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Robert Balopole, CFA

 
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  • Asta Funding: What Is The Short Case Missing? [View article]
    Good article but perhaps you are confusing some readers by your use of the term "zero cost basis portfolio". The 10-Q refers to this as portfolios accounted for under the cost recovery method. While this portfolio does contain many receivables whose cost basis has been written down to zero, there is still $88 milllion of cost basis on the books. Also in your earlier article you refer to the cost recovery method as the cost basis method. Aside from this quibble, I certainly agree with your conclusions!
    Aug 30 12:33 PM | Likes Like |Link to Comment
  • Build My Portfolio: Taking Some Of This Poker Player's Chips Off The Table [View article]
    I thank you for your valid note of caution. I like dividends too, but if one insists on dividends one would miss out on some great growth industries (i.e. technology stocks in the 80's and 90's). Conversely, you can stick with high dividend payers and still get slammed (i.e. bank stocks, builders, auto industry). So I agree with you that dividends are a good thing for the most part, but you can also get into lots of trouble just buying stocks that pay a high dividend. When a stock is cheap in relation to its dividend there is usually a good reason. You state that "evidence suggests dividend payers return much more over time than their peer groups". If you have a citation you can give me I would be most interested to review such evidence. Thanks again for your comment.
    Aug 29 11:24 PM | Likes Like |Link to Comment
  • Build My Portfolio: Taking Some Of This Poker Player's Chips Off The Table [View article]
    I do not disagree with your comments but please understand I was trying to summarize my thesis in a few sentences for each stock. These unapproved drugs are highly speculative there is no doubt. But as I said in my article, it's an exercise in probability. If MELA trades for $2 and there is a 30% chance it becomes a $10 stock and a 70% chance it becomes a $0 stock, then MELA is worth $3 by my calculations. The FDA Advisory Panel has already recommended approval and the FDA follows its Panel Recommendations in the vast majority of cases. There is also the northern European market where melanoma is becoming an epidemic. Countries with national health care systems such as Sweden and Germany may be more receptive to a low cost screening tool versus the situation in the US.

    Robert Balopole, CFA
    Aug 26 03:48 PM | 1 Like Like |Link to Comment
  • Build My Portfolio: Taking Some Of This Poker Player's Chips Off The Table [View article]
    It worries me more than a tad. However, most of the reverse merger shenanigans involved small U.S. audit firms that relied on poorly trained poorly supervised Chinese affiliates to perform their audit work. CCCL is audited by Grant Thornton which is a large global audit firm with 1400 employees in China. But you are right that being China based makes this a much more risky investment. I just think the rewards compensates for the risk, and I limit the investment to 5% of the portfolio.

    Robert Balopole, CFA
    Aug 26 03:47 PM | Likes Like |Link to Comment
  • Build My Portfolio: Taking Some Of This Poker Player's Chips Off The Table [View article]
    I agree with everything you wrote, and that is why I recommended the investor meet with me every quarter so I can provide the required research and vigilance.
    Aug 26 03:47 PM | Likes Like |Link to Comment
  • Build My Portfolio: Taking Some Of This Poker Player's Chips Off The Table [View article]
    Let me try to explain myself. In the old days (pre 1960) stock dividends rates were usually higher than bond interest rates, and an investor would look for the income stream. Today it is more confusing because many fine companies pay little or no dividends. Today if you want to approach stocks as an investor, you look at the cash flow the business generates, not the cash paid out as dividends. You say my theory does not seem to be applied to my specific reommendations. I agree I would have been more consistent in recommending stocks with a low price to cash flow ratio. Instead I used a low price to earnings ratio. This was at the suggestion of the Seeking Alpha editor. Cash flow and earnings usually equal out in the long run.
    Aug 26 02:23 PM | Likes Like |Link to Comment
  • Build My Portfolio: Taking Some Of This Poker Player's Chips Off The Table [View article]
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    The expense ratio is high in absolute terms but in relative terms it is typical of actively managed foreign bond funds. The expense is partially offset by the wholesale commission rates enjoyed by institutional investors.

    Robert Balopole, CFA
    Aug 26 02:22 PM | Likes Like |Link to Comment
  • Build My Portfolio: Taking Some Of This Poker Player's Chips Off The Table [View article]
    Regarding the EDD expense ratio, I agree with you that in absolute terms it is very expensive. Relative to other actively managed foreign bond CEF's it is about average.

    Robert Balopole, CFA
    Aug 26 02:22 PM | Likes Like |Link to Comment
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