If investors want to take October off and maintain the current valuations of the market, then I'm more than happy to step in and continue buying positions of stocks I own at what I view to be very attractive prices.
I am a long-term investor, so keep in mind that I look at this as an opportunity rather than something negative that impacts my portfolios
Apple is about to learn a very important lesson that many before have learnt the hard way. You don't reduce margins in an effort to spur demand for your product in a market that's already matured.
They were better as a company that offered niche products and could therefore charge a much higher margin for them. Now what they're doing is matching competition margins for similar products and expecting to have the same sales growth as before?
You NEVER compete on price. It's the last thing you do. If demand dries up either you're not making a product that people want or they simply don't have the discretionary spending to afford it.
Now Apple does make some great products, but the consumer is tapped out at the moment and lowering their margins is akin to suicide. Motorola tried it and failed, McDonald's learnt their lesson in the early part of this decade and Apple will be no different.
Over the long-term it might be a fine investment, but its certainly not dirt cheap as the market is pricing it accordingly to how the margins will express their future earnings potential.
I'm applying a 2009 multiple that brings RIM closer to the valuation NOK held a few years ago. NOK is a much more global company and RIM currently is entering markets where NOK has dominant market share. If they make significant inroads there then I would expect them to trade on par with Nokia's 2002-2004 P/E range.
I have no doubt that RIM can continue to make significant cashflow, but its well documented that when any company enters the consumer market after dealing with a professional niche that price needs to come down in order to reach scale. RIM is also commiting a significant amount of their cashflow to R&D and I don't expect this to stop. After further analysis over the weekend I have a target price I'm comfortable with in mind.
If you believe that RIM offers considerable value at this time than I encourage you to buy. As a value investor I look for a higher MoS, so I'll hold off for now.
Goldman Sachs: Buffett's the Milkman and He Always Delivers [View article]
I don't see GS stock declining from here for a number of reasons. They have incredible intellectual capital despite the problems that the industry is facing at this time. Do they have massive exposure? Yep. Will they look to decrease that exposure promptly? Yep.
If the warrants are worthless than why on earth would Buffett had demanded them? GS didn't simply say, "Hey WEB....here are some warrants we're throwing in for free." This was part of the package that BRK offered and likely wasn't something negotiable. BRK is getting a dividend which is accounted for in the MoS calculated for the transaction. Buffett buys for the long-term and isn't concerned with making a quick buck.
While there's risk in any investment my belief is that Buffett again will come out in the end just fine. He is taking substantially less risk than other individuals (say SWF's) when they've placed large equity injections into companies and the long-term downside risk to GS is much less, IMO, than many of the other banking institutions in the US.
Miken - in my submitted draft I did include all three brands of Toyota and why this was edited back to my original article I can't say. Maybe editors choice?
Any reader is welcome to question my advice or insights, but my business fundamentals are sound as I completed a business degree from Wilfrid Laurier University prior to going back to school for my BScN. I've had consulting experience both in Canada and abroad and do more than just change dirty diapers when in a hospital.
Dow 'Dirty Dozen' Offers High Yields and Good Value [View article]
PFE & GE would be my top picks from that group. I would not count on GM being a "yield" investment for quite some time due in part to the risks they face on many fronts. Chronic mismanagement vs. yield? I'll avoid that stocks as a value trap despite the upside many analysts and investors continue to see in that company
Where Are the Bank Failures in This Financial Crisis? [View article]
I think through this credit cycle many long-term investors will find that reality is balanced somewhere between maximum pessimism and maximum optimism concerning financial institutions. What an investor really has to focus on is individual equity risk and how much reward they anticipate receiving from investing their capital in these names. There are certain opportunities emerging where the market has cast all stocks with the same brush. We’ve seen failures, but none of the magnitude that many are raving about in the streets.
One or two large failures is to be expected from this credit bubble bursting and a greater number of smaller regional institutions who got away from conservative operations will bite the bullet also. The risks are real, but the systemic risks to the system have been handled well enough to ensure viability of the sector and continue operations.
The Most Essential Secret to Successful Investing [View article]
I still believe that DD (due diligence) is by far the most important tool for successful investing, but patience to stick with a strategy and remain committed is nearly equal in the same respect.
Why Buyers Might Take October Off [View article]
I am a long-term investor, so keep in mind that I look at this as an opportunity rather than something negative that impacts my portfolios
Apple in the Bargain Bin [View article]
They were better as a company that offered niche products and could therefore charge a much higher margin for them. Now what they're doing is matching competition margins for similar products and expecting to have the same sales growth as before?
You NEVER compete on price. It's the last thing you do. If demand dries up either you're not making a product that people want or they simply don't have the discretionary spending to afford it.
Now Apple does make some great products, but the consumer is tapped out at the moment and lowering their margins is akin to suicide. Motorola tried it and failed, McDonald's learnt their lesson in the early part of this decade and Apple will be no different.
Over the long-term it might be a fine investment, but its certainly not dirt cheap as the market is pricing it accordingly to how the margins will express their future earnings potential.
Keeping RIM in Sight for 2009 [View article]
I'm applying a 2009 multiple that brings RIM closer to the valuation NOK held a few years ago. NOK is a much more global company and RIM currently is entering markets where NOK has dominant market share. If they make significant inroads there then I would expect them to trade on par with Nokia's 2002-2004 P/E range.
I have no doubt that RIM can continue to make significant cashflow, but its well documented that when any company enters the consumer market after dealing with a professional niche that price needs to come down in order to reach scale. RIM is also commiting a significant amount of their cashflow to R&D and I don't expect this to stop. After further analysis over the weekend I have a target price I'm comfortable with in mind.
If you believe that RIM offers considerable value at this time than I encourage you to buy. As a value investor I look for a higher MoS, so I'll hold off for now.
Goldman Sachs: Buffett's the Milkman and He Always Delivers [View article]
If the warrants are worthless than why on earth would Buffett had demanded them? GS didn't simply say, "Hey WEB....here are some warrants we're throwing in for free." This was part of the package that BRK offered and likely wasn't something negotiable. BRK is getting a dividend which is accounted for in the MoS calculated for the transaction. Buffett buys for the long-term and isn't concerned with making a quick buck.
While there's risk in any investment my belief is that Buffett again will come out in the end just fine. He is taking substantially less risk than other individuals (say SWF's) when they've placed large equity injections into companies and the long-term downside risk to GS is much less, IMO, than many of the other banking institutions in the US.
The Ultimate Value Trap [View article]
Miken - in my submitted draft I did include all three brands of Toyota and why this was edited back to my original article I can't say. Maybe editors choice?
Any reader is welcome to question my advice or insights, but my business fundamentals are sound as I completed a business degree from Wilfrid Laurier University prior to going back to school for my BScN. I've had consulting experience both in Canada and abroad and do more than just change dirty diapers when in a hospital.
Dow 'Dirty Dozen' Offers High Yields and Good Value [View article]
Where Are the Bank Failures in This Financial Crisis? [View article]
One or two large failures is to be expected from this credit bubble bursting and a greater number of smaller regional institutions who got away from conservative operations will bite the bullet also. The risks are real, but the systemic risks to the system have been handled well enough to ensure viability of the sector and continue operations.
The Most Essential Secret to Successful Investing [View article]