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Anthony Grossi

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  • Merger Arbitrage Mondays: July 25, 2011 [View article]
    look forward to the list every week. think NLC will be a good arb play if debt debate knocks the market down (looking to get long < $35, for a very safe 10% return)
    Jul 29 06:48 AM | Likes Like |Link to Comment
  • Nintendo: Dirt Cheap Ahead of Next Growth Cycle [View article]
    www.engadget.com/2011/.../

    Left holding the bag for all this desperation / generosity, are the company's investors. While pressure from the upcoming Vita is surely playing a part, Nintendo plans to sell 16 million 3DS units in the financial year, but still slashed its financial projections for the year from ¥110 billion to just ¥20 billion

    ouch, even got dissed by engadget
    Jul 28 10:14 AM | Likes Like |Link to Comment
  • Rooting for a Crash [View article]
    "I'm only a middle class IT worker, but I'm aspiring to be rich someday. I give to charity of my own accord, but I say screw the government when they think they can be more charitable than me with my own hard-earned money."

    its easy to be generous with other people's money
    Jul 28 01:17 AM | 1 Like Like |Link to Comment
  • Dividend Stock Battle: Coke vs. Pepsi [View article]
    I'd like to see Frito Lay sold to its former CEO Irene Rosenfeld. But I'm only saying that b/c Altria handed me a bunch of KFT shares.
    Jul 27 07:24 AM | Likes Like |Link to Comment
  • Asset Allocation, From Nirvana to Nightmare [View article]
    you and your contrarian ideas. worst case scenario large cap value acts like an infinite duration bond with rising rates and you only beat the treasury markets, more likely outcome is you get index returns with a higher dividend kicker. (b/c the major indices are cap weighted)
    Jul 27 07:15 AM | 1 Like Like |Link to Comment
  • Rooting for a Crash [View article]
    www.theatlantic.com/po.../

    so the link brings up a chart of NEW spending under Bush and Obama and helps show just how big the impact of the wars and the bailout have been. The point is that gov't can respond to but not control external shocks and should focus on policy changes.

    I'm cool with letting the Bush era - Obama extended tax cuts expire, and I am well aware that I hold an unpopular view. It would be nice to see an end to ethanol subsidies as well as purposeful reform to social security and medicare/medicaid, but why would a publicly elected official shoot themselves in the face like that?

    I find it amusing to watch congress argue about borrowing money to pay for spending they already approved. Its like watching a college kid get their first credit card invoice.
    Jul 27 06:58 AM | 10 Likes Like |Link to Comment
  • Western Union: Old Name, New Opportunities [View article]
    New development regarding WU
    news.morningstar.com/a...
    So basically the CFPB is considering putting on cap on remittance transaction fees like they did with swipe fees at V and MA. Best to sit on the sidelines until this issue gets resolved.
    Jul 21 06:59 AM | 1 Like Like |Link to Comment
  • Western Union: Old Name, New Opportunities [View article]
    Martin you're ignoring that we had a major recession very shortly after WU was spun off from FDC. One that severely hurt the US housing industry, which hires a lot of migrants. The company has increased shareholder equity, increased its dividend, bought back shares, grown eps, generated impressive free cash flows and returns on equity. The market is over emphasizing weakness in the US - Mexico corridor transaction volume, WU is becoming a much more global brand and expanding its market share in mature markets, even in the face of weak employment.

    This link highlights some of the opportunities WU has to expand its product offerings using new technology
    donsdocs.com/Documents...
    Jul 17 04:48 PM | 1 Like Like |Link to Comment
  • Shorting Student Loans: The Next Major Credit Bubble [View article]
    emerging markets not in need of "skilled labor", they already have too many "ants". Over-educated and underemployed.

    www.gurufocus.com/news...

    oh demographics, what a wonderful field of speculation
    Jul 7 06:56 AM | Likes Like |Link to Comment
  • Shorting Student Loans: The Next Major Credit Bubble [View article]
    If you are going to paraphrase the work of Steve Eisman (2010) and Jim Chanos (2011) from the Ira Sohn Conference you should at least provide links to your source material.

    www.marketfolly.com/20...

    app.streamsend.com/c/1...
    Jul 5 10:06 AM | 3 Likes Like |Link to Comment
  • Altria Group Still Has Upside [View article]
    Thank you for your reply Mr. Maniere,

    You're,of course, absolutely right about the addicting nature of smoking allowing for inelastic demand and near infinite pricing power. The analogy I choose regarding book sales was admittedly inapt. The alternatives I was thinking of are either a) quitting or b) choosing smokeless products, c) electronic cigarettes, or finally d) black market or counterfeit cigarettes. The adoption rate of all four of those choices could gain traction in the market place as a result of pricing (rather than health concerns or restrictions on public use). I know from my quarterly conference calls that the Marlboro brand in particular is struggling with counterfeits, though mostly oversees, and that e-cigs and smokeless products are showing modest growth as traditional cigarette volumes continue to decline. Cigarette producers such as MO should be able to offset declining volumes with regular price increases for the foreseeable future, but I fret about a day when those price and demand curves take an ominous turn. As for the FDA regulations, the US government has shown short-sightedness and a willingness to operate at a loss in the past. It is often this threat of death by regulation that makes tobacco companies compelling value ideas. I wish that I would have had the foresight to invest in LO ahead of the FDA proposals regarding mentholated and flavored tobacco, as demographics show that most of today's young adult smokers prefer these products.
    Jun 22 07:23 AM | 1 Like Like |Link to Comment
  • Altria Group Still Has Upside [View article]
    I've been an Altria shareholder since the early 1990's and have a theory about how to evaluate the business model. MO is in a declining business, as we all know, and the company's extraordinary pricing power allows it to offset declines in revenue. What we need to be cognizant of as shareholders is the tipping point between volume declines and revenue. While this inflection point is abated somewhat by growth in smokeless products and alcohol sales it is still a likely future outcome for the company to start shrinking at some point in the future. Basically you need to think about the future cash flow generation of the business versus your per share cost. At some point shares will likely cost more than the anticipated dividend returns thus signaling a sell. At a current annual dividend of $1.52 the company needs to operate in runoff mode for 18 years to repay the current investment. From this basic model you can add or subtract future returns based on various assumptions about the decline of smoking or expansion into alcohol business, and then compare that to your needs for making a safe and profitable investment in the company. So basically a dividend payback instead of a PEG payback. My shares have already paid more in dividends than their initial cost but I closely monitor the relation between volume and prices for the when the cigarette business inverts.
    Much like how rising prices of books and newspapers drove readers to adopt new platforms at an increasing rate, rising cig prices will drive current/future smokers to adopt alternatives at increasing rates.
    Jun 22 01:01 AM | 2 Likes Like |Link to Comment
  • Stored Value at the Bancorp Bank [View article]
    Good dig and an interesting article
    I like your investment thesis but I think that the stored value card/prepaid card business segment would be hard pressed to compete with Western Union, given the scalability and size of its agent network. WU issues both V and MA branded prepaid credit cards and offers exposure to this market without the risks of the banking sector. No worries about home price depreciation or write-offs or byzantine regulations.
    I'll have to take a real look at the company to make an informed decision (or criticism for that matter) but typically any service one bank can offer any other bank can match. Competitive advantages are short lived in the financial sector. Won't rising interests rates benefit larger holding institutions like WFC equally?
    Jun 17 01:11 AM | Likes Like |Link to Comment
  • German Renewable Energy: A Bright Future for Companies Focused on Wind Energy [View article]
    rather than large solar and wind fields and building up infrastructure into the grid, I think it makes more sense to install smaller on-site projects. A few solar panels on a hospital rooftop won't allow for energy independence but if properly metered and fed back into the existing grid these smaller, faster, cheaper on-site installs can and will make a big difference in how energy is distributed. Diversification of energy sources will stabilize price fluctuations and help Germany to deal with the risks of relying on Russia for oil and gas. Doubling capacity of renewable sources over 10 years isn't far fetched, its quite prudent.
    Jun 16 01:26 AM | Likes Like |Link to Comment
  • Electric Utilities Today Like Newspapers in 2000 - Facing Pressure From a Disruptive Technology [View article]
    Only the advent of extremely cheap electricity storage would enable consumers to cut themselves off from the grid, and until that becomes possible the traditional model for regulated utilities remains sound. If any of you are convinced that PV is on the cusp of grid parity and rapidly expanding deployment, don't short regulated utilities, as Mr. Tirpak suggested - not without a viable option for cheap electricity storage. The long term investment winners won't be the ones everyone else is looking at.

    Regarding the future potential of solar power: consider the ultimate forward integration possibilities with Berkshire Hathaway. Charlies Munger believes in the future of solar as shown in his youtube video (www.youtube.com/watch?...). Connect the dots, Berkshire (BHK.A) owns a major interest in the company BYD. BYD is known for batteries, cars, but is also a major solar company making modules and inverters. Berkshire owns the roofing company Johns Manville (who have announced BIPV plans). Berkshire owns the building company Clayton Homes and and owns the Electrical Utility companies MidAmerica Energy, PacifiCorp, Rocky Mountain Power, Pacific Power. Regarding forward integrations, Munger has indicating that the higher cost of today's solar energy is a small blip when looking at the over all macro economic factors facing the world. In other words he is bullish. I think Berkshire Hathaway has potentially the ultimate forward integration strategy.
    Jun 14 03:33 AM | Likes Like |Link to Comment
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