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.
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.
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.
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.
Is Gold Really an Investment? [View article]
Yes, Gold Is a Decent Inflation Hedge, But It's a Lousy Investment [View article]
The Dow Yields More Than 10-Year Treasuries [View article]
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.
Deluxe Corp (DLX) is declining but not doomed [View instapost]
The Housing Collapse Intensifies [View article]
Good. That's what they are.
Don't Sell Your Qwest Shares [View article]
I'm afraid the corporate ambulance chasers have it right this time. This is an unfortunate deal for Qwest shareholders.
Conn’s Teaches a Vital Lesson in Inventory and Receivables Analysis [View article]
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.