptcy/

$426,530.31.

This is in comparison to what they owe Nikon (26.6 Million), Canon (13.7 Million), and so on. Not really all that much.

What is more likely to hurt is the money owed to smaller companies such as TOCAD, Tamrac, Tamron, and even C.R.I.S. Camera Services, all of which are owed more than Ritz owes Kodak. Those losses are liable to hurt the smaller companies a lot.

dfoo

03-14-2009, 17:26

My impression that the sell-off of GE, like just about every company on wall street, is way over done.

climbing_vine

03-14-2009, 18:08

My impression that the sell-off of GE, like just about every company on wall street, is way over done.

There is still, minimum, $600 billion in basically worthless derivative trash to be unwound. That's only what people are admitting to, and those watchdogs with something of a clue (the folks who called this whole mess four years ago) are targeting the reality to be more than twice that.

GE is a huge player in this market--between that and the impact of the downturn on their other holdings it's not unlikely that their losses will be more than their current market cap. They may not be actually insolvent as Citibank, AIG and others clearly are, but they're not in good shape either.

The sell-off isn't overdone; it has a long way to go. Stocks still haven't fallen to 1993 levels, which is about what they need to hit to undo all the growth that was strictly due to funny money "created" by nominal investment holdings fueled by the various bubbles of the last 15 years.

bmattock

03-14-2009, 19:00

There is still, minimum, $600 billion in basically worthless derivative trash to be unwound. That's only what people are admitting to, and those watchdogs with something of a clue (the folks who called this whole mess four years ago) are targeting the reality to be more than twice that.

GE is a huge player in this market--between that and the impact of the downturn on their other holdings it's not unlikely that their losses will be more than their current market cap. They may not be actually insolvent as Citibank, AIG and others clearly are, but they're not in good shape either.

The sell-off isn't overdone; it has a long way to go. Stocks still haven't fallen to 1993 levels, which is about what they need to hit to undo all the growth that was strictly due to funny money "created" by nominal investment holdings fueled by the various bubbles of the last 15 years.

I don't know how much more the stock market will fall, but I agree with you that we don't know GE's exposure yet.

Al Patterson

03-14-2009, 19:35

There is still, minimum, $600 billion in basically worthless derivative trash to be unwound. That's only what people are admitting to, and those watchdogs with something of a clue (the folks who called this whole mess four years ago) are targeting the reality to be more than twice that.

GE is a huge player in this market--between that and the impact of the downturn on their other holdings it's not unlikely that their losses will be more than their current market cap. They may not be actually insolvent as Citibank, AIG and others clearly are, but they're not in good shape either.

The sell-off isn't overdone; it has a long way to go. Stocks still haven't fallen to 1993 levels, which is about what they need to hit to undo all the growth that was strictly due to funny money "created" by nominal investment holdings fueled by the various bubbles of the last 15 years.

I'm interested in where the 1993 date comes from, and why you seem to thinks that ALL the growth during the last 15 years is bubble related.

For all we know, the selloff is done and the rally will commence. Or, we may lose another 50% from here.

Isn't there ONE company who grew by selling innovative products and keeping expenses under control?

dfoo

03-14-2009, 19:38

1993. How ridiculous.

climbing_vine

03-14-2009, 20:10

1993. How ridiculous.

1996 would be more like it just to get in line with historical norms (where, in the long run, the DJIA and S&P tend to run about 1-2% over inflation, for the past century). But the backside of a crash always goes a little lower than equilibrium (in any market, including stock).

Stocks had a large run-up in the twenty years after WW2, largely because American businesses filled vacuums created by the destruction of the industrial capacity of essentially the entirety of Europe and Asia. Other than that, stock markets throughout history have tended to remain quite close to inflation. The largest increase in history of a stock market has happened in the US in the past fifteen years, and last time I checked there wasn't a WWIII to explain it. This is credit bubble wealth which is going to vanish, as tends to happen about once every 80 years.

If you think it's ridiculous, you have no idea of the history of markets. It's not ridiculous, it's entirely banal, ordinary, and inevitable.

But, this is a rangefinder forum and the topic was Kodak so I'll get back on topic and say: Kodak is dead unless they focus their digital efforts--and my own hunch is they'll pull it off, but it's only a hunch.

climbing_vine

03-14-2009, 20:15

I'm interested in where the 1993 date comes from, and why you seem to thinks that ALL the growth during the last 15 years is bubble related.

For all we know, the selloff is done and the rally will commence. Or, we may lose another 50% from here.

Isn't there ONE company who grew by selling innovative products and keeping expenses under control?

Oh, sure. It's not ALL bubble-related. Just the large majority. Stock markets in the long haul tend to be relatively stable vis-a-vis inflation.
Quasi-exponential increases only happen for two reasons: world circumstances that lead to massive exporting, and bubbles which are going to pop.

When the bubbles pop (and anyone who doesn't think we've been in one is a darn fool), things sink further than they "should" before finally getting back to "normal". 1993 is cherry-picked based on the fact that 1996 is about where things went off the rails. That'll be the nadir, then it'll come back a little. Probably take a few years to finish unwinding, because nobody is going to force all these losses to be catalogued and announced tomorrow.

dfoo

03-14-2009, 20:16

climbing_vine

03-14-2009, 20:20

I don't think it ridiculous to point out that markets expand and contract; that is eminently sensible and true. However, the source of my comment was that I believe it is impossible to accurately predict a level of contraction and how much money needs to be unwound.

Well, I can get with you on that. I threw out the 1993 because barring something totally bizarre it's close enough to illustrate the point. With a brief break for 9/11, we've been in bubble-ville since 1996. First the 'net bubble, then the various credit bubbles (including mortgages). So... eh. Everyone will draw their own conclusion, but the most sensible one is that it falls back into historical norm now that the easy credit is all gone, and the corollary is that it falls a little further than that before rebounding because that's just how people are.

dfoo

03-15-2009, 05:56

Aren't you failing to correct for inflation?

climbing_vine

03-15-2009, 06:22

Aren't you failing to correct for inflation?

Nope. Here's an inflation-adjusted chart, using the CPI.
http://www.dogsofthedow.com/dow1925cpilog.htm

Note the change in slope from the 82-95 trend to 95-2000. If the Dow doesn't drop at least another 30% or so, it will be the smallest bear drop vs inflation since the WWII downtick, which we pulled out of strongly thanks to nobody else in the world having a manufacturing base left at the end of the war. Overall conditions in terms of production vs debt are worse than any time since (or maybe including) the Great Depression, and we have no relief in sight from international competition.

Pickett Wilson

03-15-2009, 06:49

Interesting discussion. I've read several articles over the last several weeks that argued that the stock market was, contrary to popular belief, not a good long term investment and used similar reasoning, along with the suggestion that it is impossible to time markets.

dfoo

03-15-2009, 06:50

Looking at that chart if you follow the slope from 1980 to 1995 and then extend that line the chart has already dropped way below...

dfoo

03-15-2009, 06:51

Pickett Wilson

03-15-2009, 07:01

The lottery? ;)

Really wasn't the point of the stuff I've read. They were just pointing out the fallacy of the stock market as a long term investment. Looking at the results of whole financial mess, I have no idea what might work. I moved my investments out into bonds and money markets back when the stock market was headed down toward 12,000. Still trying to figure out what to do when this mess stabilizes.

Al Patterson

03-15-2009, 07:17

Nope. Here's an inflation-adjusted chart, using the CPI.
http://www.dogsofthedow.com/dow1925cpilog.htm

Note the change in slope from the 82-95 trend to 95-2000. If the Dow doesn't drop at least another 30% or so, it will be the smallest bear drop vs inflation since the WWII downtick, which we pulled out of strongly thanks to nobody else in the world having a manufacturing base left at the end of the war. Overall conditions in terms of production vs debt are worse than any time since (or maybe including) the Great Depression, and we have no relief in sight from international competition.

Using the 1900 to present line, look at the period from 1965 to 1982, where the Dow moved sideways for almost 20 years. If you use that type of trend, the Dow could stay at roughly the current levels for a similar period to return to the trend line, or could drop to 4,000. Either scenario is possible.

Pickett Wilson

03-15-2009, 07:30

I think about what might happen when it really sinks into the American people that things are likely to never be like they were. Their modest brick homes aren't going to be worth $400,000 again, they will not have unlimited access to easy credit, etc. I know a lot of people who believe everything will return to the way it was before the crash in a couple of years.

climbing_vine

03-15-2009, 07:38

Looking at that chart if you follow the slope from 1980 to 1995 and then extend that line the chart has already dropped way below...

Sure, but I'm not sure what significance it has. You could say the same thing but even more so if you look at 1950 to 1965 instead. There's some level of natural up and down, so you can't take just an up-cycle as establishing a norm...

climbing_vine

03-15-2009, 07:40

Using the 1900 to present line, look at the period from 1965 to 1982, where the Dow moved sideways for almost 20 years. If you use that type of trend, the Dow could stay at roughly the current levels for a similar period to return to the trend line, or could drop to 4,000. Either scenario is possible.

Very true. Either way you're losing in the real, the only question is does it happen slowly enough that the nominal value "hides" it. But it's a good point that it's difficult-to-impossible to predict how it'll go (though that doesn't mean some things aren't more likely than others).

Bob Michaels

03-15-2009, 08:09

I hear there is some great photo discussions going on over on some of the investment web sites.

dfoo

03-15-2009, 08:19

Sure, but I'm not sure what significance it has. You could say the same thing but even more so if you look at 1950 to 1965 instead. There's some level of natural up and down, so you can't take just an up-cycle as establishing a norm...

I don't think it was an unnatural up cycle. If you put a line roughly on that chart then we're right around where we should be be right now (as opposed to a year ago when it was obviously way too high).