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  • A 45%+ Crash Could Be Coming For The Market - Here's Why [View article]
    I will add a few thoughts to this article.

    The market has exhibited a very clear topping out this year and is rolling over. I have been largely out of Oil and Commodities since the beginning of the year . It is too early to get back in.

    Exporters including multinationals from PG to industrials have some huge headwinds and I like to use PEP's guidance to analysts from 7/9 saying 11% impact to revenue and a 12% impact to EPS for currencies as an illustration. Things have gotten worse since then as the world is devaluing against the dollar.

    I also agree with the outflow theory as money is flowing back to its home. So I think shares could drop lower in the next 2 months and perhaps an additional 10% drop. Oil could get tricky as assets are revalued in the next month and banking could see a chilly wind especially if a Hedge Fund or Private Equity player should falter.

    On the other hand stocks are becoming fair values. As an investor rather than a speculator I try to stay invested with 20% cash or less. So I do think the market will drop another 10% and be above its current level by the end of the year.

    One other indicator I use is the small investor sentiment. So far I dont see anyone I know selling. Usually a market cant bottom without a little fear. So this isnt 2008 or even 2001-2, but it could likely be a normal correction which can still be painful.
    Sep 2, 2015. 08:10 PM | Likes Like |Link to Comment
  • Johnson & Johnson: The Definition Of A Great Company At A Good Price [View article]
    As a rebuttal I would say PG would be ok if your old and dont have long to live.

    What for 50 years was a star in the 20th century is in significant decline. Why worship the past instead of looking to the future. At least JNJ has a future. PG is going to drop roughly to the revenue they had 10 years ago.

    Why would anyone buy a business expecting it to decline?
    Sep 2, 2015. 04:50 PM | 1 Like Like |Link to Comment
  • The Biotech Compound Drug Insight [View article]
    You are traveling a long distance to find little of value in compounding.

    Also Kyle Bass attempt to disrupt pharma is a shakedown attempt to injure companies and steal value from shareholders. There is nothing to celebrate about legalized theft from smaller shareholders. Not so long ago it would have been considered illegal stock manipulation.
    Sep 2, 2015. 04:36 PM | Likes Like |Link to Comment
  • On Bank Of America And The Fed [View article]
    My view of BAC - Wait

    So a few weeks ago I looked at BAC and I looked at falling Oil prices and falling commodity prices and decided the risk was much higher than the reward opportunity. I sold at $18 BAC and most of my banking. If I still had it I might slim down slightly on an up day but mostly just hold.

    My view is that Oil will cause a bigger scare as 3Q earnings come in. When confidence lessens in banking, banks get the flu even if they are healthy. As an investor I might get a really good price on BAC in the coming weeks.

    So I wouldnt get caught up in buying BAC right now.
    Sep 2, 2015. 03:16 PM | 1 Like Like |Link to Comment
  • Herbalife: Where The Rubber Meets The Road - FTC Vs. Vemma [View article]
    After a year or so I thought I would check back on the HLF situation.

    Really the biggest threat to business is letting Hedge Fund investors like Bill Ackman short a company and then viciously attack it with huge resources. It is a threat to shareholders in public companies and free markets.

    Whether Ackman is paying the author or he has some socialistic green power mission is unclear. I am not an investor in HLF but eliminating jobs and industry isnt a strategy for economic growth. Neither is launching into whole new regulatory restrictions.

    I would be more inclined to enforce current laws regarding business and markets. As such I would start with Ackman and stock manipulation laws. I highly doubt the FTC is going to destroy the MLM business.
    Sep 2, 2015. 12:24 PM | 11 Likes Like |Link to Comment
  • Johnson & Johnson: The Definition Of A Great Company At A Good Price [View article]
    Interesting Article!

    JNJ has been a disappointing holding this year.

    Most conservative investors already own a significant allocation of JNJ. My view is JNJ is suffering from brutal currency headwinds and last years hugely profitable HCV drug sales from Olysio, which went away.

    At its core JNJ is growing long term, creating important new drugs and is a good investment. I would probably try to buy in thirds, now $93, $91 and $90 if I didnt have any. It should be a good basis for excellent long term returns.

    My view is that forward EPS estimates need to be reduced for multinationals based on what looks to be long term currency changes. JNJs PE may already account for much of that.
    Sep 2, 2015. 12:03 PM | 5 Likes Like |Link to Comment
  • Why I Got Back Into GE [View article]
    I suspect it would have gotten bailed out just as it did under Immelt.

    I dont believe Welch would have financed the company on 30 day commercial paper or created Structured Investment Vehicles (SIV's).

    It is a higher risk time to buy into a financial company. What kind of a value did you put on the Energy Financing business before purchasing GE?
    Sep 2, 2015. 11:42 AM | 1 Like Like |Link to Comment
  • Biotech Review (Part 2 Of 3): New Coverage Of Some Mid-Caps With Update On Intercept [View article]
    I would just add that on 8/14 when the S&P500 was at 2091 and GILD was at $115 I made the same comment regarding having sold the small biotechs in a comment to your article on ISIS.

    Perhaps lucky but I did want to note that my comment has integrity even if it was perspicacious.
    Sep 1, 2015. 10:45 PM | Likes Like |Link to Comment
  • Gilead Sciences Is A Safe Harbor From The Market's Recent Volatility [View article]
    I believe it is going to take a deeper pipeline so that GILD looks like a $30+ bil revenue company longer term to the many doubters.

    Or a view that HCV is a long term viable revenue source at something close to current levels.

    If something would break on HBV or NASH the stock would sky rocket.

    More likely an acquisition with some promising drugs would be a catalyst to move the PE higher by a couple points.

    Another possibility is that EPS for 3Q comes in at $3.20 and ttm EPS of $11.73 would merit a 12 PE as GILDs longer term HCV strategy comes into focus with a pan genotypic solution.

    World revenue could take off including an agreement with China or the likely true needs of Japan become apparent. I read an article today where a Japanese leader was stating that this is the solution they have been looking for, for a long long time.

    So many things could happen and only time will tell. Logic would suggest that GILD will not remain the only vibrant company at a long term 8-10 PE.
    Sep 1, 2015. 10:16 PM | 1 Like Like |Link to Comment
  • Gilead Sciences Is A Safe Harbor From The Market's Recent Volatility [View article]
    Now that markets are closed I want to comment further on this article.

    I think it is a bad choice to call GILD a safe harbor because it isnt. It is a great value and a great opportunity provided an investor can hold on through the turmoil. Lets talk about downside potential. Why are markets dropping?

    1) Foreign SWF funds are removing money from markets to use back at home
    2) S&P500 stocks are slightly negative in earnings and rational thinking questions if earnings estimates will drop further.
    3) The threat to Oil and Commodities is also a threat to banks and financials.
    4) Exporters and international companies are in severe currency cross hairs and earnings could disappoint.

    I could easily see the DOW drop by another 1000 points as Oil could get messy as assets get revalued. GILD will go down if the S&P500 goes down, so it isnt a safe harbor.

    The other side of the coin is that GILD is performing well and 3Q is two thirds complete. I expect excellent earnings to be reported at the end of October. It may be uncomfortable until then.

    So I have some room to buy more GILD at or below $100. I have room to buy more in the low $90s etc. Anyway calling a biotech a safe harbor is a poor choice of terms. It is a great value. It would not surprise me if GILD tests the high $80s lows from last week.
    Sep 1, 2015. 05:05 PM | 3 Likes Like |Link to Comment
  • Gilead Sciences Is A Safe Harbor From The Market's Recent Volatility [View article]

    I always enjoy your comments and outlook. However Yee's value to me is questionable.
    Sep 1, 2015. 04:25 PM | Likes Like |Link to Comment
  • Gilead Sciences Is A Safe Harbor From The Market's Recent Volatility [View article]

    As a GILD bull I have to both agree and disagree on the safe harbor aspect of GILD. I do think that on a PE basis GILD should hit a bottom based on my outlook.

    At the same time GILD is underperforming the IBB today and shows little sign of contradicting the S&P500 trend. I have orders for more GILD that I thought I would get over the coming weeks. The way things are going it may be today.
    Sep 1, 2015. 02:04 PM | 1 Like Like |Link to Comment
  • How Dividend Reinvestments Will Increase My Cash Flow Over The Coming Year [View article]

    One other thing that bothers me about KO at this time.

    So PEP on 7/9 told analysts to expect currency headwinds of 11% on revenue and 12% on EPS in 3Q. That was before a China devaluation so it could be worse. I apply that same scenario to KO and ask if it is really worth a 22.7 PE when both revenue and earnings are declining.

    Were it me and I had the choice to reinvest in Healthcare which this year has a 93% record of meeting or beating earnings estimates I might choose JNJ currently at a 14.84 PE on 2015 EPS estimates (91.60/6.17) or AMGN (15 PE, 2.1% yield) which has provided a 23% annual return for me for 30 years.
    Sep 1, 2015. 01:32 PM | Likes Like |Link to Comment
  • How To Handle Market Crashes [View article]
    a few thoughts...

    It doesnt hurt to think ahead as long as you stay mostly invested. So last year at end of year COP was $69 and down 1% for the year while Oil was down 40%. I sold!
    GILD was a great opportunity so I reinvested in GILD mostly at $94.

    A couple weeks ago with Oil and Commodities crashing I decided I didnt see the reward for financials matching the risk. So I sold my positions in banking with BAC at $18 within a few days it was $16 and now $15.

    As I look forward I see investors happily buying PEP at a 21 PE. The same PEP that at earnings on July 9 told analysts that it expected a 11% hit to revenue and a 12% hit to EPS. That was before the recent China devaluation so it is likely going to be worse. The EPS estimates already reflect a decline. PEP isnt alone and EPS estimates from a lot of companies may soon drop.

    So where are earnings the most predictable? Try health care and its 93% record of meeting or beating EPS estimates. So I have taken more CELG, CVS, JNJ and AMGN as examples.

    I like Oil after a horrible 3Q gets reported and might get interested in XOM before that in the $60s for great hopefully decade long returns.

    Real dependable growth however may be the biggest bargain if you can demand a fair price and strike while the iron is hot.
    Sep 1, 2015. 01:11 PM | Likes Like |Link to Comment
  • How Dividend Reinvestments Will Increase My Cash Flow Over The Coming Year [View article]
    For those who might disagree with you I ask

    Whats wrong with buying JNJ as an example with its 3% dividend?

    DIS, HON, LMT???
    Sep 1, 2015. 10:02 AM | Likes Like |Link to Comment