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  • Should You Borrow Money To Make Investments? [View article]
    Fantastic article and solid advice. Great job.
    Jul 25, 2013. 03:17 AM | Likes Like |Link to Comment
  • Should You Borrow Money To Make Investments? [View article]
    Because those people buying blenders/TVs on credit are uneducated...

    Using leverage isn't a bad thing at all. It's one of the greatest assets to a growing economy, however, leverage is something that must be approached with caution.
    Jul 25, 2013. 03:17 AM | Likes Like |Link to Comment
  • Should You Borrow Money To Make Investments? [View article]
    That's exactly how I use my margin account as well. I've been burned twice with using margin trading and have learned my lesson.

    Thankfully, though, the losses have been small.
    Jul 25, 2013. 03:15 AM | 1 Like Like |Link to Comment
  • Should You Borrow Money To Make Investments? [View article]
    Surfgeezer,

    You're comparing apples and oranges here. Using debt to invest in stocks and real estate are entirely different beasts...

    Stocks are incredibly volatile and, thus, the margin interest rates reflect that. Currently, using margin debt on my brokerage account yields me 10%+ in interest, whereas the interest on mortgage loans are around 4%.

    It's very, very difficult to guarantee 10%+ yearly returns on stock performance, which makes margin trading speculative by nature. Those who utilize it are using it for shorter-term trades, while your mortgage loan durations are typically 30-year fixed rates.

    Essentially, you're much better off using debt in real estate because of the predictability of cash flows, whereas you'll likely run negative when using margin debt to invest in stocks (in the long run)
    Jul 25, 2013. 03:12 AM | Likes Like |Link to Comment
  • Apple (AAPL) roundup: 1) The NYT reports Apple has talked with pay-TV providers other than Time Warner Cable about Apple TV-based content access, and is looking to "collect a [per-user] fee." 2) 9to5 Mac reports Apple has added medical sensor and fitness experts to a wearable computing team, and has "experimented" with many wearable computing designs. All signs suggest the team is working on an iWatch. 3) Digitimes reports Apple is testing Ultra HD panels, and is talking with LG Display (LPL) about buying panels. Rumors about Apple prototype TV sets have been around for a while. 4) Wells Fargo notes Verizon's Q2 iPhone sales fell only 4% Q/Q vs. 16% last year, and thinks this could lead FQ3 iPhone sales to top its 26M-unit forecast. [View news story]
    Jesus Christ... the sales data implies 34.7m iPhone activations... I wonder what Samshit's numbers were
    Jul 19, 2013. 01:42 AM | 6 Likes Like |Link to Comment
  • Apple (AAPL -3.3%) roundup: 1) Shares are near $400 thanks to Peter Misek's note and an equity selloff. On top of reporting of high inventories (a reason for Wal-Mart's promotion?), Misek says checks indicate Apple's wafer starts at a Samsung fab used for app processor production "have likely been cut." 2) Global Equities claims "recruiters are seeing more and more employees from Apple applying for jobs" at other tech companies (previous). 3) TSMC (TSM) has scored a 3-year app processor deal with Apple, says Digitimes. Volume production of Apple's A8 CPU, said to use TSMC's next-gen 20nm process, will reportedly start after December. 4) The Supreme Court has rejected an appeal from Mirror Worlds to review an overturned $625.5M infringement ruling against Apple. [View news story]
    Assuming the bonds are callable, then they will run the gain through the income statement; however, they're using the debt for buying back their stock.
    Jun 24, 2013. 06:25 PM | Likes Like |Link to Comment
  • Apple (AAPL -3.3%) roundup: 1) Shares are near $400 thanks to Peter Misek's note and an equity selloff. On top of reporting of high inventories (a reason for Wal-Mart's promotion?), Misek says checks indicate Apple's wafer starts at a Samsung fab used for app processor production "have likely been cut." 2) Global Equities claims "recruiters are seeing more and more employees from Apple applying for jobs" at other tech companies (previous). 3) TSMC (TSM) has scored a 3-year app processor deal with Apple, says Digitimes. Volume production of Apple's A8 CPU, said to use TSMC's next-gen 20nm process, will reportedly start after December. 4) The Supreme Court has rejected an appeal from Mirror Worlds to review an overturned $625.5M infringement ruling against Apple. [View news story]
    It won't be a negative if Apple accounts for the bonds as held-to-maturity. The losses will only run through the income statement if Apple accounts for the bonds at fair value, which they likely won't.
    Jun 24, 2013. 06:24 PM | Likes Like |Link to Comment
  • Apple (AAPL -3.3%) roundup: 1) Shares are near $400 thanks to Peter Misek's note and an equity selloff. On top of reporting of high inventories (a reason for Wal-Mart's promotion?), Misek says checks indicate Apple's wafer starts at a Samsung fab used for app processor production "have likely been cut." 2) Global Equities claims "recruiters are seeing more and more employees from Apple applying for jobs" at other tech companies (previous). 3) TSMC (TSM) has scored a 3-year app processor deal with Apple, says Digitimes. Volume production of Apple's A8 CPU, said to use TSMC's next-gen 20nm process, will reportedly start after December. 4) The Supreme Court has rejected an appeal from Mirror Worlds to review an overturned $625.5M infringement ruling against Apple. [View news story]
    Under GAAP rules, Apple cannot show a "gain" from the debt they issued
    Jun 24, 2013. 01:57 PM | 1 Like Like |Link to Comment
  • Annaly Capital Management And The Spread: One Widening Reason Not To Sell [View article]
    Can anyone explain to me how exactly mReits are able to borrow at such low rates?
    Jun 15, 2013. 06:08 PM | Likes Like |Link to Comment
  • Amazon's (AMZN) Q1 Y/Y paid unit growth was 30%, the company discloses in its CC; that's down from Q4's 32% and Q3's 39%, but still above rev. growth of 22%. 3rd-party sellers (some of them upset over fee hikes) made up 40% of unit sales vs. 39% in Q4 and 41% in Q3; they've been a major source of gross margin growth. Digital content sales growth slowed down, leading physical units to rise over 300 bps Y/Y as a % of total units. Forex expected to have a 275 bps impact on Q2 rev. growth. North America had a $457M op. profit in Q1, international a $16M op. loss. Active customer accounts rose to 209M+ from 200M+ in Q4.  AMZN now -3% AH. (Q1: I, II[View news story]
    Technically, it's all the profit/losses that aren't generated by core operations. It's designed to help investors understand how core activities are doing.
    Apr 26, 2013. 12:30 AM | Likes Like |Link to Comment
  • Samsung Electronics (SSNLF.PK) says its Q1 profit rose 42% to a record high on strong smartphone sales. Net profit rose to a record KRW7.15T ($6.4B), up from KRW5.05T a year earlier. Operating profit rose 54% to KRW8.8T from KRW5.7T. Sales rose 16.8% to KRW52.9T from KRW45.3T, coming in in line with the company's guidance of KRW51T to KRW53T. The results stand in stark contrast those of Apple (AAPL), which earlier this week reported its first profit drop in a decade and forecast margins to decline in the current quarter ending in June. [View news story]
    Just a few things to note. Please drop the "why does everyone buy Samsung, they're not American" whining. We're in a highly globalized economy in which businesses compete with each other; often, by mimicking each others' products.

    It's true that Samsung has piggy backed off Apple, but complaining about it is fruitless. As an investor, look at the cash flow prospects of an investment and its ability to generate consistent returns. I'm long Aapl, but I also believe Samsung is a great investment as well. They've been able to capture markets Apple had missed (with the phablets) and continue to take Apple's market share due to management's stubbornnes to extend their iPhone product line.
    Apr 25, 2013. 11:21 PM | 5 Likes Like |Link to Comment
  • Apple (AAPL) only looks cheap if it maintains its profit margins (35.3% in 2012), writes The Brooklyn Investor. Slapping Samsung's mobile operating margin of 18% on Apple's $181B in expected revenue this year then giving it a 10 multiple and adding back cash yields a value of $370/share. Margins might not decline right away (and revenues may increase to offset), but Apple bulls are fighting the powerful historical tendency (particularly for Apple) of excess margins getting competed away. [View news story]
    Omer, that is true. I was being conservative with the 3.5%-4% yield, which would be indicative of a 20-30 year time horizon. At 10 years, they can likely issue debt for only 2%. Given an effective tax rate of 25.2%, they'll actually only be paying only 1.5% interest (given the tax savings).

    They can easily issue $100b in debt and bring down the outstanding shares by 25%.
    Apr 22, 2013. 12:24 AM | Likes Like |Link to Comment
  • Apple (AAPL) only looks cheap if it maintains its profit margins (35.3% in 2012), writes The Brooklyn Investor. Slapping Samsung's mobile operating margin of 18% on Apple's $181B in expected revenue this year then giving it a 10 multiple and adding back cash yields a value of $370/share. Margins might not decline right away (and revenues may increase to offset), but Apple bulls are fighting the powerful historical tendency (particularly for Apple) of excess margins getting competed away. [View news story]
    Apple should just issue $50b-$100b in debt/preferred shares at 3.5%-4% interest, which is tax deductible, and buyback shares with those funds. They can easily pay back the debt within a few years, given their ability to generate tremendous free cash flows; even if revenues decline. This is a much cheaper alternative than repatioting income at an additional 35% tax.

    Once the U.S. realizes how desperate our federal deficit is, they'll eventually create a tax holiday for U.S. corporations to repatriate their offshore funds. After this occurs, Apple can then permanently increase their dividends. They're currently bulwarked with the 35% repatriotization tax, which makes any idea of transferring back international funds fruitless.

    Until U.S. corporations, like Apple, can bring back their "permamently reinvested earnings", we won't be experiencing the significant dividend hikes most investors are anticipating. The cost is simply too much.
    Apr 21, 2013. 05:52 PM | Likes Like |Link to Comment
  • 3 Undervalued, High-Yielding, Solvent Investments [View article]
    Including dividends, since the time of writing:
    CXS is down 0.0015%
    HLCP is up 5.25%
    SB is up 33.42%

    The S&P 500 is up 2.77% during the same time period.

    Also, to disclose, I've recently sold out of my position in SB at $4.80.
    Mar 16, 2013. 05:15 PM | Likes Like |Link to Comment
  • 3 Undervalued, High-Yielding, Solvent Investments [View article]
    Earnings report coming out next week. They cut their dividend on their last report, so I doubt they would cut it again anytime soon.
    Feb 15, 2013. 03:13 AM | 1 Like Like |Link to Comment
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