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    • Thu Oct 16th 06:46 AM | Rating: 0 0
      Commented on:
      What Does Warren Buffett See in General Electric?
      Actually, Buprestid, Warren Buffett does own a significant position in GE from previous purchases (7.8 million shares). You can view his (actually Berkshire Hathaway's ) holdings as of 6/30/2008 at this web-site:

      www.marketfolly.com/20...

      His largest single holding is Coca-Cola.

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    • Mon Oct 13th 02:34 AM | Rating: 0 0
      Commented on:
      What Does Warren Buffett See in General Electric?
      This is the second article in which this author, who holds a short position, has postulated a drop from $21 to $10, without supporting his position. Well, I believe the stock will be $30 next year. I have no support for that position either. I am long the stock.

      If I were short the stock, I would certainly be making unsupported statements to the effect the stock will halve in value by next year. Flog if long, flame if short.

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    • Thu Oct 2nd 23:18 PM | Rating: 0 0
      Commented on:
      Be Like Buffett: Get Off the Roller Coaster
      Curbs-In and I disagree on the idea of brands. Brands like Gillette or Johnny Walker are virtually impossible to replace or displace. In the case of Gillette, they have virtually no competition and are able to charge premium prices for their top-end products. Getting and keeping shelf space is easy to do for a proven seller, and difficult to do for a beginning product.

      GE's main problem, to nobody's surprise, is that it's vulnerable to the credit crisis and to the real estate market. Secondarily, it's vulnerable to a worldwide slowdown. I wish I hadn't bought it, but at $22 and change it's on sale. AAA rating, solid businesses, and sufficient income to at least maintain the dividend and work through the crisis. I don't see what's not to like with GE at this price.

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    • Thu Oct 2nd 12:22 PM | Rating: 0 0
      Commented on:
      Be Like Buffett: Get Off the Roller Coaster
      I would generally agree. Diageo has been down ever since I bought it last year (at $87), but I have hopes it will rise at some point. Like GE, from $37 to the low twenties. I think these are both solid buying opportunities. GE in particular will come roaring back when it gets over the credit crisis.
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    • Fri Sep 19th 10:18 AM | Rating: 0 0
      Commented on:
      Bank of America: Bank on This Opportunity
      I sold my modest position in BAC today. I liked BAC up until the Merrill Lynch acquisition, and until they annouced that they might be (read that will be) cutting their dividend. Merrill Lynch does indeed involve risk, and risk of the worst kind. It's a company where the biggest assets go home at 5:00 (or at least sometime) at night.

      Will those hotshots last a year with Ken Lewis, whose determined to bring expenses down? Probably not. He'll be left with a name, and probably not to much to show for his expense other than a pretty good stream of income from the remaining clients and the asset management business.

      I loved the Countrywide deal, incidentally. The losses will work out, the mortgages originations will increase, and that mortgage servicing business in an underestimated jewel.

      Merrill--a hugely bad fit. Ken Lewis has already proved he doesn't like or know how to run a brokerage business or an investment bank.
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    • Wed Sep 17th 10:36 AM | Rating: 0 0
      Commented on:
      Buyouts and Shakeups: How the Financial World Is Changing
      The role of the GSEs made them incredibly vulnerable. Although they have been saved, it's unlikely that they will resume their role as freely as before, meaning that commercial banks will take up more of the "burden" of mortgage lending. Without mortgage guarantees, money will be tighter and loans will have higher standards and bigger down payments. Securitization will be reduced. The clear beneficiaries of this will be commercial banks, who have large deposit bases to use as a source of loans (in the absence of securitization).

      Homes will be harder to finance, but worthy borrowers will still be able to get a home loan. Savings rates will go up as people save for down payments, home prices will stabilize to modest appreciation, dampening the rampant speculation that made them so unafforadable in the first place. HELOCs will be reduced as equity climbs more slowly. Things will return, for a time at least, so a slower, more stable pace.

      Securities will replace homes as the investment vehicle of choice, and the stock market will go up.

      It's not a new world, we're just going to rearrange things a bit.
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    • Tue Sep 16th 08:42 AM | Rating: 0 0
      Commented on:
      What B of A Gets by Passing on Lehman & Gobbling Up Merrill
      Bryanz, it's the .86 (actually .8595) shares of BAC as the date of the actual sale, which I gather will be sometime in the first quarter of next year.

      The events of last weekend revealed that we're running out of options for shotgun marriages. Federal officials believed that both Lehman and Merrill were going bad, and the only suitor they could find for an unassisted buyout was Ken Lewis for Merrill. Actually, the Fed probably offerred something to BAC, perhaps down the road.

      Who do you think will be interested in Goldman Sachs and Morgan Stanley? And who can afford them?
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    • Mon Sep 15th 22:28 PM | Rating: 0 0
      Commented on:
      BofA's Lewis Is Still Making Deals, But Now Aiming for Distressed Assets
      Well, I grudgingly like the deal for Merrill. Ken Lewis wants three things from Merrill, i.e., increased deposits (MER's deposit-gathering arms are classified as a thrift and an ILC), relationships with wealthy individuals (MER has that in spades), and a chance to use BAC's access to cheap cash to get the easy money that will be available when investment banks start handling M&As and similar transactions again.

      Traditional banking doesn't allow BAC much room for growth, since BAC will be well over the 10% deposit threshold with the MER purchase. BAC will get deposit growth by offering loans and services that are tied to a BAC bank account.

      On the other side of credit excesses and unemployment growth is a future of better credit quality, a normal yield curve, and a pent-up demand for homes, cars, and stuff in general.
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    • Mon Sep 15th 00:07 AM | Rating: 0 0
      Commented on:
      What's the BofA / Merrill Synergy?
      Well, I'm not quite ready to give up on all this so quickly. The thing that Ken Lewis is looking at is keeping Merrill intact and reasonably happy. Lehman employees are wiped out, in terms of both morale and finances. Merrill employees are breathing a sigh of relief and gratitude. This will help immensely in merging the two cultures, which are quite different.

      The synergies are there, in terms of giving BAC an affluent customer base, increasing deposits, and crossmarketing. And Merrill has enormous talent on its payroll, and a huge, valuable brokerage business.
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    • Mon Sep 8th 10:31 AM | Rating: 0 0
      Commented on:
      Charlie Maxwell to Barron's: $300 Oil is Inevitable
      Well, it's an easy call to predict a peak in oil if demand exceeds supply. The obvious answer to this is to develop alternernative fuel for transportation (electric or CNG) and reduce the use of oil for heating (replace it with solar, elecltric, or natural gas).

      We saw demand fall as oil approached $150, helped by reduced transportation of all sorts. It will take price pressure to make significant changes in our habits, and the sooner the better. It's unrealistic politically, but the US needs to put a higher tax on fuel and punish "gas guzzlers" with an annual excise tax of say, $2000).

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    • Mon Aug 11th 09:36 AM | Rating: 0 0
      Commented on:
      Procter & Gamble Should Continue To Perform
      Proctor should be Procter, isles should be aisles. Good company though, and I see Crest, Tide, and Pringles all over Asia. Gillette is the dominant shaving product everywhere in the world. You didn't mention OralB toothcare products and Oil of Olay skin care, which are also huge sellers abroad.

      Earnings will probably be hurt slightly by a stronger dollar, but the general trend in markets like China is to buy more health and skin-care products, and there is no substitute for strong brands, especially since many of these products are manufactured in the region and are price-competitive.

      Gillette has no competition other than Schick, which is equally expensive and a distant second. It's a truly great brand.

      Pringles is a strong brand, but it is their only food product. Wonder if it will continue to fit in the company's strategy?
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    • Mon Jun 30th 11:52 AM | Rating: 0 0
      Commented on:
      McDonald's: Solid Dividend Yield, Above Average Growth
      I think of MCD as a REIT with a bonus (the franchise fee), and then as a fast food company. I wonder if they could afford larger dividends based on funds from operations (FFO).

      The price of gas will hurt them more than most because of those prime freeway locations, and it throws some cold water on the Sinopec deal (building a Mickey D at thousands of gas stations in China). I believe we can expect some normalization of oil prices, but the days of freewheelin' across America are over. They'll have to concentrate more on "local" business.

      Anyway, good company. Helped now by rapid expansion abroad and by the weak dollar, but steadily increasing in value based on its prime real estate as a bonus.
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    • Mon Jun 23rd 08:35 AM | Rating: 0 0
      Commented on:
      Countrywide: Potential Short Squeeze in the Offing
      I have a small position in BAC that is, of course, under water. I'm also skeptical about the short-term wisdom of buying CFC. That said, I think the long-term prospects for BAC are excellent. They are focusing on being a retail bank, and I think that will be rewarded.

      In the long run, the CFC purchase will be accretive to business, increasiong the bank's revenue from mortgage originations and mortgage servicing, but more importantly, funneling new mortgage loan business into BAC, with new bank accounts following. I mean, you'll get some sort of discount from BAC if you have your bank account there. Bank deposits = cheap money plus additional service revenue.

      It's one way to get around that 10% cap.

      Absorbing CFC would seem to require either selling some of that China Construction Bank stock, further diluting BAC stock, or cutting the dividend. We'll know the results of all this by year end, after we get a couple of quarters of writeoffs behind us.

      Who knows, the economy could come riding to the rescue and make Ken Lewis look like a genius. Stranger things have happened.

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    • Sun Jun 15th 12:55 PM | Rating: 0 0
      Commented on:
      Stock Analysis: General Electric
      The dividend puts a floor under this stock. We have arrived at a point where we think the economy of the developed world will never return to normal, which is a ridiculous proposition. This stock will probably sell at 35 sometime in the next 12 months, which will give it a 25% return from today's price of $29.05, including dividends.

      Oversold, low downside risk, significant insider purchases, dividend yielding an all-time high.
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    • Thu Jun 12th 17:16 PM | Rating: 0 0
      Commented on:
      GE, Microsoft on New Low List
      I'm stunned by the market's aggressive write-down of GE, now approaching $29 from a 52-week high of $42, a loss of about $130 billion in market cap. Does anybody think their credit losses will be that high?

      I'm still waiting for info on the tanker thing. The Senate seems happy with the Northrop-GE contract, while the House seems to want to flip it to Boeing.

      Airplane engines, airline leasing, and financial--OK, they could have some problems ahead. But GE is going to get huge slices of the 21st century's energy restructuring. Maybe Immelt isn't so dumb after all.

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