No Moss's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/107636/comments http://seekingalpha.com/article/163383-what-is-mcdonald-s-thinking?source=feed#comment-696375 696375
Sorry, I had to laugh at this analysis. Their "net equity" includes a huge debit (reduction of equity) for treasury stock. For those unacquainted with the term, treasury stock is stock that has been repurchased by the company. While this nominally reduces equity, it is actually a huge plus. The company could pay off all of its long-term debt by either sellling half of its treasury stock, or alternatively pay off its debt in a few years by ceasing to buy back stock for that period.

Goodwill arises when you pay more for an investment than the book (historical) value of that investment. The net difference is booked as goodwill. To give you an example of how that works, if you bought McDonald's today, you would pay far more than its book value--hugely more. Just on the basis of real estate, they have $21 billion in net book value (asset historical cost minus accumulated depreciation) which is actually worth, I would guess, at least three times that amount. Do you think McDonald's would actually sell an urban corner lot purchased 20 years ago for what it paid for it, much less its net book value? Then you would have to pay for the value of McDonald's as an incredibly successful business (the term goodwill actually stems from the reputation of a business and the value of its brand).

MickeyD is a formidable cash machine. It generated about $6 billion in cash flow from operations in 2008, and used about $4 billion of that to repurchase stock. The real question is whether MCD's shareholders are better served by paying off debt or by repurchasing stock and receiving dividends.

The mistake that most people make in analyzing MCD is to think of it as a restaurant company. It is a huge REIT, a franchisor, and a restaurant company. As a REIT, it collects increasing rent revenue even as the net book value of the rented properties decreases. This accounting anomaly gives rise to the use of FFO, or funds from operations, as a method of computing the real return (and the source of dividends) for REITs.

What it is also becoming is an investment company, it business plan being to actually invest in companies that purchase land and property for new restaurants. This allows them to increase their return on assets. ]]> Tue, 29 Sep 2009 22:52:05 -0400
Sorry, I had to laugh at this analysis. Their "net equity" includes a huge debit (reduction of equity) for treasury stock. For those unacquainted with the term, treasury stock is stock that has been repurchased by the company. While this nominally reduces equity, it is actually a huge plus. The company could pay off all of its long-term debt by either sellling half of its treasury stock, or alternatively pay off its debt in a few years by ceasing to buy back stock for that period.

Goodwill arises when you pay more for an investment than the book (historical) value of that investment. The net difference is booked as goodwill. To give you an example of how that works, if you bought McDonald's today, you would pay far more than its book value--hugely more. Just on the basis of real estate, they have $21 billion in net book value (asset historical cost minus accumulated depreciation) which is actually worth, I would guess, at least three times that amount. Do you think McDonald's would actually sell an urban corner lot purchased 20 years ago for what it paid for it, much less its net book value? Then you would have to pay for the value of McDonald's as an incredibly successful business (the term goodwill actually stems from the reputation of a business and the value of its brand).

MickeyD is a formidable cash machine. It generated about $6 billion in cash flow from operations in 2008, and used about $4 billion of that to repurchase stock. The real question is whether MCD's shareholders are better served by paying off debt or by repurchasing stock and receiving dividends.

The mistake that most people make in analyzing MCD is to think of it as a restaurant company. It is a huge REIT, a franchisor, and a restaurant company. As a REIT, it collects increasing rent revenue even as the net book value of the rented properties decreases. This accounting anomaly gives rise to the use of FFO, or funds from operations, as a method of computing the real return (and the source of dividends) for REITs.

What it is also becoming is an investment company, it business plan being to actually invest in companies that purchase land and property for new restaurants. This allows them to increase their return on assets. ]]> http://seekingalpha.com/article/163668-diageo-the-coca-cola-of-the-alcoholic-beverage-industry?source=feed#comment-694849 694849
You can see a direct relationship between Diageo and the British Pound. Intuitively, the stock should benefit from the fall of the British pound in the last year (and vice versa for its recent rise). However, the stock is widely held internationally, so in fact it seems to fall on the Pound's weakness and rise on its strength.

Try comparing a chart of the British Pound to the price of the stock over the last year.

You don't mention how you arrived at the value of $64. I'd be surprised if the stock remained in the sixties once the growth in volume resumes, and I expect that to be the case this year (fiscal year ending June 30th, 2010). You have to remember that fiscal year 2009 coincided with the worst recession in modern memory.

You might want to check the spelling of Ketel One. ]]> Mon, 28 Sep 2009 22:56:03 -0400
You can see a direct relationship between Diageo and the British Pound. Intuitively, the stock should benefit from the fall of the British pound in the last year (and vice versa for its recent rise). However, the stock is widely held internationally, so in fact it seems to fall on the Pound's weakness and rise on its strength.

Try comparing a chart of the British Pound to the price of the stock over the last year.

You don't mention how you arrived at the value of $64. I'd be surprised if the stock remained in the sixties once the growth in volume resumes, and I expect that to be the case this year (fiscal year ending June 30th, 2010). You have to remember that fiscal year 2009 coincided with the worst recession in modern memory.

You might want to check the spelling of Ketel One. ]]> http://seekingalpha.com/article/159194-the-renminbi-as-a-reserve-currency-part-1?source=feed#comment-655613 655613
We in the industrialized world have made China the workshop of the world. But China has made a bargain with the devil, that is, they have taken on the risk of labor market volatility. Because their production is largely OEM (that is, they only manufacture goods, they don't design or market them), there are relatively few jobs for the millions of new college grads. In any case, those new college grads can't compete with graduates of American or European universities. The idea that there is anything in China approaching an MIT or a Stanford is laughable.

Finally, China is burdened with an antique language that only about 50-60% of its population has mastered. Just learning the characters for the language absorbs years of the educational process.

I'd give China a few more years before they're ready to rule the world.]]> Mon, 31 Aug 2009 21:19:57 -0400
We in the industrialized world have made China the workshop of the world. But China has made a bargain with the devil, that is, they have taken on the risk of labor market volatility. Because their production is largely OEM (that is, they only manufacture goods, they don't design or market them), there are relatively few jobs for the millions of new college grads. In any case, those new college grads can't compete with graduates of American or European universities. The idea that there is anything in China approaching an MIT or a Stanford is laughable.

Finally, China is burdened with an antique language that only about 50-60% of its population has mastered. Just learning the characters for the language absorbs years of the educational process.

I'd give China a few more years before they're ready to rule the world.]]> http://seekingalpha.com/article/159066-diageo-better-trading-opportunities-abound-elsewhere?source=feed#comment-654035 654035
You might also point out that the movement of the stock in the last year traces the movement of the pound, i.e., down a ton and back up about 20%.

Long-term, this is a great investment. They have an unparalleled lock on the world's best liquor brands, and they have a distribution channel that is unmatched. And these two things are scalable, that is, they can add new brands and volume without too much of an increase in cost.

Their recent forecast didn't offer much hope, but I'd say they'll be beating their forecast of low single digits. Why? Well, the worst 12 months of the last 70 years are behind us, and they increased their profits in that period (even net of currency fluctuatons).
]]> Sun, 30 Aug 2009 22:55:42 -0400
You might also point out that the movement of the stock in the last year traces the movement of the pound, i.e., down a ton and back up about 20%.

Long-term, this is a great investment. They have an unparalleled lock on the world's best liquor brands, and they have a distribution channel that is unmatched. And these two things are scalable, that is, they can add new brands and volume without too much of an increase in cost.

Their recent forecast didn't offer much hope, but I'd say they'll be beating their forecast of low single digits. Why? Well, the worst 12 months of the last 70 years are behind us, and they increased their profits in that period (even net of currency fluctuatons).
]]> http://seekingalpha.com/article/157537-natural-gas-could-cure-what-ails-america?source=feed#comment-640656 640656
You can argue that extensive use of gas would push the price up, and that's true. But LNG shipping and receiving capability would be quickly overtaxed, so those prices would go up too. There is an incredible supply of natural gas in the US, and there's no bottleneck in its supply. The ability to drill and deliver is all in place.

Changing the mentality of Americans is the critical step here. Big oil and the oil service industry, the car-makers and associated parts industry, and service stations and repair shops are all afraid of the change to anything away from the internal combustion industry.

Big oil has been a source of contributions, the mother's milk of politics, ever since Lyndon Johnson brought in Brown and Root's money during the third FDR election (1940).

Thailand has managed the shift to LNG pretty easily, as an example. While they have far fewer service stations than the US, it is also true that a partial shift to LNG could be handled with only a few stations along interstate routes, and the use of LNG to power fleet vehicles, such as urban public transportation and local delivery vehicles, which can return to a central location for refueling.

Instead, we piddle along without a coherent energy policy, pursuing such idiocy as ethanol, which, when corn-based, consumes as much energy as it produces.

Electric cars are fine, but you have to remember that the electricity they use has to be produced by something, and in America's case that is primarily by coal.

The path of least resistance at present is to offer lip service to "clean energy" and "energy independence" while doing nothing to actually accomplish it. Oh, I forgot, we funded the purchases of new cars, the great majority of which run on gasoline. Made those sheiks in Saudi Arabia happy!]]> Fri, 21 Aug 2009 21:07:57 -0400
You can argue that extensive use of gas would push the price up, and that's true. But LNG shipping and receiving capability would be quickly overtaxed, so those prices would go up too. There is an incredible supply of natural gas in the US, and there's no bottleneck in its supply. The ability to drill and deliver is all in place.

Changing the mentality of Americans is the critical step here. Big oil and the oil service industry, the car-makers and associated parts industry, and service stations and repair shops are all afraid of the change to anything away from the internal combustion industry.

Big oil has been a source of contributions, the mother's milk of politics, ever since Lyndon Johnson brought in Brown and Root's money during the third FDR election (1940).

Thailand has managed the shift to LNG pretty easily, as an example. While they have far fewer service stations than the US, it is also true that a partial shift to LNG could be handled with only a few stations along interstate routes, and the use of LNG to power fleet vehicles, such as urban public transportation and local delivery vehicles, which can return to a central location for refueling.

Instead, we piddle along without a coherent energy policy, pursuing such idiocy as ethanol, which, when corn-based, consumes as much energy as it produces.

Electric cars are fine, but you have to remember that the electricity they use has to be produced by something, and in America's case that is primarily by coal.

The path of least resistance at present is to offer lip service to "clean energy" and "energy independence" while doing nothing to actually accomplish it. Oh, I forgot, we funded the purchases of new cars, the great majority of which run on gasoline. Made those sheiks in Saudi Arabia happy!]]> http://seekingalpha.com/article/117580-sell-altria-during-market-hours?source=feed#comment-370905 370905
No advertising expense, a concentrated product line (with the exception of their wine company), and nice investment in SAB Miller, high markup, stupendous cash flow...I don't find a lot to dislike.]]> Fri, 30 Jan 2009 09:17:18 -0500
No advertising expense, a concentrated product line (with the exception of their wine company), and nice investment in SAB Miller, high markup, stupendous cash flow...I don't find a lot to dislike.]]> http://seekingalpha.com/article/114754-crude-reality-how-long-can-oil-stay-down?source=feed#comment-356799 356799
That's just observed behavior, without any statistical backup. Global statistics are hard to come by, anyway.

Demand will continue to rise as the developing countries emerge from poverty. The obvious example of this is China, which went from being a net exporter of oil to a net importer.

We're looking at a temporary dip in demand as if it were a permanent development. What is more likely is a surge in demand as we start up our economies again sometime this year and starting burning that $1.50 a gallon gas.]]> Thu, 15 Jan 2009 13:48:33 -0500
That's just observed behavior, without any statistical backup. Global statistics are hard to come by, anyway.

Demand will continue to rise as the developing countries emerge from poverty. The obvious example of this is China, which went from being a net exporter of oil to a net importer.

We're looking at a temporary dip in demand as if it were a permanent development. What is more likely is a surge in demand as we start up our economies again sometime this year and starting burning that $1.50 a gallon gas.]]> http://seekingalpha.com/article/112785-don-t-miss-the-coming-gold-bull?source=feed#comment-343844 343844
Gold is us 8 years in a row, but it's just about where it was at its peak in early 1980. After that, it went into a long period of trading between 250-450 before starting to rise again in late 2005, when it was 430 at the beginning of the year.

Perhaps you could surmise that gold has already peaked again and will fall on hard times if the economy bounces back. If it does, look for the price of gold to drop like a lead balloon.

Otherwise, listen to the gold bugs who scream of huge gains to be made by buying at the top of the market.

]]> Thu, 01 Jan 2009 22:28:17 -0500
Gold is us 8 years in a row, but it's just about where it was at its peak in early 1980. After that, it went into a long period of trading between 250-450 before starting to rise again in late 2005, when it was 430 at the beginning of the year.

Perhaps you could surmise that gold has already peaked again and will fall on hard times if the economy bounces back. If it does, look for the price of gold to drop like a lead balloon.

Otherwise, listen to the gold bugs who scream of huge gains to be made by buying at the top of the market.

]]> http://seekingalpha.com/article/111327-as-oil-bottoms-out-it-s-time-to-go-long-rbc?source=feed#comment-333083 333083
I would agree that oil prices are too low to last, but I have no idea how long they will last at this level. Futures indicate prices will rise, but it is apparent that OPEC actions have far greater influence on prices when demand is strong than when demand is weak.

]]> Thu, 18 Dec 2008 11:04:19 -0500
I would agree that oil prices are too low to last, but I have no idea how long they will last at this level. Futures indicate prices will rise, but it is apparent that OPEC actions have far greater influence on prices when demand is strong than when demand is weak.

]]> http://seekingalpha.com/article/109702-western-goldfields-cash-is-king?source=feed#comment-330587 330587 Mon, 15 Dec 2008 23:36:34 -0500 http://seekingalpha.com/article/109973-merry-new-year-cheaper-oil-silver-options?source=feed#comment-325272 325272
biz.yahoo.com/ts/08120...

Basically, Daniel mentions the huge contango that exists now (current price of $43 vs December 2009 futures of $57), plus credit issues that constrain the investment in futures and lead to deflation. The strong dollar is a major factor in keeping prices down. We've got winter fuel oil and cheap gas prices in the US to fuel demand.

What we haven't had is any geopolitical event of note recently.

Demand for oil will continue to drop until it doesn't, and then the turnaround could be very quick. China's demand for oil edged up in October, according to Reuters and this Seeking Alpha article:

seekingalpha.com/artic...

Short oil? Wow, that would be incredibly dumb at this point, given the low possibility of reward and the virtually unlimited possibility of punishment. ]]> Wed, 10 Dec 2008 05:47:03 -0500
biz.yahoo.com/ts/08120...

Basically, Daniel mentions the huge contango that exists now (current price of $43 vs December 2009 futures of $57), plus credit issues that constrain the investment in futures and lead to deflation. The strong dollar is a major factor in keeping prices down. We've got winter fuel oil and cheap gas prices in the US to fuel demand.

What we haven't had is any geopolitical event of note recently.

Demand for oil will continue to drop until it doesn't, and then the turnaround could be very quick. China's demand for oil edged up in October, according to Reuters and this Seeking Alpha article:

seekingalpha.com/artic...

Short oil? Wow, that would be incredibly dumb at this point, given the low possibility of reward and the virtually unlimited possibility of punishment. ]]> http://seekingalpha.com/article/108545-realty-income-the-monthly-dividend-company?source=feed#comment-318409 318409 Mon, 01 Dec 2008 17:31:55 -0500 http://seekingalpha.com/article/108344-last-thursday-was-the-bottom-it-s-time-to-get-back-in?source=feed#comment-316603 316603
What little I know about water transport stocks scares me, and that is volatile prices, spot markets, and ship inventories. Good dividends when times are good, though.

Oil? Well, anybody that doesn't believe oil will come back is crazy. The bottom we are seeing here has delayed people solving the problem of oil dependency, so we're no better off than we were before. Demand is down now, but will return when things perk up a bit, and any sign of shortage lures investors and hedgers into the market. I mean, a barrel could be $100 in March--it's just that volatile. ]]> Fri, 28 Nov 2008 09:04:28 -0500
What little I know about water transport stocks scares me, and that is volatile prices, spot markets, and ship inventories. Good dividends when times are good, though.

Oil? Well, anybody that doesn't believe oil will come back is crazy. The bottom we are seeing here has delayed people solving the problem of oil dependency, so we're no better off than we were before. Demand is down now, but will return when things perk up a bit, and any sign of shortage lures investors and hedgers into the market. I mean, a barrel could be $100 in March--it's just that volatile. ]]> http://seekingalpha.com/article/99504-what-does-warren-buffett-see-in-general-electric?source=feed#comment-283519 283519
www.marketfolly.com/20...

His largest single holding is Coca-Cola.

]]> Thu, 16 Oct 2008 06:46:23 -0400
www.marketfolly.com/20...

His largest single holding is Coca-Cola.

]]> http://seekingalpha.com/article/99504-what-does-warren-buffett-see-in-general-electric?source=feed#comment-281057 281057
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.

]]> Mon, 13 Oct 2008 02:34:46 -0400
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.

]]> http://seekingalpha.com/article/98237-be-like-buffett-get-off-the-roller-coaster?source=feed#comment-272286 272286
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.

]]> Thu, 02 Oct 2008 23:18:37 -0400
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.

]]> http://seekingalpha.com/article/98237-be-like-buffett-get-off-the-roller-coaster?source=feed#comment-271682 271682 Thu, 02 Oct 2008 12:22:35 -0400 http://seekingalpha.com/article/96315-bank-of-america-bank-on-this-opportunity?source=feed#comment-258952 258952
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.]]> Fri, 19 Sep 2008 10:18:48 -0400
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.]]> http://seekingalpha.com/article/95887-buyouts-and-shakeups-how-the-financial-world-is-changing?source=feed#comment-256951 256951
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.]]> Wed, 17 Sep 2008 10:36:46 -0400
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.]]> http://seekingalpha.com/article/95558-what-b-of-a-gets-by-passing-on-lehman-gobbling-up-merrill?source=feed#comment-255700 255700
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?]]> Tue, 16 Sep 2008 08:42:16 -0400
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?]]> http://seekingalpha.com/article/95508-bofa-s-lewis-is-still-making-deals-but-now-aiming-for-distressed-assets?source=feed#comment-255471 255471
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.
]]> Mon, 15 Sep 2008 22:28:08 -0400
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.
]]> http://seekingalpha.com/article/95405-what-s-the-bofa-merrill-synergy?source=feed#comment-254528 254528
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.]]> Mon, 15 Sep 2008 00:07:48 -0400
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.]]> http://seekingalpha.com/article/94294-charlie-maxwell-to-barron-s-300-oil-is-inevitable?source=feed#comment-248277 248277
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).

]]> Mon, 08 Sep 2008 10:31:31 -0400
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).

]]> http://seekingalpha.com/article/90293-procter-gamble-should-continue-to-perform?source=feed#comment-227668 227668
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?]]> Mon, 11 Aug 2008 09:36:04 -0400
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?]]> http://seekingalpha.com/article/83233-mcdonald-s-solid-dividend-yield-above-average-growth?source=feed#comment-195947 195947 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.
]]> Mon, 30 Jun 2008 11:52:58 -0400 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.
]]> http://seekingalpha.com/article/82184-countrywide-potential-short-squeeze-in-the-offing?source=feed#comment-190742 190742
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.

]]> Mon, 23 Jun 2008 08:35:31 -0400
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.

]]> http://seekingalpha.com/article/80570-stock-analysis-general-electric?source=feed#comment-185925 185925
Oversold, low downside risk, significant insider purchases, dividend yielding an all-time high. ]]> Sun, 15 Jun 2008 12:55:25 -0400
Oversold, low downside risk, significant insider purchases, dividend yielding an all-time high. ]]> http://seekingalpha.com/article/80835-ge-microsoft-on-new-low-list?source=feed#comment-184498 184498
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.

]]> Thu, 12 Jun 2008 17:16:22 -0400
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.

]]> http://seekingalpha.com/article/80710-are-high-profile-ceos-effective?source=feed#comment-182631 182631
]]> Tue, 10 Jun 2008 12:52:33 -0400
]]> http://seekingalpha.com/article/80438-preparing-for-the-fall?source=feed#comment-180722 180722
What we're looking at right now is a consumer under pressure, unable to spend at the rate he was before. Yesterday's performance was a perfect storm of rising oil prices and unemployment. Rising oil prices affect the ability of some businesses to survive, much less operate at a profit.

Still, gas is cheap in the US, about half of what it is in Europe. Homes are cheap compared to Europe, and getting cheaper. Unemployment is 5.5%, but that's a rate that most European countries would love to have.

I think that the financial news channels tend to drive the markets faster in either direction, but I'm not sure they have any long-lasting effect. America has incredibly strong brands that will be dominant for generations, and these brands are doing well in developing markets. I'm a skittish bull these days, doing OK on my energy-related stocks, getting slaughtered on BAC, and breaking about even on my REITs.

There is a lot of liquidity around waiting for a signal to join the party. We'll see what happens to that money when the market makes a move up.]]> Fri, 06 Jun 2008 23:43:22 -0400
What we're looking at right now is a consumer under pressure, unable to spend at the rate he was before. Yesterday's performance was a perfect storm of rising oil prices and unemployment. Rising oil prices affect the ability of some businesses to survive, much less operate at a profit.

Still, gas is cheap in the US, about half of what it is in Europe. Homes are cheap compared to Europe, and getting cheaper. Unemployment is 5.5%, but that's a rate that most European countries would love to have.

I think that the financial news channels tend to drive the markets faster in either direction, but I'm not sure they have any long-lasting effect. America has incredibly strong brands that will be dominant for generations, and these brands are doing well in developing markets. I'm a skittish bull these days, doing OK on my energy-related stocks, getting slaughtered on BAC, and breaking about even on my REITs.

There is a lot of liquidity around waiting for a signal to join the party. We'll see what happens to that money when the market makes a move up.]]>