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Tom Au, CFA
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In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s.
My book:
A Modern Approach to Graham and Dodd Investing
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  • Apple Has Become A Corporation

    In this I opined that a corporation was a company where a younger version of its founder would have a hard time getting a job.

    Before passing, Steve Jobs famously urged his employees to "Stay hungry, stay foolish."

    That is not the Apple of today. Tim Cook's company is one that probably would not hire a younger Steve Jobs. Thus, Apple has now become a corporation.

    Mar 11 11:43 AM | Link | 2 Comments
  • Why America Isn't Sharing in the Good Fortune of Corporate America
    The fortunes of corporate America have pretty much recovered from the 2008-09 crash. Profitability is close to 2007 peaks, and should cross that level sometime this year. Corporate cash balances, meanwhile, are at an all time high.

    But you wouldn't guess this from looking at what is happening the rest of America. Unemployment,while off its peak, is nowhere near 2007 levels. For stockholders, meanwhile, dividendshave lagged the rebound in profits, and may not challenge record levels.

    So who are the beneficiaries of the prosperity of American corporations if not Americans? A lot of it is taking place overseas, where American companies are finding new customers and hiring new workers. Capital is "trapped" outside our borders, as well, because of the prospect of heavy taxation. American corporations are flush with cash, but they are not spending it here in America.

    The U.S. government needs to do more to incentivize American companies to do more at home. A "tax holiday" on repatriation would help. So would the restoration of an investment tax credit. But the biggest boost to hiring, might be tax credits for new hires.
    Mar 31 1:29 PM | Link | 2 Comments
  • More Bad News From the Retailing Front
    I'm writing from New York City, which may not be representative of "Main St. as a whole. Even so, it is probably representative of what's going on in "big cities," especially on one or both coasts.

    Normally, there is a certain amount of discounting after the Christmas (and Hanukkah) holidays, to move merchandise, but this year's discounts seem to be larger than usual. For instance, the "standard" discount is ANOTHER "half off" a FIRST "half off," or 75% in total. This is large compared to the cumulative 60%-70% discounts that prevailed in most previous years. Suits are going for $200 that used to sell for $800. Skirts that originally cost $59.95 are selling for $14.95. (Note the "clipping" of 5 cents off prices to make them one "handle" lower.) Similar things could be said for men's clothes.

    What's worse, these low prices are being transferred to SPRING clothing just being put on the shelves. It's as if the stores realize that they have overordered for their spring sales as well, and need to cut prices on "new" merchandise (not just last year's). If that's the case, and it keeps lasting year round, we may be getting into a culture of "everyday low prices." That's not good news for retailers.
    Jan 15 6:54 PM | Link | 1 Comment
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