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Anthony Grossi  

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  • Blackrock Global Allocation: Balanced Investing on U.S. Stocks, International Stocks and International Bonds [View article]
    I'm still patiently waiting for one of the big funds to offer a passive 60/40 or 50/50 balanced index fund of the MSCI world stock index and the Barclay's global aggregate bond index. DFA funds (DGSIX) comes the closest but they are equal weight, not cap weighted, on the equity side and weighted by debt issued, not GDP, on the bond side (overweight "riskier" investments, i.e. emerging markets, in both cases). But its nice to see how easily one can replicate a managed fund with simple ETF's (for less).
    Apr 26, 2011. 07:25 AM | Likes Like |Link to Comment
  • The Glencore IPO: A Bad Sign for Commodity Investors [View article]
    Before we jump to conclusions, I think its worth taking time to detail the "this time its different" side of the story. There are a lot of advantages to Glencore going public. The first among these is that the company can use shares as an acquisition currency. Secondly, a public offering allows departing partners to sell their equity without depleting working capital. There are some limits to how fast a private equity firm can grow. For example, a public listing would give Glencore the scale to undertake very large capital projects or transformational M&A, including the potential takeover of Xstrata (XSRAF) or Anglo American (AAUKY). Glencore already holds 34.4% of Xstrata, and Anglo American was the object of a proposed 2009 "merger of equals" that never happened. So basically, going public gives the company the ability to leverage up.

    There is reason to believe that this IPO could benefit shareholders as well. According to the company factsheet, the company has total assets of $66.3 billion and last year London-based Liberum Capital Ltd valued Glencore at between $47 and $51 billion. That's big enough to put Glencore in the FTSE 100, which translates into a lot of institutional buyers at index funds and pension funds that track the FTSE index. And lets not forget that shares of Goldman Sachs have walloped the S&P since its IPO. If the prevailing demographic patterns regarding the growing rate of consumption in China and other emerging economies proves to be accurate, the next twenty years bodes well for firms exposed to the commodities sector.

    seekingalpha.com/insta...
    Apr 19, 2011. 08:00 AM | 5 Likes Like |Link to Comment
  • Top 5 Tobacco Producers Paying Substantial Dividends [View article]
    think about the relation between taxes and state revenues as a bell curve where excess taxation costs the public money and incentivizes illegal market activity and under taxation costs the public money and results in waste. Example, the true cost of leaving your lights on is under taxed and results in misallocation of resources, whereas "sins" are over taxed and result in capital loss and increase in crime rates. As for income and sales tax, the bell is probably flatter allowing for slightly lower loss rates as you move right on the scale, but yes there is a point at which sales taxes disrupts sales and at which income tax dis-incentivizes productivity. There is an old russian joke from the soviet era, "the people pretend to work and the government pretends to pay us".
    Apr 18, 2011. 06:38 AM | 3 Likes Like |Link to Comment
  • Top 5 Tobacco Producers Paying Substantial Dividends [View article]
    according to the 2007 Altria annual shareholder letter it costs 27.5 cents to produce a pack of cigarettes. There is a reason why tobacco is the biz school model for inelastic demand. However, the gov't may need the money but that hasn't stop them from running higher deficits in the past. Anyone else who lives in NYC must have also noticed the increase in black market smokes and "loosies", kids who sell individual smokes on the corner at 2 for $1. Highert taxes will eventually drive down demand and kill the industry.
    Apr 18, 2011. 02:46 AM | Likes Like |Link to Comment
  • Investment Legends Say Dollar Collapse Inevitable [View article]
    great set of interviews. would have liked at least one quasi bull for balance, but mostly out of a dying sense of patriotism. how about John Bogle's recently voiced opinion that the S&P acts as a proxy for the global market b/c American based companies revenue streams in Europe/Asia/Other correlate roughly with global growth demographics? main take away: always helps to diversify and re-balance across asset classes.
    Mar 24, 2011. 11:28 AM | 5 Likes Like |Link to Comment
  • How to Profit From MLP 'Stink Bids' [View article]
    always feels good to be right ;) the best ever stink bid win in history is some lucky bastard in 2008 managed to buy 10 shares of BRK class A for $880 dollars in premarket bid. Flip side of course is some poor retired person prob just lost their life savings.

    Many brokers no longer allow this sort of thing and during the flash crash many trades were canceled (including my 1000 MO @ $13.50).

    All the same its great to hunt for value in market inefficiencies. If you look hard enough you'll eventually find one. Enjoyed the article, I'm jealous I wasn't one of the people buying EPD below 30
    Mar 16, 2011. 09:11 AM | 7 Likes Like |Link to Comment
  • Harry Browne's Simple Approach to Asset Allocation [View article]
    the legendary Harry Browne permanent portfolio, a descendant of the principles of libertarian economist Ludwig Von Mises. An approach to asset allocation so boring that it has been ignored for decades despite a great long term record.
    crawlingroad.com/blog/.../
    I think the permanent portfolio idea is a great way to start a core and explore portfolio for the money you just can't afford to lose (i.e. retirement/college savings)
    Mar 10, 2011. 04:11 AM | Likes Like |Link to Comment
  • Pfizer: The Market's Undervalued Ugly Duckling [View article]
    we are also ignoring regulatory risks. It is in the governments best interest to increase the regulatory standards of approving new treatments to reduce liabilities assumed under gov't provided care and to bring generic drugs to market more quickly to bring down the cost of providing said treatment. Hence, it will continue to cost companies more money to develop and seek approval for new treatments and those new treatments will face a shortened market cycle in which to recuperate cost. This leads to continually shrinking profit margins and P/E ratios for the pharma sector. If you don't believe that revenue growth and shrinking stock prices go together just take a look at PFE 10 year chart.
    Mar 4, 2011. 06:47 AM | 2 Likes Like |Link to Comment
  • Kinder Morgan Inc IPO first step in getting rid of KMR [View instapost]
    my prediction, for what its worth, is that KMP will follow the same strategy set forward by EPD when it bought out EPE and that you will receive KMI shares that represent a premium in stock price but a discount in expected future distribution growth rates. The companies that are buying back their GP's are looking at these like 30 year bonds, sure they're paying a lot up front but the distribution incentives cost more over a long enough time horizon.
    Mar 4, 2011. 01:33 AM | Likes Like |Link to Comment
  • Star Scientific Just Announced They Cured Alzheimer's Disease and Nobody Cares [View article]
    what, no in depth examination of how interluekin affects cardiovascular blood flow? Just kidding...

    Longer term I think you are right about this stock but I was under the impression that the inflammaging human clinical trial was part of the process for CIGX's Stonewall Moist BDL being allowed to show the levels of tobacco carcinogens on labeling and packaging.

    Even if the alzheimer's cure doesn't happen you can still make money when Altria buys the company out for its MRTP patents.

    This is what to look for in a spec stock. This company is either worth nothing or ten plus times what it trades for now. Black-Scholes models can't price options on a stock like this.
    Mar 1, 2011. 09:00 AM | 1 Like Like |Link to Comment
  • Could a Glencore IPO Signal a Top in the Commodity Market? [View article]
    its funny you mention LTCM and Enron since both lost big in commodities trading and here comes a firm that does what again?

    But actually I'm with Fisher on this one, I think Glencore is coming public because they have ideas about where to invest the new capital they will be able to raise...

    seekingalpha.com/insta...
    Mar 1, 2011. 01:24 AM | 1 Like Like |Link to Comment
  • Are Cargill and Glencore as Smart as Conagra and Blackstone? [View article]
    Before we jump to conclusions, I think its worth taking time to detail the "this time its different" side of the story. There are a lot of advantages to Glencore going public. The first among these is that the company can use shares as an acquisition currency. Secondly, a public offering allows departing partners to sell their equity without depleting working capital. There are some limits to how fast a private equity firm can grow. And lets not forget that shares of Goldman Sachs have walloped the S&P since its IPO in 1999. If Goldman's the perfect example of the corp. insider shouldn't they have sold at the top too?

    I know its not classy to piggyback off your post but here's my two cents on the matter...
    seekingalpha.com/insta...
    Feb 28, 2011. 05:46 AM | Likes Like |Link to Comment
  • Why Glencore's Going Public [View article]
    There's a well know Warren Buffet quote regarding IPO's. "It's almost a mathematical impossibility to imagine that, out of the thousands of things for sale on a given day, the most attractively priced is the one being sold by a knowledgeable seller to a less knowledgeable buyer."

    Felix, I like your take away that commodities speculation is creeping into traditional indexing under the radar. Sorry to piggyback off of your post but here's my two cents on the matter..

    seekingalpha.com/insta...
    Feb 28, 2011. 05:37 AM | 2 Likes Like |Link to Comment
  • Diversification: 10 Investments That Don't Correlate With the S&P [View article]
    kwm3
    re: Gabelli return of capital, Gabelli funds will often telegraph when a fund is drying up by opening a fund that directly competes with the existing one. For example, the recently opened GNT is offered as a replacement for GGN. I've enjoyed the yield at GGN just as you enjoy the yield at GABUX, but know when its time to move on.
    Feb 24, 2011. 03:23 AM | 1 Like Like |Link to Comment
  • Loews: A Value Story That Never Gets Old [View article]
    I have breached this topic with you before, regarding the how CNA is mostly responsible for the discount in Loews, in the comments of an article called, "Ruminations on the Conglomerate Discount of Loews". I think the market is trying to tell us that CNA's consistently unprofitable underwriting practices are a liability, a real/actual drag on the future returns of Loews, and that, right or wrong, is where the discount stems from.
    However, CNA looks like it might finally be making a comeback after 10-15 years of poor performance, in which case the value argument for Loews would be like a leveraged bet on CNA but with so much less risk because of the other valuable assets. I'm sure you are more familiar with this than I (profitability on new written business better than runoff operations, declining combined ratio). But its hard for me to get excited about Loews or CNA until they do something about its unprofitable runoff operations. That and I still don't quite understand the case for selling Lorillard, which has continued to create value for shareholders.
    I've read your blog for at least a year now and you and James Potkul have both been pushing L for years. Slow and steady wins the race. We appreciate the work you do.
    Feb 8, 2011. 02:52 AM | 1 Like Like |Link to Comment
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