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Michael L. Boyer

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  • Safeway: In The Discount Aisle For A Reason [View article]
    How do you like the picture for SWY with the announced sale of the Canadian stores and use of the proceeds to pay down debt and buy back shares?
    Jun 13 05:26 AM | 1 Like Like |Link to Comment
  • A Day In The Life: Spinning Siegel [View article]
    Hard to say where the market would be without some of those inputs.

    I love the rational, data based "Stocks For the Long Run" (Siegel's great book) ideas.... Great thesis and case for stocks (over the very long term)...

    But where you get in the game and out of the game (your life cycle relative to the bull/bear market cycle) is also key.

    We also have the "Madness of Crowds" and general animal spirits driving much of investing short term.

    Hard to ask people who lost much of their savings (be it 1929, dot.com crash, or more recent financial crisis) to be rational and look at long term stock data and re-enter the market. Too much emotion, too much pain, etc.

    Behavioral economics, group psychology, generational trends, etc. may tell us much about the next market. Alarming numbers of baby boomers have inadequate retirement savings (will they invest in stocks like mad and let it ride on the market or look for stronger government funding for entitlements)....
    Dec 28 12:51 AM | 1 Like Like |Link to Comment
  • A Day In The Life: Spinning Siegel [View article]
    Nice look at issue(s) in above comment from an article I came across today-- on market events and their potential impacts on a generations' asset allocation:

    http://bit.ly/TssbnG
    Dec 27 04:54 PM | 1 Like Like |Link to Comment
  • A Day In The Life: Spinning Siegel [View article]
    I see this theme more and more--looking at real savings patterns, life expectancies, even normal human behavior (like who really invests like clockwork without fail a set % from 20 to 65)... Also, considering human capital is key.

    We may even see generational trends and biases towards asset classes (or lack thereof).

    An example, I recall is inheriting some EE Bonds from a greatest generation era grandparent in 1999 ( a life time US bond & CD) investor. Of course, I was thinking at that time--as a Gen X equity-o-phile- how I wish the grandparent had discovered stocks. Oh the riches and lost opportunities.

    Then I found myself holding those double EE's quite dearly in the dot.com collapse.

    Yes, grandparent had been alive and old enough to understand the market crash of 1929 and seen its impacts. So we may even have to begin looking at market history and the interplay with human psychology, too...

    It is a very complex and nuanced issue--much more than just stocks versus bonds in a race over the last 100 years.
    Dec 27 01:21 AM | 1 Like Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Some relevant updates that caught my eye:


    http://bit.ly/RPbodt

    Brief CNBC report that foreclosure values are drying up; relevant because it could bad for those still trying to buy (little/no discount to market) and flip; but it may be positive for first movers--those who bought bulk foreclosures a couple of years ago. Also, even without discount, they could pencil out as rentals, according to report.

    James K. Glassman points out some similar housing plays (for home improvement) in the December Kiplinger's:

    http://bit.ly/WQMIa8

    Some relevant picks in the same vein as above are Lennox Int (LII) for heating and A/C; Mohawk (MHK) for floors; and A.O. Smith (AOS) for water heaters.
    Nov 10 03:35 PM | 1 Like Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    This "flipping" of houses is generally associated with a very short term transaction where a buyer quickly buys the house (often making cosmetic improvements) and then attempting to sell it quickly for a profit. You can find definitions, websites, and even past television shows on the concept online.

    This was very popular during the housing boom with quickly appreciating property values.

    In this context, some comments point to private equity attempting to do this "flipping" as opposed to buying the properties longer term and renting them out.

    The keys being buying at a favorable price, not spending too much in repairs/improvements and--of course-- selling quickly.
    Nov 5 12:36 AM | 1 Like Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Brilliant point and addition to the article! Great article. I had not come across this early mover in the market making an exit.

    I have been drafting this idea for many months, especially when working to convert a rental to sale all summer (still on the market), thinking "how are the funds going to do this x 1,000 profitably"). So it looks like this piece supports the thesis of the article; however, Och Ziff may get out "ok" with the price appreciation in that particular area as the article mentioned by ntalebfan notes:

    "But the New York-based hedge fund is looking to sell now because the returns it is generating from rental income are less than expected and it is looking to take advantage of a recent rebound in home prices in northern California, the sources said. It's not clear what kind of return Och-Ziff had expected to earn from renting out homes.

    The average cost of renting a home nationally grew at 0.9 percent in the third quarter from the previous three-month period. That growth rate is down from 1.3 percent in the second quarter, according to Reis Inc., a commercial real estate research firm.

    Meanwhile, the median price paid for all new and resale houses and condos in the San Francisco Bay Area in August was $410,000 -- up 10.8 percent from $370,000 in August 2011, according to DataQuick.

    Och-Ziff's move could indicate that institutional investors may have to dial back their expectations, especially with regards to rental income.

    "It's not surprising that some investors may have overestimated rental returns," said Rick Sharga, executive vice president with Carrington Mortgage Holdings, a division of Carrington Capital, which has been buying and renting foreclosed homes since 2007. "If you are an investor getting into this cold you were probably making assumptions based on models rather than experience"
    Oct 25 02:17 AM | 1 Like Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Very interesting close up look of private equity property management pigdog67(or maybe mismanagement).

    It highlights so many questions. The two insurance companies I use for rental won't allow a long list with certain breeds of dogs (including the one you mentioned). And they visit the place before writing the policy.

    So you can see private equity could lose coverage and face direct liability. Dog bites are top reason for claims--just one of the hundreds of pitfalls in their new venture as landlords. And I am sure a dog bite in a single family home (rented out) or apt could find its way back to the property owner and/or their coverage.

    Some of these larger firms may even be self insuring rather than pay the landlord policies (not sure if an insurance firm would write a blanket policy for a few hundred or even a thousand dispersed homes in bulk; so they'd have to be individually done; the costs could be substantial). This is just a narrow probe on one of a hundred issues the scale creates for oversight, tenant screening, insurance coverage, safety issues, etc.
    Oct 24 11:40 PM | 1 Like Like |Link to Comment
  • The Best Thing Warren Buffett Has Said All Year [View article]
    Good points. My consensus after reading all the Buffet books I could get my hands on was it is largely a financial/numbers equation for him.

    Buffett would (and should) offer a dividend as soon as he thinks shareholders can get a better return on the money themselves (say in an index fund) than he and the managers at Berkshire can get with the money left in Berkshire.

    It makes no sense to pay cash to shareholders (purchasing power now) if you can plow back "snowball" the money into the company for greater future purchasing power, as the introductory quote concludes.

    And you have to look at the tax paid at the entity and the individual shareholder level (plus the company's rate of return versus market rates) in the final equation. And when the firm is Berkshire, the money is usually best left in the firm.

    And also see the importance of RD in the equation for good uses of retained earnings. I have brief seeking alpha piece on dividend policy from about a year ago if anyone is interested.
    Jun 8 09:41 PM | 1 Like Like |Link to Comment
  • These Companies May Be Habit Forming [View article]
    Yes, PDT is right.

    I have CL in my handwritten draft but somehow typed CP (which seems to be the Canadian Pacific Railway, probably only habit forming for shipping).

    Thanks for catching that one.
    May 14 07:12 PM | 1 Like Like |Link to Comment
  • Procter & Gamble's Problems Go Beyond Costs [View article]
    Good news-- the problems seem to be mostly (according to some analysts) the management (and hence unlike the economy or industry, leadership is a problem that can be changed).

    Bad news--the problems seem to be mostly management (and it may take some real efforts from shareholders and the board to make the changes--not always fast or easy).
    May 14 05:08 PM | 1 Like Like |Link to Comment
  • Ford: A Hot Buy At $11 On Stable Dividend [View article]
    And on the cons, I would add the precipitous drop in consumer reports ratings year over year (from overall 5th overall as a brand to 10th).

    The F-Series franchise is strong, but Ford (and GM and Chrysler/Fiat) still need to up the scores on reliability and cost of ownership across the board, in my opinion. Still to many defects and recalls.

    The press gets into the financial management (dividends, margins, etc) labor relations, and leadership too much for autos. The quality and engineering of the cars should be at the forefront.
    May 13 01:22 AM | 1 Like Like |Link to Comment
  • Why Caterpillar Is One Of The Best Blue Chip Stocks To Own [View article]
    A top Dow performer for the last 20 years!

    Hiding in plain sight....with something at most any construction site on the planet.
    Apr 2 02:18 PM | 1 Like Like |Link to Comment
  • Kraft's Split Story Continues In 2012 [View article]
    Here is what we have on the dividend goals for the North American business--from the 8/4/2011 release from the company:

    "Capitalizing on the investments that the company has made during its transformation, an independent North American business would be managed to deliver reliable revenue growth; strong margins and free cash flow; and a HIGHLY COMPETITIVE DIVIDEND payout." (emphasis added).

    http://bit.ly/wOua1J;highlight=

    So by competitive we'd probably look for something that is in line with the current yield and attractive, considering the upper end of the SP 500--2.75% to 3.5% yield--in the ball park where current owners would not see a drop in income, income investors would be enticed.

    We could also extrapolate from the revenues and free cash flow goals (and look at a high but sustainable percentage paid out as dividends).

    Of course, the Global Food firm will likely have little or no dividend, focusing retained earnings on growth and market share in developing and global markets.

    But it may be you get the current 3.0% yield from both new companies--with 2.8% from the NA and .20% on the Global.

    Of course, yield could vary greatly on how shares move up and down just before/after the split and the balance sheet of the new firms (debt service etc). Each firm will also be establishing its own dividend policy and stance on retained earnings.
    Feb 11 02:04 PM | 1 Like Like |Link to Comment
  • 5 Bank Stocks To Consider For Your Portfolio In Q1 2012 [View article]
    I just wrapped up the book "The End of Wall Street", and while not an investment book per se, it helped me better understand the banking sector post meltdown.

    We now have reduced competition and consolidation but also increased regulation and continuing aftershocks from the meltdown (lawsuits, slow housing, etc).

    Long term, I like the leaders in the sector. The survivors have fewer competition and were allowed to pick the bones of the firms that collapsed. The P/E's are attractive, too.

    I am looking more at what earnings might be in the next few years than what they are going to be this week.
    Jan 15 01:10 PM | 1 Like Like |Link to Comment
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