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Brendan Wagner
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Brendan Wagner is a portfolio manager at Spectrum Advisory Services in Atlanta. In addition to managing portfolios for private individuals, families and corporations, Spectrum is the advisor for the Marathon Value Portfolio (MVPFX) mutual fund. After graduating with a finance degree from Boston... More
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  • Equal sunburns, unequal taxes
    I really wonder what is going through the minds of "the arbitrarily targeted" in this health care fiasco...

    From the text of the bill, tanning salons will see a new 10% tax on their evil services:

    Rational people might wonder, why on earth single out tanning salons?  What about parks and beaches that encourage sunburns?   Where is the new 10% tax on putting a pool in your backyard, which might encourage more sun -worshiping than a tanning salon?

    I can't find an answer, and I suspect it's because the people who crafted this bill simply don't CARE.  If they're going to force a 29year old into buying insurance befitting a sick 55 year old, why wouldn't they arbitrarily throw taxes around?

    Disclosure: no position
    Mar 22 6:06 PM | Link | Comment!
  • Not getting his way, Senator Bayh says congress is broken...and will not seek re-election

     So noble!!

    On his website, you can read Indiana Senator Evan Bayh's impassioned, emotional explanation for deciding not to run for re-election. In summary - congress is broken because I'm not getting my way.

    From Bayh's speech:

    Two weeks ago, the Senate voted down a bipartisan commission to deal with one of the greatest threats facing our nation: our exploding deficits and debt. The measure would have passed, but seven members who had endorsed the idea instead voted “no” for short-term political reasons.
    Just last week, a major piece of legislation to create jobs -- the public’s top priority -- fell apart amid complaints from both the left and right.
    All of this and much more has led me to believe that there are better ways to serve my fellow citizens, my beloved state, and our nation than continued service in Congress.

    The horror! The bipartisan commission Bayh refers to was voted down BIPARTISANLY, because even Democrats saw it as a laughable attempt by the executive branch to impede on congress' territory as holders of the nation's purse-strings.

    The second example cited by Bayh as proof that congress doesn't work anymore was the proposed "jobs bill" that was scuttled bipartisanly. The first "jobs bill," the American Recovery and Reinvestment Act (also known as the Stimulus Bill) was enacted in spring 2009. Of $787 billion in authorized spending and tax cuts, about 34.5% has actually been paid out, according to theunintentionally-comedic website

    More specifically, of the portion of the stimulus bill that directly goes to create jobs - the Contracts Grants & Loans Section - only $74.4billion of the allocated $275billion has been spent. 

    So one of the reasons Bayh has dramatically, profoundly lost faith in the Senate - an institution he says is "in need of significant reform" - is that they won't create a new $85 billion jobs bill to do the work of the previous Stimulus bill, of which $201billion in job-creating money has yet to be spent.

    Disclosure: no position
    Feb 15 5:10 PM | Link | Comment!
  • Big beat, rosy outlook from Cisco leaves shares poised for more gains
     Networking giant Cisco (NASDAQ:CSCObeat earnings by about 5cents last night, reporting fiscal q2 EPS of 40cents per share versus the 35cents expected.  Revenue of $9.8billion were up 8% versus company guidance for 1-4% year-over-year growth.  Shares are up about 1 % in the first few minutes of trading.

    One of the most heavily scrutinized companies in the market (31 analysts publish earnings estimates for 2010), it's usually considered standard operating procedure for Cisco to come in a penny or two ahead of consensus.  But 5cents, on 5.8billion shares outstanding, is quite significant.  Gross margin declined from the previous  quarter, but diligent expense management allowed operating margin to increase 1% sequentially.  Cash and equivalents on the balance sheet ended the quarter at $39.6billion, or $6.75 per share.

    On last night's earnings conference call, CEO John Chambers boosted the coming quarter's revenue guidance to $10.2billion, above the street at $9.5billion.  That would be 25% revenue growth from the third quarter of last year.  Robust to say the least.  His comments were as bullish as we've heard in some time, a great sign for the coming 12months.

    In addition to upbeat revenue guidance on the conference call, CEO John Chambers warned investors that while he is very positive on the current phase of this recovery, he noted uncertainties regarding the strength of this recovery and the weak employment situation.

    Based on my estimates for 2010 and 2011 Free Cash Flow, and putting a 7% Free Cash Flow Yield on the shares, I see a fair value for Cisco of at least $35 and likely closer to $37 as we progress through 2010, well above the current $23.30.  For those that think that's a low yield, it amounts to only 15times Free Cash Flow, and is healthily above Cisco's cost of Capital, illustrated below with its 2016 bonds trading to yield only 3.35%.  Cisco is headed higher, and I still own it and recommend owning it.  In addition to that, it's another important driver of DJIA upside..

    Disclosure: Long CSCO
    Tags: CSCO
    Feb 04 9:42 AM | Link | Comment!
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