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  • Japan: Printing Up Miracles And Mirages [View article]
    All countries including your favorite African countries suffered from catastrophic situations one time or another. Rwanda just came out of a genocide less than a decade ago wherein 800,000 of its population perished! Northern Uganda was terrorized by the genocidal maniac Kony and his Lord's resistance army not too long ago. Kenya has their tribal violence in December 07 wherein the whole country was upended
    Putting aside the volatility and potential tribal violence in Africa including South Africa, majority of the African countries have unfortunately subsistence agriculture. Unless a country has developed its agriculture to a point of being nearly "food secured" or relatively independent of food imports, it cannot jump into being a manufacturing powerhouse. It has not happened throughout history for a major country (unless you are talking about mercantile countries like Switzerland or Singapore and the major oil producting countries who don't manufacture anything ).
    Somehow, you continually ignore this precept. Nearly all African countries including all the countries you have cited have dismal records in agricultural productivity. How can they defy history and transform themselves into manufacturing powerhouses? Look at all the Asian countries in recent years- China,Japan, South Korea, Taiwan, Thailand, Malaysia and now Philippines, India,Vietnam,Bangladesh. All of these countries introduced drastic agricultural and land reform programs and successfully implemented these reforms to garner the jump in agricultural productivity prior to industrialization. Look at US and Europe prior to industrialization in the 19th century. Your "bind faith" in Africa continually ignores this historical fact! Remember in the eco system of economic development all critical finite resources- inputs- capital, labor and land are interconnected. You must develop your agriculture first (thus your basic infrastructure,labor and capital) before you have a shot at developing your industries. That is the nature of the beast. There are no magical short cuts. And it has been proven over and over again in the 20th and 21st centuries (look at the disasters in Mao China in the 60's and early 70's, Russia in the 70's, Cuba in the 80's and North Korea in the 90's and early 2000's.)
    Jul 12, 2013. 04:47 PM | Likes Like |Link to Comment
  • Japan: Printing Up Miracles And Mirages [View article]
    It is not that the US that is free to set up "sweat shops anywhere in the world", it is the US companies. What do you think Nike,Walmart etc. are doing in inland China, Bangladesh, India, Sri Lanka, Vietnam? ( Besides there is no provision in WTO,ITA, USTRA that prohibits a company from opening a sweat shop. The developing countries will never ever sign such a treaty!) These are "sweat shops" producing products for the US,Europe and Latin America markets. Guess you know very little about international trade. Physical proximity really has very little to do with importing manufacturing goods except for bulk commodities. This is because ocean going containers have become so cheap to ship over the last two decades and this had allowed a source as far as China to the US to compete even with most Latin American countries in terms of transportation costs. If proximity is the major criterion, why don't all the importers in the US source their products from Haiti? Haiti probably has the cheapest labor costs cheaper probably than a lot of African countries and is relatively a stone's throw to the US in comparison with China. Its labor costs at $1,300. gdp per capita is much less than more than two third of the African countries. International goods sourcing is all about (1)logistics- the presence of reliable network of suppliers feeding to the assembly sources, yes, (2)low labor costs, (3)reliable infrastructure and a highly productive labor force. This drive for high productivity is the reason why we have all those mishaps in Bangladesh. The bottom line is this for Bangladeshi garment exporters (per capita of $846 which is lower than 80% of African countries!) despite having labor costs nearly a quarter of the Chinese, they still have to strive for productivity gains and fulfill timetable deadlines to be able to replace Chinese garment manufacturers.I just don't see this happening with workers in Africa.
    Jul 10, 2013. 12:35 PM | Likes Like |Link to Comment
  • Intel's Total Earnings Are Falling Faster Than Meets The Eye [View article]
    I think in analyzing a technology stock the more important issue than quarterly earnings has alway been the potential market that a new technology will engender. How else do we explain the Amazons, Netflixes,ARMS of the investing universe? Their PE's are totally out of whack with their earnings. Intel has had a lock on a very dismal industry- the PC market. Invariably Intel will probably report a lackluster quarter for the next two quarters being supported by a continuing growth in its PC server market and some in roads into the mobile market (from practically zero). The key question here is still whether Haswell and Silvermont will be accepted increasingly by the mobile market. If not, Intel will probably be consigned to its historical trading range of 18-24. A dip in the share prices will invariably present a buying opportunity for the medium term investor who believes that Haswell and Silvermont will be successful given Intel's generous dividend payout and its continuing prodigious cash generating capability. The article has not addressed whether the new chips are accepted by the marketplace and as such is really irrelevant to the long term investor of INTC and really misses the crux question in Intel.
    Jul 9, 2013. 07:55 PM | 6 Likes Like |Link to Comment
  • Japan: Printing Up Miracles And Mirages [View article]
    DeepValueLover, I cannot figure out where this "blind faith" optimism is coming from. "China is well on its way to building out the African industrial infrastructure.." I am ethnically Chinese and have been dealing with Chinese exporters since the 80's while working for US banks. The Chinese export machine was built by US companies who have had the intricate knowledge and infrastructure of marketing goods in the US,Latin America and Europe. The Chinese exporters themselves have tried to market products here themselves and have failed miserably. The industrial landscape in the US is filled with disastrous attempts from the Chery (automobile), Sany (construction machines) etc. The Chinese have no intentions to build any export manufacturing capabilities in Africa. Where will they export them to? Europe? US? How can they compete against well-entrenched US companies who can just as easily establish "sweat shops" anywhere in the world. To China? China is a close market despite WTO. Even cars cannot be imported without a joint venture. China's primary and sole interest in Africa is access to the abundant resources. The New Yorker has it right with this article The Vietnamese, Thailand, Malaysia and Indonesia started out achieving high productivity in their agriculture. Particularly Malaysia,Thailand and Indonesia with their developments of palm oil and rubber plantations achieved extremely high productivity in their agricultural sector. Go Back to 19th century Europe, US and Japan. Any industrial productivity surge has always been preceded by high productivity in agriculture. That is the nature of the beast in development. Africa is woefully lacking in this sector. How in the world will the labor force in Africa develop that sudden surge in industrial productivity when it cannot even get its act together in its agricultural sector. It just doesn't work like that in real life.. as seen throughout history!
    Jul 9, 2013. 12:39 PM | 1 Like Like |Link to Comment
  • Japan: Printing Up Miracles And Mirages [View article]
    I'm surprised you mentioned Kenya and Algeria. Algeria despite its huge oil exports which accounted for 96% of its 2013 total exports has had very anemic growth rates of 2.7 % over the last three years. Kenya despite a relatively significant increase in exports in 2011 (16%) has not exhibited consistent growth in exports- 2012, it experienced a significant slowdown- 3% and this year Kenya might even experience a decline in exports. Kenya's GDP growth rates over the last three years most certainly do not portend an emerging "tiger nation". It has a pathetic average growth rate of less than 3% over the last three years almost equaling the tepid growth in the US! Ghana is all about oil, nearly 60%(and climbing fast) of its exports are in oil and gas! I have yet to see a manufacturing powerhouse in a country whose exports are very dependent on oil (as inflationary pressure increases significantly thus pushing up labor costs- look at Nigeria, the Arab countries).
    Having a manufacturing capability is not all about low labor costs- it has a lot to do with productivity too. If not, the US and Germany would not be the nos.2 and 3 biggest exporters in the world. You need a combination of low labor cost and world beating productivity to become a power manufacturer. I see these qualities in the Asian countries like Vietnam, Cambodia, Sri Lanka and perhaps eventually India. Your sample of 3 African countries merely proved my contention that Africa is nowhere in sight in becoming a manufacturing powerhouse.
    Jul 8, 2013. 12:46 PM | 2 Likes Like |Link to Comment
  • Japan: Printing Up Miracles And Mirages [View article]
    DeepValueLover seriously Africa? A very accurate indicator of the next growth areas is frequently the labor productivity jump that a promising country undergoes before the veritable industrial "take off" stage. All industrialized and industrializing countries go through such productivity surges particularly in the agricultural sector ( the theory is that a jump in agricultural productivity will force both labor and capital to the urban areas the same hardworking productive labor will then concentrate on manufacturing). Most Asian countries like Japan, Taiwan, South Korea, Thailand, Malaysia and China went through this stage of sudden jumps in their agricultural productivities. What was the agricultural productivity rate of Africa the past two decades? A measly average of 2%! The sad fact is that Africa just has a very unproductive labor force. Africa despite its jump in population and huge natural resources will always be confined to development stage unless it can show its capacity to have a very productive labor force. Africa is probably more than 3or 4 decades away if it will ever become a so-called "global manufacturing powerhouse" at all. Fundamental changes in value system and its education have to be undertaken first. Look at the mess South Africa is in nowadays. South Africa, despite having a significant part of its labor force educated and well trained, despite its relatively developed infrastructure is in a mess nowadays mired by tribalism, corruption and a very unproductive labor force - that is the future of least for the forseeable future.
    Jul 5, 2013. 12:13 AM | 3 Likes Like |Link to Comment
  • This 'Forever' Stock Could Return At Least 30% [View article]
    I will remember all of your "pen names" when INTC reaches 30's price levels in 2014. The corollary cannot be said to be true, INTC due to its yield and its consistently increasing dividends has a floor baseline to it. At certain price range (19-20) major dividend institutional investors will most certainly pick it up. INTC still has a 90% lock on the pc market. The pc market may be projected to grow sideways but it is not going away soon! It is still a 76 million unit market allowing Intel to continue to generate its prodigious cash flow. None of the foundries would be foolish enough to invest in billions of dollars to try to compete against Intel in both the PC and server markets. As to the mobile markets, guess you guys have been ignoring the articles on Haswell, Silvermont and Skylake. Intel has been working with OEMs in perpetuity(remember Intel still owns the PC and server markets and has owned them for more than a decade). If indeed Intel has a superior product in their Atom series, we can trust these guys eventually will break through and collaborate with the Samsungs, Apples, HTC's, LG and Huaweis of the world.
    Jul 3, 2013. 12:41 PM | 4 Likes Like |Link to Comment
  • 3 Growth Catalysts Of General Electric [View article]
    Rubel, how much have you lost in GE? Or, how much are you sitting on a "loss" position? Like Life in general, investing is all about "moving on". From my 36 year perspective, sometimes the "dogs" that burned you at some time in the past may be the "two or three" folder alphas in the future. This is why "stop losses" and partial put options are critical defensive arsenal in serious investing....
    Jul 3, 2013. 12:23 PM | Likes Like |Link to Comment
  • 3 Reasons Bank Of America Is A Buy Ahead Of Earnings [View article]
    jstratt, probably 12 instead of 11. BAC has been a great trading stock for me for the past 4 years, hands down. It didn't start out that way- it was supposed to be a long term hold. I jumped in when Buffet bought that ridiculously priced preferred. I've been trading in and out for 3 times over the past years. The price trend of the stock ever since late 2012 is obviously on an uptrend and fallbacks thus far have not violated support levels. I have been out since a couple of weeks ago and have been trying to nibble back up when BAC hovers in 12 area(have GTC's at those levels). I agree BAC can easily be a 16-17 stock once this litigation is out of the way.
    Jul 2, 2013. 04:51 PM | Likes Like |Link to Comment
  • 3 Reasons Bank Of America Is A Buy Ahead Of Earnings [View article]
    DoowopDave...the fact that BAC top management and its high priced lawyer team rejected even to restart negotiations with AIG did tell us that they are extremely confident of their position. . These decisions cannot be taken lightly as an unfavorable decision could easily push BAC to Chapter 11. Should a favorable decision come out in late July as expected, BAC would easily take off. 2014 is just too late. By then BAC's price to book ratio would probably be on par with the industry. Investing is still a calculated risk....
    Jul 2, 2013. 02:59 PM | Likes Like |Link to Comment
  • Intel Has The Potential To Double By The End Of 2015 [View article]
    Mrnomad, investing is still about taking calculated risk. Invariably there will always be "black swan" events such as an unexpected advance by an Intel competitor. But what is the probability of that from taking place? (1) there is significant roadblocks for any new entry or even inventions at the nanometer levels- R&D and eventual fab costs are presently in the billions of dollars (2) we have read all the technical papers on Intel's haswell and silvermont plus the skylake for late 2014. We are reasonably confident that they are the state of arts and that Intel has spent on investing the chips' fabrications facilities.(3) Intel continues to generate prodigious cash flow(similar to Google,Qualcomm,Apple and other performing hi tech companies) that allows it to invest in that kind of money for R&D and new manufacturing facilities and (4) Intel has a generous and growing dividend payout (more than 4% for my position) to pay us while we wait for a turnaround in the marketing plans for handhelds. This appears to be your once in a decade play for a "fallen highflyer" to finally turn around in addition to having a pristine balance sheet and generous payout. What is there not to like? Indeed, I'm waiting for a doubling of the stock within 3 years and being paid generously while waiting...
    Jul 1, 2013. 02:58 PM | 1 Like Like |Link to Comment
  • General Electric (GE -0.3%) is reportedly looking to sell its CareCredit healthcare financing unit in a deal that could be valued at about $2B. The company has tapped Goldman Sachs to oversee the process and has already attracted buyout interest from a few banks, as well as at least one nonbank financial services firm. Neither Goldman nor GE are commenting on the matter. [View news story]
    fuzzymc, first GE has to get back its pre 2008 EPS levels of $2.00. At current EPS $1.52 it will probably take another 3 years even at the optimistic growth level 11-12% as most analysts are predicting. Then there is the nasty term called PE evaluation. Presently GE has trailing PE of 15x and forward PE of around 13-14x. GE previous to 2008 sports PE ratio of 20+ to as high as 40. And that was because GE was involved in the "flavor of the ages" industry of quasi-financial industry which was generating "phantom" fists of money in those years. The bottom line then even if GE generates EPS of $2.00 by 2016, its trailing PE will probably be similar to the other industrial conglomerates like Siemens and ABB which are in the range of 17-20. In other words, it will take another 3 years for GE to reach $40. even with the most optimistic projections. A more realistic price range for GE (assuming all the stars are aligned) is for GE to be in the high 20's or low 30's in 2014. It is unlikely that this "fallen star" will ever regain back its glory days soon! At these present price levels, GE is almost richly valued- a market price of 25-26 would make it richly valued. I'm holding on to my long position of GE which I have accumulated the past 4 years for one reason alone- I'm waiting or hoping against hope for the distribution of a one time large dividend resulting from sale of Comcast and dividend distribution from the finance company. I wouldn't hold my breath on it I am itching to sell and forget the whole story of GE! My other hesitation of course is the rich dividend payout which is in excess of 4% for my position.
    Jun 28, 2013. 05:03 PM | 1 Like Like |Link to Comment
  • Should Bank Of America Still Be Part Of Your Portfolio? [View article]
    The fact that Bank of America turned down an offer by AIG the other day to renegotiate the settlement bodes well for BAC long holders. Such a rejection to negotiate I am sure is not taken lightly. A rejection by the judge of the settlement may mean Chapter 11 considerations for Bank of America. The attorneys and management are probably extremely confident that the judge will uphold the settlement. There could be a short squeeze when the decision finally comes down
    Jun 28, 2013. 01:01 PM | Likes Like |Link to Comment
  • The speculative phase of the rally in Japanese stocks is over, says Deutsche, setting up the next leg which will require the participation of domestic investors. Yes, underweight global equity funds may help, but they've already boosted stakes and have just $2T in assets compared to $9T of Japanese household cash. DXJ +3.1%, EWJ +2.3%[View news story]
    There is still money to be made then in Japan. All the ETF funds were mid-way between the 52 week highs and lows just a few days ago. The participation of domestic investors specially institutional and pension funds is really a given. Japan never implements any major earth shaking policy without getting the consensus of all the important institutions and entities.
    Jun 18, 2013. 02:13 PM | Likes Like |Link to Comment
  • Intel Has The Potential To Double By The End Of 2015 [View article]
    Double down with 65.65 trailing P/E ? A misstep like having Apple or Samsung switching out to another chip supplier like Intel for their smart phone models will devastate the stock.

    The risk-reward ratios at these price levels for ARMH are just too skewered against an investor with such P/E ratios, trailing or forward.
    Jun 17, 2013. 06:33 PM | 3 Likes Like |Link to Comment