donzelion

Alcoa's Dividend Is at Risk - Cramer

Funny, I just read the Wikipedia article on aluminum/aluminium. Hard to believe that back in the 19th century, aluminum was worth more than gold for a time.

I like Alcoa, and have been dollar cost averaging into a modest position for several months. No one seems likely to replace aluminum for its primary uses any time soon, and I buy the long-term story on commodities to some extent. My greatest uncertainty involves Alcoa's pension: if the pension fund needs to be replenished, that should drain earnings for years to come, regardless as to how well aluminum does or how productive/efficiently the company operates.

There are several other miners I've also bought recently - once they fall below their 1996-98 valuations, build up a 10-year record of reasonable dividends, and manage their debts appropriately in this industry, I'm game.

Birinyi: New Dow Companies?

"we should do away with 10Qs and 10Ks altogether and public companies should just make their general ledger public at market close every day..."

Cute idea...hmmm, that sort of "transparency" wouldn't work unless you could strike the bulk of the important stuff off the ledgers (nothing about anticipated long-term receivables, firm v. probable orders, very very certain debts v pretty certain but not totally sure v. "never gonna repay but he looked swell on paper" debts, etc.).

All of those things working out as subjective expectations (hopes). Depending on how one looks at it, a corporation is little more than a network of relationships intended to convert hope into cash flow. The problem with too many media outlets is that they get the "hope" portion of the story, and overlook the fact that "conversion" is a tricky bit of alchemy. The team doesn't win just because it has the most enthusiastic cheerleaders.

Companies Facing Pension Deficits and EPS Impact

The conspiracy of silence regarding pensions is amazing.

Although social security is orders of magnitude more secure than the majority of the pensions or 401k structures out there, legions of Americans have been told that the collapse of social security was imminent (while the public/private pension schemes have actually started to collapse).

I suspect the reasons involve the fact that so many in the financial services industry make so much money managing pensions without adding any real value. Like parasites, they drain the pensions before a pensioner ever receives a dime...then they blame others when the pension falls short, and beg for a bail out.

What to Buy and Why: Barron's 2009 Roundtable, Part III

Faber's tech picks look a lot like several recent buys.

MSFT and INTC remain dominant, and the main question isn't who will unseat them, but rather how much they'll profit from their dominance. It may take years for them to earn returns, but they'll survive the downturn and pay a dividend that beats treasuries (and many bonds) in the interim - sounds like a good deal to me.

Earnings Season: Separating the Wheat from the Chaff

"Earnings season is here, and it’s clear that there remains a lot of bad news in the pipeline."

Perhaps, but for an investor, isn'tt the real question, "to what extent is the news - good or bad - already incorporated in the price?"