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  • Disney's Dividend Growth Outlook Is Outstanding [View article]
    I bought at nearly twice your price and still feel clever :-)
    Mar 25, 2015. 01:02 PM | Likes Like |Link to Comment
  • Disney's Dividend Growth Outlook Is Outstanding [View article]
    Postage on one share's dividend is a significant fraction of the dividend, and multiplying it by 4 hurts. You also need an envelope, printing, etc. for these own-name holdings.
    Mar 25, 2015. 01:01 PM | 2 Likes Like |Link to Comment
  • Understanding American Capital's 2014 Annual Results [View article]
    Management's guidance has been that it's going to create a bond fund (for people who want steady dividends), a fund that has equity in it (for those who liked the equity gains; but since the regulations against structuring holding companies as tax-pass-through entities require a BDC to have <50% of equity in controlled investments this fund will have significant holdings in the form of a leveraged bond portfolio), and a fund manager. I can't add much to that except to point out that ACAS' current NAV discount is rather grater than most BDCs' NAV discount. Much of the value to be had in the split-up involves getting a more typical NAV discount. By concentrating like investments in two different BDCs and stripping out the funds-management business one should expect to get a BDC-typical NAV-driven valuation of the BDCs while getting whatever the market grants a fund manager. Since the fund manager will have new contracts with its soon-to-be-externally-... funds, we can't necessarily rely on past fee income to predict fee income under the percentage-plus-partic... contracts the last presentation suggested we should expect. I think that after a few quarters the fund manager will be in a position to demonstrate both its regular fee-driven income and its power to launch new funds incubated with its $1b significant seed money.

    My best post-crash buy was $1.80, and my second-best post-crash buy was the reinvested post-crash dividend (I elected stock only). I still think we move up from here.
    Mar 25, 2015. 12:34 PM | 1 Like Like |Link to Comment
  • Apple: The New Battle For Smartphone Profit [View article]
    Samsung's contract foundry work competes with Intel's, TSMC's and others' for the kind of large-scale jobs Apple offers, that few other firms do. Samsung may make itself a great SOC, but Samsung doesn't sell enough volume of any one phone to make the part a low-cost item for it: it's got lots of design investment (that will perish) and modest production volumes over which to amortize setup costs.

    The mobile hardware business is cut-throat

    and although Samsung makes money in it because it's more vertically integrated than its typical competitors,

    Apple makes the most money because it owns the most valuable IP in its products and because it concentrates so much volume on so few models:

    The world hasn't changed much since I wrote those articles in 2013, only the die size in the current chip lineup and Apple's increased fraction of global smartphone profits. Apple's best bet at investing in foundries would be to do what it did with the failed sapphire manufacturer and lend secured money while putting all the risk on a vendor obliged to meet Apple's requirements. Look at the comparative graph of Apple and its third-party sapphire vendor around the time of the last iPhone launch, and ask whether risks associated with novel manufacturing processes should be on Apple's balance sheet or on a third party's:

    The more Apple builds in-house, the less free it is to switch nimbly as conditions and opportunities change. As long as foundries are happy to compete with each other to sell top-notch manufacturing to Apple for Apple's in-house designs, I believe Apple is better off sticking to its strengths in design than in trying to take established foundries on head-to-head in a market segment in which Apple has no expertise.
    Mar 9, 2015. 10:24 AM | 3 Likes Like |Link to Comment
  • After Earnings, Apple Is Aces [View article]
    One Day –
    Mark Twain said to put all your eggs in one basket, then *watch that basket*. Concentrating assets in one name gives you the best and worst – biggest return if it goes to the moon, and the biggest disappointment if it does not. For perspective, keep in mind Apple's historic volatility. Look at a few of the charts in this article:
    Whether Apple is a good retirement stock for you could turn on things like your investment horizon. If that horizon is long, Buffett would seemingly counsel equities – but he also counsels that the first two rules of investing are both not to lose money. You need to have a horizon long enough to tolerate downswings without being forced to realize a loss.

    Best wishes on your retirement :-)
    Mar 6, 2015. 10:56 PM | Likes Like |Link to Comment
  • After Earnings, Apple Is Aces [View article]
    Although I once had a position as part of an AAPL/RIMM long/short
    ... I'm not trading BBRY at all right now, as I closed the RIMM short at about 15% profit two months in:

    I only mentioned the RIMM buyout links because someone suggested it was some kind of unfounded rumor, when in fact it was a Research In Motion corporate press release. Those who asked about it probably don't follow the company and simply recall the news and either assumed it had been completed, or that it was in process pending regulatory approvals. I don't think this is a case of trading on old information so much as recalling news about a stock that's not really a particular investor's focus and expressing surprise that current events didn't jive with the old news.
    Incidentally, buyout discussions do have more current dates, though the stories are not deal announcements but talks about proposals. Like this one:
    That last link suggested Canadian regulators had concerns that a Chinese buyer could constitute a security risk. This kind of thinking could work against a buyout, which might be bad for shareholders looking for a premium in a sale.
    Blackberry. Hmm. Maybe there's another article there...
    Mar 6, 2015. 10:49 PM | Likes Like |Link to Comment
  • Understanding American Capital's 2014 Annual Results [View article]
    I appreciate your coming back. It means a lot to hear it.
    Mar 4, 2015. 09:58 PM | Likes Like |Link to Comment
  • Understanding American Capital's 2014 Annual Results [View article]
    Thanks for the kind words. I appreciate your stopping by!
    Mar 4, 2015. 09:58 PM | Likes Like |Link to Comment
  • Understanding American Capital's 2014 Annual Results [View article]
    Actually I advocated ACAS fling bankruptcy to avoid default-rate interest, because the company was having no trouble servicing its interest:

    It just couldn't repay the corpus overnight, but that's not unusual; most banks can't either – the money is tied up in people's homes and businesses.
    Mar 4, 2015. 08:23 AM | Likes Like |Link to Comment
  • Understanding American Capital's 2014 Annual Results [View article]
    It's not bad to see folks fixed on 2008 results and 2009 news. Anti-ACAS sentiment provides near-term opportunity, and its reversal provides a catalyst. Fear and greed move buyers and sellers and therefore markets.

    ACAS post-crash at $1.80 was one of my best purchases, but I could have done better still if I hadn't still been in shock when I saw it print 57¢. I had to do the math a few times to reassure myself, and by then it'd tripled.
    Mar 4, 2015. 08:21 AM | 3 Likes Like |Link to Comment
  • Understanding American Capital's 2014 Annual Results [View article]
    ACAS' credit situation has improved dramatically, as its rates and terms have gotten better in each refinance. Management expects to replace its existing debt in the spinoff transaction; the entities are changing and will need separate credit, and assets securing the existing credit lines will end up in different entities.
    Mar 4, 2015. 08:16 AM | Likes Like |Link to Comment
  • Understanding American Capital's 2014 Annual Results [View article]
    I'm glad to hear it.

    Thanks for reading!
    Mar 4, 2015. 08:14 AM | 1 Like Like |Link to Comment
  • Understanding American Capital's 2014 Annual Results [View article]
    In 2012 I presented some charts that painted the post-crash picture pretty well:

    Since then ACAS has begun to build a levered portfolio of senior floating notes to be part of its growth & equity BDC in the spinoff, so it's acquired some debt after nearing a debt:equity of nil.

    Hope that helps.
    Mar 4, 2015. 08:13 AM | 1 Like Like |Link to Comment
  • Berkshire Hathaway: High-Growth Stock? [View article]
    GAAP. The value conforms to GAAP even when GAAP is not thought to reflect reality, because GAAP is what the SEC requires in these reports.
    Mar 1, 2015. 03:34 PM | 1 Like Like |Link to Comment
  • American Capital: Do We Win Or Win Big? [View article]
    If you have access to the PRO articles, you might look at my piece on what ACAS' capital returns have done for shareholders since the crash:

    If not, my article interpreting the 2012 annual report makes a value case for ACAS as a diversified investment portfolio:

    The shareholder return I've gotten from ACAS since the crash has beaten even the shareholder return I've gotten from AAPL, and that's saying something.
    Mar 1, 2015. 11:40 AM | Likes Like |Link to Comment