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Geoffrey Rocca  

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  • Yes, Gold Is a Decent Inflation Hedge, But It's a Lousy Investment [View article]
    $35 to $1215 in 39 years isn't 89.7% a year; it's actually 9.5% a year.

    Between Jan 1, 1971 and Dec 31, 2009, stocks returned an annualized return of 10.06%.

    They do teach compound interest in Econ 101.
    Jul 9, 2010. 05:43 PM | 1 Like Like |Link to Comment
  • Is Gold Really an Investment? [View article]
    In the words of Seth Klarman, to be considered an investment, a thing must throw off cash flow for its owner. Anything else must be speculation.
    Jul 9, 2010. 05:36 PM | 3 Likes Like |Link to Comment
  • Yes, Gold Is a Decent Inflation Hedge, But It's a Lousy Investment [View article]
    Read Adam Smith. The correct measure of the price of bread, or the other necessities of life, is hours of work, not ounces of gold.
    Jul 9, 2010. 05:34 PM | 1 Like Like |Link to Comment
  • The Dow Yields More Than 10-Year Treasuries [View article]
    "And if you’re valuing stocks on some kind of discounted-cash-flow basis, then your valuations should be soaring right now, as long-term interest rates continue to fall. Which probably just demonstrates the limitations of DCF analysis more than anything else."

    Indeed. You can't discount long term cash flows based on what rates are now; you have to consider what rates are likely to be in future, which is probably a good chunk higher.
    Jul 1, 2010. 04:48 PM | 1 Like Like |Link to Comment
  • Deluxe Corp (DLX) is declining but not doomed [View instapost]
    The 10-K identifies the business printing industry as "highly fragmented," and it mentions several competitors in the check printing line, including check printing software vendors and other direct check marketers. It's only in the financial services area that they have just the one major competitor.
    Jun 27, 2010. 11:44 PM | Likes Like |Link to Comment
  • The Housing Collapse Intensifies [View article]
    "Homes are now looked at as a place to live versus an investment. "

    Good. That's what they are.
    Jun 24, 2010. 11:06 PM | 2 Likes Like |Link to Comment
  • Don't Sell Your Qwest Shares [View article]
    By any measure (operating earnings, free cash flow, even the number of employees), CenturyTel is between 1/2 and 2/3 the size of Qwest. And now they're merging as equals?

    I'm afraid the corporate ambulance chasers have it right this time. This is an unfortunate deal for Qwest shareholders.
    Apr 22, 2010. 05:13 PM | Likes Like |Link to Comment
  • Conn's Teaches a Vital Lesson in Inventory and Receivables Analysis [View article]
    The reason that receivables have been increasing is that before 2008, Conn's transferred all its receivables for the goods it sells on credit to a securitization entity. In 2008 they obtained a line of credit that gave them a lower cost of funds than the securitization, so they kept the receivables on their balance sheet instead. The average lifespan of their receivables is 19 months, and so it takes a while for principal payments on their receivables to equal new receivables acquired. But that should happen in a quarter or two.

    If you sum the receivables on their balance sheet and still in the securitization entity, you find that the total has barely increased at all for several years. Likewise for the debt picture.
    Feb 17, 2010. 10:49 PM | Likes Like |Link to Comment