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Philip Mause  

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  • John Hussman: Monetary Policy And The Economy: The Case For Rules Vs. Discretion [View article]
    His writings contain a mix of market predictions, economic forecasts and public policy prescriptions and it is not always easy to separate these out. If he is right and the economy is getting softer (I THINK that is what he is implying) then fixed income investments would seem attractive. Valuations have gotten high but the important thing to remember is that, when you buy a stock, you buy a claim on a stream of cash flow and, if interest rates are going to stay very very low, then the present value of a given stream of future cash flow is higher. This is what I think he has missed about the past 6 years. We are now at a point where there is some real prospect of higher interest rates and valuations are very high so that his arguments are beginning to make some sense. As I said a two or three years ago when he predicted a very low return on stocks over the next ten years - I did not necessarily disagree with him but I felt that almost all of the money for the ten years starting in 2011 would be made in the first two or three years.
    Mar 23, 2015. 11:38 PM | Likes Like |Link to Comment
  • Sotherly Hotels: Another Dirt Cheap REIT [View article]
    Thank you. I think that this is a plausible trajectory. They can't issue stock at this price level but they probably can borrow on the existing properties and build up cash to expand.
    Mar 23, 2015. 11:09 AM | Likes Like |Link to Comment
  • U.S. Oil Export Ban: Are There Reasons Not To Repeal? [View article]
    In my view, the burden of proof is on those who advocate an export ban. Except in unusual and compelling circumstances, these kinds of restrictions on the free market generally turn out to be perverse and counterproductive. I do not see any compelling arguments for an export ban. On the other hand, we have had the ban for a long time and investments and other decisions have been made based on the ban. As a result, there may be some argument for a phase out over a short period of time.
    Mar 22, 2015. 09:28 PM | 1 Like Like |Link to Comment
  • Quantifying The Impact Of A Strong Dollar On U.S. Growth [View article]
    Isn't there also an impact on tourism??? Fewer foreign tourists in the USA, more Americans choosing to travel abroad rather than at home. We get a ton of Canadian tourists in New England in the summer and in Florida in the winter. Won't their ranks be thinned and their spending decline because of the decline of the Canadian currency against the US dollar?
    Mar 20, 2015. 12:10 PM | 1 Like Like |Link to Comment
  • Sotherly Hotels: Another Dirt Cheap REIT [View article]
    Don't get me wrong on this. I am not crazy about outside management either. And I am troubled by HPT's related party transactions. However, with respect to any investment decision, my key question is "what is the price?" - I think that, with respect to HPT, the problems are more than "priced in" and, that, while a discount to the group may be appropriate, the current pricing includes too large a discount.
    Of course, SOHO has none of these problems and has a much larger discount (based on P/FFO to the group). And the only possible basis for the discount is size which, for the reasons noted in the article, is already baked in to FFO and, thus, shouldn't be a basis for discounting P/FFO.
    Mar 18, 2015. 12:20 PM | Likes Like |Link to Comment
  • Sotherly Hotels: Another Dirt Cheap REIT [View article]
    The related party transactions are certainly an issue but HPT is sooo cheap on a P/FFO basis that I think it is overdone.
    Mar 17, 2015. 10:15 PM | Likes Like |Link to Comment
  • Sotherly Hotels: Another Dirt Cheap REIT [View article]
    The bull argument is based on P/FFO. The dividends "pay you for waiting."
    Mar 17, 2015. 08:41 PM | Likes Like |Link to Comment
  • Sotherly Hotels: Another Dirt Cheap REIT [View article]
    This returns us to the depreciation problem. With depreciation factored in, income is below the level of dividends and the dividends can be described from an accounting point of view as a return of capital. But - as pointed out in the article - there really isn't "economic depreciation" of the real estate assets and so this is not a case in which the company is becoming worth less and less each year on a net asset value basis because it is paying out dividends in excess of income. The actual value of the hotels has nothing to do with book value or depreciated original cost. On an FFO basis, SOHO is producing ample cash flow to cover its dividends.
    Mar 17, 2015. 08:40 PM | 2 Likes Like |Link to Comment
  • Sotherly Hotels: Another Dirt Cheap REIT [View article]
    I consider LXP and HPT to be very very cheap on a P/FFO basis.
    Mar 17, 2015. 08:35 PM | Likes Like |Link to Comment
  • Herbalife's Venezuela Woes Continue [View article]
    It appears that MLM is very popular in Venezuela. Much of the local economy is geared to a "getting something for nothing" mentality (ultra cheap gasoline, subsidized exchange rate for preferred participants, etc.). I wonder whether this mentality breeds a mindset that is susceptible to MLM marketing.
    Mar 16, 2015. 12:24 AM | 6 Likes Like |Link to Comment
  • Clean Energy Fuels Should Make It Through The Valley Of Death [View article]
    I generally agree. CLNE has minimal direct currency exposure and China has continued a loose peg to the dollar so it is really in the "dollar zone." On the other hand, the strong dollar indirectly affects CLNE because it tends to reinforce lower oil prices (but probably also lower natural gas prices). The infrastructure point is a good one; this is a company which has a lot of CAPEX behind it and, although there is some in the future, we will gradually see the cash flow from the past CAPEX swamping the cash needed for future CAPEX. There is a Happy Headland on the other side of the Valley of Death; the big question is whether CLNE has enough fuel and/or water to get through the Valley.
    Mar 15, 2015. 01:07 PM | 1 Like Like |Link to Comment
  • A Bear Market Is Unlikely In 2015 [View article]
    I agree. But I long for the days when Roubini and Faber were constantly on CNBC and Bloomberg and predicting the end of the world as we know it. We hardly hear from them at all any more. In one key area - interest rate anticipation - I think that there may become an opportunity for a contrarian play. I think that the high dollar and the very low inflation we are seeing may turn out to render predictions of substantially higher interest rates wrong but everyone seems to disagree with me (a good sign).
    Mar 14, 2015. 10:19 AM | 6 Likes Like |Link to Comment
  • Clean Energy Fuels Should Make It Through The Valley Of Death [View article]
    They should continue to open stations (especially urban fleet/CNG stations) but probably at a lower pace than in the past at least until cash flow is substantially positive. CNG for urban fleets (garbage trucks, transit buses, airport vehicles) is here to stay and will continue to grow based on favorable price comparison and air pollution advantages. A major development would be a big break out into another urban fleet market (taxis, police cars, ambulances, fire trucks, local delivery fleets, school buses) - when we visited China in 2008, all the taxis seemed to be on CNG.
    Mar 14, 2015. 10:14 AM | Likes Like |Link to Comment
  • Beaten-Down BDCs: OHA Investment Corp. [View article]
    Good point. It seems like that the focus on low P/NAV has some merit although we have to see how this plays out if oil prices stay low.
    Mar 13, 2015. 08:42 AM | Likes Like |Link to Comment
  • A Bear Market Is Unlikely In 2015 [View article]
    With all due respects (I generally agree with you), as a contrarian I just hate to see a headline like this.
    Mar 13, 2015. 08:39 AM | 14 Likes Like |Link to Comment
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