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scarlo

scarlo
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  • Even The Council On Foreign Relations Is Saying It: Time To Rain Money On Main Street [View article]
    It's about time an article like that hits the mainstream. Who woulda thunk that giving money to the 'spenders' would create more spending? My only qualm with your analysis is about delivering the helicopter drop to the 80%. Politically this will cause strife since from 80%-99% are also working hard; ie - they are not living off rent/dividends/interest payments. Anyone receiving free money is more prone to spend it and even the top 20% would be happy to consume more. Earning into the top 20% really isn't that much $ and these folks would surely be happy to spend more on travel, insurance products, real estate, autos, better quality foods, and etc. If you want to boost the broad economy, including larger ticket items, you'll have to handout to this segment too!
    Sep 2 08:24 AM | Likes Like |Link to Comment
  • Google Will Conquer A New Frontier [View article]
    I'm just outside of Philadelphia and hate the fact that I have to choose between Verizon's FiOS and Comcast - both of whom smatter the mail with promotions and then jack the rates after a new client's honeymoon period is over. I only need internet but the cost is prohibitive so I end up with TV and a useless (for me) land line. I can't wait for a viable internet option so I can stop paying $120/mo. for mediocre services.
    Aug 24 07:36 AM | 3 Likes Like |Link to Comment
  • Exxon Q2 Results: Continuation Of Almost Decade-Old Oil Production Slide Confirmed [View article]
    I think it's well known that over the last decade there has been a dramatic increase in capital, worldwide. This leaves XOM with less opportunity to capitalize on high ROE projects (their primary filter used when taking on a new project). Amongst this backdrop the project types that remain unbid are those where XOM gets to leverage their size & political clout (mega projects) or where their high-level engineering expertise is required (relatively complex projects). While both of these strategies mean higher risk, when diversified across many projects the end result is the higher ROE that XOM requires. While your article seems to suggest a perpetual decline of production for XOM, I'm satisfied with their commitment to longer term projects that are high in ROE. During down markets is when XOM really flourishes - it's then that the lion's share of opportunities become priced ripe for XOM's picking. And their production costs are lower than much of the competition. Their investment & capital allocation model is generally counter-cyclical. They are a cash cow defensive play during fat times and a boa constrictor eating competitors during lean times.
    Aug 5 01:34 PM | 3 Likes Like |Link to Comment
  • Can We Ever Really Retire? Why Americans Stink At Math [View article]
    So your goal is to figure out how much you must put away each year for the next 50 years to retire with $7mm?

    I would suggest that your i = 4% is unrealistic. I would plug in 6% as an estimated real return rate. That should change your savings needs dramatically. This is assuming you will have an equity heavy portfolio. And this would make sense given that research shows equities outpacing bonds over nearly every 10 year period and certainly over every possible 50 year period to date.

    Also - where did you get the $7mm figure from?
    Jul 29 10:35 PM | Likes Like |Link to Comment
  • McDonald's - Headwinds Continue As Pressure Is Building To Make A Dramatic Strategic Move [View article]
    In a worst case scenario it's already a REIT.
    Jul 27 03:29 PM | 1 Like Like |Link to Comment
  • McDonald's - Headwinds Continue As Pressure Is Building To Make A Dramatic Strategic Move [View article]
    I've also been very disappointed in this CEO thus far. I see very little in the 'leadership vision' department - a pretty crucial element for this position.
    Jul 23 09:52 AM | Likes Like |Link to Comment
  • Stevia switch creates an uproar [View news story]
    also a Stevia fan. glad to see this change. encouraging.
    Jun 11 12:39 PM | 4 Likes Like |Link to Comment
  • J.C. Penney: Penney For Your Plotz? [View article]
    I don't think anyone is arguing that JCP is out of the woods. That said, the rate of bleeding is decreasing, there's been a fresh IV transfusion, and the patient is starting to regain awareness. All due to the hand of a practiced surgeon who's worked with this same patient before. It might take awhile before the patient is dancing the halls and springing into cartwheels, but the vultures could well be disappointed.
    Jun 2 03:29 PM | 4 Likes Like |Link to Comment
  • J.C. Penney: Penney For Your Plotz? [View article]
    Ullman ran a ploddingly boring, but profitable JCP before RJ took the wheel. I don't think he's going to promise not to dilute the shares until he knows they are past the turning point. That being said, I think he needed last fall's dilution to satisfy debt covenants or keep ratios high in order to keep fixed borrowing costs low enough to operate efficiently. IE - he did what he had to and won't dilute again without cause.
    Jun 2 03:14 PM | 3 Likes Like |Link to Comment
  • Is Farmland Partners The Best Set And Forget Opportunity Ever? [View article]
    As soon as I read that all the current parcels are being leased (back) to companies controlled by PTI's Executive Chairman, President and CEO, my hackles raised and I walked away. Hopefully shareholder interests are in mind with this offering, but that's not a set up I want to be part of.
    May 15 09:05 AM | 3 Likes Like |Link to Comment
  • Anheuser-Busch InBev: A High Dividend Yield Buying Opportunity Presents Itself [View article]
    You mentioned that the stock had recently "broken through" the resistance line. I don't see that as justified. First off, a breakout is not followed by hopping back into the pattern. Secondly, a justifiable breakout is always on above average volume with a nice little price spike. The price can then pull back and what was resistance becomes support. So a breakout may occur, but it remains to be confirmed.
    May 13 08:10 AM | 2 Likes Like |Link to Comment
  • Coca-Cola: Buffett Vs. Icahn [View article]
    Well said, auto.
    May 4 08:49 AM | 2 Likes Like |Link to Comment
  • Exxon Mobil Needs A Big Dividend Hike This Year [View article]
    Your perspective on this seems solely driven by a desire for immediate cash returns. Fortunately, the board of Exxon is not letting you any closer to the decision making process. Capital allocation is the name of the game here (and everywhere).

    First off, in the US markets, companies are rewarded by how consistent their dividend policy is. You aren't going to be a low beta, low cost of equity capital company by dramatically raising the dividend every time you have extra cash and then lowering it in years where CAPEX is much more favorable. This isn't Europe where that type of thing is seen favorably.

    Secondly, opportunistic capital deployment is the rule and it's one of the main reasons why CFO's get paid well and can have a major influence on a company's historical returns. Perhaps I'm oversimplifying here, but: 1 - buy back shares when they are cheap. 2 - borrow when interest rates are low. 3 - invest in CAPEX when opportunities screen favorably. 4 - divvies when nothing else to do with the excess cash flows. When companies decide to go heavy on divvies it's often a signal to the markets that there are limited other opportunities for the foreseeable future. This type of decision usually weighs heavy on the share price as the anticipated internal growth factor for pricing models must be dramatically realigned.

    Yes, I get that being a good steward requires a commitment to shareholder cash returns - but Exxon's "mantra" is sound and they do have a very long term perspective (and long term performance to back it up!). They have a great history of dividend growth and a good history of share repurchases as well. They are also strict around CAPEX spending and have a high ROIC compared to their competitors. Sounds like good decision making to me. Tillerson's Exxon may not have performed as favorably since he took the helm, but it's certainly not because of the dividend policy. And if your argument is that they should increase dividends because share price has languished you are simply putting the cart before the horse.

    Disappointed in this article, Michael. Either you lack an understanding of how the market is analyzed by professionals and high level investors or you are just speaking from emotion. This article would have been better kept in the journal under your pillow.
    Mar 8 05:07 AM | 12 Likes Like |Link to Comment
  • McDonald's Top Line May Recover [View article]
    McDonald's plan to offer customizable options for their burgers is a fools' errand. If they are trying to move away from fast service and low price, it certainly makes sense. However, this new direction doesn't align with their image, history or strengths. The choices made by this CEO trouble me - I feel he's missing the grand view of the market and competitive landscape and is thereby making incorrect assessments of where to steer the ship.
    Mar 5 07:19 AM | 3 Likes Like |Link to Comment
  • 3 Cheers For Small Banks [View article]
    How is it possible that Matthew so missed the mark on this? Has he even been paying attention during the last decade? Perhaps this industry is not his sweet spot, in which case he should retreat to his level of competency.
    Dec 13 07:09 AM | 1 Like Like |Link to Comment
COMMENTS STATS
55 Comments
71 Likes