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  • The Bull Trap That Is Philip Morris International [View article]
    I have an alternative theory on tobacco use, If you smoke your risk of getting cancer goes up but does not necessarily mean you die of cancer nor does it mean you die any earlier than someone who never smoked based on life expectancy indexes. There are plenty of people who smoke who live into old age. Question then is if the public health perspective is totally honest even if you agree that the risk of smoking is cause for concerns. Tobacco does have "health" advantages. it is an appetite suppressant because the addition over rides other lessor addictions and the urge to eat. There are secret Hollywood diets that include chewing Nicorette that are not publicized . The other thing is we all have a sense that leisure time is increasing with worldwide industrial productivity. As people get closer to the upper range of their known life expectancies in aging countries such as our baby boom they may already have cancer and then decide to start smoking. When that fad starts down look down on tobacco company shares.
    Sep 25, 2014. 03:51 PM | Likes Like |Link to Comment
  • Clouds Over Omaha - Time To Sell Berkshire Hathaway [View article]
    Sounds like bad advise and poor analysis. What concerns me is that crowd in the photo filling the sports arena in Omaha. Too many people depending on a sure thing. Go back 30-40 years when Buffet/ Berkshire Hathaway was a mostly unknown investment prospect or extremely "contrarian" When Buffet purchased coke shares in the first place it was not the most popular thing on the market.
    May 6, 2014. 06:55 AM | 1 Like Like |Link to Comment
  • Gold Likely Entering A Deflationary Spiral [View article]
    i see signs of a deflationary spiral too. Gold prices falling against the dollar indicates the end of the recent gold bubble and other falling commodity prices too. These signal producers to commodity produce less because they can lose money . Mines that take gold out of the ground at over a certain price level even at over $1400 an ounce to sell for $1800 when the price was that high have to close. The spiral only goes so far as production costs and supply and demand make new production feasible with the hope of mining for profit and not taking loses. companies that over invested in new mines and equipment (the Chinese come to mind first) get wacked hardest. There is a bottom somewhere and central bank buying gold with easy print money can keep things going. Estimating where gold lands and bounces is probably around just under $800 but the lowest cost producers might get it out of the ground for $450 and less on rare occasions. In a weird way central banks trading fiat cash for gold makes fiat cash worth more and not less at least some of the species of fiat cash. meanwhile it seems currencies are getting debased in places where labor is cheap which is a deflationary input as far as added production maybe concerned. We are looking at how many gross tons of everything gets produced and hauled to shopping malls, walmart stores and gas stations. Get more supply on the markets and prices can fall or just stay low. less demand for goods in countries where prices rise too fast because of debasement means they are better off shipping away for harder currencies like the US dollar than selling at home. deflation then has not been checked by federal reserve monetary games .
    asset values can fall with deflation because factories can churn stuff out with other factories churning too to get relatively lower prices and so factories might be worth less everywhere. Lower prices then come to the US and developed countries and the misery index rises where people work in labor intensive production. they have the illusion of earning more but the goods stay cheap for export. fuel prices if imported rise and that gives the us lower labor factories some advantage . then you read these conditions are leading to less direct foreign investment in the US which means dollars are not returning home as they might otherwise and less dollars can buy more and not less. That could mean stock prices and real estate are at risk of deflationary pressures again? if real estate in India is priced in gold and gold falls against the dollar and rises in India because they debase their currency then Americans can take fewer dollars and buy more asset based real estate in India with gold further enhancing buying power even with asset inflation there? If that happens it can come home? The federal reserve meanwhile says it may start selling bonds again at higher interest rates sucking in rarer dollars including those that stay overseas. How is that inflationary? I guess the US treasury just has to start debasing by printing bogus counterfeit money and spending it quickly to enrich the government.???
    Jan 6, 2014. 04:38 AM | Likes Like |Link to Comment
  • Coca-Cola: Wait For A Pullback [View article]
    Right now it seems most of the world's markets have no discount prices at all. in the latest edition of the economist only three world markets seem to have any discount to the US dollar (including the US) those include Greece, Chile, and Thailand with the protests and threats of civil war in the streets. Other markets discounted are Saudi Arabia with a possible full blown conflict with Iran pending playing itself out in the streets from Russia to Lebanon and Iraq as the epicenter. Interest rates seem to be rising even if inflation is nil. The connection between interest rates and inflation is not always predictable. Sometimes they coincide and sometimes not. Coke may wake up some day with the Chinese government attempting to nationalize their Chinese plants. Lawyers are busy trying to link artificial sweeteners in diet sodas with every conceivable bad health outcome and Warren Buffet is entering the 'actuarial' period of his life span as life insurance companies view it. I could never imagine having a president like the one we have now who is propping up a compete utter disaster like Obama care and causing infinite chaos around the world supporting every gorilla movement there is especially in the middle east. Today I find an article in Barrons that says foreign investment in the US has come to a stand still. That maybe because the dollar is over valued. Foreign money props up the US stock markets . The Barrons commentator said something like it has become an almost "dangerous" trend or something like that because US stock prices are an international phenomenon. An investment in coke or intel or Ibm is an investment in multinational markets not just the US. Then there is that stock market chart or just the one of the broad market indexes. It is rare by some percentage probability that the market stays on the same trend line it is on those charts 2 years in a row going back 150 years or more. It does happen but dips and pull backs are more the norm than the unusual happenstance. Pull backs I would say looking at long term charts are more predictable than sprinting bull markets year after year after year even if the ongoing trend is sky high. I need to look at the actual probability of market advances 2,and 3 years in a row on a table to see what the real frequency is before deciding on that as a factor to worry about now. I rather predicted the dollar would go higher and remain the international currency back when that idea became unpopular. It should stay relatively high or business around the world suffers. I doubt all commodities have hit bottom though maybe a few have. a pull back looks inevitable maybe even ugly considering my screening for cheap stocks has almost nothing available. Expensive stocks with low dividends verses higher interest rates on the horizon maybe trouble and deeper trouble than expected and then again bull markets can over shoot reality. If the dollar is increasing in world wide value beware cash is not really necessarily says it may be a big deflationary trend when you see gold prices fall the way they have against the dollar Believe it or not Gold world wide may have a bigger market than the US dollar. So what about coke? maybe you will be able to buy it between $26 a share and
    $35 if banks give depositors 2-4 % interest yields on their money for a year. On the other hand companies like coke protetected them selves selling bond that yield very low interest rate while interest rates were low. buying back stock that way would make a lot of sense if interest rates rise fast and hard. I am waiting for Nestle to make an offer for coke eventually just because those kinds of things do happen . Just look at what happened to Heinz and to Wrigley etc............
    Jan 6, 2014. 03:07 AM | 2 Likes Like |Link to Comment
  • Don't Follow Buffett Into Exxon [View article]
    It Makes sense for Burlington Northern Santa Fe to make good friends with their potential customers/ existing customers as sort of a rebate for Berkshire Hathaway and a discount to Exxon possibly. Makes sense for a major shipping company to own part of the business that it will transport. Typical of the way Japanese trading companies take financial interests in their customers businesses.
    Nov 15, 2013. 03:06 PM | 1 Like Like |Link to Comment
  • Don't Follow Buffett Into Exxon [View article]
    It looks more like a sort of rebate/friendly gesture to Exxon which is one way to make friends as a railroad owner who wants Exxon's business. Seen Buffet make deals that give him an interest in his customer's business in the past. A lot of big Japanese companies have financial relationships in their customers businesses and it makes sense.
    Nov 15, 2013. 03:02 PM | Likes Like |Link to Comment
  • What Buffett Premium? [View article]
    I discovered something interesting about Warren Buffet few people consider. I was looking at an old investment book on the shelf here called something like "How to Invest in Stocks to Make Money " dated 1988 . I looked in the index to see the stocks and names of investors mentioned in the book and realized there was no mention of Berkshire Hathaway , No mention of Warren Buffet , No mention of Bill Gates either for that matter. Remember Wang Computers? It was a hot stock back then and is in the book. So I started thinking about seeing when Warren Buffet started appearing in investment guides as an example of this that or the other thing. It sure was not in this book from 1988. I looked quickly to see if KO was mentioned in the book and it appears to be non existing too in the index. I save old investment guild publications for this purpose actually. I did find a listing for Microsoft at an early date in its history after going public when it was between a dollar going to 15 dollars a share before many splits probably. That was back when it was a growth stock with a PE listed at 32 I think I recall. That was found in an old issue of world investing magazine. So now I am curious just how much or little financial reporting was done on Berkshire Hathaway or Warren Buffet in it's / his earlier years. Buffet really exploded on the investment bookshelves after his success was certain and not before some point.
    Aug 9, 2013. 01:12 AM | 3 Likes Like |Link to Comment
  • Aereo And The Death Of Broadcast TV [View article]
    I looked more carefully at the mater after reading the hype that a two trillion dollar broadcasting and cable industry was going to go down the drain because of new technology platforms like Aereo and their parent company and reached the conclusion that broadcast companies and cable companies have lots of options regardless of what the courts or congress does to enable Aereo and its present business model. If you broadcast original content and or sell it and want it exclusively on cable you can simply stop broadcasting or broadcast it in a way that Aereo has no right to ENCRYPTED with a payed pass key for users. Say you are CBS and don't want your content to be redistributed by Aereo or Netflix or even xfinity well then just stop broadcasting it and put it directly on the internet instead in HD! Then your intellectual property is protected. Those broadcasting towers cost money to keep up and running so shut em down if the pirates get a legal pass to rip you off, But that is not necessary by having a company make little anteneas for you that have a subscription fee encryption device attached to them and yes you can actually give them away and to protect them you copyright the encryption vocabulary used. I can link that to your smart phone or to your tv or smart tv and package it so lots of broadcasters are free to join a private consortium the pirates can't legally take the encryption from . Oh and you can eventually just shut down those pesky broadcasting towers too or reuse them to make sure that all aereo sites end up rebroadcasting is the Laurence welk show. Actually I don't see the game changer of Aereo because there are strong laws that protect intellectual property and Aereo has no monopoly on internet access television. CBS, ABC, NBC etc can just do this go to you tube or a similar site now and put their shows up there instead of on the air and earn adsense that might really pay from Google. Aereo is just killing the broadcasting towers that are a blight on the landscape anyway not the cable companies. You are not going to get broadband internet access from Aereo..Although that could be a reuse of the tall broadcasting towers maybe?
    May 30, 2013. 07:07 AM | 1 Like Like |Link to Comment
  • Daniel Loeb, whose Third Point has a 6.5% stake in Sony (SNE) worth some $1.1B, is pushing for a spinoff of the company's entertainment business including the film studio responsible for James Bond blockbuster "Skyfall" and the music label which houses big name artists such as Taylor Swift. (Andrew Ross Sorkin[View news story]
    Dan is going for the free ride with the yen in devaluation all the talk about breaking it up is theater and nothing more. The idea of the massive yen devaluation is to spur exports from Japan so Sony can benefit and US holders who also have to deal with the poorer exchange rate for going back into dollars when selling Japanese stocks have to hope that exports pump up the value of Sony more than the yen devaluation does harm and it probably will with Sony dependent on foreign exchange currencies for exports. That probably makes Sony a free ride within parameters. It will not want to sell off any foreign exchange generating businesses because foreign harder currencies make Sony powerful and ordinary Japanese citizens grovel before them. Here we go again where Sony cameras and other devices cost more in Japan than they do in the west and of course all foreign imports cost more in Japan too. So more Japanese people are working and earning less.
    May 14, 2013. 04:12 PM | Likes Like |Link to Comment
  • Berkshire Hathaway Intrinsic Value Pie Chart [View article]
    looking at those charts you can see that Warren Buffet wished he had bought a controlling interest in Coke when he could have. Had he purchased 10 percent of Wal-mart back when he first considered it it might have been a large part of the pie. Rail and oil are not bad industries to be in except when they are. They are good ballast for a diversified portfolio. Hybrid gas/ electric trucks are coming but the rails still are cheaper just slower.
    May 13, 2013. 05:05 PM | Likes Like |Link to Comment
  • What Berkshire's 'Elephant Gun' Means To Investors [View article]
    Heinz might not be too over priced . I practically flipped when I found out that the French have adopted Heinz Ketchup. McDonald's presence there helped. You may have noticed that pickles you buy in jars at the supermarket are actually prepared and bottled in India. I have not seen Heinz products made in India and sold in the USA yet but I can tell you that if Vlasic does it , not sure who owns that brand, Heinz can do it too. That means the brand is even more valuable with lower production costs and low affordable shipping surcharges. I bought India pickles at krogers or safeway. Heinz has watched food processing grow into big business in Thailand and no doubt Heinz will be a big Chinese brand if not already. Heinz does have Chinese brands already but nothing like they might in the future. They purchased Yoshida's special sauce company in Portland so they already understand soy sauce. There are several Chinese soy sauce brands that have as high quality as Kikoman. You can see how Heinz can go shopping for brand in China and everywhere else and be a monolithic company still 500 years from now.
    May 7, 2013. 07:08 AM | Likes Like |Link to Comment
  • Buy, Sell Or Hold The Brand New 'CST Brands' Stock? [View article]
    Kroger or Walmart could snap up 1000 outlets to add to their collections and distribution networks or even Budweiser. There is a base value for these assets that is tangible.
    May 2, 2013. 03:58 PM | Likes Like |Link to Comment
  • Buy, Sell Or Hold The Brand New 'CST Brands' Stock? [View article]
    It does not look bad. 7-11 with a captive audience. I had no idea how popular Slurpies are being one of the top categories of foods in the USA. It does not mater how cars refuel in the future they have to stop somewhere plug in, get a fill up or change out a compressed natural gas tank. reality has already come into the picture that liquid hydrogen is just a frozen battery of sorts. If we were to go electric we could run 12 volt "third rail" in the pavement to keep cars charging as they stay in motion with a metal sweep made of wires. That seems unlikely especially with the US oil and natural gas boom and hints of substantially lower prices coming.
    May 2, 2013. 03:56 PM | Likes Like |Link to Comment
  • ARM Proven Wrong, Intel Vindicated [View article]
    Intel maybe worth 30-60 dollars per share while it trades around 20. Revenues in the last annual report were 55 billion dollars. Over the past years they plugged more than 30 billion into new capital improvements/ new plants and equipment and pumped about 30 billion into R&D. The company has world sales in a variety of currencies in case the dollar ever plunges again. It takes just 9 or 10 years for dividends they pay out to equal what you pay per share now and the dividends are likely to trend higher each year. Earnings pay for the shares much faster . If you opened your own business and got 11 dollars per share in revenue having invested say 22 dollars per share a year and return on equity was relatively high would you sell or buy. The age of self driving cars is near. We are talking about a robotics revolution that is almost here. We are talking done and robotic armies. I will bet a lot of Intel will be inside. The cell phone revolution is just really a universal remote and a tool collection all in one . usually people buy a universal remote because they have a tv or two that goes with it.
    Apr 14, 2013. 04:10 PM | Likes Like |Link to Comment
  • Warren Buffett Violates His 'Ham Sandwich' Principle With Goldman Deal [View article]
    You can't predict how long Berkshire will own the Goldman common shares. Goldman is in a business that is rather in dispensable to the economy contrary to ideas that investment banking is a sleazy profession. Goldman Sachs is a window on all sorts of opportunities. Some day some independent firm like Goldman will break up the Berkshire Hathaway conglomerate into bits and pieces. Seems to happen all the time. If Warren Buffet is looking for other conglomerates being sliced and diced having friends at a place like Goldman can get you leads on what private companies maybe coming up for sale . It might be Europe having the next fire sale and getting a whim of something like that in a timely manner can get research done before other potential bidders can figure out what the various business elements involved might be worth. Goldman has some expertise in being able to evaluate such things and Buffet does too. Being in Business with Goldman Sachs and partnering with them could be pretty lucrative if you stay away from the next sub prime mortgage derivatives mess?
    Mar 26, 2013. 11:44 PM | Likes Like |Link to Comment