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  • I Was Wrong: A Post Mortem On Genworth Financial [View article]
    When the CFO or other key officer leaves abruptly, it's usually time to bail out. It's certainly not a time to buy, even if things seem cheap.

    Distinguish a departure for a real job - the case with Genworth CFO - from a departure for unnamed "better opportunities."

    The latter means they were fired. The former is a tell that something is wrong with the business and you should get out fast.
    Nov 23, 2015. 08:08 PM | 1 Like Like |Link to Comment
  • 25% Allocation To Apple - Too Much Risk? [View article]
    I agree with the author's recommendation. I structured my portfolio similarly, and I'm older than most of you. Whether it's Apple or another security, an investor has two choices: balanced diversification or concentration.

    If you prefer balanced diversification, you will rarely, if ever, beat indices. In fact, chances are very good you will not beat the indices. So why try? Only a few pros get lucky enough (or are smart enough) to beat indices, especially if they only hold long positions.

    The risks compound with the other approach, concentration. However, if you can tolerate large potential risk, follow one security closely and take a shot. Understand you will probably do worse than indices, and could do a lot worse, but you might get lucky.

    The only twist to the author's strategy which I would recommend is that for the remaining 75% of the portfolio, select index funds rather than 10 separate securities which you would have to monitor and buy and sell from time to time as conditions change.
    Nov 21, 2015. 09:54 AM | 2 Likes Like |Link to Comment
  • Overstock Is Stockpiling Gold -- And You Should, Too [View article]
    If it turns out that you are the only one in your neighborhood to own physical gold and that:

    -paper ETFs for gold are worthless, and

    - stocks and bonds and paper money are worthless

    you also better own a big gun, because society will be collapsing and someone will take your gold from you.

    Owning physical gold makes no financial sense, unless you just like the touch and feel of it. Don't invest based on the collapse of civilized society. If it goes, so will you.

    Be a little more optimistic when you select investments. Gold is a stinker to own compared to any other asset class, except for occasional and short lived exceptions. It's a bad bet.
    Nov 20, 2015. 08:24 PM | 5 Likes Like |Link to Comment
  • Qualcomm: Is There Life After Samsung? [View article]
    This sell-off is hugely overdone. Huizhou licensing deal announced after hours. Other deals will fall in place. Company is selling at only 3 x book with massive cash flow. This is like finding gold in the streets at this price.
    Nov 5, 2015. 09:19 PM | 2 Likes Like |Link to Comment
  • Rite Aid Sells Out To Wallgreens [View article]
    I sold my RAD in disgust this morning and took the profit. There will be litigation, and maybe some minor upside, even for sellers.

    Realistically, when this stock crested $9 it was based on buyout hopes, not the current fundamentals of this debt laden company with entrenched lousy management.

    What's the point of keeping dead money with RAD when there is so much more to invest in? Also, anti-trust process is no slam dunk. What if this deal can't go through? Would you want to own it a year from now with this management?

    Time to move and be happy with $8/share.
    Oct 28, 2015. 11:12 AM | 3 Likes Like |Link to Comment
  • Rite Aid up 39.7% on WSJ report that Walgreens is close to purchase [View news story]
    I hope it's more than $10. We RAD true believers deserve a little more.
    Oct 27, 2015. 01:24 PM | Likes Like |Link to Comment
  • Notable earnings after Tuesday’s close [View news story]
    Fabulous cash-flow, near monopoly on a vital product, and flat stock price for years.

    Sounds like Microsoft after Gates left. The magic disappeared.

    Balmer was no Gates. Cook is no Jobs. Investors like magic.

    I love Apple. It's a big part of my retirement fund. But I think we just need to earn a higher price the hard way, and it may take longer than we would like.
    Oct 27, 2015. 05:01 AM | Likes Like |Link to Comment
  • My Long-Term Analysis On Shake Shack [View article]
    With wine and beer licenses, and premium locations, this is not a Big Mac. Overpay, and in five years you will be thrilled. The management has a premium vision for the brand. Anyone who has eaten "there" is a fan. In my case, it was at the Saratoga racetrack, for the after-hours celebration for California racing. Place was packed, and no one cared about price. Shack is an affordable luxury, and a step above the competition. Pay for quality.
    Sep 4, 2015. 06:36 PM | 1 Like Like |Link to Comment
  • NCR CEO Bill Nuti: Where's The Cash? [View article]
    Is it time to buy back?

    Purchasers couldn't raise necessary debt at $36 asking price. That is a ceiling.

    The strong dollar, and tight domestic bank budgets, hem in the cash revenues.

    Company may have to tuck it in and sell for $30, as long as the management (suspect in integrity) can get a parachute.

    $24 to $30 not a bad deal.

    Sep 4, 2015. 06:30 PM | Likes Like |Link to Comment
  • It's Not Rocket Science: STAG Is Now Grossly Mispriced [View article]
    Thanks, Brad
    Aug 24, 2015. 08:04 AM | Likes Like |Link to Comment
  • It's Not Rocket Science: STAG Is Now Grossly Mispriced [View article]

    I agree that if this were real estate acquired many years ago, that book value way understates the underlying value. However, that's not the case with STAG, a new company. I have a tough time thinking they were so clever that their real estate is valued at 75% more than they paid, so my feeling is that investors overpay for REITs like this when the assets are not unique and are replaceable in most areas. The stock price reflects my thinking.

    I haven't dug into this real deeply, but I'll admit I am interested in STAG with this yield. Average lease term of 4 years and only a 70% renewal rate does concern me. Issuing stock for purchases instead of using debt is very dilutive, but reflects the inability to finance based on real cash flows. STAG does not have unlimited pricing power with warehouses, because it's not that hard to compete by putting up a building for $10M or so. Still, it's getting to a price where I might acquire a few shares.
    Aug 24, 2015. 08:02 AM | 2 Likes Like |Link to Comment
  • It's Not Rocket Science: STAG Is Now Grossly Mispriced [View article]
    I could never figure out REIT valuations. It's normal to overpay for management expertise, but 1.75 x book means that you are paying almost twice what these guys paid for rental property. This is not the cure for cancer or the next new tech device or a hotel in a crowded urban area. These are just warehouses, and it's pretty easy to build them and locate them.

    For a small investor, I guess that's OK to buy a REIT, but they have all been hammered because they got sold based on yield and some undeserved mystique.

    Almost 2 x book is a lot of money to pay. You simply get management which does not have the discipline (because they get paid anyway) to buy low like a small investor will. Anyone with reasonable capital should engage a local realtor and property management company. Buy a building only after getting familiar with the market.

    There's too munch premium, based on "yield," built into these prices. Buying closer to book makes this REIT (and others) more sensible as long term investments.
    Aug 23, 2015. 05:24 PM | 2 Likes Like |Link to Comment
  • NCR Moves To Town Out Of Weakness [View article]
    I bought this for the long term. (Repeat that, to keep myself from going crazy, I bought this for the long term.)

    I'm expecting another disappointing call in a few days, with the normal excuses about slow economy, retailers prioritizing purchases for customer security over fast check-out, the dog ate my order book, etc.

    The impact of currency translation will also be significant, and the pension is still an issue because of low interest rates, unless you credit their wishful non-GAAP accounting that disregards it. (I love the back-slapping of management for its swell strategy of pulling the whole fund out of the stock market after the crash.)

    There is also a class action for alleged wage and hour violations going on, and whether it will have a significant impact or not is hard to tell. Not a breath in their reporting so far about that case, but the credibility of the management is suspect after the last year, so who knows?

    Anyway, I'm hoping it works out. This does show, however, that Barrons, which continued to produce pump-up recommendations when the stock had crested 40, is just a rag.
    Feb 8, 2015. 08:35 AM | Likes Like |Link to Comment
  • Danger Zone: NCR Corporation [View article]
    You should take a well-deserved victory lap. Excellent analysis.
    Oct 21, 2014. 07:01 AM | Likes Like |Link to Comment
  • Danger Zone: NCR Corporation [View article]
    The conference call was not pristine. Losing John Bruno to the much larger AON was a loss, no matter how it is glossed over by platitudes like strength on the bench, etc. There is a replacement already announced for some of his functions, and a search for the rest of his job description. If he were the CFO, I'd panic. However, I've rationalized as follows: he knows he will not be CEO, and this is simply a better deal, with a much larger company. In a way, this endorses NCR for having had so much talent. But it is still a downer.

    On the upside is the math. The most important ratio is debt to earnings, and they project the bloated 3.7 (at 1/1/2014 reflecting DI acquisition) to be down in just 12 months at 12/31/2014 to 3.0. That's staggering improvement.

    As for the announcement last week that Target had cancelled the NCR relationship, Nuti was fast out of the blocks and opined that NCR and Target had mutually agreed to say this "announcement" was inaccurate. Who knows. My guess is that they deferred the NCR rollout to be sure Target has the enhanced security features in place due to its huge embarrassment. Nuti volunteered later in the call that he was eager to speak more on this, but was restricted by agreements with Target.

    Otherwise, it was a good call. Nuti is frank to acknowledge his sales team does not fully get it, so that closings are sloppy, causing slippage from one quarter to the next. As a long term investor, I'm not real concerned about short term sentiment.

    Let's see over the next two years. My horizon as a searcher for companies out of favor with good long term prospects NCR is an undervalued gem. Let others quibble about quarterly "results." In one good day, with reversed sentiment, a small company like NCR can make that all up, and then some.
    Aug 4, 2014. 05:34 PM | Likes Like |Link to Comment