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  • Qualcomm: Recent Woes Bring New Opportunities [View article]
    Qiwei Li:

    Congrats on your first article. Excellent run down and around the edges view of QCOM.

    Am giving you a follow tap, because of your good writing and excellent thinking.

    Nov 23, 2015. 02:57 PM | 3 Likes Like |Link to Comment
  • 30% Underpriced? How Is The Market So Wrong About ChipMOS? [View article]
    Fellow Investors:

    RH wrote: "Suppose further the terminal value is 0, after 10 years. With a discount rate of 12% I get a value of about $35. Then I subtract all debt net of cash (leaving 100 million cash for working capital), and also subtract the minority interest valued at P/B = 1.5. That's $7/share.

    So when trying to replicate the steps you use I arrive at a value of $28/share (35 minus 7). It's a small difference with your $26.8 but my more conservative growth assumptions should result in a lower value, not a higher value.

    So you must be doing something different, can you tell me what?"

    Comment: Well, it does seem I was correct. No one did respond to RH's points. Only a lot of fluff about my comment. Nothing substantive. I'm flabbergasted.


    Nov 15, 2015. 01:53 PM | Likes Like |Link to Comment
  • AT&T's Dividend: It's A Red Herring [View article]
    Fellow Investors:

    I would like to remind you of what happened to shareholders of two companies (there are plenty more examples) with very similar balance sheets, debt, and margins that T has: GM & SDRL.

    For some reason Yield Hogs seem not to be able to see anything but the current yield, which is about 5.7% for T. Wonderful. What do you have to accept to get a yield like that?

    For that yield you're going to have to accept a company that is paying out over 150% of its earnings to provide that type of dividend. The LTD is already over 100% relative to equity — and looks to me to be growing. T has a fat GPM of about 53% (one of the few good things I see when I'm looking for yield), yet the NPM gap crashes to about 5%, which is always a sure sign of serious inefficiency (often brought about by a high debt load).
    The Current Ratio, which gives us a general guidance of the company's ability to pay its debt, is just a mere 40% below where I would accept one for this type of company. The net income return per employee is all of $22,500, which is not even half of the least of salaries at T.

    On top of that, we have what appears to be a Fed that is determined to raise interest rates, which will further burden high-debt companies such as T (and the utilities), because no matter what anyone tells you, once the Fed gets started (from a historical precedence) it's not going to stop raising rates.

    Add to historical precedent the fact that Big Banks are screaming for rate hikes, the bond crowd (who hates to see money going to stocks instead of their precious bonds) is lusting for them, and there are other weighty types (politicians, et al.)who are dying to see the American people have to pay 8% rather than 4% to buy a home.

    For those of you who don't mind the high risk level of stretching out into that type of balance sheet and interest rate atmosphere to receive a 5.7% yield, I certainly wish you well.

    But I would urge young and new investors, who don't know everything yet, not to venture into this type of investment, because in the past they've not turned out well. And that's largely what we have to go by: similar past experiences of similar businesses in similar situations.

    Other than the massive destruction of businesses brought about by governments (which includes central banks), debt has destroyed more businesses than anything else. Fear it! You might still be standing after years of investing.

    I remain, the ArtfulDodger
    Nov 9, 2015. 11:49 AM | Likes Like |Link to Comment
  • Learn From History: Pay Attention To Apple's Crystal Ball [View article]
    Holy Shiskabob!

    If I had had to go to this much trouble to invest in a company over my lifetime, I wouldn't have bought the first one.

    Simplify, folks, simplify!

    Dedicated, proven management. Good, extremely loved products. Excellent balance sheet. Enviable margins and low debt-load. Great intellectual capital. Reasonable price. Worldwide distribution.

    What else?

    Nov 6, 2015. 12:05 PM | 42 Likes Like |Link to Comment
  • Book Review: Criminal Capital [View article]

    Every day we hear it from the media and the government: To protect us we need more laws, more rules, more regulations, more government, more police, more bureaucrats, and fewer guns!!?? That's what we need? Has that type of thinking done anything other than take rights and freedoms away from honest people? Has it stopped crime?

    What we need are mandatory fMRI neuroscience testing for politicians, the police, government bureaucrats, teachers, counselors of all types, the medical field, the military, and for businesses to be able to use this tool, for the purpose of checking whether people have the brain deformities that psychopaths have.

    That would save us billions from crime of all types. Think of the suffering it would save us if we could head these cunning, lying, deceitful monsters off before they gained power over us in one of the above fields. Think of what that would do for our government. There would hardly be any need for the dreaded spinning handlers that come running out every time politicians get caught in one of their scams. That alone is enough to enact laws that would test all people who immediately gain power over us simply by getting hired or elected.

    fMRI Brain Testing Shows That Psychopathy is a Brain Disorder

    fMRI Neuroscience Testing Shows That Narcissism is a Brain Disorder

    fMRI Brain Testing Shows Psychopaths Have Brain Disorders
    See also the Psychopath Check List at the bottom of the page (You'll most likely want to fire every politician you know, because I don't know of another group this list fits better than our politicians. And the author of this book wants them to make more laws "to protect us"?)

    See Here: The Frontal Lobes Are Deformed in Psychopaths
    This study shows that the deformities in the frontal lobes of psychopaths keep them from understanding the damage they do to people with their lying, conning, thieving, manipulating ways. They also cannot feel or understand the pain and suffering of others, or the love that normal people feel for others.
    Young L, Bechara A, Tranel D, et al ( 2010) Damage to ventromedial prefrontal cortex impairs judgment of harmful intent. Neuron 65: 845–51.

    If these beasts make up 5% of the population (as some think), that's somewhere around 15-million of them. You don't think if we could stop these monsters from working in government and the other fields mentioned above and if businesses had a method to keep from hiring them, we wouldn't stop a large amount of the crime taking place in all parts of our society.

    Think about it. Sex offenders have to register wherever they live for life, and are on probation for life in many states. Almost every job you get today requires a drug test and many of them require them regularly. Would knowing that you were interviewing a psychopath for a job not be more important than the above?

    Why shouldn't we test for psychopathy when we know what the brains of psychopaths look like, how they work and don't work, especially because we know that their brains are very different from mentally healthy people's brains?

    That's the way we put a huge halt to crime. But do you think there's a chance that your government will enact laws to do that?

    I remain, the ArtfulDodger

    Note: These are merely a few of the many studies done proving that psychopaths have brain abnormalities and that they are so far incurable. 
    Nov 1, 2015. 03:05 PM | Likes Like |Link to Comment
  • The Calm Before The Storm? [View article]
    Fellow Investors:

    The comments regarding this article show clearly why cynics are such losers and why they've been wrong about stocks since 1982 when the DOW was about 800 before it took off that Fall: They cannot admit that they are now and have been horribly wrong — and that their cynicism has cost them and is still costing them and will continue to do so unless they can dump.

    Of course, I want young and new investors to realize that many of these commenters are not investors; they are trolls roaming around seeking to carp and knock for the sake of stirring up dust, because that's all they're good for.

    Above you'll find conspiracy theories as to why markets did not crash as these Negative Nellies have been predicting forever. But they're still as bearish as ever, and they'll tell you so. You'll find them still predicting a Great Crash in the future. Wow! How brilliant!

    Then there's the claim that only the Fed has kept markets up. That cynical view completely tosses out the possibility that managements across the land have made one, single good decision, that there have been any innovations that could have driven investors to buy and be optimistic, that cheap energy, a strong dollar, and such things could have had anything to do with rising markets.

    Then there is the arrogant, or either ignorant (or possibly both), cynicism that forces them to continue trying to do what no human (most surely smarter than they) have been able to do: predict market direction.

    I would hope young and new investors would run from such wasteful silliness. Go to a movie. Go have a good meal somewhere. Anything! But get as far away from this worthless nonsense as you can.

    For better investing, I remain, the ArtfulDodger
    Oct 23, 2015. 12:43 PM | Likes Like |Link to Comment
  • The Calm Before The Storm? [View article]
    Fellow Investors:

    Warmed over soup from last week's financial news, with a typically cynical conclusion: markets are about to crash and kill stock holders. Not one thing new.

    Remember this: We know three things about markets and only three things: 1) They fluctuate. 2) Over time they tend to rise. 3) No one has ever consistently been able to predict market direction.

    Those who are arrogant and/or ignorant enough to think they can predict market direction ought to trade index futures, because the leverage there is so great that, if they can do what they claim or think they can, they can earn far more money in a few months than Buffett and Icahn have managed to scrounge up over the last 60-years.

    But they never do. They just predict on paper or over the airwaves, looking for the young and the novice to sell to. Pay this stuff no attention.

    Rather, put your efforts into finding well-managed companies with good products that are out-of-favor for what you believe are unjustified reasons. You'll do much better than wasting your time trying to predict market direction. Why try to do something or pay any attention to something that no one has ever consistently been able to do? Why buck such odds?

    But for those of you who are damned and determined to follow the path of predicting market direction, then I surely wish you well, because you'll need all the good wishes you can get with that endeavor.

    Oct 19, 2015. 01:36 PM | 4 Likes Like |Link to Comment
  • Corning: An Up And Coming Dividend Growth Gem [View article]
    Good points, Steve, especially the one regarding what the proceeds with go to after the sell. Thanks!

    Indeed, after a stock sell, the question always ought to be, What are the funds going to at that point? Not whether it was correct to sell at that time or not, which is generally the point discussed.

    Looking back on a stock after a sell (unless you're planning on buying back into it) tends to create the horribly useless mindset of Would-I, Could-I, Should-I, Might-I, If-I-Had-a.

    The best, AD
    Oct 19, 2015. 11:52 AM | 1 Like Like |Link to Comment
  • Intel And Cisco Head-To-Head [View article]
    Thank you, Retired. And thanks to the others in this discussion. I think it would be helpful to a lot of people, at least those who have not reduced their choices to the majority view of investing — and gambling, too, as far as that goes.

    Be well, all. Please contact me privately any time you wish to exchange ideas and philosophies.

    Oct 16, 2015. 07:06 PM | 2 Likes Like |Link to Comment
  • Intel And Cisco Head-To-Head [View article]

    It's one of my main goals to help young and new investors. But problem is finding ones who will listen. That's a tough proposition that I would dread figuring the odds on doing, because I fear it would discourage me from trying.

    As I noted earlier, good work and good responses all the way around on your part. Please, keep it up.

    Oct 16, 2015. 07:02 PM | 1 Like Like |Link to Comment
  • Corning: An Up And Coming Dividend Growth Gem [View article]

    This is a very good piece. Pretty decent coverage of the negatives, too, which pretty much stand at all times when there's competition roaming around. To be perfect I would like a tad more qualifying, especially of management, but your rundown on products was excellent.

    I believe GLW & GILD are two of the more high-quality out-of-favor stocks out there today. It's my view that most of the negativism on the two is unjustified, as I think your piece shows of GLW. Good companies step up to competition — and swing for the stands. I have no doubt GLW will do (and has already done) just that.

    I love high-quality stocks that are out-of-favor and am hence long GLW at 17 and GILD at 95.

    I'm giving you a follow tap, not only because you wrote a good piece, but also because you are invested in the stock you are promoting, which always adds integrity to the author and value to the article in my view.

    Thank you for the article, and I will look forward to reading future writings from you.

    I am, the ArtfulDodger
    Oct 16, 2015. 06:55 PM | 9 Likes Like |Link to Comment
  • Running On Empty [View article]
    Fellow Investors;

    When the market is winnowing the chaff from the wheat, there are always moves that look odd to novice investors — but the end result is positive for those who recognized the wheat early on, because that’s where the funds snatched from the chaff go.

    For those stocks it’s up, up, and away — and that’s what moves markets that are in a cleansing mode.

    I remain, the ArtfulDodger
    Oct 16, 2015. 06:24 PM | Likes Like |Link to Comment
  • Intel And Cisco Head-To-Head [View article]

    Thank you for the comment. Though I've not seen many lawyers who were what I would classify as good investors (Charlie Munger is about the only one I know of), I certainly liked your bio and am giving you a follow tap because of it and your comment.

    How people look at their money is both strange and fascinating to me, and you are correct: that surely is "one of the key reasons losers stay losers" and, we might add: will never become winners.

    Love the idea of taking a rifle's aim at a few stocks and "watching them closely." To me, that beats the hell out of the majority view that you blast a scatter gun across the board, sit forever holding on, and hope for the best. Or worse even, give your stew to people who do not even invest for themselves and let them fire the scatter gun for you.

    I ask young and new investors this question when it comes to allowing someone to manage their life savings: Would you let your best friend control your checking account? In every case the answer is something on the order of, "Hell no! Are you crazy?"

    Next question: But you would let a complete stranger control you life savings?

    Whole-sheet diversification buying and holding on until the moon turns to blood is about as logical a method of investing as throwing darts at a list of stocks and buying off the fall of those darts, because it completely tosses out the most important aspect of investing: money management, or "knowing when to hold `em and when to fold `em."

    Looking forward to reading some of your work.

    Thanks again for the comment.

    I remain, the ArtfulDodger
    Oct 16, 2015. 12:26 PM | 1 Like Like |Link to Comment
  • Dow Theory, The Economy And A New Bear Market [View article]

    I understand the frustration. That's why you want to try to figure things with as few intangibles involved as possible, and predicting market direction is not one of those things.

    Risk assessors do quite well figuring certain probabilities, such as the risk of one person (all of whose personal and driving record info they have) having a driving accident going and coming from their work every day, if they're traveling pretty much the same route back and forth.

    However, even at that the driver can add intangibles that may raise or lower their favorable risk probability. They can make sure their tires are kept up, their brakes are tight, and their car is serviced all the way around. They can look twice at stop signs, and they can look both ways after a light turns green (before taking off) to make sure no one is running the light. And so on. Those actions will increase the favorability of their risk. Doing the opposite will decrease it.

    But what about figuring the risks of a whole host of drivers at once? The whole problem changes dramatically, because you've just added perhaps hundreds of intangibles.

    That gets down to figuring the risk/reward of one stock versus the entire market, and you can easily see why one is basically impossible and the other is certainly possible. Not easy maybe — but possible.

    Managing those stock picks is the next most important thing that comes after finding them: when to take profits and when to take losses, becomes the monster questions that make or break investors.

    The best to you and your investing, and thank you for the response: AD
    Oct 16, 2015. 11:56 AM | 1 Like Like |Link to Comment
  • Avoid Seagate After Q1 Warning [View article]
    Fellow Investors:

    I have been concerned about the rise in STX's debt for quite some time, and the purchase of Dot Hill didn't help my concerns either. Moreover, buyouts and mergers in tech companies have rarely panned out.

    This is a well-written and informative piece, and it makes taking a second look at our STX holdings worthwhile. And that I'm going to do.

    Thanks for the piece: AD
    Oct 15, 2015. 06:02 PM | Likes Like |Link to Comment