mwswi's Comments

Jeremy Grantham: Collapse is Over, But Monumental Challenges Remain

Thu, 07 May 2009 17:59:54 -0400

Thanks for your reply, Maya_. I did register at GMO and read the "GMO 7-Year Asset Class Forecasts (1Q 2009)," the "1Q 2009 GMO Quarterly Update" and just as importantly, the "1Q 2009 International Active Update." I came away with a better understanding of GMO's investment strategy as a whole.

I also enjoyed reading, "Valuing Equities in an Economic Crisis," written by GMO's Ben Inker.

Again, I appreciate your reply...

-- mwswi --

On May 07 12:58 PM Maya_ wrote:

> Go to his website (gmo.com), register (its free) and read his quarterly
> updates - these provide substantial details of allocation to equity
> and specific shares invested. I suspect his own monies will be invested
> in a substantially similar manner, probably through in house managed
> funds.
>
> On May 07 12:36 PM mwswi wrote:

Jeremy Grantham: Collapse is Over, But Monumental Challenges Remain

Thu, 07 May 2009 12:36:24 -0400

Any idea(s) what particular investments Jeremy Grantham is leaning towards or favors during the "V" run-up and what investments he would retreat into during the "L" portion/era? It's difficult to interpret what investments he would direct (1) his clients monies and (2) his own personal portfolio from this, his current thesis.

Potential Upside in Energy-Related MLPs

Sun, 15 Feb 2009 13:16:28 -0500

Thanks for the article. I'm in complete agreement that pipeline MLPs are a nice way to play the energy sector.

I currently own shares of KMR, and as the above column states, dividends in KMR are paid in additional shares vs. cash (unlike KMP).

Articles in recent editions of "Kiplinger Personal Finance" also points out, shares in pipeline partnerships are offering rich current yields -- 8% to 10% -- and the most stable of firms are unlikely to cut their payouts. The cash flow that these pipelines distribute comes from fuel transportation charges and is independent of oil-and-gas prices (although cheaper gasoline prices generally mean more volume).

Currently, shares of KMR and/or KMP fall beneath Morningstar's "Consider Buying" price levels.

In my opinion, pipelines are an effective way to diversify the energy investment sector within my portfolio. The dividend and financial soundness of the company is also what drew me to consider investing in KMR.

Source: Kiplinger "Personal Finance"
"The New Rules for Investing Your Money," January 2009
"A Pipeline to Energy Profits," February 2009

Morici: Depression or Recession

Sun, 15 Feb 2009 12:35:45 -0500

I read a series of columns by Gabor Steingart on the German news source, Der Spiegel earlier in 2008. That lead me to purchase his book, "The War on Wealth." I agree that it is a worthwhile read and page 85 is spot-on with what is occurring at this moment in America. His series of graphic charts (PowerPoint-like) at the end of Chapter 5 was also thought provoking for me. In my opinion Gabor Steingart and Mohamed El-Erian (PIMCO CEO and Co-CIO) share many similar global viewpoints.

On Dec 05 02:55 PM mattupp wrote:

> Well, to curb our thirst for Chinese goods, we'd have to stop buying
> things a) from Wal Mart, Target, Kmart (are they STILL in business?),
> b) anything made of plastic, c) any toys with electronics or d) all
> of the above adn more.
>
> And it's not just China, although they are the biggest problem to
> our economy. Read a quick book called "War on Wealth" by Gabor Steingart
> to see how India & China are quickly accelerating their growth
> through an uneven playing field (uneven against the West).
>
> Simply put, if Wal Mart, et al, demanded more than the lowest price
> from their vendors and included workers rights in China/Far East,
> true environmental protection, basic health care coverage for the
> workers in both China/Far East AND the US, raised prices (YES, RAISED
> prices) to reflect the true cost of the goods being sold, then US
> made products would have a chance to compete for shelf space - since
> much of the price disparity can be attributed to the US laws on child
> labor, environment, minimum wages and medical insurance, which should
> be included in a product's price.
>
> I recall the news reports of local protest when Wal Mart wanted to
> open a store in small towns, feeling that it would drive out small
> independent "mom & pop" stores, but the bigger threat wasn't
> to the local retail sector, but to the larger national manufacturing
> sector. Wal Mart and other big box retailers always demands the
> lowest price possible and reaps the benefits, claiming that their
> customer demands the lowest price, but the true cost of the products
> are being borne by those shoppers through lost manufacturing jobs
> in their community and across the nation.

Larry Swedroe: What to Do Now

Sat, 14 Feb 2009 12:11:33 -0500

Excellent article... just ordered your book. Also have heard you on Paul Merriman's "Sound Investment!" podcasts and enjoyed listening to your investment perspectives.

Your statement, "And a lot of people took the allocation they made to commodities from their fixed-income portfolios. That was a common mistake too," just dampened my consideration of making such a move.

Therefore, I'd like to thank you for posting this fine article and mentioning PIMCO's CommodityRealReturn Fund.

2009: Expecting a Massive Rally

Fri, 02 Jan 2009 11:07:58 -0500

Up, down, sideways, stagnant, etc. Everyone seems to have an educated "guess," which is all that it is. Nobody truly knows which direction the market is headed. This article and subsequent conflicting commentary proves it. Still it's entertaining to read everyone's varying perceptions.

Deepwater Drillers: Not in a Very Deep Hole

Sun, 28 Dec 2008 14:47:42 -0500

Alan von Altendorf: This may an ideal time for you to short energy big-time ("...those oil service jobs aren't coming back"). Meanwhile, some of us don't find it feasible to think that energy pricing will stay suppressed for the long-term. Only time will tell if you are correct or some of us are badly mistaken. And when all is said and done, none of us truly know what's in the cards for the future.

Best Stocks for 2009

Sun, 28 Dec 2008 14:14:29 -0500

Thanks, Dividends4Life, for publishing an entertaining article. I enjoyed reading the fearless predictions of your various, "investment experts". Do I take any of those predictions seriously? I don't think so.

Still, it's always interesting to read the differing perspectives of readers in the commentary section. It simply proves that investing is a very inexact science and nobody can truly predict the market's future. This implies to both the "investment experts" as well as those SeekingAlpha readers who offer their own unique opinions.

TIPs to Protect Yourself from Future Inflation

Fri, 05 Dec 2008 12:22:43 -0500

Rory,

According to Morningstar's columnist Sue Stevens and what I've been told by other investment analysts/advisors, Treasury Inflation-Protected Securities (TIPS) have a fixed interest rate, but investors’ principal adjusts along with inflation rates. Because interest paid from TIPS is taxable, it’s generally best to hold them in tax-deferred accounts.

Naturally, there's exceptions to every rule, but this is the guideline that I've been following. I'd be very interested in learning if the investment landscape has changed in this respect...

TIPs to Protect Yourself from Future Inflation

Fri, 05 Dec 2008 12:11:50 -0500

Thanks for your timely article. I've been considering adding TIPS to a tax-deferred retirement account (to constitute approximately 10% of my wife's and my overall bond holdings). And as you point out, now may be a very opportune time to do so with both ETFs being down between 7% and 8% for the year while yielding near 8%. In the mutual fund realm, Vanguard's Inflation-Protected Securities (VIPSX) is currently down 7.7% for the year and yields 6.48%.

Coke or Pepsi?

Wed, 26 Nov 2008 15:16:14 -0500

I like both KO and PEP. IMHO, both can coexist very well in almost any portfolio.

China: The One Global Market with Gains Behind the Gloom

Sun, 23 Nov 2008 19:58:45 -0500

brooklynbl,

<< Did you not read the news before writing this article? Obama, 2.5 million jobs, road, schools, infrastructure. Hello? >>

Proposing the creation of 2.5 million jobs, etc. and successfully putting these ideas into play are two very different things...

Buy, Sell or Hold: PepsiCo Got Thrown Out with the Bathwater

Sun, 23 Nov 2008 19:43:12 -0500

P-Opt,
Between your price point of $55.00 and Morningstar's "Consider Buying" point of $59.20, shares of PepsiCo (PEP) remains a timely buy. PEP also provides a strategic play on China, along with Coca-Cola (KO), McDonald's (MCD), and Yum Brands (YUM). IMHO, this sure looks like a win/win proposition especially in the face of a currently deteriorating economy.

General Electric: Genuine Risk of Collapse?

Wed, 19 Nov 2008 10:11:02 -0500

In my personal opinion, I think we've hit a period in history where there is a serious dearth of talent in the upper management ranks of an overwhelming number of American companies.

Ten Illinois Stocks

Sat, 15 Nov 2008 14:28:09 -0500

Thanks for the Illinois Chamber of Commerce tour :)

McDonald's: Safety in Gold - or in Golden Arches?

Sat, 15 Nov 2008 12:51:36 -0500

In support of the author's column, it should also be noted that McDonald's CEO, James Skinner, recently purchased an additional 20,000 shares of MCD at $55.00 for a total investment of $1.1 million (10/23/08 purchase date). This increased his overall holdings to 236,700 shares of MCD. The buy was the first for Skinner in at least five years.

Under the terms of McDonald's stock ownership guidelines, Skinner is expected to hold 6 times his annual base salary in shares, or $7.65 million in stock. He exceeded the ownership guidelines prior to his recent purchase and presently owns more than $12.55 million in shares, excluding unvested restricted stock, phantom stock, and options.

When you take into account McDonald's results and Skinner's optimism in the face of an obviously deteriorating economy, it's hard to ignore the largest insider purchase at the company in more than five years. A company lifer, Skinner is now more financially committed to the business than ever before.

Sources: Morningstar, Street Insider.com, finance.paidcontent.or... and Mark Skousen's report at StockAdvisors.com

The Shallowest Generation

Sun, 09 Nov 2008 09:34:08 -0500

As each of us realizes, for every "point," there is most likely a "counter-point." The following article was allegedly authored by a late night television celebrity. Agree or disagree, the following does merit consideration as it offers a unique and differing perspective to the very bleak depiction of where we, and this country, currently stands.

"As most of you know I am not a President Bush fan, nor have I ever been, but this is not about Bush, it is about us, as Americans, and it seems to hit the mark.

The other day I was reading Newsweek magazine and came across some Poll data I found rather hard to believe. It must be true given the source, right?   The Newsweek poll alleges that 67 percent of Americans are unhappy with the direction the country is headed and 69 percent of the country is unhappy with the performance of the President. In essence 2/3 of the citizenry just ain't happy and want a change. So being the knuckle dragger I am, I started thinking, 'What are we so unhappy about?''

A. Is it that we have electricity and running water 24 hours a day, 7 days a week?
 B. Is our unhappiness the result of having air conditioning in the summer and heating in the winter?
 C. Could it be that 95.4 percent of these unhappy folks have a job?
 D. Maybe it is the ability to walk into a grocery store at any time and see more food in moments than Darfur has seen in the last year?
 E. Maybe it is the ability to drive our cars and trucks from the Pacific Ocean to the Atlantic Ocean without having to present identification papers as we move through each state?
 F. Or possibly the hundreds of clean and safe motels we would find along the way that can provide temporary shelter?
 G. I guess having thousands of restaurants with varying cuisine from around the world is just not good enough either.

H. Or could it be that when we wreck our car, emergency workers show up and provide services to help all and even send a helicopter to take you to the hospital.
 I. Perhaps you are one of the 70 percent of Americans who own a home.

J. You may be upset with knowing that in the unfortunate case of a fire, a group of trained firefighters will appear in moments and use top notch equipment to extinguish the flames, thus saving you, your family, and your belongings.
 K. Or if, while at home watching one of your many flat screen TVs, a burglar or prowler intrudes, an officer equipped with a gun and a bullet-proof vest will come to defend you and your family against attack or loss.
 L. This all in the backdrop of a neighborhood free of bombs or militias raping and pillaging the residents. Neighborhoods where 90% of teenagers own cell phones and computers.

M. How about the complete religious, social and political freedoms we enjoy that are the envy of everyone in the world?   Maybe that is what has 67% of you folks unhappy.   Fact is, we are the largest group of ungrateful, spoiled brats the world has ever seen. No wonder the world loves the U.S. , yet has a great disdain for its citizens. They see us for what we are. The most blessed people in the world who do nothing but complain about what we don't have, and what we hate about the country instead of thanking the good Lord we live here.   I know, I know. What about the president who took us into war and has no plan to get us out? The president who has a measly 31 percent approval rating? Is this the same president who guided the nation in the dark days after 9/11? The president that cut taxes to bring an economy out of recession?

Could this be the same guy who has been called every name in the book for succeeding in keeping all the spoiled ungrateful brats safe from terrorist attacks?
The commander in chief of an all-volunteer army that is out there defending you and me?   Did you hear how bad the President is on the news or talk show? Did this news affect you so much, make you so unhappy you couldn't take a look around for yourself and see all the good things and be glad?

Think about it......are you upset at the President because he actually caused you personal pain OR is it because the 'Media' told you he was failing to kiss your sorry ungrateful behind every day.   Make no mistake about it. The troops in Iraq and Afghanistan have volunteered to serve, and in many cases may have died for your freedom. There is currently no draft in this country. They didn't have to go. They are able to refuse to go and end up with either a ''general'' discharge, an other than honorable'' discharge or, worst case scenario, a ''dishonorable dischar... after a few days in the brig.   So why then the flat-out discontentment in the minds of 69 percent of Americans?   Say what you want but I blame it on the media. If it bleeds it leads and they specialize in bad news. Everybody will watch a car crash with blood and guts How many will watch kids selling lemonade at the corner? The media knows t his and media outlets are for-profit corporations. They offer what sells, and when criticized, try to defend their actions by 'justifying' them in one way or another.

Just ask why they tried to allow a murderer like O.J. Simpson to write a book about how he didn't kill his wife, but if he did he would have done it this way......Insane!   Turn off the TV, burn Newsweek, and use the New York Times for the bottom of your bird cage. Then start being grateful for all we have as country. There is exponentially more good than bad.

We are among the most blessed people on Earth and should thank God several times a day, or at least be thankful and appreciative."

McDonald's Defies Economic Gloom

Fri, 24 Oct 2008 18:20:52 -0400

marketfolly,

I read your article at www.marketfolly.com (thanks for providing the link). I think your analysis is both accurate and timely. One other aspect that isn't mentioned anywhere, and may be flirting with politically incorrectness (but who cares), is that many younger-to-middle-aged women either: (1) do not know how to cook, or (2) proudly refuse to. This also represents another segment of society that is accustomed to frequently dining out. Again, as money becomes tighter due to escalating bills, paychecks that don't keep pace with inflation/cost of living, etc., more and more are opting for that quick, economically feasible meal at their neighborhood Golden Arches.

I personally think it's just another "real" factor that plays into McDonald's favor.

McDonald's Defies Economic Gloom

Fri, 24 Oct 2008 10:22:26 -0400

"McDonald's, I'm lovin' it," (their stock, generous dividend, evolving menu strategies, and global presence).

The "Secret Sauce": A main ingredient has to be management/stewardship that is actually in tune with their marketplace, knows a thing or two about strengthening their brand, and strive to constantly enhance their customers' experiences. McDonald's intends to continue returning $17 billion to shareholders, via dividends and stock repurchases, which began in 2007 and will continue through 2009.

Their "Value Menu": The U.S., Europe, and Asia Pacific, Middle East, and Africa, account for about 47%, 40%, and 13% of the firm's operating income, respectively. McDonald's also has a presence in Canada and Latin America. McDonald's also has a presence in Canada and Latin America. In-roads into China and other emerging markets will continue to grow.

The "Drive Thru": Lots of folks that we've watched, over the years, frequent nearby establishments such as Applebee's, The Ground Round, and other like eateries are now seen stopping by (or driving thru) the Golden Arches instead. Should this econonomic climate persist, I think we'll see more diners/families frequent McDonald's.

Is McDonald's a safe long-term bet? In my humble opinion, "Yes, it's about as safer or safer than anything out there." However, like all stocks, only time will tell. Meanwhile, "I'm loving" the fact that MCD maintains a prominent position within my family's portfolio.

Buffett Likes to Be Early; Don't Rush to Follow

Wed, 22 Oct 2008 13:14:31 -0400

I still have faith in many old school investors such as Warren Buffet, Sir John Templeton, John Bogle, etc. They've experienced the many highs and lows of the marketplace. In my personal opinion, they still have credibility and much to offer by way of advice and guidance.

(Note: Sir John Templeton passed away on 07/08/2008 at the age of 95. I, along with many others, enjoyed his frequent visits to Louis Rukeyser's "Wall Street Week").

Buy, Sell or Hold: PepsiCo Got Thrown Out with the Bathwater

Mon, 20 Oct 2008 20:50:54 -0400

I'm buying additional shares even though I abhor the loss of 3,300 jobs. I also have Coca-Cola (KO) in my portfolio, so for the long-term, PepsiCo is just too good to pass-up at these prices. So I'm dollar-cost averaging by buying more shares of PepsiCo (PEP) every two weeks. Am I right or wrong? We'll see what the next 10-15 years of long-range investing will bring.

Brazil Is the Best of BRIC

Tue, 14 Oct 2008 18:41:48 -0400

Sound advice, "artogish," and a very interesting and oftentimes tongue 'n cheek commentary from "John Egan". Both posts are compelling reads.

Does Dividend Reinvestment Pay?

Tue, 14 Oct 2008 12:15:25 -0400

Thanks for your article. Needless to say, everyone has to fine-tune their own style of investing. Some favor dividend-paying/reinve... strategies and others do not. There's no hardcore right or wrongs. It's strictly a matter of personal investment preference.

Personally, I'm a big fan of dividend paying companies and enjoy being rewarded every three months for investing in what I perceive, based upon my own research, to be quality companies such as JNJ, KO, MCD, PEP, KMR, and the like.

Attractive Dividend Stocks in the Buy Zone

Tue, 14 Oct 2008 12:00:32 -0400

Interesting article... I'm inclined to agree with most of your thoughts. Thanks for posting it.

CNBC's Gasparino Problem

Tue, 14 Oct 2008 11:49:52 -0400

Media porn... (IMHO).

The End of the BRIC Trade

Tue, 14 Oct 2008 11:46:49 -0400

Interesting article, Felix. We'll have to see how your theories play-out in the years ahead. Personally, I still think China and India will be forces to be reckoned with between now and 2050 (perhaps becoming, as German economist Gabor Steingart states, "Masters of the Universe"). Still, your article provides food for thought. Thank you for posting it.

This Is What Happens When Everything Is Undervalued

Tue, 14 Oct 2008 11:26:10 -0400

Morningstar is featuring an article written by Russel Kinnel | 10-14-08 | 06:00 AM. The article is titled:

Grantham: Stocks Haven't Been This Cheap since 1987
Market seer Jeremy Grantham predicted financial debacle, and now he's buying.

The article states:

"In July 2007, Grantham warned of a financial bubble as hedge funds, private equity, and homeowners gorged on debt.

Today Grantham says we're in for slowing global economic growth. In particular, he believes China will slow down more than expected as most economists have taken in their forecasts for Chinese growth only a touch. He argues that China is very dependent upon exports and that the countries on the other end of the trade are too weak.

Grantham expects that slowing growth will also keep commodity prices falling. "I would keep out of commodities for the near term," he said.

In addition, he sees the deleveraging--an unpleasant unwinding of debt-- leading to a reverse wealth effect for companies and consumers alike. Both had been living beyond their means and now will have to adjust to below-average earnings and income, and that means they'll be tight with spending.

Nonetheless he's now more constructive about equities because he believes they are trading at severely depressed prices. He said that at the end of Friday, global equities were trading as cheaply as they had been since the 1980s. In fact, the U.S. had traded below GMO's fair value estimate--though as we spoke Monday morning a rally had brought it back to around fair value. Specifically, he prefers blue chips to small caps or highly leveraged companies.

"We're buying carefully and slowly," Grantham notes. Why slowly? "When bubbles correct, they usually overcorrect so that the market is selling well below fair value."

Interestingly Grantham also says he's now neutral on financials--a sector he has long disliked. He notes that most of the credit crisis is likely behind us and that the newest plan of worldwide governments to inject capital into banks in exchange for shares is a big improvement on past plans.

So, add Grantham to the list of sage investors who see this as a huge buying opportunity. The list includes Marty Whitman and Dan Fuss."

Jeremy Grantham: Stocks Still Aren't Cheap

Tue, 14 Oct 2008 11:14:38 -0400

Morningstar is featuring an article this morning, by By Russel Kinnel (date stamped: 10/14/08 at 6:00 a.m.), bearing the headline:

"Grantham: Stocks Haven't Been This Cheap since 1987. Market seer Jeremy Grantham predicted financial debacle, and now he's buying."

It goes on to say:

"Nonetheless he's now more constructive about equities because he believes they are trading at severely depressed prices. He said that at the end of Friday, global equities were trading as cheaply as they had been since the 1980s. In fact, the U.S. had traded below GMO's fair value estimate--though as we spoke Monday morning a rally had brought it back to around fair value. Specifically, he prefers blue chips to small caps or highly leveraged companies."

Grantham further states:

"We're buying carefully and slowly," Grantham notes. Why slowly? "When bubbles correct, they usually overcorrect so that the market is selling well below fair value."

Draw your own conclusions based on the contradictions in information provided by Barrons vs. Morningstar.

The Bottom's Within Sight - Barron's

Mon, 13 Oct 2008 13:45:40 -0400

Blair - I'm 57 years old (a Boomer) and am in agreement with the majority of your commentary. Thanks for posting your thoughts.

Lessons to Learn from the Market Meltdown

Thu, 18 Sep 2008 12:44:39 -0400

<>

I admit that I'm using the current economic climate as an opportunity to buy additional shares. Right or wrong, I've been purchasing more shares in deeply discounted companies on a weekly basis. Hopefully, this will play-out to be a strategically correct move. Only time will tell...