American Capital Is Still A Very Attractive Investment [View article]
Good point re: dividends. We have a kind of "chicken egg" problem with ACAS dividends in that ACAS wants to use its cash to buy back stock rather than pay dividends as look as the price is below NAV but one of the things that might increase the stock price to NAV would be the resumption of dividends. One solution for investors is to hold ACAS in a taxable account and hold dividend paying BDCs in IRAs and other tax free accounts.
American Capital Is Still A Very Attractive Investment [View article]
I think that that strategy makes sense. There are some other equity oriented BDCs - the pre-IPO group (GSVC, SVVC, KIPO) - and some others. ACAS seems to be following a very eclectic strategy which may work out well with limited leverage. In this sector, I look very long and hard at the price I am paying and with ACAS that continues to be a major factor convincing me to be long. Almost any of the BDCs can be a good or bad investment depending on the price you pay for the stock.
Clean Energy Systems: Nearing The Point Of Inflection? [View article]
What was he driving before he got the Volt? My guess would be that it wasn't a Prius - unless he was travellng 3000 miles each month. In any case, it sounds like he was putting a lot of miles on the car and it is the drivers who are racking up big mileage each month who will find it more economically attractive to switch to vehicles which are more fuel efficient. As I have often said, these vehicles don't necessarily have to appeal to the "national average" driver. They will do fine if they find 5 or 10% of the market. Of course, the impact on national fuel consumption is enhanced if the cars which travel the most are the ones to switch.
American Capital Is Still A Very Attractive Investment [View article]
Their policy right now is to use cash for share repurchases as long as the stock trades below NAV by a significant amount. I am not sure exactly how this plays out. One scenario would be for the discount to close in the market and dividends to be resumed at that point. I guess there is also the question of whether they would resume RIC status as their tax loss carry forward is exhausted.
American Capital Is Still A Very Attractive Investment [View article]
A decline of the Euro and/or the pound against the dollar would definitely adverse the dollar denominated value of ECAS. They appear to value it each quarter in Euros and then convert to dollars so the dollar strengthening against the Euro would virtually automatically be a negative. ECAS seems to have significant investments in the UK which would also be worth less in dollars if the dollar strengthened against the pound.
Western And Seagate: Surprising P/E Ratios [View article]
A couple of points: 1. I am not sure what you mean be "excess cash" - WDC's latest financials show balance sheet cash at over $4 billion, a higher number than you are using. 2. It may be unfair to use trailing 5 year earnings and EBIT to value the companies as they exist today since they have each recently made huge acquisitions and the old earnings were made by two companies which were much smaller than the STX and WDC that exist today. If a company borrowed a lot of money or liquidated cash one year ago and made a huge acquisition, your methodology would charge it for the full cost of the acquisition but not give it any credit for the four years of earnings before the acquisition took place.
Acorn Energy: The Hidden Marijuana Stock [View article]
I'd like to get ahold of whatever the author was smoking when he wrote this. Anyhow, the only way I could see ACFN getting involved in the marijuana business would be through a "joint" venture. Sorry.
The Q Ratio And Market Valuation: Monthly Update [View article]
In the early 80's we had the emergence of a new issue high yield bond market which facilitated takeovers and the issuance of safe harbor share repurchase guidelines by the SEC. I think that these too things may have taken away some of the screaming bargains that had been in markets in the past (it is hard to find stocks that are analogous to some of the things that Graham and Dodd found in the 1950's) but I doubt that they are important enough to have a major effect on index valuations. I would like to know more about how the numbers in the statistical release are actually calculated, whether there has been any change in methodology over the years, etc. When I was in law practice we had some cases in which Census department numbers were important and we discovered that there had been some significant changes in the way data was assembled and collected, calculations were made and even definitions were applied.
The Problem Of The Strong Dollar: Investment Implications [View article]
I don't think so. Their competitive position against US companies may improve but their earnings and dividends are denominated in foreign currencies which mean an automatic decline in dollar denominated terms. The problem is that we see the world through the window of the dollar and when the dollar becomes more highly valued, everything else tends to decline in dollar denominated terms. I do think that - for the long haul - Unilever and Total are good positions. I am less familiar with Diageo and BP depends upon the oil market. Another point - if the dollar is getting more valuable, it is likely that dollar denominated oil prices are declining.
The Problem Of The Strong Dollar: Investment Implications [View article]
I hope you are right. Of course, it the US economy recovers in a robust fashion and that is the reason the dollar strengthens, the Fed would not feel the need to ease. And I do not think that Central Bankers will ever come out and say that they are motivated by exchange rate issues. But we are up a lot against the yen in the last few weeks and, in a risk off situation, there will be no place else to hide.
The Problem Of The Strong Dollar: Investment Implications [View article]
I don't believe we have had the decisive, drastic kind of dollar strengthening that we had in the early 80's and which could be a major problem - although the dollar has moved up quite a bit against the yen. I would be concerned about a situation in which the Euro went to parity, one dollar US reached 1.25 Canadian, etc. In a bad enough risk off environment, things could move in this direction. I also think that this consideration is yet another thing which will tilt Fed policy toward easing for a considerable time
Desperately Seeking Yield Through Equities Redux: Part 11 - Wrap Up [View article]
Thank you. I hope to expand it into a book at some point. I really think that these issues have to be understood better by investors in the low interest rate environment which is going to be with us the next several years.
Desperately Seeking Yield Through Equities Redux: Part 11 - Wrap Up [View article]
Many, many credit facilities and bonds have covenants limiting the borrower's ability to disperse capital under certain defined conditions - the question is whether IDT's financial situation is in any proximate danger of matching those conditions.
The Crazy Thing About The 2008-2009 Stock Market Crash [View article]
I think that one key factor was that many companies used the recession as an opportunity to reduce head count. The technology revolution that started in the 1980's and 90's really eliminated the need for many jobs but corporate bureaucratic considerations led to the retention of many employees who were not really needed. When the recession came along, the CEOs got out the meat axe and went to work cutting head count.
American Capital Is Still A Very Attractive Investment [View article]
American Capital Is Still A Very Attractive Investment [View article]
Clean Energy Systems: Nearing The Point Of Inflection? [View article]
American Capital Is Still A Very Attractive Investment [View article]
American Capital Is Still A Very Attractive Investment [View article]
Western And Seagate: Surprising P/E Ratios [View article]
1. I am not sure what you mean be "excess cash" - WDC's latest financials show balance sheet cash at over $4 billion, a higher number than you are using.
2. It may be unfair to use trailing 5 year earnings and EBIT to value the companies as they exist today since they have each recently made huge acquisitions and the old earnings were made by two companies which were much smaller than the STX and WDC that exist today. If a company borrowed a lot of money or liquidated cash one year ago and made a huge acquisition, your methodology would charge it for the full cost of the acquisition but not give it any credit for the four years of earnings before the acquisition took place.
Acorn Energy: The Hidden Marijuana Stock [View article]
The Q Ratio And Market Valuation: Monthly Update [View article]
I would like to know more about how the numbers in the statistical release are actually calculated, whether there has been any change in methodology over the years, etc. When I was in law practice we had some cases in which Census department numbers were important and we discovered that there had been some significant changes in the way data was assembled and collected, calculations were made and even definitions were applied.
The Problem Of The Strong Dollar: Investment Implications [View article]
Why 'Dr. Doom' Is Buying Stocks (Why I Will Wait On Stock ETFs) [View article]
The Problem Of The Strong Dollar: Investment Implications [View article]
The Problem Of The Strong Dollar: Investment Implications [View article]
Desperately Seeking Yield Through Equities Redux: Part 11 - Wrap Up [View article]
Desperately Seeking Yield Through Equities Redux: Part 11 - Wrap Up [View article]
The Crazy Thing About The 2008-2009 Stock Market Crash [View article]