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  • 2 Possible 'Barron's Bouncers' For Monday [View article]
    Oh, I've been into Varco for years, good thing Barron's is finally showing up to the party. I think they're a great company and occasionally you can grab shares at very low multiples. (Don't overpay.) They pretty much have a monopoly in their field and they're very well-managed. People speculate quite a bit in oil and gas these days, but for me there's really only XOM and NOV for the long haul.
    Jan 6 08:23 AM | Likes Like |Link to Comment
  • Apple cut to Sell at Standpoint over moral reasons [View news story]
    This. Especially with last year's inflation in the rupee. The analyst in question seems to have some trouble with the concept of exchange rates.
    Jan 6 08:14 AM | 11 Likes Like |Link to Comment
  • Gyrodyne Likely To Lose Half Its Value In The Coming Days [View article]
    Yyyyeah, good call. I only found out about this whole situation, per my customary style, the day after the ex-dividend date, and I've been trying to parse this very confusing situation. I hadn't seen the new holder's list, and thank you for posting it. I almost never short stocks, but if there's a sure thing in the bag...
    Jan 6 08:03 AM | Likes Like |Link to Comment
  • Why Apple's Recent 'Analyst Downgrade' Is A Farce [View article]
    I'm not interested in talking about Apple. There are plenty of Apple articles out there. Let's bash the analyst community instead, because they deserve it.

    Analysts are absolutely no good to me except to drive prices down before I want to buy something. The only difference between most professional analysts and your barber is that the former have passed the Level III's and the latter has not. There's nothing you can learn in b-school that you can't through plain old fashioned common sense, sound logic, and reasoning. In fact, with all the Fama-French style claptrap and utterly useless "technical" aeromancy you pick up at most b-schools (Columbia's a notable exception, there are a few others) I feel like it's a positive disadvantage to one who wishes to practice sound principles. If this sounds like anti-intellectualism, it's not; it's anti-bunkum, and the vast majority of professional analysts peddle nothing but bunkum. Heck, Walter Schloss almost doubled the S&P averages for more than 40 years, and the guy didn't even attend college. Just because someone's paychecks say Cantor Fitz on them doesn't make their opinion any more valid than your own.

    I say this, and I put CFA after my name on my calling cards. Take that as you will.
    Jan 6 07:33 AM | 24 Likes Like |Link to Comment
  • AMD's Kaveri Looks Like A Dud [View article]
    Moar like... Cadaveri, amirite
    Jan 5 06:58 PM | Likes Like |Link to Comment
  • The Rise Of Long-Term Thinking [View article]
    Fantastic little piece of contrarianism. This generation of investors will no doubt have its bubble stocks (see: DDD, TSLA) but I also feel like there will be very many rational, conservative investors. For a few reasons.

    First of all, the '07-'09 period was such a system-wide shock that it will leave an emotional and psychic residue similar to the Great Crash of '29 and the Depression. Secondly, they're witnessing the heyday of the greatest investor ever at the peak of his fame, and there are very many good lessons to learn from Buffett. Thirdly, they're cleaning up after the Boomer generation -- nothing encourages thrift and conservatism like being handed the largest generational debt burden in human history. I think the coming generation will invest much more like their grandparents than their parents, and that will be a great thing for the overall health and soundness of the system long-term. There will be speculators and the speculative tendency - it's only human nature - but I predict they will be outnumbered by the investors.

    Right now there's all this hand-wringing about the youth: why are they still living at home? Why aren't they having kids at 25? But I think things will turn out just fine.
    Jan 5 11:54 AM | 4 Likes Like |Link to Comment
  • Apple urges shareholders vote against Icahn buyback proposal [View news story]
    I'm voting with Cook. Apple's superb results over the past ten years speak for themselves and have bought them a certain level of trust from this shareholder.

    Carl Icahn's problem is that he's Carl Icahn. We've all met Carl before.

    BTW how slick is it that Apple released this as a Friday night news dump? Carl can't even get his say on the big financial news infotainment shows until next week and it must be killing him. Point goes to Apple. Very cagey, Mr. Cook.
    Dec 28 02:11 PM | 2 Likes Like |Link to Comment
  • Why It's A Mistake To Raise Cash For Fear Of A Market Crash [View article]
    Finding quality companies which have been undervalued by the market, I have found, is not appreciably harder in frothy markets than in a depressed market. It's true that in 2008 more whales appeared, that more companies like KO and JNJ were cheaper than normal all at the same time, but we shouldn't expect such opportunities any time in the near future. In the meantime, the next "right time" might be many years away, while in the interim the cash is lying dormant, every day growing less valuable than when you sock it away.

    Ordinary business fluctuations and the sway of market attitudes influence some prices to value levels even during the most exuberant times. It was a good time to buy KO in 2008, but good times to buy it arose during the dotcom mania as well, when an investment in boring old Coke took a back seat to gambles on Pets.com and Netscape for many people. Coal companies, for-profit universities, and mortgage REITs are today's dog-ends; who knows what tomorrow will bring? The entire market rarely rises (or falls) altogether -- there are always sprinters and laggards, companies, industries, and sectors. Looking at it from this angle, the time to buy is almost always.

    Holding cash in anticipation of a market downturn is a form of market timing. A disciplined system of regular cash allocation I feel is preferable to waiting for a market downturn, which may be very long in coming and also may not return prices below previous levels anyway.
    Dec 27 08:32 AM | 1 Like Like |Link to Comment
  • A Strategic Shift In My Dividend Portfolio [View article]
    Mexican Coke, man: they're still using real sugar down there!
    Dec 26 06:47 AM | 22 Likes Like |Link to Comment
  • How Do I Know When To Sell A Stock? [View article]
    Well here's what I do when I'm selling.

    I have pretty precise ideas of what I want when I'm buying; I want good value, always, growth if I can get it but book value if I can't.

    Selling is harder. Selling, I think you have to identify why you bought in the first place? If I bought into XOM, who I plan on holding indefinitely, my objectives will be different than if I bought into Intelliquent. XOM, unless there is some radical sea change in the world economy, will still be XOM in 50 years and I can hold it well assured as long as my purchase price was OK, as long as I bought in at fair or under fair intrinsic value. But, a company like Intelliquent, which I bought for its cash flow only due to an identified market inefficiency, I may hold onto for a lot shorter.

    As CC says, it's a market of stocks. Every one is different, every one is a special little snowflake. Are you holding on because of slow, but inevitable glacier-like growth? Or are you holding because you think you realized something the rest of the market hasn't caught onto. The parameters are different.

    Therefore, I think the answer to the question "When do I sell a stock" is... depends on the stock. Some people think you should sell out at 100% gain, on principle. But that prevents you from the next ten-bagger.

    I say, and I've always relied on, intuition. I don't think there is a calculable, scientific "right" time to sell a stock. Good enough, is good enough. Great investors have held stocks for too long, great investors have gotten rid of stocks too early. We all live by our own light and make good or bad judgements.
    Dec 18 09:02 PM | 2 Likes Like |Link to Comment
  • Ford, Lincoln, And The Great Revival [View article]
    haha, it's been suggested that tdot knock out some articles, because he has a great handle not only on ford but the auto industry as a whole. he doesn't, i guess for his own purposes! they'd be good ones though.
    Dec 18 09:03 AM | 1 Like Like |Link to Comment
  • Ford, Lincoln, And The Great Revival [View article]
    i banged out an article (my only article on SA! hah) trying to gauge ford's fair market value some months ago, and i believe their automotive operations debt is somewhere in the neighborhood of $14-17 billion if memory serves. it *is* hard to arrive at a good book value reckoning for F because you're essentially handling both an industrial and a credit company rolled into one.

    corporate accounting for us steel and for american express would be handled very differently. amex can assume gobs of debt, possibly even showing a negative enterprise value, and that's ok because they have customers who are in essence buying that debt from them to finance their own borrowing. whereas if us steel is ev negative, look out below. amex can run large debt numbers and skate. us steel can't run large debts or they collapse. so, likewise, ford credit should be differentiated from ford auto -- but their fortunes are obviously intertwined. so you have to kind of take the two and blend them together.

    it's a neat puzzle, and you can play with the numbers a bit. ford's book value, however, one way or the other shouldn't be the end-all consideration in valuing them. we all remember big, bloated, inefficient pre-mullaly ford, and book values were much higher then. ford is getting far more for much less these days operationally. i consider it a GARP company.

    ford's main anchor, as far as "bad" debt goes, is in funding for its pension program, which they seem to be dealing with aggressively.
    Dec 18 08:50 AM | Likes Like |Link to Comment
  • Ford, Lincoln, And The Great Revival [View article]
    "That is, until you count Ford's debt, the effects of which can be seen when comparing price to book value, below..."

    In before tdot:

    large amount of ford debt is credit debt from its lending arm, and its automotive debt is quite contained. the book value, as well as some other numbers and ratios, is inflated with ford because of this; it's not "real" due debt, but debt ford assumes in order to pass along to its customers. the credit situation alters some of ford's numbers. this trips up many analysts it seems.
    Dec 18 07:42 AM | Likes Like |Link to Comment
  • Why It's A Mistake To Hold Cash In This Market [View article]
    Hi Chuck,

    Great job as always. I'm a little surprised you didn't include the Dean's classic definition of investment as opposed to speculation, so I'll post it here for the general benefit:

    "An investment operation is one which, upon analysis, offers safety of principal and an adequate return. Operations not meeting these requirements are speculative."

    Anyhow, to the above poster TennisBoy88, who wrote: "Bonds, held to maturity, are actual contracts that award the bondholders with periodic interest AND a guaranteed return of your principal at the end. Stocks, however, can discontinue dividends and erode your initial principal. Nice try though."

    We're not making any categorical statements here, I hope. Ask a Detroit municipal bondholder what he thinks of this "guaranteed return" business! Holding common stock, bought at reasonable value, in a conservatively financed operation like Johnson and Johnson offers far more safety than purchasing, say, low grade junk bonds.
    Dec 12 06:41 AM | 17 Likes Like |Link to Comment
  • My Favorite Stock For 2014: Ford [View article]
    Dude, they REALLY need to reduce their share float. Still something like 4 billion floating around!! If they reduced that by 25%, the share price would go orbital.
    Dec 10 10:42 AM | 1 Like Like |Link to Comment
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565 Comments
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