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Lake Investor

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  • Buy Verizon: Significant Upside And Dividend Growth [View article]
    I am long VOD but am not willing to do an invest and forget it scenario with this stock. I'd rather pick a General Mills, XOM or Coke for that.

    The cellular business is extremely leveraged. Telefonica, Vodafone, AT&T, Verizon. All have tons of leverage. What happens if rates spike? Are they able to manage maturing debt issues?

    What is their sensitivity to rate increases? I'd love to see an article analyzing the stress to their bottom lines from increasing debt service costs.
    Dec 10, 2012. 04:34 PM | 2 Likes Like |Link to Comment
  • Buy Verizon: Significant Upside And Dividend Growth [View article]
    I think VOD owns 45% of Verizon Wireless--not VZ itself. Still I agree with your conclusion and am long VOD. Many of the author's points are a reason to own VOD.
    Dec 10, 2012. 04:31 PM | 1 Like Like |Link to Comment
  • Calendar Q4 iPad estimates need to come down, argues Mizuho's Abhey Lamba, in a note that may have contributed to the Apple (AAPL -1.2%) selloff. Citing "lackluster demand" for the regular iPad as the Mini cannibalizes sales, Lamba is forecasting FQ1 iPad sales of 20M and revenue "slightly below $10B" vs. a consensus of 25M and $11B. He also thinks H-P's (HPQ) Jan. quarter PC sales forecasts could be too high by $1B, and Dell's (DELL) FY14 PC forecasts by $3B. (IDC tablet forecast[View news story]
    I just bought the new ipd4. Love retina display and Siri. Anecdotally, support staff in my law office are buying minis for their grand kids for Christmas.

    Don't think I have heard someone say they plan to buy a kindle fire in a long time. Walk down n aile of a plane and what do you see? Apple tablets
    Dec 8, 2012. 12:23 AM | 2 Likes Like |Link to Comment
  • A partnership of Imperial Oil (IMO), Exxon Mobil (XOM) and BP could file for regulatory approval to restart exploration drilling in the Canadian Arctic - estimated to hold 90B barrels of recoverable oil - as early as summer 2013, the Northwest Territories industry minister says. IMO takes a more cautious line, saying it's not yet at the point of confirming a timetable. [View news story]
    Good news. They'll probably end up sucking the oil out of the Arctic National Reserve. The Canucks can reap all the tax benefit and then they'll mark it up and sell it to us. Oh well, if your government is too stupid to profit from an easy deal at least you can vote with your own $$ and profit by owning Exxon.
    Dec 6, 2012. 04:59 PM | 2 Likes Like |Link to Comment
  • "When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years," says Apple (AAPL) CEO Tim Cook in a TV interview. "It's an area of intense interest, I can't say more than that." Other news from the chat is his announcement one of the existing Mac lines will be manufactured exclusively in the U.S. next year. [View news story]
    That's quite a large step away from their core competency. So far Apple makes nifty devices. On a smaller scale they are a distributor of content but not a creator. I think you try to become too big and do too many things you end up alienating yourself. I wouldn't want to see them stretch in that manner. It would be a misallocation of capital.

    If the focus is on a device that masters interactive entertainment that might be OK. I want them to stay away from content creation.
    Dec 6, 2012. 11:49 AM | 2 Likes Like |Link to Comment
  • Nigeria, Africa's top oil producer, is in talks with Shell (RDS.A, RDS.B), Exxon Mobil (XOM) and other energy producers to reach an agreement on taxes that would increase the country’s share of profits from oil pumped off its shores. The government claims extraction laws are based on $20 crude and unrealistic at today's prices; the companies warn against driving away investment. [View news story]
    Who are the thieves? Oil companies or those stealing from them?

    I'm getting a little weary of the problems big oil has with tinpot dictators. Venezuela, Nigeria, Russia, Brazil--no one keeps their promises and they all want to come back and renegotiate deals once capital investments are made. Tough row to hoe. I have started to focus more on domestic plays. You have to be real careful to avoid being taken by these countries. One thing is for sure, our President will not stand up for US investors and pension funds when their investments are raided by these tinpot dictators.
    Dec 4, 2012. 05:53 PM | Likes Like |Link to Comment
  • More on Intel's (INTC +2.3%) debt offering: Intel states in a prospectus it will offer a mixture of 5, 10, 20, and 30-year notes. To no one's surprise, the yields Intel are offering are pretty low: they range from 80-150 bps above what treasuries of similar maturity are yielding. Moody's rates the debt A1, and S&P A+. [View news story]
    I like that they are staggering maturities and taking advantage of some long-term financing. The US Government should do the same. I think they should use the proceeds of the maturities at ten years or shorter to retire shares if they can do so at or nearly current stock prices.
    Dec 4, 2012. 05:11 PM | Likes Like |Link to Comment
  • Analyzing Coca-Cola's Debt And Risk [View article]
    Article really omitted some important facts as noted by other commenters. A number of years ago I represented a coke bottler and it was a very lucrative business then. I doubt there's any better qualified to analyze an investment in that business than KO itself.
    Dec 4, 2012. 12:04 PM | 1 Like Like |Link to Comment
  • 3 Reasons Why I Think Apple Is Going To Increase Its Payout Next Quarter [View article]
    I think they should use the cash to purchase some other assets that are more inflation resistant--preferably jurisdictions that have low or no capital gains taxes. Need to preserve value of that asset. Buying some plants may make sense for them. Are there any materials Apple needs to hedge? What markets do they move?

    I want Tim Cook to lobby for repatriation breaks as a means to make investment in US more likely. Otherwise, $$ stranded overseas are likely to be invested there. Current tax policy is very counterproductive.
    Dec 3, 2012. 05:34 PM | Likes Like |Link to Comment
  • The Unbridled Truth About Dividend Contribution To Shareholder Profitability [View article]
    I agree with your point that dividends are not free.

    I invest primarily (almost exclusively) in dividend paying stocks. I think dividends are useful because they focus management--I don't want a safety net they can burn through. I want them thinking about shareholders. Even good businessmen find it hard to master more than one business. Eventually, successful businesses will generate more cash than can be profitably deployed in the existing business. If new investments don't pass a high bar and would result in lowering ROE, I would rather they pay the money out as dividends.

    I would rather manage the diversification. If you can't profitably invest cash in existing business, give it to me and I'll invest it. When managers get too into diversification, they end up not being to manage disparate business lines. If their interest is merely growing the size of their "kingdom" they will make bad investments with cash generated by their kingdom.

    That in my mind is the primary benefit of a sound dividend policy.
    Nov 28, 2012. 04:50 PM | 4 Likes Like |Link to Comment
  • Apple (AAPL) has fired the manager behind the mapping software which put a cloud over the iPhone 5 release, reports Bloomberg. Maps manager Richard Williamson was let go by Senior VP Eddy Cue, who recently was put in charge of Maps and Siri amidst a management shakeup that saw the departure of iOS chief Scott Forstall. [View news story]
    My experience too--good product. Keep eyeballs in-house. Move had to be made. I like that Tim Johnson appears to be decisive. Long Apple and recently added more.
    Nov 27, 2012. 01:55 PM | 2 Likes Like |Link to Comment
  • Apple (AAPL +3.2%) roundup: 1) iPhone 5 shipping times have dropped to just 1 week after falling to 2 weeks a few days ago. 2) Apple has bought the trademark for "Lightning" from Harley-Davidson (HOG). 3) Apple, which has made clear its interest in lowering its dependence on Samsung, has reportedly dropped Samsung as an iPad/MacBook battery supplier in favor of Chinese firms Amperex and Tianjin Lishen. [View news story]
    Already dropped them on many displays. Haven't done it on processors yet but it is only a matter of time. Apple has protected itself contractually.

    Samsung will lose this business. Still, at the end of the day when the legal shoes drop and Samsung pays up it still may have been worth the cost (legal damages and lost business on components from Apple) if their theft allowed them to get a firm foothold in the top end smart phone business.
    Nov 26, 2012. 05:51 PM | Likes Like |Link to Comment
  • The Real False God Of Dividends [View article]
    I agree that over emphasis on cash flow is wrongheaded and may lead one to miss pending dividend cuts and price crashes. Everything goes backs to profits eventually.

    On the flip side, I like the discipline that is brought to bear on managers by regular dividend payments. I hate it when CEOs accumulate cash and then waste it on wild diversifications. A good CEO is humble enough to know he can only manage so many irons in the fire. He may be great in one field but if the incremental returns to investing in that field diminish he should return the excess capital to shareholders rather than try to prove he can master another universe.
    Nov 20, 2012. 12:05 PM | 3 Likes Like |Link to Comment
  • Apple's Patently Profitable Portfolio [View article]
    If that article is close to accurate Samsung is going to have serious problems and the verdict will only be the tip of the iceberg on compensation that will be due Apple as every Galaxy sale probably adds to damages. Apple is being patient in seeing this process through but I think this ends badly for Samsung. I wish someone more tech savvy could quantify the impact on Samsung's sales and potential damages to Apple if the California jury verdict is upheld.
    Nov 15, 2012. 05:30 PM | Likes Like |Link to Comment
  • 8 Reasons The iPad Mini Launch Should Have Failed [View article]
    The mini will be a home run. I love my ipad 2 and am in the market for a new one. When I went to the apple store and picked up the mini I was blown away. It is so light and weighs just a fraction of the old ipad. I'm 54 and use readers so I appreciate bigger screens but I am torn at the moment and can't decide between the new ipad 4 and the mini.

    Apple greatly expanded the ipod line by going smaller. They're doing it again with the ipad and their macbooks/macbook airs. They just get it.
    Nov 15, 2012. 12:07 PM | 2 Likes Like |Link to Comment