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Anthony Grossi

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  • Aflac's Fair Value PE Ratio Should Be Double, And So Should Its Price [View article]
    Great series
    Nov 9 10:45 PM | 4 Likes Like |Link to Comment
  • The Only Investing Strategy That Always Works [View article]
    At the risk of sounding old fashioned, I still believe in owning the market in aggregate. I don't know which sectors will outperform but the size of the pie itself will continue to grow as it has since Seneca wrote investing advice to his sons. A balanced portfolio of stocks bonds and cash (people always forget cash), according to your needs or risk tolerance, make monthly or yearly contributions as you are able. Worry less.
    Long VT
    Long BND
    Nice article Tyler
    Oct 12 01:38 AM | Likes Like |Link to Comment
  • Why Buy And Hold Outperforms [View article]
    I want to thank every who contributed a comment and for highlighting some of the shortcomings inherent in the pamphlet approach to investing advice.
    1) I gave short shrift to the importance of "buy right" in the buy right and sit tight aphorism.
    2) I also gave short shrift to why you should sell stocks.

    re: market timing strategists- if you care to share a method for calling tops and bottoms in the market I'm all ears (soleprop, et al).

    re: chartists- correlation does not equal causation.

    @ thetruth916
    Yes, I made an appalling math error and will contact SA to correct it. Very sorry.

    I was trying to keep things simple, but yes you should also consider tax on dividends and broker commissions.
    Oct 12 01:16 AM | Likes Like |Link to Comment
  • Dreamworks Animation: At Lowest Price But Worth Highest Value [View article]
    I read the long version. One hell of a good write-up. If you can calculate the downside the upside will take care of itself. You managed to write something resembling a Walter Schloss asset value approach to a content producer.
    Oct 11 02:15 AM | Likes Like |Link to Comment
  • Exelon: Now Is A Great Time To Pick Up Utility Stocks [View article]
    no mention of interest rates? that's the bread and butter of utility sector analysis. Rising rates are bad for utilities. CEG is a regulated utility. So EXC is gaining exposure to interest rate risk at a time when interest rates are at the lowest point possible, while hedging their IPP portfolio when spot prices for energy are somewhere in recessionary low range. Unless you think the market is going to continue to struggle and energy prices stay flat, management at EXC is doing you a disservice. Look at NRG if you want price exposure or DUK for a superior regulated utility.
    Oct 5 10:24 AM | Likes Like |Link to Comment
  • Investment Guidance For Those In Their 20s And Younger [View article]
    MBT trades are only $1, which is pretty reasonable. If you don't mind my putting my two cents in; I think you would be better served by only two funds, the Vanguard Total World Stock Index (VT) and Total Bond (BND). Pick a stock bond mix you're comfortable with (60/40) and just make monthly contributions for the rest of your life without every thinking about it again and you will come out ahead of most in life. Best of luck.

    Also make sure you open a ROTH IRA account if you haven't already. Enjoy the wine.
    Oct 3 11:59 PM | Likes Like |Link to Comment
  • Investment Guidance For Those In Their 20s And Younger [View article]
    for someone who is just starting out they should be investing in a balanced index fund (60/40 or whatever your tolerance) and not buying and managing a portfolio of twenty or thirty individual securities in addition to managing a portfolio of corporate bonds, gov't treasuries, tips and whatever else.

    Your advice to swing your allocation in equities from 75% to 25% based on market prognostications is also questionable at best. Vanguard recently abandoned their asset allocation fund, which attempted to put this advice into practice. If the worlds largest fund family lacks the resources and analysis to derive alpha from market timing algorithms, the average 20 yr old shouldn't be fool enough to think he will succeed in this endeavor either.

    All the major fund families like Vanguard, DFA, and T Rowe Price offer balanced funds and target date funds that are far cheaper and simpler than trying to follow the advice laid out above.

    Apart from that I agree whole heartedly with the articles most important themes and advice. Time in the market is more valuable than timing the market. It is important to start early and learn as much as you can. Its your money and no one will ever care about you, your money, or your financial goals than YOU.

    If you've studied Graham, Lynch, et al. and already have a balanced portfolio for retirement savings it is perfectly wise to invest in individual securities. That's what your education is training you for. But start simple, and grow from there.
    Oct 3 09:27 AM | Likes Like |Link to Comment
  • Compelling Values In Energy Exploration And Production [View article]
    The section "the price you pay matters" is a reference to Devon Shire's articles about PetroBank and other canadian E&P's. In his articles he espouses the theory that unproven acreage and advances in drilling techniques will lead to increased reserves and PV10's. My point was that one no longer needs to be so bullish to justify investing in the sector.
    Sep 28 11:57 PM | Likes Like |Link to Comment
  • Petrobank Energy: An Terrible Risk / Reward Opportunity [View instapost]
    So I know you wrote this quite a while ago when the price was $40. Has the drop in price down to about $9 changed your mind about PetroBank? I will be avoiding this stock just b/c of management, like the options issue you pointed out, but the sector itself I find very cheap now that the market has taken its toll.
    I've been using the following metrics for valuation and would appreciate your criticism/insight since you also track this space.
    total MMBOE per $100 investment
    you'd be surprised how many of these companies have debt above 50% of their proven reserve values. Doesn't leave much room for shareholders to share in the profits. I've basically been looking at this as a pure asset play and only recently have been starting to look at company operations and management. Thanks for any info you choose to share.
    I'm pretty keen on PEYUF, which you've also written about.
    ticker PEY
    EP/PV10 = (133 X 20) + 474 / 2105 = 1.48
    total MMBOE per $100 = (256.7/133) X (100/20) = 7.7 MMBOE
    debt/PV10 = 474/2105 = 0.23
    by virtue of comparison, PEY has low debt but also lower MMBOE per $100 investment than many of its peers.
    thanks for your time
    Sep 26 12:31 AM | Likes Like |Link to Comment
  • Battle Of The Brands Match-Up 1: Pepsi Vs. Coca-Cola [View article]
    re: returns for KO vs. PEP.
    PEP had higher returns for 02 thru 08. That trend broke down with the great recession, and the flight to safety theory reiterates if you look at a 3 month chart. If you go back to the mid- 90's PEP totally dominates KO. So which trend line am I fighting? In the long run PEP is the second best soda company and the number one crisps company, hardly tilting at windmills. If you can buy a high quality company like that (or like KO obviously) at a price you're willing to pay, odds are in your favour.

    The articles' peer to peer numbers comparison should be expected to result in KO having a slight premium b/c its the industry leader.
    Goes Without Sayin
    Sep 22 12:19 AM | 1 Like Like |Link to Comment
  • Western Union: Old Name, New Opportunities [View article]
    right. this is definitely a play that only starts to work when employment turns around. margins basically have to come down as the industry matures, but WU still has plenty of growth potential specifically in India and the rest of Asia. WU is a good company selling cheap on fears of the EU economy and or the US/Mexico corridor. Its not a "great company" with regards to pricing power, but is a value play with an identifiable catalyst (job growth, new products).
    Sep 17 07:30 AM | Likes Like |Link to Comment
  • Western Union: Old Name, New Opportunities [View article]
    I've had this debate on GuruFocus and you might be interested enough to follow the thread on that website. Here is the short answer (short being relative)

    In 2006 they had Revenue of 4470 million with operating income of 1311 million with assets of 5321 million while in 2010 they had Revenue of 5193 million with operating income of 1300 million with assets of 7929 million. So they added about 2.6 billion of assets in order to keep their operating income flat. That seems like a declining business. Maybe it is, but...

    The question is: How much of that is attributable to the US housing market and "the great recession/global slowdown".

    My take: They are right back to where they were before the crash and global economic slowdown and now when the economy turns they will return to growth (In the mean time they have significantly expanded their operational reach and returned a healthy part of their cash flow to shareholders). In other words, the margin contraction is a result of acquisitions and investing for growth. When the economy returns to growth margins will expand again. This is evidenced in the last quarterly conference call (margin expansion in all 3 operating segments) and also by looking at ten year records of operating margins, which expanded from 01 to 05, then contracted (stuck at 25% since 05). I think history will repeat and margins will expand during the next economic growth phase, too.

    Secondly, I'm not hung up on margins. WMT's business model is to "always sell for less" and they were able to grow to offset industry low margins (ditto for AMZN). Its the reason they became successful. Its the reason V and MA are a duopoly instead of banks providing their own card networks. In the future WU will look more like TSS or FDC. They have to price their services such that banks can't afford/be bothered to take those operations on in house.

    Thanks for taking the time to leave a pertinent comment. I read your article about why Combs is bullish on WU when I was researching the article.
    Sep 16 09:21 AM | Likes Like |Link to Comment
  • 5 Stocks For The World's Best Dividend Portfolio [View article]
    I'm going to have to disagree with MO. Falling sales volumes for years can only be offset by price hikes for so long until you hit an inflection point. Other MO product categories like smokeless and alcohol have significantly lower margins and thus shouldn't be expected to make up the difference in earnings.
    KMI, VOD, XOM, KO stalwarts each.
    Since you already have KO as a consumer staple I would look at replacing MO with maybe a diversified healthcare (ABT, JNJ) or branch out and try either an industrial or transportation stock the world probably couldn't work without (CNI, EXPD, GE, 3M).
    Sep 16 06:43 AM | 1 Like Like |Link to Comment
  • Julian Robertson Sees Apple And Google As Fabulous Investment Opportunities [View article]
    it might be fun thinking about the long term value of google's horizontal integration business model (will advertisers be willing to spend as much on search when customers are getting product info from social sites like fb or retail sites like amazon? Will the google wallet expand the company into a financial services firm?), but the real gem of the SEQUX investors day transcript is the talk on CNQ. You're way deep in canadian oil/gas plays, I would have expected you to write about that instead.
    Sep 15 07:46 AM | Likes Like |Link to Comment
  • Digesting the Kraft Split: Global Snacks and North American Foods [View article]
    you mentioned current CEO Rosenfeld to reign over N. American Grocery business and pick someone new for Global Snacks. I hate to bicker over a small point but Irene was the head of PepsiCo's Frito Lay division, the largest global snacks company in the world, it was her idea (her goal) to purchase Cadbury and transform KFT into a global snacks company, she's not about to hand over the wheel to her new sports car. Rosenfeld will do well at the head of the snacks division b/c it is within her circle of confidence, her experience in driving int'l sales at Frito Lay is the reason KFT hired her in the first place.
    Aug 17 11:44 PM | Likes Like |Link to Comment