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  • Raising My Price Target To $39.42 On Intel  [View article]

    "Why would I follow the recommendation of some random guy on Seeking Alpha when the insiders are clearly on the other side of the trade?"

    These insiders don't have stock they have options. The difference is that options have a sunset date. The insiders have to make their profit before that date occurs or they completely lose it. This will cause some of them to trade earlier than they otherwise might.
    Jul 17, 2014. 04:07 PM | Likes Like |Link to Comment
  • Will Linn Energy Benefit From The Deal With Devon?  [View article]
    "If it takes 6 months to close the transaction that is going to be $60 million."

    No, They are not going to pay for the Devon property until the transaction closes (in the third quarter). The April 1 effective date will result in a lot of purchase price adjustments that relate to production, operating costs, taxes, etc. But there will be no adjustment for interest. I would think this would work to Linn's advantage and encourage Devon to close quickly.
    Jul 14, 2014. 05:35 PM | Likes Like |Link to Comment
  • Will Linn Energy Benefit From The Deal With Devon?  [View article]
    "I assume they are paying interest on the $2.3B until they can complete the trade."

    Normally in this type of transaction a deposit of maybe 10% is paid up front - upon signing the agreement (June 30). The bulk of the funds would be remitted at the closing date (sometime in the third quarter). The retroactivity to April 1 would not effect the amount of debt outstanding. Linn has been very clear that they have secured commitments for financing, they haven't had to actually borrow the money yet. At this point they haven't borrowed anything other than the deposit.
    Jul 14, 2014. 05:25 PM | 1 Like Like |Link to Comment
  • Conflicts Of Interest: The Manager Got Your Money  [View article]
    "would have been great if you added ARR, NLY, and CIM to this"

    Three companies where the red on the chart has already translated to red in the investment returns.
    Jul 9, 2014. 02:54 PM | 1 Like Like |Link to Comment
  • Linn Energy: Where Are The Naysayers Now?  [View article]
    "If there weren't ever any accounting issues, why did change they (sic) way they disclose DCF calculations"

    The implication of your comment is that there were accounting issues and that the change in disclosure proves it. You've been singing this song for months but your melody is out-of-tune. The SEC did not require accounting changes, and probably only suggested areas where LINE should consider disclosure changes. The SEC suggesting disclosure changes is a very common occurrence and happens in almost every Proxy statement that involves a substantive merger or acquisition.

    In fact, accounting and disclosure are two completely different things. Companies change their disclosure all the time, but a change in accounting is a far rarer occurrence and deserves attention when it happens.
    Jul 3, 2014. 05:05 PM | 3 Likes Like |Link to Comment
  • Intel: A Big Announcement May Come Soon  [View article]
    "Intel shares are at their highest point"

    That's why its dumb to start buying now.

    "ANY shares bought bought back in recent years would be at a decent price"

    In fact Intel cut back repurchases dramatically from 191 million shares in 2012 to 94 million in 2013. It was exactly the wrong time to cut back as they missed the lows. This is typical of the kind of screw-ups that companies make with stock repurchases. They recap their repurchase activities in Item 5 of the 10K, so it's easy to see.

    "cash flow DECLINED heavily in the most recent quarter"

    Bill, I don't get your point? In your comment just above you talk about cash increasing - now you're talking about it decreasing? The 1Q decrease in funds from Operations is almost all buried in "Other assets and liabilities" (primarily income taxes) and Accounts Payable. I don't think those are substantive. I don't care either way. If the Company has excess cash they shouldn't blow it on repurchases at this time. If they want to distribute it somehow to shareholders (which I think is a mistake), the only thing that makes sense is a special distribution.
    Jun 25, 2014. 02:24 PM | 1 Like Like |Link to Comment
  • Intel: A Big Announcement May Come Soon  [View article]
    I don't agree that a buyback is better than holding cash on the balance sheet. Buybacks have consistently been shown to be losing propositions. Intel's experience is not as bad as most but it certainly hasn't bought back shares at the right time in the past few years.

    If a company has excess cash it should increase dividends. I don't deny that Intel has had a modest improvement in cash flow. However that increase in cash flow cannot be ascribed to long term sources. That would suggest that any additional payout should be in the form of a special dividend.
    Jun 24, 2014. 05:00 PM | 1 Like Like |Link to Comment
  • Never Pay Someone To Actively Manage Your Portfolio  [View article]
    "the Cat won the contest... These results support the idea that share prices move completely at random"

    I liked your article but I need to point out that the conclusion above is not supported by the contest results.

    This type of contest has been done many times academically by comparing a managed portfolio against a portfolio constructed with a simple dartboard, instead of a cat throwing a toy mouse. The dartboard portfolios usually win but it's not the result of random selection.

    Managed portfolios, and major indices like the S&P 500, are constructed with an eye on the weighted market value (size) of each company component. A big company is considered as a bigger part of the stock market and is a much larger part of the normal index than a small company. Accordingly a dartboard portfolio has a much larger emphasis on small companies than the usual managed portfolio or the unmanaged index.

    So, it's not randomness that improves the portfolio it's the emphasis on small companies. This conclusion is supported by academic studies that show, over extended periods of time, that unweighted indices do better than size weighted indices (with greater volatility). There's a certain inherent logic in this conclusion because large companies simply can't have as much growth potential as small companies.
    Jun 23, 2014. 05:36 PM | 1 Like Like |Link to Comment
  • Intel: A Big Announcement May Come Soon  [View article]
    "if Intel stops the buyback completely, you're going to start dinging EPS by a couple pennies a year probably."

    You've made this point several times. It's not a good reason for a buyback. All it says is that management is overpaid with respect to stock compensation.

    Buybacks have been shown repeatedly in academic studies to be a poor use of excess cash. At first glance, the theory is good in that the investor is supposedly getting a tax-advantaged return of capital. This is offset by two things. First, the timing of buybacks is historically terrible; and, second, the main beneficiaries of buybacks are management holders of stock options. Stock option holders get an increase in the value of their option shares while their option price is unchanged. This second feature, in fact, creates a moral issue as those option holders are the ones who decide whether to do a buyback or not. It's an easy way for them to get a hidden compensation increase with no management effort.

    I personally believe that Intel should not increase the dividend or buyback at this time. R&D requirements continue to be at very high levels and it's too easy to ascribe the improved financials to short term events, i.e. the phase out of support for XP.
    Jun 23, 2014. 04:26 PM | 3 Likes Like |Link to Comment
  • Fadel Gheit: Lift Oil Export Ban, Free Domestic Profits And Defeat Russia  [View article]
    "Fadel Gheit knows how to thwart Russia's aggressive tendencies and encourage domestic oil and gas production: Lift the ban on oil exports."

    Unfortunately there is no valuable investment information in this knowledge. Everyone knows lifting the ban would be bad for Russia. The valuable information would be insight as to action towards lifting the ban. My guess is that an administration so paralyzed on energy policy that it can't approve the Keystone Pipeline could never approve lifting a ban on oil exports.
    May 19, 2014. 04:59 PM | Likes Like |Link to Comment
  • Micron: Buy Hard And Hold Through Earnings  [View article]
    ISOs, when used, do go to Upper mgmt, but they are rarely used because they are so limited in the amount you can grant. Most upper mgmt stock options are, by far, NQSOs. The Money Magazine quote is accurate a far as it goes, but it mislead you to conclude that most Upper management stock options are ISOs as opposed to just concluding that most ISOs are to upper management. The correct statement is simply that most (and for many companies - all) upper management stock options are NQSOs.

    "The amount of options granted to the upper management far exceeds the amount of options granted to lower level employees, on an individual basis".

    Apr 3, 2014. 01:23 AM | Likes Like |Link to Comment
  • Micron: Buy Hard And Hold Through Earnings  [View article]
    "In most cases, Incentive Stock Options provide more favorable tax treatment than Nonqualified Stock Options.

    Executives get the ISO type of options."

    This is not correct. ISOs do provide more favorable tax treatment but they are severely limited in the amount a company can grant. As a result almost all Officer and Director option grants are NQSOs.
    Apr 1, 2014. 12:41 PM | 1 Like Like |Link to Comment
  • Micron: Buy Hard And Hold Through Earnings  [View article]
    "early exercising could be construed as bullish in that the option holder could pay less tax by exercising early, particularly if he intended to hold the shares long term and expected the stock price to rise."

    This looks like a real stretch to me. The recent Form 4s clearly show sales immediately after the option exercises. I didn't check to see if the officers exercised before they had to, but they definitely didn't hold the shares.
    Mar 31, 2014. 09:43 PM | Likes Like |Link to Comment
  • The Great Squeeze Play  [View article]
    Thanks, Zeldan. It's also interesting to note that the Median Household Income is "Real", i.e. inflation adjusted, while the Corporate Profits are not inflation adjusted. This is a very misleading chart.
    Feb 5, 2014. 09:00 PM | Likes Like |Link to Comment
  • How Could Intel Miss The Mobile Chip Business?  [View article]
    "Later this year Intel will ... pull even with Qualcomm in LTE after the release of the Intel XMM 7260 multiband LTE chip."

    Oh, I wish this were true...but I really doubt it.
    Jan 20, 2014. 09:38 PM | Likes Like |Link to Comment