Value Investors Portal

Value, special situations, arbitrage, long-term horizon
Value Investors Portal
Value, special situations, arbitrage, long-term horizon
Contributor since: 2010
Company: Prudent Value Investment Management
"I really hope the share repurchase was aggressively put to use over the last two weeks."
I concur as repurchasing stock below intrinsic worth creates value for shareholders.
Good question bud. A conundrum in this low rate, overheated environment.
Yes, you can go full throttle short, but just make sure your timing is good. Thanks for commenting Harm Elderman.
A valid point Bobbo! Thanks for commenting.
O'Leary, thank you for the comment. A strong dollar does effect Google as 58% of their revenue reside outside the U.S. However, net exposure to fluctuations in foreign currency exchange rates is partially offset by foreign exchange contracts.
A company with sustainable competitive advantages.
SFA, thanks for the comment. It's also worthy to note that the big swing between GAAP and Non-GAAP earnings recently is due to "discontinued operations" because results from discontinued operations are required to be presented separately from the results of continuing operations, below net income from continuing operations. Barring any major discontinued operations in FY 12/31/15, GAAP and Non-GAAP earnings should converge.
gismo, thanks for the comment. GOOGL (class A shares) possess voting rights, and therefore will trade at a premium over GOOG (non-voting class C shares) going forward. Note: As the result of a class-action settlement around the stock split, Google will compensate non-voting GOOG stock investors in a year from date of the stock split if there is a substantial difference in price between the two classes.
Yes and corrected, thanks.
Thanks for reading. To prepare, "have some hedges set up" based on your risk tolerance.
EFA excludes U.S. stocks. The fund generally tracks the price and yield performance of publicly traded securities in the European, Australasian and Far Eastern markets, as measured by the MSCI EAFE Index. Long EFA is belief on a debt resolution over time. German Chancellor Angela Merkel contends a solution to the crisis to take years.
Congratulations Seeking Alpha...well done!
Correction: Prem Watsa of Fairfax Holdings is hedging against deflation with CPI-linked derivatives and not credit default swaps as previously mentioned.
The 200% is based on gross debt.
A key consideration in evaluating accurately the burden of public sector debt is to understand the distinction between gross debt (often the headline number) and net debt (true measure of debt burden).
For detail explanation, please refer to my reply to kwm3 below.
The jury is still out on how Obamacare will impact drug stocks. Increase in volume is anticipated for big cap pharmaceuticals because a lot more insured people will be visiting their physicians and getting prescriptions. Also thanks to good pricing power, big pharma might be able to pass through the tax that they will be assessed.
A key consideration in evaluating accurately the burden of public sector debt is to understand the distinction between gross debt (often the headline number) and net debt (true measure of debt burden).
A large chunk of the the U.S. federal debt is held by various government agencies or government trust funds and therefore needs to be subtracted out. So in assessing the true size and burden of the debt is to exclude internally held intra governmental debt. Once we do this according to economists and U.S. government statisticians we arrive at federal debt held by the public.
Recent Gross Federal Debt and Net Federal Debt figures:
Gross Federal Debt Debt Held by Public (Net Federal Debt)
FY 2012 $16.7 trillion $10.8 trillion
FY 2011 $15.5 trillion $9.9 trillion
FY 2010 $13.5 trillion $8.2 trillion
FY 2009 $11.9 trillion $6.8 trillion
FY 2008 $10.0 trillion $5.3 trillion
When we use the smaller $9.9T net federal debt number as the numerator, we get to a U.S. net debt-to-GDP of a 70.7% (9.9T/14T).
Aggressive investors who can get their arms around BAC's or similar institutions' financial position might consider investing in them (see Theodor Tonca's comment below). Also Warren Buffett invested $5 billion in BAC because he considered BAC to be a strong company with good leadership.
Sources: Robert Shiller, some studies by regulators, and Bloomberg News, respectively. The final capital requirements for SIFI is still under consideration by regulators and can increase "to" as high as 14%. The Basel Committee on Banking Supervision is considering extra capital requirements of as much as 3.5 percentage points that the largest banks may face if they grow bigger. The capital surcharge based on some studies may range as high as 7 percentage points above the Basel III requirements according to Fed Governor Daniel Tarullo in a testimony to the House Financial Services Committee in Washington. He said the final figure, now under consideration by regulators, may not be 7 percentage points and that he sees a need to “calibrate” the number based on risks of the assets held by the biggest banks. Many of the requirements will be subject to extended phase-in periods.
The market drop can be attributed to a confluence of factors, with sovereign debt crisis in Europe being one of them. The debt situation is and will continue to be a headwind.
1.44% dividend yield is measure of the annual dividends of the shares of all index components divided by the index value as of 3/31/2011. Morningstar and Yahoo generally reports the ETF's distribution yield. The difference in yields can be attributed to tracking error and/or fees associated with EPI.
EPI is a passively managed low-cost Exchange Traded Fund (ETF) with an annual expense ratio of 0.88%. Comparatively, IFN is an actively managed Closed End Fund (CEF) with a 50% higher annual expense ratio of 1.32%. Therefore, we like EPI's long-term cost advantage and are willing to trade-off active management for lower fees. Past performance is no guarantee of future performance.