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Kraft Idiot

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  • Economic Investment Trust: A Safe CEF With An Appealing Discount To NAV [View article]
    My take on the tax implications are that Canadian investors have an extra incentive to buy which U.S. investors do not. Even so I find Canadian shares interesting because I think positively of the Canadian dollar.

    Near as my untutored eye can tell, the expenses are reasonable
    but I'll pass on this one. Two things bother me. First there is missing data on the closed-endfunds.com site. I've looked for some of it in the 2012 annual report and find the explanations less than clear. Second, note 8 to the financial statements includes this statement: "Included in investment management and administrative costs are fees for administrative services paid to E-L Financial, a company that can be significantly influenced by a party that can significantly influence the Company." I take this to mean that their largest investment has been chosen by a process that may not be wonderful for the bulk of the shareholders.
    May 31, 2013. 12:40 PM | Likes Like |Link to Comment
  • Microsoft Seems On The Verge Of Something Ugly [View article]
    Windows 7 was a large improvement over what people had in their desktops. I'm one who bought Windows 7 for that reason. I don't find Windows 8 to be that much of an improvement and I'll not buy it for any of my current equipment. I expect the day will come when there is some touch screen device on Windows 8 or a successor that I'll think I need to have. Then I'll buy it with the hardware.

    Twice before I've seen Microsoft evolve products I wanted no part of to products I felt I needed to have. IMHO they are doing it again.
    Mar 7, 2013. 02:16 PM | Likes Like |Link to Comment
  • Can An Intelligent REIT Investor Over-Diversify? [View article]
    I don't see a contradiction between

    "The only investors who shouldn't diversify are those who are right 100% of the time."

    and

    "Diversification is protection against ignorance."

    Clearly, you can be more confident and take bigger positions in your area of competence. But ain't none of us competent in all things
    and what we are competent in might turn out to be a bad place to be, a fact clearly exemplified in this article.

    With respect to REITS, I think it is a mistake to stay within the U.S. even though that is what we know best. I've accepted some of the ignorance of the index investor and picked up a couple real estate companies in Japan: United Urban Investment Corp. (ticker: 8960)
    and Mori Trust (ticker: 8961). So far they've been good to me.
    Feb 11, 2013. 12:21 PM | Likes Like |Link to Comment
  • Netflix: 6 Bucks For A Penny [View article]
    A slightly different take: when considering Netflix's competitive position we might want to look at in house efficiency as well as other things.

    A NPR piece this morning (Feb 1) has me wondering if Netflix doesn't have an underrated advantage in this area. Briefly, the NPR piece claimed that Netflix has a Big Data opportunity to tune new content to their customer base. They pointed out that Netflix has the customer data for this. I believe they have another important ingredient as well: the abilty to the IT to serve their needs in an efficient way.

    Such an ability IMHO comes only when their is a close connection between IT and it's users. Normally this means a good in house IT department. It also requires competent people and a culture of working together. My experience as a customer of Nefflix's DVD mailing service makes me think Netflix has that.

    I admit to a bias here. I've long been interested in companies that use in house IT smarts to provide a cheaper and/or better experience for customers. Once such a company has found the right niche to operate in, it can do well. The NPR piece suggests Netflix has done that.

    The NPR piece claimed no competitor has the customer data necessary to do this vertical integration. Methinks that's wrong: Amazon does. Amazon also seems to have an excellent in house IT service. My impression of Amazon though is that they seem content to rely on leveraging their mastery of physical distribution and are more interested in moving into new markets than mastering the markets they are in.

    Netflix may well have found a niche where it can thrive.
    Feb 1, 2013. 11:01 AM | 1 Like Like |Link to Comment
  • Leveraged Dividends [View article]
    Seen with sufficient generality, this plan involves investing X dollars by paying X-D dollars and incurring a cost of C dollars and some additional risk. Without the additional risk this is also what you do when you buy a closed-end fund at discount. In that case D is the discount of price from net asset value and C is the management fee. You may or may not also get the gain/risk of leveraging depending on whether the CEF itself uses leverage.

    I'm probably too fiscally conservative to use leverage by borrowing but I sometimes get "leverage" by buying CEFs at discount. Although this SA article

    http://seekingalpha.co...

    is about finding CEFs that are likely to increase dividends, the funds recommended there offer both "leverage" by discount and leverage by borrowing. Interestingly, the recommended CEFs themselves use leverage and at approximately the rate you suggest (in their case from 20% to 33%).

    BTW, I have been an IB customer for six months. I moved to them because of their access to foreign markets and I'm pleased with what I'm getting from them and what I'll be able to get when I learn more about how to use their variety of order types.
    Jan 17, 2013. 10:26 AM | Likes Like |Link to Comment
  • Equity CEFs: Other Funds Which Could Raise Distributions In 2013 [View article]
    I was pleased to see all these funds are selling at a discount but it seems to me that a fund that is not levered would be somewhat more able to raise dividends than one that is paying interest on some of its money. At the same time, a non-levered fund would be less risky on the downside. So I checked how levered these funds were. Sure enough the few funds in these lists that have no leverage have already raised dividends. Had I found a non-levered fund that was on the list of funds able to raise dividends I would have put an order in for it. That not being the case, I'll need to consider further.
    Jan 15, 2013. 05:27 PM | Likes Like |Link to Comment
  • How Dell Will Escape The Value Trap [View article]
    I know plenty of businesses and institutions that have been using a 5 year replacement cycle without reaching to the cloud. I think, therefore, that assuming an average of 4 years to replacement is, going forward, erroneous.
    Dec 3, 2012. 12:21 PM | Likes Like |Link to Comment
  • Why Deleveraging Is The Ultimate Outcome As The Fiscal Cliff Just Doesn't Matter [View article]
    Interesting article. The "Seasonally Adjusted Outstanding Debt" chart would be scary but for the fact that it apparently ignores a lot of debt: state, municipal, and business to be precise. Perhaps debt has shifted from those entities to the feds? That could mean the total level amount of debt in the country has in fact gone down.

    Or not. These superficial analyses are a bit difficult to draw meaning from.

    Another point where this one confuses me is what is included in "household debt"? Are mortgages that banks have not gotten around to writing off in that figure? Perhaps nobody knows how big a number that is. If big then household debt is falling faster than the chart shows. Also, we've been hearing anecdotal evidence that credit cards are being paid off. Is that just wrong?

    Ignoring the murky stats I must say I've been convinced since reading Richard Koo's "The Holy Grail of Macroeconomics - Lessons from Japan’s Great Recession" in 2008 that our deleveraging process will take a very long time.
    Nov 29, 2012. 02:37 AM | 1 Like Like |Link to Comment
  • Why Wal-Mart's Stock Is Now Cheaper (And Safer) Than Its Bonds [View article]
    It does not fill me with confidence to see current bond yields compared with projected 2114 free cash flow.
    Oct 31, 2012. 04:50 PM | Likes Like |Link to Comment
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