Procter & Gamble - A Dividend Stock To Hold Forever [View article]
Buyandhold 2012, Grace Groner was lucky she didn't buy United Airlines in 1934 or the predecessor of the Penn Central Railroad (PRR) - we all know how that turned out. Concentrating your investments in a few stocks either makes you rich or poor. Investors in Enron and more recently, Citibank, failed to heed the lessons of history - diversify or perish.
Also, I don't know about you, but for me here if Florida, the nearest Tesla supercharging station is about - oh - about 900 miles away in Washington, DC. Currently, there are only 8 Tesla supercharges in the entire country, according to their website.
Irrational Exuberance In The Electric Car Market [View article]
Julian,
1) Mass market phone? Ballmer may have laughed but who is selling more phones, MSFT or AAPL? And while the phone is sold for $600, the cost to consumers is $200, placing the iPhone well within the reach of most consumers, including many of the most impoverished Americans -
And of course, the model 4 is now free. AAPL sold 37,000,000 phones last year so, yes, it is a mass market product.
2) Even if Tesla ratchets up production, the company's share of the worldwide vehicle production will never be more than a rounding error (the math is simple, take their annual production and divide by 84,000,000), and hence, a recall would not start a "civil war" as you indicated.
3) Moore's law applies to computer hardware and processor speed and cannot be extrapolated to other endeavors. Whether Tesla can "bend the cost curve" remains to be seen. Lots of smart people at BMW, Ford, GM, Mercedes, Toyota, etc. are trying to do the same thing and yet, the average new car still costs over $30,000.
Furthermore, advances in battery technology have been stubbornly slow, and venture capitalists are looking at ventures that increase performance a mere 1.2X, not multiples of X -
Finally, Musk's definition of "cash flow positive" must be different than mine - the company's new capital raise indicates that the company is not cash flow positive. The new capital must be raised in order to increase production, indicating that the company needs financing for working capital and new capital expenditures. It is not cash flow positive in the traditional sense. Companies that are cash flow positive do not need to raise new capital.
I truly hope that Tesla succeeds, after all, everyone (including me) loves the underdog that succeeds against all odds. When the company produces a $40,000 vehicle that consumers buy in droves, I will sing Tesla's praises. Until then, they remain a niche company unlikely to change the world.
Irrational Exuberance In The Electric Car Market [View article]
Julian,
Big difference between AAPL and Tesla - APPL is a mass market product while Tesla is not because of its very high price point.
Second, the recall of 100,000 to 200,000 Teslas triggering a civil war? A bit of hyperbole, don't you think? Don't make me laugh!
There were 84MM cars produced in 2012. Even if Tesla ramps up its production to 5X its current production, it would still account for only .12% of all cars produced annually. While the car may "change the world" for those lucky few who can afford it, it will not change the world for most of the rest of us. If you have information to the contrary and know that Tesla is coming out with a much more affordable model, please share. (Wait, didn't they recently announce that they would not be coming our with a more affordable model? I think they did, on April 1, I believe it was.)
Time For Investors To Reassess Their MLP Holdings [View article]
I hold a significant number of MLPs and the payoff has been worth it. Most of them are pushing their debt out to mature far into the future. The increase in rates, when it ever comes, may not be that much of an issue.
Having said that, MLPs have had a tremendous run and any investor would be wise to review his/her allocation to the sector. I am.
Procter & Gamble - A Dividend Stock To Hold Forever [View article]
There is no question that PG is a dividend stock worthy of strong consideration.
However, both of its competitors, CL and KMB, have produced better returns over the last two and five year periods - significantly better. The challenge that PG faces in one of growth - how can they continue to grow the top line and the bottom line? During the last two years, the company's net income has decreased and cash flow has flattened out at $10bn.
Buy Coca-Cola: It Will Pay Dividends In The Long Run [View article]
Coke is the darling of many in the dividend growth investing world, but in my view, it is not a buy today - it is a hold. The company has barely outperformed the S&P 500 during the last two years and nothwithstanding good performance year to date, KO has trailed the averages badly in the last twelve months.
The problem is one of growth - where will they get it and how will it be achieved? The company already has a sizeable but very manageable amount of debt so any financial engineering or large acquistion is out of the question. Revenues, income and cash flow are growing a very slow rates and the relatively high payout means dividends can only grow as fast as the bottom line grows.
A significant trend running against them is the trend toward more healthy beverages - water, vitamin water, gatorade, etc., etc.
I won't be selling, but I won't be buying here either.
Optimizing Triple Net Lease REIT Investment: Time To Sell Realty Income [View article]
Dane,
Thank you for this analysis. I agree that O is overvalued, but I am not sure I want to put in a "sell" order while the market seems to be in an uptrend. While it is true that clients will be able to move to cheaper space, how many of them actually will?
Any successful retailer has customers that know where to find it and are used to established traffic patterns as part of a daily or weekly routine. Thus, I see the threat to move as an "empty threat' since I doubt most retailers will actually do it. They will however be able to use the threat of moving as a means to get a better deal but the effect on "O" may be less than you anticipate. Weaker tenants, looking for better quality space, will no doubt make the move to try and increase their business.
Linn Energy: Don't Believe The (Negative) Hype [View article]
I fail to understand why a company like this hedges at all. At best, hedging can help only in the short run and can hurt if they guess the wrong way. In addition, the costs of hedging add up over time. Bottom line, they will always be long oil and gas and there is nothing that can provide a long-term hedge, even if they wanted to do it. And finally, don't investors who buy this stock want and accept full exposure to oil and gas prices anyway?
The Obama Administration's Natural Gas Policy Is Tragically Misguided [View article]
We have more gas than we know what to do with right now. That is why prices are so low. Many wells have been capped and won't produce until prices rise above today's levels. Exporting gas will raise prices and cause more production to come on line. The switch to natural gas as a main source of energy will continue at a rapid pace regardless of whether we export or not.
No question - we should export. In ten years, we may revisit that decision, but for now, it is the right one.
Linn Energy: Don't Believe The (Negative) Hype [View article]
Not a fan of LINE - I owned it and sold it recently. It had nothing to do with the negative Baron's article or any other negative press.
My rationale for selling? LINE has trailed the S&P 500 badly over the last year (relative performance was awful) and it trailed almost every other MLP I owned as well.
Maybe it was the fact that everything was going up and LINE was going down that got to me. Yes, that's it.
Is Dividend Growth Inertia Dead At Medley Capital? [View article]
Ralph,
I have looked at the sector and own APO, OAK and CG. Their financials are extremely complicated and almost defy traditional analysis because you never know when portfolio realizations will take place and boost earnings.
That said, they are all raising capital and fee income is increasing, and relatively robust capital markets are facilitating exits from investment positions. If the market ever goes south or becomes extremely volatile, they will not perform as well.
Investing in the management companies of some of the world's smartest investors is an compelling prospect. Their interests are aligned with yours and their major compensation will now be in the form of dividends, not "carried interest" like before. My feeling is that many of them went public because they didn't want Congress to turn their income (carried interest) into ordinary income through changes to the tax laws. Now, they can take their dividends at capital gains rates without fear.
I'm bullish on the sector but it will not be a smooth ride and dividends will bounce up and down with a volatile earnings stream.
Procter & Gamble - A Dividend Stock To Hold Forever [View article]
Grace Groner was lucky she didn't buy United Airlines in 1934 or the predecessor of the Penn Central Railroad (PRR) - we all know how that turned out. Concentrating your investments in a few stocks either makes you rich or poor. Investors in Enron and more recently, Citibank, failed to heed the lessons of history - diversify or perish.
Tesla Squeaks Out A First Ever Profit With The Help Of A DOE Stock Warrant, What's Next? [View article]
Most people charge their Tesla's at home, at night. This page from the company's website might be useful to your "research" -
http://bit.ly/16mcGHa
Also, I don't know about you, but for me here if Florida, the nearest Tesla supercharging station is about - oh - about 900 miles away in Washington, DC. Currently, there are only 8 Tesla supercharges in the entire country, according to their website.
Irrational Exuberance In The Electric Car Market [View article]
1) Mass market phone? Ballmer may have laughed but who is selling more phones, MSFT or AAPL? And while the phone is sold for $600, the cost to consumers is $200, placing the iPhone well within the reach of most consumers, including many of the most impoverished Americans -
http://huff.to/17zk2GV
And of course, the model 4 is now free. AAPL sold 37,000,000 phones last year so, yes, it is a mass market product.
2) Even if Tesla ratchets up production, the company's share of the worldwide vehicle production will never be more than a rounding error (the math is simple, take their annual production and divide by 84,000,000), and hence, a recall would not start a "civil war" as you indicated.
3) Moore's law applies to computer hardware and processor speed and cannot be extrapolated to other endeavors. Whether Tesla can "bend the cost curve" remains to be seen. Lots of smart people at BMW, Ford, GM, Mercedes, Toyota, etc. are trying to do the same thing and yet, the average new car still costs over $30,000.
Furthermore, advances in battery technology have been stubbornly slow, and venture capitalists are looking at ventures that increase performance a mere 1.2X, not multiples of X -
http://bit.ly/12xC3ko
Finally, Musk's definition of "cash flow positive" must be different than mine - the company's new capital raise indicates that the company is not cash flow positive. The new capital must be raised in order to increase production, indicating that the company needs financing for working capital and new capital expenditures. It is not cash flow positive in the traditional sense. Companies that are cash flow positive do not need to raise new capital.
I truly hope that Tesla succeeds, after all, everyone (including me) loves the underdog that succeeds against all odds. When the company produces a $40,000 vehicle that consumers buy in droves, I will sing Tesla's praises. Until then, they remain a niche company unlikely to change the world.
Irrational Exuberance In The Electric Car Market [View article]
Big difference between AAPL and Tesla - APPL is a mass market product while Tesla is not because of its very high price point.
Second, the recall of 100,000 to 200,000 Teslas triggering a civil war? A bit of hyperbole, don't you think? Don't make me laugh!
There were 84MM cars produced in 2012. Even if Tesla ramps up its production to 5X its current production, it would still account for only .12% of all cars produced annually. While the car may "change the world" for those lucky few who can afford it, it will not change the world for most of the rest of us. If you have information to the contrary and know that Tesla is coming out with a much more affordable model, please share. (Wait, didn't they recently announce that they would not be coming our with a more affordable model? I think they did, on April 1, I believe it was.)
Time For Investors To Reassess Their MLP Holdings [View article]
Having said that, MLPs have had a tremendous run and any investor would be wise to review his/her allocation to the sector. I am.
Procter & Gamble - A Dividend Stock To Hold Forever [View article]
However, both of its competitors, CL and KMB, have produced better returns over the last two and five year periods - significantly better. The challenge that PG faces in one of growth - how can they continue to grow the top line and the bottom line? During the last two years, the company's net income has decreased and cash flow has flattened out at $10bn.
I think I will stay with the competition.
(Long CL)
Buy Coca-Cola: It Will Pay Dividends In The Long Run [View article]
The problem is one of growth - where will they get it and how will it be achieved? The company already has a sizeable but very manageable amount of debt so any financial engineering or large acquistion is out of the question. Revenues, income and cash flow are growing a very slow rates and the relatively high payout means dividends can only grow as fast as the bottom line grows.
A significant trend running against them is the trend toward more healthy beverages - water, vitamin water, gatorade, etc., etc.
I won't be selling, but I won't be buying here either.
(Long KO)
Optimizing Triple Net Lease REIT Investment: Time To Sell Realty Income [View article]
Thank you for this analysis. I agree that O is overvalued, but I am not sure I want to put in a "sell" order while the market seems to be in an uptrend. While it is true that clients will be able to move to cheaper space, how many of them actually will?
Any successful retailer has customers that know where to find it and are used to established traffic patterns as part of a daily or weekly routine. Thus, I see the threat to move as an "empty threat' since I doubt most retailers will actually do it. They will however be able to use the threat of moving as a means to get a better deal but the effect on "O" may be less than you anticipate. Weaker tenants, looking for better quality space, will no doubt make the move to try and increase their business.
Holding for now. Cheers.
Does SodaStream's Razors And Blades Model Hold Up? [View article]
In order to refill SodaStream cannisters, retailers would need medical-grade CO2, which they don't currently have.
Linn Energy: Don't Believe The (Negative) Hype [View article]
Investors: Confident But Worried, Steadfast But Concerned [View article]
The Obama Administration's Natural Gas Policy Is Tragically Misguided [View article]
No question - we should export. In ten years, we may revisit that decision, but for now, it is the right one.
Linn Energy: Don't Believe The (Negative) Hype [View article]
My rationale for selling? LINE has trailed the S&P 500 badly over the last year (relative performance was awful) and it trailed almost every other MLP I owned as well.
Maybe it was the fact that everything was going up and LINE was going down that got to me. Yes, that's it.
Is Dividend Growth Inertia Dead At Medley Capital? [View article]
I have looked at the sector and own APO, OAK and CG. Their financials are extremely complicated and almost defy traditional analysis because you never know when portfolio realizations will take place and boost earnings.
That said, they are all raising capital and fee income is increasing, and relatively robust capital markets are facilitating exits from investment positions. If the market ever goes south or becomes extremely volatile, they will not perform as well.
Investing in the management companies of some of the world's smartest investors is an compelling prospect. Their interests are aligned with yours and their major compensation will now be in the form of dividends, not "carried interest" like before. My feeling is that many of them went public because they didn't want Congress to turn their income (carried interest) into ordinary income through changes to the tax laws. Now, they can take their dividends at capital gains rates without fear.
I'm bullish on the sector but it will not be a smooth ride and dividends will bounce up and down with a volatile earnings stream.
Protected Principal Retirement Strategy: Foreign Utilities [View article]
Here is the link on RWEOY - http://on.wsj.com/18YscF5
And EONGY - http://on.wsj.com/11jb1k6
Best of luck. M