Camelot Portfolios, LLC

Camelot Portfolios, LLC
Contributor since: 2012
Company: Camelot Portfolios, LLC
inkyx - you're right. You've gotten a nice dividend and a nice pop. Our feeling in the article was that fair value was in the 23 to 25 range and maybe we could deploy our capital elsewhere for bigger gains. We were buyers of other stocks/REITs/etc. in the summer that have done a little better (UVV, SHS, SMS, BRS, etc.). Keep saving!
Exited our position.
Oh, wouldn't a handcuffed Congress and President be grand! :) Thanks for commenting.
Well yes, but. It is a spending problem in that our gov't doesn't even try to match receipts and outlays.
Tax rates are lower than the average you cite, however the average is high due to some severe skewing (think WWII and for a decade or two post-WWI). When calling for higher rates, it is always important to note a couple things. First - Any government -Republican, Democrat, Whig, Tory, Labor, Communist- throughout history always wants more to spend. Second - The United States operated w/o an income tax for nearly half of our history. I am not saying that we abandon the income tax here, but for perspective reasons folks should know we had a 0% income tax rate for a long time.
Gov't spending is making up a larger percentage of the annual GDP as time goes by - proving we have a spending problem. In 10 yr increments starting in 1947 outlays as a % of GDP have been 16.3%, 18.1%, 19.8%, 22%, 21.4%, 19.2%, and now for the past five years 22.8%. So even in the days when we had these high tax rates you cite, the government did not spend as much as they do now. There is a point (I don't know the number) when such a phenomenon as gov't spending making up more of the GDP is counter productive.
Taxes could certainly be raised to offset some of that spending, but I fear history shows that when more money enters the gov't coffers, they just spend it.
Thanks for reading.
Yep, didn't mean to imply that private insurers could or should charge based upon earnings. Meant to say that since the gov't is already playing insurance company, and since they have a progressive tax code - then putting the two together probably makes sense.
Agree that it is the incentive system that matters most. On the current course, however with the incentives taking a massively wrong turn, we'll be lucky to pull out of this.
Yes. You are right. The Federal Reserve could buy up all excess debt with electronic dollars and keep the government funded with phoney dollars, leaving the rest of us unable to fund ourselves. Thanks for pointing that out.
Hi Cash for Clunkers!
Thanks for reading and caring. I'd be reticent to turn over more control to a bunch of fellas and gals who've proven they cannot be trusted with real money and power. It is for that reason I would be against socializing medicine. The negative impacts these programs have on incentives and liberty are a distant concern.
However, I have already said too much. My entire goal in writing the paper was to prove that we should debate only four things in this election cycle. Medicare, SS, defense, and our debt load (interest payments too). All else is worthless.
Actually we don't need massively higher taxes. The first large table of my article shows that receipts as a % of GDP will trend much higher w/o massively higher taxes (other than the end of Bush-era tax cuts which expire on 1/1/13). Nothing will stifle an economic recovery like growing tax receipts to a massive portion of GDP.
I'd rather not address your Solyndra comments or the like because they are not immediately germaine to the three largest, fastest-growing spending culprits (medicare, SS, and interest). Commenting would get us both off in the woods like our politicians are wont to do.
Hi whidbey
Thanks for the comment. Yes. Since the math is so simple, it is a problem of political will, that is the fellas and gals who are sent to D.C. fail to govern and want only to give more entitlements (I include all here - corporate and personal welfare).
I guess I tried to make the point that the solutions are completely doable for rational people. Hopefully, once more voters appreciate that fact, they can get to the heart of the problem and elect responsible leaders.
Perfect. We are going to sell puts with laddered strikes.
All - Since we published this article UVV's stock price has climbed about 12% plus you've gotten some yield. We do begin to exercise caution as UVV passes fair value. We guessed a $50 intrinsic value a month or two ago. We're here. If you've got other great opportunities it may be time to reduce/elim UVV. If you don't have other great opportunities, you can wait until UVV becomes over-valued in our eyes and collect a dividend along the way.
Well - I am always, always, did I say always suspicious of serial acquirers. I cut my teeth in the days of GE and Tyco and Danaher and . . . The moment the music stops they find that there are not enough chairs.
At this point I can't confirm ConvertClassic's assertion that CRM acquisitions are done exclusively to cover losses. I do know with certainty, however, that Howard Schilit has proven again and again in his books that serial acquirers have learned to glean all the inherent accounting benefits that come with buying other companies. I am sure CRM is no different in this regard.
ConverClassic - Genius. (read that as genius period)
aWannabe - Great comments. You are correct that I did not update my FY 2013 revenue numbers. That was a mistake, however I think not likely to increase the intrinsic value calculation since I also assumed an immediate and permanent improvement in operating margins to 10%. Operating margins have been negative of late, though last quarter was around 12%. Point is that I think my rosy operating margin, likely more than compensated for my error in revenue numbers.
Also good question on my revenue assumptions. I actually wanted to show all my calculations easily on a webpage and so used some shorthand assumptions. It is clear that at some point revenue growth will fall - whether abruptly or gradually I do not know. I always encourage folks to change assumptions in their own spreadsheet and see what happens. One further assumption I made was that revenue grows at 10% forever. I think that is a pretty aggressive assumption (one I don't advocate) since I usually put a 3-5% growth rate on my terminal numbers.
Anyway, good comments! Ultimately, at these levels, mgmt must execute precisely . . . or else.
Thanks TimeOnTarget! With time, we'll see just how useful it was.
$2 billion is big to be sure, but they have cash flow/operating earnings to cover. Would mean about $1 in lower BV/S.
I think you're right, we don't know where iron ore will go. That is why we avoid trying to predict that with any precision. We assume it can go down a lot. If it can, and the price of VALE still seems fair, we probably still begin to accumulate.
About 20% of their revenue comes from Brazil.
Sounds like you and your husband have been good stewards. We like the stock at these prices, but also acknowledge that if a company becomes too big a portion of your account, that it may lead to trouble for you and your heirs.
With capital gains rates set to change dramatically at year end, I would seriously consider checking in with a trusted advisor for advice. If you have none you would consider trusted, feel free to contact Camelot Portfolios in Maumee, Ohio and ask for me.
Thanks and best wishes.
Hi Bleach!
Depends on what your looking for. The company is liquid so going out of business is not really a concern right now. So if you want yield and a little safety. I think that could be had around 20 or below.
If you want to buy truly depressed stocks, I think this could see a yield grow to nearly 10% so I'd look for an entry around 17 based upon recent dividends.
Hope that helps.