Skip Olinger

Credit Card Crunch: Creating a New Generation of Subprime

Interesting detail on FICO but this is old news and not very helpful in stock picking. How bad can the credit card losses get at JPM? What effect on earnings will that have? Will it take the company under? Are they under reserved? At $12 per share, there could be an awful lot of pain baked into that price. Is there a value investment opportunity there even if write offs go to 10-12%? What happens of consumer spending improves in 2-3 years? Or will the company go under?

How this information affects specific stocks would be more helpful.

Nervous About MLPs

I will reiterate what has been said above, this is not a well thought out piece and lacks facts and statistics to back it up. In short, this was a waist of time to read. By the way, if you actually read the quarterly press releases, many of the MLP's show the reconciliation from net income to EBITDA and then to distributable cash flow. Try a little research sometime.

Follow up to MATT:
Thanks for the insight on NG wells depleting faster than oil wells. I need to research that further.
There are 3 general types of MLP's: E&P and gathering companies tied to the price of commodities (hedging really matters here), pipeline companies that make a toll on throughput and propane distributors (tied to seasonal demand and to some extent their ability to hedge prices). Toll companies should be the safest and least volatile to energy prices. As I understand it, it is harder to shut off a gas well when prices are low than it is an oil well. Therefore, in most markets, a long haul pipeline will still get throughput and thus revenues. In theory this should make their distribution stream more stable. Look, if I could get my portfolio to grow at 10% a year, I'd be a happy man. So looking at Energy Transfer and Enterprise Products, I get temped here.

Best,
Skip

Investing in Dividend Paying Companies

A couple of comments:
1. Mr Okie - I believe your math is a little off this morining. Generating a 430% gain over ten years is NOT equal to 4% annually. If you got 4% annually on $100 for 10 years you would have $40, assuming no compounding. Using a HP17B calculator to compute the future value of $100 compounding annually at 4% you would have a future value of $148. (n=10, i=4%,pv=-100, pmt=0).

To get a FV of 430% of your initial investment, your IRR would be 15.7%, not 4%. That is a very good return, especially considering that it is exclusive of dividend reinvestment. (n=10, pv=-100, pmt=0, fv=430)

2. GM should be deleted from the list. They just announced a suspension of their dividend.

It is getting bad out there!