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Jason Merriam  

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  • Fifth Third Doesn't Possess The Earnings Growth I'm Looking For [View article]
    Abba's Aces,
    Enjoyed the article and share some of your concerns regarding earnings growth. Some of the problems facing FITB are industry related and some are their own.

    I do like that they have avoided over lending to the energy sector and their move towards corporate lending. FITB also has very low cost of funds at avg. of 12 basis points vs. about 19 for the industry.

    I'm watching this one and will look for 19.50 area to nibble.
    May 21, 2015. 03:45 PM | 1 Like Like |Link to Comment
  • SolarCity Is My Favorite Idea That Everyone Knows, But That No One Understands [View article]
    Rogier,

    Very compelling argument...great article.
    Apr 22, 2015. 03:52 PM | 4 Likes Like |Link to Comment
  • Netflix Bull Thesis Is Profoundly Flawed [View article]
    J Mintzmeyer,

    Your thesis is a good read and your discussion of the content liabilities says it all...SCARY!!!
    Apr 20, 2015. 10:19 PM | Likes Like |Link to Comment
  • General Electric: A Golden Dividend Growth Opportunity Is Never Offered Twice [View article]
    Bobcat,
    Your points are well taken. The variable comp plans were one of four "sales force effectiveness" priorities implemented by GE. Michael Pindell, who was initiatives leader for GE Capital Solutions was one of the project leaders.

    At onset of the project, there were some 165 different var. incentive comp plans (just within GE Cap. Sol.). Many of those plans were complex and lengthy.

    It was under Immelt's reign that these initiatives were implemented under a broader framework to be used in all of GE's businesses.

    Current leadership should be commended for changing course. After all, Immelt was an appliance guy early on. However, GE Capital under Welch, was referred to as GE's secret weapon. It allowed GE to dance the consensus estimates like clockwork.

    Obviously, 100% of blame for GE Capital's expansion can't be thrown at Welch. Thankfully, the finance unit was much smaller since before the credit crisis. But, as a legacy, it was definitely Welch's baby.
    Apr 13, 2015. 10:08 PM | Likes Like |Link to Comment
  • General Electric: A Golden Dividend Growth Opportunity Is Never Offered Twice [View article]
    David,
    Sound thesis.

    GE Capital was the spawn of Jack Welch and (unfortunately) Immelt's bane. Welch used this unit (along with certain pension accounting) to always meet consensus estimates almost to the penny.

    Welch had the audacity to call out Immelt some years ago on GE's post-Welch inability to accommodate consensus expectations. Welch was the king of earnings smoothness.

    It's taken Immelt 15 years to clean up Welch's mess and GE is a better company as a result. Better late than never.
    Apr 12, 2015. 02:01 AM | 19 Likes Like |Link to Comment
  • It Takes Courage To Not Run With The Bull [View article]
    I enjoyed reading the article and comments. It certainly takes "courage" not to run with the bull, particularly when major indexes flirt with record highs. The cognizant dissonance issue would be defined by the magnitude.

    History has shown numerous examples of significant market pricing adjustments. Some swift, others orderly and still others "anomalous". There is also anecdotal lore such as mom/pop investors (last to get in and often last to exit).

    For me, the market slide in reaction to the 9-11 WTC attacks challenged my sense of courage. However, we were fortunate enough to have been holding larger than average cash positions prior to the tragic event(s).

    Cognitive dissonance theory is founded on the assumption that individuals seek consistency between expectations and reality. Following the attack, a reasonable expectation would be selling pressure. Also, the NYSE and Nasdaq remained closed until Sept. 17th (longest shutdown since 1933).

    In the first week of post-attack trading, the Dow and S&P lost 14% and 12% respectively. I was expecting a sell-off, but not as severe as we had. It was a blood-bath.

    As for reality, insurers, airlines, financials, etc. had steep declines due to a sense of fear and uncertainty. Yet, we realized that people still need to travel and this created an opportunity to acquire some names in the re-insurance group as well as hotels and hospitality.

    Our reality also made it clear that the economy was wobbly prior to the attacks. Could the event further thwart prospects for economic expansion? Perhaps, but the prospects of acquiring severely discounted and well-managed businesses more than offset our economic concerns.

    Jump forward fourteen years and we are six years into a bull market. The punch-bowl has been largely fueled with liquidity pumped into the system along with protracted and historical low interest rates.

    Also lurking in the shadows are discernible signs of deteriorating quality-of earnings. Balance sheet maneuvering is alive and well, but this is also in the face of strong dollar headwinds, potential for rising interest rates, and prospects of slower sales growth in many sectors.

    I'm less concerned about corporate debt than I am about what's in an earnings report. Earnings supported by cash-flow generated by actual operations (i.e. paying customers) are best, but we're seeing a lot of creative accounting in recent years.

    There is nothing wrong with holding lots of cash. Whether you are a trader or investor, the secret is to recycle the cash opportunistically or invest in a company that you would be willing to own for the long-haul.

    Good article and food for thought.
    Apr 11, 2015. 03:10 AM | 2 Likes Like |Link to Comment
  • Some Concerns That Have Me Worried About The Overvalued Markets In 2015 [View article]
    Mycroft,
    Another outstanding article and perspective. Many thanks. Your data hits the nail exactly on the head.

    Your earlier comment/reply to a poster about the bearish-extreme indicator of when mom and pop get back into the market is the anecdotal nightmare! If my memory serves me correctly, we saw something similar several years prior to the credit crisis. Mom, pop and even grandma were cashing out of CD's (prior to maturity) so they could jump into the market.

    We benefited from buying CD's at a discount to value in the secondary market, giving us a bit of juice to cash yields. Those days are long gone, but as I also recall, mom, dad and granny are also the last ones to get out of the market.

    Thus, your mom/pop bearish indicator is both wise and salient. Great article!
    Apr 10, 2015. 09:54 PM | 4 Likes Like |Link to Comment
  • Mr. Valuation Thinks AbbVie Will 'Humira' Us For A Few More Years [View article]
    Chuck,
    Wonderful overview on ABBV, thanks much. We picked up shares on the "cheap" and will continue to add on pull-backs. Your thoughts that ABBV's dividend growth potential will likely be realized over time is both comforting and in sync with our view.

    On the issue of debt (mentioned in another comment), the PCYC deal will be primarily debt-equity financed. I'm hopeful that a gradual deleveraging will play out in the next few years.

    Very good article!!
    Apr 10, 2015. 09:14 PM | 1 Like Like |Link to Comment
  • Why Now Is The Time To Pick Up 117-Year-Old Goodyear Tire [View article]
    David,
    Very good overview, thanks. I believe investors have yet to appreciate management's operational efficiency progress. Your deferred tax allowance point is a valuable consideration. GT is a company getting their house in order.
    Apr 1, 2015. 05:21 PM | Likes Like |Link to Comment
  • The Future Of Seeking Alpha, From One Contributor's Perspective [View article]
    Robert,
    I appreciate the dialogue also. Ultimately, and as you point out, it does come down to our ideas on investment. I read the Beware Experts Bearing... and found it interesting. Reminds me of the old saw "economists were created to make weathermen look good" (it might be the other way around).

    In contrast, the SA platform is in concept by investors for investors. One can observe that the openness of the platform has been wildly successful (as a community).

    I agree with your thinking that speaking with strong convictions (should) generate more eyeballs. Yes, there are many top authors on SA who express their "calls" with ample conviction. These are also the authors who generally stick to their knitting and are consistent to their theme(s).

    However, there are many other top ranked authors who have carved out a niche by playing it safe with their "calls". By this I mean, they hedge their thesis with conditional outcomes. If "x" happens "y" might happen, then if "x" and "y" do happen, they come out and say, "see I told you so".

    The average investor may find this guilt free approach comforting, but at some point, the author needs to put his/her cards on the table. Fair and balanced is always welcome, but what side of the fence is the message being sent.

    Anyways, enjoy the rest of your Sunday and I've enjoyed our discussion.

    Mar 29, 2015. 01:35 PM | 1 Like Like |Link to Comment
  • The Bond Market Tells The Fed What To Do, Not Vice-Versa [View article]
    This article is a good wake-up call to those with short memories. When levered parties get caught with pants at ankles, many will surely get caught in the belly of some yield curve.
    Mar 29, 2015. 12:14 PM | Likes Like |Link to Comment
  • The Future Of Seeking Alpha, From One Contributor's Perspective [View article]
    Robert,
    I agree that too much conviction may be a sort of bias overwrought. To your point that authors who "realize" an actionable buy/sell idea yields "odds only slightly in the investors favor", I disagree.

    In a crowd-sourced environment such as SA, an actionable thesis can often be nothing more than a crafty hook disguised as investment/research...... in drag.

    What is the intended consequence of an "actionable" idea? An author who arbitrages "balance" to the point of a coin-toss may generate high volume of eyeballs, (and compensation via page views), but will not get me any closer to actionable.

    I'll be curious to see what research you find, but I'll take an author who is willing to walk the plank over the author who needs to stay in the cabin...any day of the week. SA's mission statement: read, decide, invest.
    Mar 29, 2015. 11:45 AM | 2 Likes Like |Link to Comment
  • The Future Of Seeking Alpha, From One Contributor's Perspective [View article]
    First of all, congratulations Chris on your subscription endeavor. Much success to you going forward. I have always enjoyed reading your work and the new direction is a natural fit.

    To Eli Hoffman, kudos for the constant evolution and innovation of the SA platform. Change, especially positive change is a win-win proposition.

    To readers/contributors: this article has generated vibrant discussion. Many comments express support to SA's subscription initiatives, while many others take umbrage.

    For those in the latter camp, a contributor subscription model is an option not a mandate. There are many actionable authors here at SA, and people like Chris DeMuth stand tall among the crowd.

    There are also many other contributors here who strive for balance, are earnest, but fall way short of actionable thesis. Surprisingly, some of these authors also have large numbers of followers and in some cases high "ranking" topics.

    However, there is a big difference between popular and actionable. Some contributors produce volume (a result of SA's shift to compensation), but how effectively can any author cover a large universe of stocks or frequent recurring coverage of a few popular names without inflecting some sell-side ambiguity into the story?

    As an investor, I want to hear some conviction from the author/contributor. I have no problem with balance, but at least tilt the balance one way or another.

    At least with Chris DeMuth and some others, I know that his/her position (thesis) will be crystal clear. In that respect, his subscribers will likely benefit immensely.
    Mar 29, 2015. 02:00 AM | 6 Likes Like |Link to Comment
  • AT&T: A Bird In Hand Is Worth 2 In The Bush [View article]
    I added to positions at the close of market Wed. Good article.
    Mar 26, 2015. 03:25 AM | 4 Likes Like |Link to Comment
  • The Mexican Peso: An Oil Hedge Bought Some Stability But That Is Only Part Of The Story [View article]
    Hi mykie,

    I share with you Mexico's"Napoleonic" legal system. We have property there and have experienced a drawn out civil litigation which the defendant(s) were amparoed to the hilt. We were represented by Baker Hughes who did a wonderful job representing us, but our resolution took three years to manifest.

    Mex is a work in progress, but wheels of justice could use some serious lubrication. There were also some political influences in our case which were unfortunately adversarial. But, we ultimately prevailed.
    Mar 19, 2015. 08:09 PM | 1 Like Like |Link to Comment
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