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Michael L. Boyer  

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  • Private Equity's Foreclosure Binge (& Purge) [View article]
    More great comments that add to the discussion...

    Benny is right on track with the notion that capital appreciation can bail out the strategy--if it comes soon and is strong. Of course, they'll need appreciation to cover rehab and transaction costs plus cost of capital (and soon).

    And he also notes these firms, through collective buying with billions of dollars, could even impact supply and hence pricing in some markets where they are concentrated. And he also notes private equity could even be middlemen to emerging (see Silver Bay above) single family REITS or existing REITS that seek to get involved in the single family market at scale right away (i.e. need to buy hundreds or thousands of homes); they'd be almost like bulk flippers selling the homes in bulk after a short time to another institutional buyer. Good ideas/exits strategies.

    The apartment complex comments is interesting and may be a better fit for scale for private equity; they'd be able to outsource to existing management firms--more proven and certain cash flows.

    And on the income point. Yes, median income, the job market and lots of economic factors can impact housing prices. Interestingly, this sage comment notes these numbers don't look favorable and flat rents and home prices could be a real problem for this strategy, sticking private equity with real cash flow problems and not many profitable ways out ...
    Oct 24, 2012. 02:40 PM | 2 Likes Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Thanks for the great comments!

    I think this may be a situation where the hedge fund whiz kids and high profile private equity pro's left out a key person from the table: the regular, experienced landlord in overalls.

    Yet that person and that skill set may be as important to the success of this strategy as almost any other factor.
    Oct 23, 2012. 06:35 PM | 4 Likes Like |Link to Comment
  • Denny's: A 'Grand Slam' For Investors? [View article]
    Just got back from 5 days in Denny's heavy Southern California. Steady but not overwhelming traffic in all of them. Still like to see that state's economy improve to get more people discretionary income and on the road for vacations.

    Restaurant competition is pretty fierce but Denny's has a nice value proposition with 24 hours, some new promotions (across America meals) and good prices.
    Jul 11, 2012. 05:07 PM | Likes Like |Link to Comment
  • Berkshire Hathaway's General Motors Test Drive [View article]
    GM had a few models that had positive improvements on quality in a third party review (JD Power):
    Jun 21, 2012. 03:03 PM | Likes Like |Link to Comment
  • Reviews You Can Use: Third-Party Product Reviews And Stock Price [View article]
    JD Power report on 2012 auto problems:

    Expectations? Jaguar had a nice upside surprise; MINI had the largest downside change in the review; Ford (and Lexis) had the most segment leading models and BMW got in the top ten.
    Jun 20, 2012. 03:27 PM | Likes Like |Link to Comment
  • Reviews You Can Use: Third-Party Product Reviews And Stock Price [View article]
    Interesting USA Today piece on Chrysler looking to get off bottom of quality ratings (even a small surprise--not being dead last-- could help)
    Jun 15, 2012. 03:17 PM | Likes Like |Link to Comment
  • McDonald's Approaching Dollar Menu Prices [View article]
    Great comment, David. Been enjoying this ride since 2002, and with a long term perspective, any weaknesses just means more buying power with the DRIP. The dividend is also a very strong one.

    This is an ideal habit forming company, too, and I had recent piece on habits and investments, and it fits right into that theme.

    Hope the new CEO can keep the momentum.
    Jun 9, 2012. 01:31 PM | Likes Like |Link to Comment
  • Berkshire Hathaway's General Motors Test Drive [View article]

    May Auto Sales Strong in China:

    GM up 21%; and up 36% in joint SAIC partnership (selling minivans).
    Jun 9, 2012. 01:02 PM | Likes Like |Link to Comment
  • Kraft's Split Story Continues In 2012 [View article]
    Both new firms will trade on the Nasdaq:

    KRFT: North American Grocery

    MDLZ: Global Snack
    Jun 9, 2012. 12:41 AM | Likes 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, 2012. 09:41 PM | 1 Like Like |Link to Comment
  • The Best Thing Warren Buffett Has Said All Year [View article]
    Hang in there Tim! At your age, your human capital (future earnings) is your best asset, far eclipsing what most college students would have for ready capital to invest.

    One thought: love the Buffett quote and Fortune article (also share it with others) but then your article touts dividends.

    See the potential contradiction: Buffett generally does not favor dividends. Think some more about firms dividend policies. What about double taxation? Why does Buffett favor plowing the money back into the firm (tax free compounding) as opposed to giving it back as shareholders?

    Are there other better ways to deliver value as effectively? Often depends on the situation of the company and the individual investors goals.
    Jun 8, 2012. 05:35 AM | 3 Likes Like |Link to Comment
  • The Best Dividends On May 24, 2012 [View article]
    Like the dividend yield but not the current P/E ratio on SIX. Hayman Capital (Kyle Bass) seems to be a holder. Maybe worth a look if the P/E comes down to earth.
    Jun 4, 2012. 04:01 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Great piece on the BofA/Merrill Lynch deal in the NY Times (Mon/June 4th); details of omissions by Lewis related to Merrill's losses:

    Still more major rounds of litigation to weigh down the stock.
    Jun 4, 2012. 01:59 AM | Likes Like |Link to Comment
  • Microsoft: Increasing Dividend With Some Margin Of Safety [View article]
    Like the valuation analysis; MSFT's best niche may be as the predictable high dividend stock, returning the money to shareholders as we can likely do as well or better with the funds than the firm internally.

    Too many older investors still remember the high flying growth days of decades past and look down on the current stock because it can't fulfill the growth rates of its youth (like asking a middle age guy to run the 40 yard dash in his best time as a teen).

    It is a slow, steady, stable company at this point in its life cycle. So the dividend model is probably one of the best valuation methods.
    Jun 1, 2012. 05:17 PM | 3 Likes Like |Link to Comment
  • Despite Berkshire Boost, General Motors Still A Risky Stock At $22 [View article]
    Follow the 3rd party auto reviews, where GM has some major room for improvement (especially in reliability).

    Really tough to take on TM, HMC, and also Subaru (Consumer Reports top brand); and even Mazda.
    Jun 1, 2012. 02:01 PM | Likes Like |Link to Comment