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Philip Mause  

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  • Desperately Seeking Yield Through Equities: Part 11 - Strategies For An Economic Downturn [View article]
    As someone who has off and on considered changing his last name, I want to pose a question but I hope you don't take this the wrong way - but have you ever considered changing your last name? Mine gives me fits and my wife still uses her maiden name. Yours would (I think) make it difficult for you to start a hedge fund.
    Aug 22, 2011. 12:14 PM | 3 Likes Like |Link to Comment
  • Microsoft: Ridiculously Cheap [View article]
    Buy some MSFT and take the dividend checks and invest the money in AAPL.
    Aug 21, 2011. 12:29 PM | Likes Like |Link to Comment
  • Microsoft: Ridiculously Cheap [View article]
    They have been buying their own stock back at a pretty furious pace and have been steadily reducing share count. As to Skype, I am afraid we will have to see but based on your metrics they paid about 30 times earnings and when you buy a 10 year Treasury you are paying 50 times earnings. MSFT has been earnings a lot less than 3.3% (the inverse of 30 to 1) on its balance sheet cash.
    Aug 20, 2011. 10:57 PM | Likes Like |Link to Comment
  • Microsoft: Ridiculously Cheap [View article]
    On a worldwide basis, tech may grow fast enough so that,s even if MSFT loses market share, it may still be able to grow. There is a lot of room for tech to grow in emerging markets.
    Aug 19, 2011. 11:31 PM | Likes Like |Link to Comment
  • 7 Utility Divided Stocks to Consider for a Better Night's Sleep [View article]
    You've cast the net a little wider than I have and seem to have included foreign companies, propane distributors and small really small companies. I think a lot of these are worth a look but some of them may have additional risk factors(e.g. exchange rate issues).
    Aug 19, 2011. 11:28 PM | Likes Like |Link to Comment
  • Apple Is Still Dirt Cheap [View article]
    Very good point.
    Aug 18, 2011. 07:36 PM | Likes Like |Link to Comment
  • Value Investing 7: The Question of Timing [View article]
    Good point. I read one interesting piece which asked the question - "How would you value a stock which had great growth in earnings but had an absolute commitment never to pay a dividend and never to be taken out in a takeover or an LBO. It would just go along, grow like crazy, but never generate cash for the shareholders." I never was able to come up with a satisfactory logical answer to the question but it would seem that the discounted cash flow method would make the most sense and should produce the same valuation whether or not dividends are paid. Dividends have the advantage of guaranteeing the shareholder some return and may have the effect of reducing beta so the market fluctuations are moderated.
    Aug 18, 2011. 05:18 PM | 1 Like Like |Link to Comment
  • Microsoft: Ridiculously Cheap [View article]
    I agree with offsetting the debt. I think it is too conservative to assume that MSFT will repatriate the overseas cash and pay the full tax load on it: I assume they will figure out some angle to do better than that but I would compromise by using a 15% tax rate. I think it is too conservative to treat the Skype acquisition as a deadweight loss. They have the cash until the deal closes and after the deal closes they have the additional earnings capacity of Skype. I would reduce cash by 4.25 billion making the conservative assumption that it is a bad deal but not as bad as throwing 85 million 100 dollar bills into an incinerator.
    Aug 18, 2011. 05:08 PM | 1 Like Like |Link to Comment
  • America's Latest Obsession and Its Investment Consequences: Part 1 - Agency Mortgage REITs [View article]
    I tend to agree but we continue to rack up high deficits(which I think is perfectly appropriate given the economic climate we are in). If we need a bigger deficit to support a recovery, I think it will have to be in the form of a tax cut or military spending to enter a new war. I do not think further increases in domestic spending will get through the Republican controlled House of Representatives.
    Aug 17, 2011. 11:19 PM | Likes Like |Link to Comment
  • America's Latest Obsession and Its Investment Consequences: Part 1 - Agency Mortgage REITs [View article]
    I agree - at least in the short term and intermediate term future.
    Aug 17, 2011. 11:16 PM | Likes Like |Link to Comment
  • 4 Business Development Companies Trading Below 75% of Book Value [View article]
    I have some familiarity with FGB and it is a reasonable way to access the sector. As a general matter, BDC's have a variety of debt instruments - including everything from first lien secured loans to mezzanine loans. Some BDC loans are likely less risky than loans in junk bond CEF's. In this regard it is important to review the financials of each BDC you are considering investing in because the riskiness of the loan portfolios varies quite a bit.
    Aug 17, 2011. 11:14 PM | Likes Like |Link to Comment
  • 4 Business Development Companies Trading Below 75% of Book Value [View article]
    MVC has a relatively high percentage of equity holdings which tend to be harder to value and this tends to make book value a less reliable metric. I believe MVC has been trending toward a higher and higher percentage of debt instruments in recent quarters. I will cover it in a upcoming piece.
    Aug 17, 2011. 11:10 PM | Likes Like |Link to Comment
  • Value Investing 7: The Question of Timing [View article]
    AFC is a bond which matures in 2046. It is a debt instrument which would provide the holder with a claim in a Chapter 7 Bankruptcy. There has been some question as to its seniority vis a vis other debt instruments of the company but the balance sheet of ARCC appears strong enough to support a very good recovery in the unlikely event of a liquidation.
    Aug 17, 2011. 12:56 PM | 1 Like Like |Link to Comment
  • The Great Earnings Yield Spread Divergence: The Bullish Case [View article]
    Another key factor. Before 1980 we did not really have a functioning new issue high yield debt market and in the early 1980s the SEC promulgated the safe harbor stock repurchase rules. These developments have produced LBOs and stock repurchases(really slow motion LBOs) that have removed from the market some of the very cheap equities that Ben Graham identified in the 1950s. Its harder and harder to find stocks trading for less than working capital because they get taken out in LBOs.
    Aug 16, 2011. 02:40 PM | 2 Likes Like |Link to Comment
  • Acorn Energy: Recent Developments Confirm Bullish Thesis [View article]
    Ultimately. I am in this stock not for a short term pop but because in the long term I think it could go well North of $10 a share depending largely on the progress of USSI.
    Aug 16, 2011. 01:00 PM | Likes Like |Link to Comment
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