Patrick Garot's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/318576/comments http://seekingalpha.com/article/154178-the-myth-of-abercrombie-fitch?source=feed#comment-637534 637534 Thu, 20 Aug 2009 04:06:34 -0400 http://seekingalpha.com/article/131003-gatorade-should-sue-itself?source=feed#comment-465516 465516 Thu, 16 Apr 2009 14:22:20 -0400 http://seekingalpha.com/article/122331-13-safe-stocks-in-a-return-to-the-1970s?source=feed#comment-455528 455528
When I penned this column, most of these stocks were at lower levels. I still like the set-ups around most of them. For TGT (was at $27, now at $34), I would sell all of my position. For AAPL (was at $90, dipped to $83-$85, now at $115), I would sell most (80%) of the position.

Still like PBR and POT and think that there's some room to run in the next 2-3 months for these.

Kroger (KR) is dead money, but reasonably safe at today's $20. Disney (DIS) and Nike (NKE) briefly hit my target prices, and I would sell most of those positions today, but at least half.

Best -- pg]]> Tue, 07 Apr 2009 20:05:23 -0400
When I penned this column, most of these stocks were at lower levels. I still like the set-ups around most of them. For TGT (was at $27, now at $34), I would sell all of my position. For AAPL (was at $90, dipped to $83-$85, now at $115), I would sell most (80%) of the position.

Still like PBR and POT and think that there's some room to run in the next 2-3 months for these.

Kroger (KR) is dead money, but reasonably safe at today's $20. Disney (DIS) and Nike (NKE) briefly hit my target prices, and I would sell most of those positions today, but at least half.

Best -- pg]]> http://seekingalpha.com/article/124063-five-predictions-for-this-market?source=feed#comment-455520 455520
When I wrote this, GE was at $6.50. It closed today (April 7, 2009) at $10.65. I suggest that whoever might have followed this advice sell most of their GE and book their 63% gains right now.

Likewise, Disney, Costco, Intel, Nike, and UPS were near lows.
DIS at $16.50, COST at $40, INTC at $12.75, NKE at $42.55 and UPS at $40.65.
They are now DIS at $19.12, COST $46.39, INTC at $15.50, NKE at $50, and UPS at $51.50.
I would harvest half the gains in DIS, COST, and INTC. NKE I would sell about a third of the position. UPS I would sell all.
Best -- pg

]]> Tue, 07 Apr 2009 19:58:42 -0400
When I wrote this, GE was at $6.50. It closed today (April 7, 2009) at $10.65. I suggest that whoever might have followed this advice sell most of their GE and book their 63% gains right now.

Likewise, Disney, Costco, Intel, Nike, and UPS were near lows.
DIS at $16.50, COST at $40, INTC at $12.75, NKE at $42.55 and UPS at $40.65.
They are now DIS at $19.12, COST $46.39, INTC at $15.50, NKE at $50, and UPS at $51.50.
I would harvest half the gains in DIS, COST, and INTC. NKE I would sell about a third of the position. UPS I would sell all.
Best -- pg

]]> http://seekingalpha.com/article/124870-repaying-tarp-life-for-usb-and-ntrs?source=feed#comment-455455 455455
When I wrote this, USB was at $9. It closed today (April 7, 2009) at $14.42. I suggest that whoever may have followed this advice sell most of their USB and book their 69% gains right now.

When I wrote this, NTRS was at $48. It went up from there to the mid-60s, and closed today (April 7, 2009) at $57. I suggest that whoever might have followed this advice sell at least half of their NTRS and book their 19% (or greater) gains right now.
]]> Tue, 07 Apr 2009 18:17:32 -0400
When I wrote this, USB was at $9. It closed today (April 7, 2009) at $14.42. I suggest that whoever may have followed this advice sell most of their USB and book their 69% gains right now.

When I wrote this, NTRS was at $48. It went up from there to the mid-60s, and closed today (April 7, 2009) at $57. I suggest that whoever might have followed this advice sell at least half of their NTRS and book their 19% (or greater) gains right now.
]]> http://seekingalpha.com/article/129349-general-growth-properties-a-speculative-play-with-favorable-risk-reward?source=feed#comment-455453 455453 It closed today (April 7, 2009) at $1.05.
I suggest that whoever might have followed this advice sell most of their GGP and book their 69% gains right now.]]> Tue, 07 Apr 2009 18:14:07 -0400 It closed today (April 7, 2009) at $1.05.
I suggest that whoever might have followed this advice sell most of their GGP and book their 69% gains right now.]]> http://seekingalpha.com/article/128022-china-why-it-can-t-be-a-global-leader?source=feed#comment-441771 441771 Thu, 26 Mar 2009 22:41:29 -0400 http://seekingalpha.com/article/128022-china-why-it-can-t-be-a-global-leader?source=feed#comment-441768 441768
Great comments, thanks! A few culpas first: sorry about the distorted chart, don't know why that didn't work; also, my title was "Why China Can't Lead (today)", not "China: why it can't be a global leader" (this header wasn't mine but SA's).

Look, I own both the FXI and EEM. China, India et al are great 25 year plays; huge markets, expanding, etc. My question was, who's the leadership today? And despite what I see on SA, often downbeat on USA prospects, my answer still comes up with the US as the lever to move the world economy forward.

2 cool comments -- from dybyx and User3837... -- had me consider if "leadership" was conceptually valid anymore, if any one nation's "leadership" can drive the world forward anymore, and whether that "drive" was even necessary.

I have to conclude yes, leadership as a mantle is valid. In any setting there is one leader or at least a moderator; this is millennia of human socialization talking, not me. And yes, the "drive" of leadership is still necessary, since drive yields benefits that accrue to the whole world. Which we can short-hand "innovation".

Innovation takes curiosity, faith, creativity, spirit. It flourishes under rule of law, and maybe even classic liberalism (freedom to say, do and explore), and further possibly capitalism.

And just for these plus the other reasons I cited, China is not ready to assume a leadership role.

I've worked with China weekly, if not daily, for the past three years. The export-oriented factories that I've dealt with are at 50% utilization now (rather than 100%+ twelve months ago), so a lot of migrants now have to move back to the interior, and subsistence lives.

China is going to be an exciting place, we can all agree. But China still needs to get itself right, before leading.

One example of this: many SA posters, and US media and politicos, like to mention the USA's "crumbling infrastructure". If the US's infra is crumbling, most of the EEM nations' infra is "crumbled" or more often just non-existent.

Not to mention politics, the press, the environment, the fact that 40% of the population works in agriculture. The list goes on.

The headline was not mine, and it's wrong. China is already a world leader: hey, it made everything that I'm using to write this.

Well, it made everything except my mind, and my thoughts, that is. Think I'd feel comfortable writing this post, and thinking these thoughts, if I were a PRC citizen?

Best to all -- pg]]> Thu, 26 Mar 2009 22:35:55 -0400
Great comments, thanks! A few culpas first: sorry about the distorted chart, don't know why that didn't work; also, my title was "Why China Can't Lead (today)", not "China: why it can't be a global leader" (this header wasn't mine but SA's).

Look, I own both the FXI and EEM. China, India et al are great 25 year plays; huge markets, expanding, etc. My question was, who's the leadership today? And despite what I see on SA, often downbeat on USA prospects, my answer still comes up with the US as the lever to move the world economy forward.

2 cool comments -- from dybyx and User3837... -- had me consider if "leadership" was conceptually valid anymore, if any one nation's "leadership" can drive the world forward anymore, and whether that "drive" was even necessary.

I have to conclude yes, leadership as a mantle is valid. In any setting there is one leader or at least a moderator; this is millennia of human socialization talking, not me. And yes, the "drive" of leadership is still necessary, since drive yields benefits that accrue to the whole world. Which we can short-hand "innovation".

Innovation takes curiosity, faith, creativity, spirit. It flourishes under rule of law, and maybe even classic liberalism (freedom to say, do and explore), and further possibly capitalism.

And just for these plus the other reasons I cited, China is not ready to assume a leadership role.

I've worked with China weekly, if not daily, for the past three years. The export-oriented factories that I've dealt with are at 50% utilization now (rather than 100%+ twelve months ago), so a lot of migrants now have to move back to the interior, and subsistence lives.

China is going to be an exciting place, we can all agree. But China still needs to get itself right, before leading.

One example of this: many SA posters, and US media and politicos, like to mention the USA's "crumbling infrastructure". If the US's infra is crumbling, most of the EEM nations' infra is "crumbled" or more often just non-existent.

Not to mention politics, the press, the environment, the fact that 40% of the population works in agriculture. The list goes on.

The headline was not mine, and it's wrong. China is already a world leader: hey, it made everything that I'm using to write this.

Well, it made everything except my mind, and my thoughts, that is. Think I'd feel comfortable writing this post, and thinking these thoughts, if I were a PRC citizen?

Best to all -- pg]]> http://seekingalpha.com/article/124870-repaying-tarp-life-for-usb-and-ntrs?source=feed#comment-420370 420370 Tue, 10 Mar 2009 10:14:36 -0400 http://seekingalpha.com/article/124761-careless-in-the-cloud-google-accidentally-shares-some-docs?source=feed#comment-419631 419631
My point is while "The Cloud" is the future, it will take years - and billions - for it to deliver on its promise. Consider that Google's "oops" above about data security is even before hackers have begun to test its Cloud.

In this context, MSFT looks cheap right now.]]> Mon, 09 Mar 2009 15:57:29 -0400
My point is while "The Cloud" is the future, it will take years - and billions - for it to deliver on its promise. Consider that Google's "oops" above about data security is even before hackers have begun to test its Cloud.

In this context, MSFT looks cheap right now.]]> http://seekingalpha.com/article/124702-mcdonald-s-still-the-big-mac?source=feed#comment-419592 419592 MCD still a solid stock at current valuations. Forex will hurt them this coming quarter, but I look for huge growth where it counts -- like +5% or more volumes.]]> Mon, 09 Mar 2009 15:31:18 -0400 MCD still a solid stock at current valuations. Forex will hurt them this coming quarter, but I look for huge growth where it counts -- like +5% or more volumes.]]> http://seekingalpha.com/article/124870-repaying-tarp-life-for-usb-and-ntrs?source=feed#comment-419578 419578 Therefore, the "Other" line of the detail Non-Int Income should show $1,185 in 2008, $1,356 in 2007. (While this does not change the article's underlying premise...) My apologies for the error.

Best regards -- pg]]> Mon, 09 Mar 2009 15:21:02 -0400 Therefore, the "Other" line of the detail Non-Int Income should show $1,185 in 2008, $1,356 in 2007. (While this does not change the article's underlying premise...) My apologies for the error.

Best regards -- pg]]> http://seekingalpha.com/article/124704-whole-foods-market-still-a-premium-stock?source=feed#comment-419424 419424 Mon, 09 Mar 2009 13:35:14 -0400 http://seekingalpha.com/article/124063-five-predictions-for-this-market?source=feed#comment-415470 415470 Hey, User 370791 --

Come on, you completely misquoted me! I don't mind your interpretations of what I said... but don't put them in "quote-marks" as if I said them.

FYI, I liked Bill Clinton. Voted for him both times. Thought the guy was the smartest guy in the room (before that phrase was popular), and a guy that I would like to know. Not right-wing at all. As a kid, voted for myself in Bush I's election vs. Dukakis (and persuaded several others to vote for me, check the Library of Congress).

Actually I was raised, and always felt I voted ,as a Daley (Chicago) Dem.
That is, a pragmatist. In favor of what works. (or what I thought would work.)

I am sorry my words made this article devolve into a political hate-bash session. I'm all in favor of Obama-- provided he does what makes the whole system work overall. And by "system", I mean the betterment of ALL our citizens first, and then the world.

I would like to pass on to my kids a United States of America to which they can bring their own passions and talents, and prosper.

(And if you have a problem with anyone even saying "United States of America" in a positive sense, then there's a nice walk-up on the Rive Gauche for you -- you'd like it there, I lived that life, too.)

I do not ascribe to an idea that our country is generally wrong, historically inviolate, or otherwise. And if you do, anyone: screw you. Become a student and learn what other "empires" (including Aztec, Sioux, other "native" cultures), with their area's or the known world's most fearsome militaries became, and how they imposed true iron-fisted Will.

Our country is responsible for 80% plus of the inventions that have most benefited all humankind. We have not asked much for it -- no supplicants, just a pittance of profits -- as we have cured diseases, linked families to families, provided a beacon against tyranny. Our benefits list is endless.

(I had a debate with a friend about this. She said she thought that Kenya was more "beautiful" and "pure", since the people there were not "into" capitalism. While living there over 8 months, she contracted a resilient staph infection. I noted, nicely, that they were researchers at Gilead who had spent many hours away from their wives and kids to develop, test and distribute the very pill that cured her. And wasn't that time important to them, and didn't they deserve an extra nice vacation from it? She finally allowed, "well, yes, ummm, yes.")

I am not George Bush first or second. I am not Ronald Reagan, nor am I Bill Clinton or Jimmy Carter or Ford or Lincoln.

I am me, and the closest parallel I offer as to who that is is Patrick Henry. If ever there was a real "liberal", in the true sense, it is Patrick Henry.

So stand up, this Patrick says. Rabble rouse! Assert your God-given rights (yes, "God" is in Jefferson's preamble) to have this dialogue.

Above all, everyone, thank you all for the healthy dialogue.

All the best -- pg

PS: If you look at my "optimistic" post of Feb 24, 2009 "13 Safe Stocks", or my "Paper is Dead"/Santelli Tea Party post, you'll see that I assert that I believe it doesn't matter, as you suggest, what any administration does, it's all about the (American) entrepreneur, who will find a way to succeed regardless. Think we agree on this, kid.

On Mar 06 12:14 AM User 370791 wrote:

> "Obama will constrain American ingenuity, with punitive taxes on
> successful entrepreneurs."
>
> What a load of garbage. Did Gates and Buffet make all their money
> under Bush II? How about Steve Jobs?
>
> Like it or not we cannot have a nation of two classes. Those two
> classes being "rich" and "think they're middle class but really working
> poor." I'm sorry but if someone is going to just "give it all up"
> because of a lousy 3% extra on taxes after the first quarter million
> they are heartily invited to leave the country and not come back.
>
>
> Try Sweeden or Great Britain or France. Maybe Germany or Italy is
> to your liking. Oh, wait, they all have much higher taxes than us.
> And yet, they all have rich people too. How is that possible.
>
>
> I know, those guys only think they are rich. The banks show them
> phony statements every once in a while to humor them.
>
> Final word to the author:
>
> Give it up, guy. McCain lost, Palin is back to her moose hunting.
> The adults are in charge now and, if you don't mind, they are trying
> to correct the market failures that got us to this point.
>
>
> ]]> Fri, 06 Mar 2009 04:13:18 -0500 Hey, User 370791 --

Come on, you completely misquoted me! I don't mind your interpretations of what I said... but don't put them in "quote-marks" as if I said them.

FYI, I liked Bill Clinton. Voted for him both times. Thought the guy was the smartest guy in the room (before that phrase was popular), and a guy that I would like to know. Not right-wing at all. As a kid, voted for myself in Bush I's election vs. Dukakis (and persuaded several others to vote for me, check the Library of Congress).

Actually I was raised, and always felt I voted ,as a Daley (Chicago) Dem.
That is, a pragmatist. In favor of what works. (or what I thought would work.)

I am sorry my words made this article devolve into a political hate-bash session. I'm all in favor of Obama-- provided he does what makes the whole system work overall. And by "system", I mean the betterment of ALL our citizens first, and then the world.

I would like to pass on to my kids a United States of America to which they can bring their own passions and talents, and prosper.

(And if you have a problem with anyone even saying "United States of America" in a positive sense, then there's a nice walk-up on the Rive Gauche for you -- you'd like it there, I lived that life, too.)

I do not ascribe to an idea that our country is generally wrong, historically inviolate, or otherwise. And if you do, anyone: screw you. Become a student and learn what other "empires" (including Aztec, Sioux, other "native" cultures), with their area's or the known world's most fearsome militaries became, and how they imposed true iron-fisted Will.

Our country is responsible for 80% plus of the inventions that have most benefited all humankind. We have not asked much for it -- no supplicants, just a pittance of profits -- as we have cured diseases, linked families to families, provided a beacon against tyranny. Our benefits list is endless.

(I had a debate with a friend about this. She said she thought that Kenya was more "beautiful" and "pure", since the people there were not "into" capitalism. While living there over 8 months, she contracted a resilient staph infection. I noted, nicely, that they were researchers at Gilead who had spent many hours away from their wives and kids to develop, test and distribute the very pill that cured her. And wasn't that time important to them, and didn't they deserve an extra nice vacation from it? She finally allowed, "well, yes, ummm, yes.")

I am not George Bush first or second. I am not Ronald Reagan, nor am I Bill Clinton or Jimmy Carter or Ford or Lincoln.

I am me, and the closest parallel I offer as to who that is is Patrick Henry. If ever there was a real "liberal", in the true sense, it is Patrick Henry.

So stand up, this Patrick says. Rabble rouse! Assert your God-given rights (yes, "God" is in Jefferson's preamble) to have this dialogue.

Above all, everyone, thank you all for the healthy dialogue.

All the best -- pg

PS: If you look at my "optimistic" post of Feb 24, 2009 "13 Safe Stocks", or my "Paper is Dead"/Santelli Tea Party post, you'll see that I assert that I believe it doesn't matter, as you suggest, what any administration does, it's all about the (American) entrepreneur, who will find a way to succeed regardless. Think we agree on this, kid.

On Mar 06 12:14 AM User 370791 wrote:

> "Obama will constrain American ingenuity, with punitive taxes on
> successful entrepreneurs."
>
> What a load of garbage. Did Gates and Buffet make all their money
> under Bush II? How about Steve Jobs?
>
> Like it or not we cannot have a nation of two classes. Those two
> classes being "rich" and "think they're middle class but really working
> poor." I'm sorry but if someone is going to just "give it all up"
> because of a lousy 3% extra on taxes after the first quarter million
> they are heartily invited to leave the country and not come back.
>
>
> Try Sweeden or Great Britain or France. Maybe Germany or Italy is
> to your liking. Oh, wait, they all have much higher taxes than us.
> And yet, they all have rich people too. How is that possible.
>
>
> I know, those guys only think they are rich. The banks show them
> phony statements every once in a while to humor them.
>
> Final word to the author:
>
> Give it up, guy. McCain lost, Palin is back to her moose hunting.
> The adults are in charge now and, if you don't mind, they are trying
> to correct the market failures that got us to this point.
>
>
> ]]> http://seekingalpha.com/article/124063-five-predictions-for-this-market?source=feed#comment-413351 413351 Actually, prudent, I think we agree that:

> "If [the market] does shoot up, it will only be to fall again.
> The current general levels (+/- 25%) are consistent
> with pre-bubbles history and with rational metrics and realistic
> economic expectations. The notion that we shall shoot back to bubble
> levels soon and fast is doubtful.

Absolutely, just expecting a +30% bear market rally in my targets. I'd have liked the market to fall further to cheapen up my list. I'll be on the sidelines until prices are where I want them.

Still, as Karen Finerman is saying as I write this, "there is just so much mis-information in the market right now, that there are stocks that are fabulously mispriced."

PS: I'm not a Dem nor a Rep, caren, russ and curmudgeon. Sorry that my post somehow turned this conversation into a political brawl; it was really not my intention.
Best regards -- pg]]> Wed, 04 Mar 2009 17:15:47 -0500 Actually, prudent, I think we agree that:

> "If [the market] does shoot up, it will only be to fall again.
> The current general levels (+/- 25%) are consistent
> with pre-bubbles history and with rational metrics and realistic
> economic expectations. The notion that we shall shoot back to bubble
> levels soon and fast is doubtful.

Absolutely, just expecting a +30% bear market rally in my targets. I'd have liked the market to fall further to cheapen up my list. I'll be on the sidelines until prices are where I want them.

Still, as Karen Finerman is saying as I write this, "there is just so much mis-information in the market right now, that there are stocks that are fabulously mispriced."

PS: I'm not a Dem nor a Rep, caren, russ and curmudgeon. Sorry that my post somehow turned this conversation into a political brawl; it was really not my intention.
Best regards -- pg]]> http://seekingalpha.com/article/123440-wall-street-s-new-math?source=feed#comment-409544 409544
I know the above is just an aside in a well-written article, but I'd like to offer a counterperspective. Your gut just needs to be supported by fundamental analysis, a back-to-the-basics approach.

I rarely have found my gut wrong. I think a lot of us go wrong when we lose discipline and follow (not our gut but) our head, which gets caught spinning around trend, momentum, other's counsel, etc. Particularly pernicious is our head's being informed by greed, as in watching a stock that has gone up 300%, and you can't believe you missed those "easy profits", so you finally board the train.

Other than that, thanks for the article.]]> Mon, 02 Mar 2009 12:25:01 -0500
I know the above is just an aside in a well-written article, but I'd like to offer a counterperspective. Your gut just needs to be supported by fundamental analysis, a back-to-the-basics approach.

I rarely have found my gut wrong. I think a lot of us go wrong when we lose discipline and follow (not our gut but) our head, which gets caught spinning around trend, momentum, other's counsel, etc. Particularly pernicious is our head's being informed by greed, as in watching a stock that has gone up 300%, and you can't believe you missed those "easy profits", so you finally board the train.

Other than that, thanks for the article.]]> http://seekingalpha.com/article/121940-santelli-s-chicago-tea-party-the-quest-for-our-nation-s-soul?source=feed#comment-404037 404037
"Right Wing" far-extremism tends to take the form of authoritarian rule by the landed gentry, moneyed merchants, corrupted capitalists or whatever the incarnation of Aristotle's "aristocracy" -- per the Attic Greek translation -- is. Visit early Russian Czars for instances.

Contrary, Hitler and Mussolini were men of the people. Fascism and National Socialism (the Nazi Party) were populist movements, wherein the individual, collectively, voluntary succumbed to the State. Hitler and Mussolini began as leftist, populist uprisings in hyper-inflationary environments. This populism was directed against the perceived control of industrialists, large merchants, and (especially but not exclusively in the German case) enterprises thought "Jewish".

(Incidentally, the treatment of Jewish merchants in Britain from the 1500s to 1940s is a fabulous case study to see how even a heroic Magna Carta may be supplanted by both left- and right-wing extremism.)

I agree with you that extremism tends negative for a nation... but I think that's whether it's from the left or the right.

Hitler and Mussolini I put on the "left" (due to populist origins), and Mao I put initially on the left, then moving to just paranoiac crazy. I would put Stalin on the right -- although he was first "elected", he subsequently consolidated rule by disenfranchising all opponents to the point where he became a true Czar, using the authoritarian mechanisms available him at the time.

As a student of history, I suppose my point is, you automatically cannot look left or right for fascism, authoritarianism, or whatever you wish to call it.

Rick Santelli's "rant" is a healthy part of the dialogue that must happen should we wish to remain the United States of America that we grew up in -- without succumbing to a neuvo-McCarthyism that may come from either "right", or the "left".

Thank you to all who posted for your comments,
and Best regards --
Patrick Garot


On Feb 24 10:16 AM Titoman wrote:

> FYI, Hitler and Mussolini were RIGHT-WING fascists. Mao, Stalin
> were left wing communists. Either way, when you are extreme on either
> side, you had terrible leaders that slaughter millions of people.
> Read your history you Santelli sucker.]]> Thu, 26 Feb 2009 04:19:42 -0500
"Right Wing" far-extremism tends to take the form of authoritarian rule by the landed gentry, moneyed merchants, corrupted capitalists or whatever the incarnation of Aristotle's "aristocracy" -- per the Attic Greek translation -- is. Visit early Russian Czars for instances.

Contrary, Hitler and Mussolini were men of the people. Fascism and National Socialism (the Nazi Party) were populist movements, wherein the individual, collectively, voluntary succumbed to the State. Hitler and Mussolini began as leftist, populist uprisings in hyper-inflationary environments. This populism was directed against the perceived control of industrialists, large merchants, and (especially but not exclusively in the German case) enterprises thought "Jewish".

(Incidentally, the treatment of Jewish merchants in Britain from the 1500s to 1940s is a fabulous case study to see how even a heroic Magna Carta may be supplanted by both left- and right-wing extremism.)

I agree with you that extremism tends negative for a nation... but I think that's whether it's from the left or the right.

Hitler and Mussolini I put on the "left" (due to populist origins), and Mao I put initially on the left, then moving to just paranoiac crazy. I would put Stalin on the right -- although he was first "elected", he subsequently consolidated rule by disenfranchising all opponents to the point where he became a true Czar, using the authoritarian mechanisms available him at the time.

As a student of history, I suppose my point is, you automatically cannot look left or right for fascism, authoritarianism, or whatever you wish to call it.

Rick Santelli's "rant" is a healthy part of the dialogue that must happen should we wish to remain the United States of America that we grew up in -- without succumbing to a neuvo-McCarthyism that may come from either "right", or the "left".

Thank you to all who posted for your comments,
and Best regards --
Patrick Garot


On Feb 24 10:16 AM Titoman wrote:

> FYI, Hitler and Mussolini were RIGHT-WING fascists. Mao, Stalin
> were left wing communists. Either way, when you are extreme on either
> side, you had terrible leaders that slaughter millions of people.
> Read your history you Santelli sucker.]]> http://seekingalpha.com/article/121940-santelli-s-chicago-tea-party-the-quest-for-our-nation-s-soul?source=feed#comment-400206 400206
Thanks for your comments. Let me share what prompted me to write the original Nov 2008 Paper Is Dead post.

In August 2008, I picked up work for a small estate for one client's in-laws. The estate had $200K paper-value in GM Senior Secured bonds as its largest asset; the bonds' market value was 60, or $120K.

Clearly GM was losing liquidity in August. I started inquiring if GM had made outreach to Senior Secured bondholders; could not find any. By November, GM was speaking to the Gov... and still had not engaged bondholders in dialogue.

Fast forward to now, the Gov has passed laws on loans it's made to GM. Gov has put its (and taxpayer) interests ahead of bondholders. So-so for taxpayers. NOT good for bondholders... who were promised the procedural "calls" on GM's assets that you cite (senior secured, sub-o, etc.)

With the loans to GM that the Gov made, a new sheriff is in town, the Gov -- with its infinite resources and nothing but time. Government has changed the rules, so distorting any "orderly liquidation process".

Paper Is Dead because the Govt is changing the rules -- literally the LAW -- to suit its perception of developing situations. Absent consistent application of civil law and procedural order, the contracted agreements on that paper are not civil nor orderly.

They are only promises. If we are setting up a world where investors cannot trust that our courts will uphold these promises, investors will not invest in them.

I earnest believe that we need to turn this ship around, and make Paper mean something.

Best regards -- Patrick Garot

ps: Thanks to all for your comments.


On Feb 23 12:28 PM raytayzmd wrote:

> ...paper is NOT dead...paper is a simple contractual agreement...failure
> to live up to the contract has civil consequences...if you hold senior
> debt then you get first call on the assets, next comes subordinated
> debt, etc, etc...if there is a problem then it is one of clarity
> -- if GM says it has a billion in assets, it's important to the bondholders
> that those assets are in fact really worth a billion...unfortunatel...
> on any given day, S&P and Fitch and the other ratings agencies
> can't seem to make up their minds what those assets are worth...and
> that makes it pretty darn hard to value the bonds.]]> Mon, 23 Feb 2009 13:24:34 -0500
Thanks for your comments. Let me share what prompted me to write the original Nov 2008 Paper Is Dead post.

In August 2008, I picked up work for a small estate for one client's in-laws. The estate had $200K paper-value in GM Senior Secured bonds as its largest asset; the bonds' market value was 60, or $120K.

Clearly GM was losing liquidity in August. I started inquiring if GM had made outreach to Senior Secured bondholders; could not find any. By November, GM was speaking to the Gov... and still had not engaged bondholders in dialogue.

Fast forward to now, the Gov has passed laws on loans it's made to GM. Gov has put its (and taxpayer) interests ahead of bondholders. So-so for taxpayers. NOT good for bondholders... who were promised the procedural "calls" on GM's assets that you cite (senior secured, sub-o, etc.)

With the loans to GM that the Gov made, a new sheriff is in town, the Gov -- with its infinite resources and nothing but time. Government has changed the rules, so distorting any "orderly liquidation process".

Paper Is Dead because the Govt is changing the rules -- literally the LAW -- to suit its perception of developing situations. Absent consistent application of civil law and procedural order, the contracted agreements on that paper are not civil nor orderly.

They are only promises. If we are setting up a world where investors cannot trust that our courts will uphold these promises, investors will not invest in them.

I earnest believe that we need to turn this ship around, and make Paper mean something.

Best regards -- Patrick Garot

ps: Thanks to all for your comments.


On Feb 23 12:28 PM raytayzmd wrote:

> ...paper is NOT dead...paper is a simple contractual agreement...failure
> to live up to the contract has civil consequences...if you hold senior
> debt then you get first call on the assets, next comes subordinated
> debt, etc, etc...if there is a problem then it is one of clarity
> -- if GM says it has a billion in assets, it's important to the bondholders
> that those assets are in fact really worth a billion...unfortunatel...
> on any given day, S&P and Fitch and the other ratings agencies
> can't seem to make up their minds what those assets are worth...and
> that makes it pretty darn hard to value the bonds.]]> http://seekingalpha.com/article/113133-kraft-foods-time-to-put-this-cash-cow-out-to-pasture?source=feed#comment-397283 397283 Fri, 20 Feb 2009 20:02:31 -0500 http://seekingalpha.com/article/120128-abercrombie-q4-eps-smoke-and-mirrors?source=feed#comment-388527 388527
Also, my changes in cash is right on for year 2008- 2009... couldn't be more accurate unless I were ANF mgmt. Re EPS, note my ests were closer ($0.63 ps GAAP vs $0.79 actual, and $1.04 "Headline" vs. $1.10 actual) than the Street's $1.00 ps. GAAP.

Look, a full year where cash+investmts rises $103mm, but debt rises $100mm, (ie, net-net up only $3mm) w/ only $80mm in share repurch is a bad year. ANF used to have its net-net up $200mm+ after making $200mm+ in buybacks. Next year will be tough, too. It's good they're cutting capex to preserve cash, but it's like a lot of things -- easy growth and huge cash flow generation is gone, so adjust perspectives.

As to why I didn't write this after earnings were released, ??? Not sure why wait; further, probably shouldn't since my numbers are more accurate than the Street's, both in "EPS" and "Headline EPS".

I think it's a good short at $22, so I bought some puts yesterday when stock went above $23 (x=$22.50, Feb 09) for pennies. We'll see what we see this week.

Thanks for your input -- pg


On Feb 13 12:12 PM Hbball wrote:

> Cash is only down $8 million or so and the marketable securities
> you keep mentioning are listed at plus $110 million or so.
>
> As for your comments on "continuing weakness in same store sales",
> your own chart shows that SSS have declined by less each month from
> November to January.
>
> Your capex prediction is off by, what, $240 million?
>
> These numbers are only based on my quick scan on their earnings release
> and your article, but I'm not writing actual articles for an investor
> web site. Why don't you write these reports after earnings are released
> instead of immediately before?]]> Sat, 14 Feb 2009 12:48:48 -0500
Also, my changes in cash is right on for year 2008- 2009... couldn't be more accurate unless I were ANF mgmt. Re EPS, note my ests were closer ($0.63 ps GAAP vs $0.79 actual, and $1.04 "Headline" vs. $1.10 actual) than the Street's $1.00 ps. GAAP.

Look, a full year where cash+investmts rises $103mm, but debt rises $100mm, (ie, net-net up only $3mm) w/ only $80mm in share repurch is a bad year. ANF used to have its net-net up $200mm+ after making $200mm+ in buybacks. Next year will be tough, too. It's good they're cutting capex to preserve cash, but it's like a lot of things -- easy growth and huge cash flow generation is gone, so adjust perspectives.

As to why I didn't write this after earnings were released, ??? Not sure why wait; further, probably shouldn't since my numbers are more accurate than the Street's, both in "EPS" and "Headline EPS".

I think it's a good short at $22, so I bought some puts yesterday when stock went above $23 (x=$22.50, Feb 09) for pennies. We'll see what we see this week.

Thanks for your input -- pg


On Feb 13 12:12 PM Hbball wrote:

> Cash is only down $8 million or so and the marketable securities
> you keep mentioning are listed at plus $110 million or so.
>
> As for your comments on "continuing weakness in same store sales",
> your own chart shows that SSS have declined by less each month from
> November to January.
>
> Your capex prediction is off by, what, $240 million?
>
> These numbers are only based on my quick scan on their earnings release
> and your article, but I'm not writing actual articles for an investor
> web site. Why don't you write these reports after earnings are released
> instead of immediately before?]]> http://seekingalpha.com/article/120224-earnings-preview-abercrombie-fitch?source=feed#comment-386560 386560
seekingalpha.com/artic...

don't know why the formatting didn't work out... it will be great to see whether my calls on EPS are close to management's.

Regards, Patrick Garot
]]> Thu, 12 Feb 2009 21:32:32 -0500
seekingalpha.com/artic...

don't know why the formatting didn't work out... it will be great to see whether my calls on EPS are close to management's.

Regards, Patrick Garot
]]> http://seekingalpha.com/article/118716-kraft-earnings-the-hurt-is-organic?source=feed#comment-382528 382528 Nestle has always been a favorite of mine on how they redeploy capital into growth. They "seem to overpay" for acquisitions, but 3 years post-acq, you see payoff in their results. That said, I haven't gone into their balance sheet for years; should I for a future SA article, I will let you know what I find.
Agree with you on KFT's mature-to-declining categories. It's hard to move the needle without dramatic redeployments like Nestle, and KFT's balance sheet doesn't allow much of that.
But KFT still can grow its existing categories. So target +5% annual gains in category consumption, for instance, and maintain or grow Share. Act like the leader, and bruise a few knuckles telling consumers that cheese is better for you than a bag of Doritos.


On Feb 09 07:44 PM foglights wrote:

> Patrick,
>
> I read your commentary with interest because I, too was a Kraft employee,
> having held senior management and strategy positions, albeit north
> of the border. If indeed, you were the architect of organic growth,
> I commend you. It was and is a key metric. You rightly observe
> that the growth numbers in Q4 were tough to say the least. Part
> of the issue in my view is that Kraft has not been successful in
> identifying and participating in categories and trends with staying
> power. Witness Nestle, who has the benefit and strength of having
> driven strategic investments in vibrant, consumer aligned categories.
> It's pretty hard to pull out consistently strong organic growth from
> mature to declining businesses...no matter how brilliant the merchandising
> in drive time periods. I wish I could be more bullish about the
> prognosis for the company and brands. I don't believe they'll be
> able to continue to line-extend and achieve superior sustained growth.
> There needs to be more fundamental change and this is certainly a
> tough environment in which to attempt such a feat.]]> Tue, 10 Feb 2009 12:49:51 -0500 Nestle has always been a favorite of mine on how they redeploy capital into growth. They "seem to overpay" for acquisitions, but 3 years post-acq, you see payoff in their results. That said, I haven't gone into their balance sheet for years; should I for a future SA article, I will let you know what I find.
Agree with you on KFT's mature-to-declining categories. It's hard to move the needle without dramatic redeployments like Nestle, and KFT's balance sheet doesn't allow much of that.
But KFT still can grow its existing categories. So target +5% annual gains in category consumption, for instance, and maintain or grow Share. Act like the leader, and bruise a few knuckles telling consumers that cheese is better for you than a bag of Doritos.


On Feb 09 07:44 PM foglights wrote:

> Patrick,
>
> I read your commentary with interest because I, too was a Kraft employee,
> having held senior management and strategy positions, albeit north
> of the border. If indeed, you were the architect of organic growth,
> I commend you. It was and is a key metric. You rightly observe
> that the growth numbers in Q4 were tough to say the least. Part
> of the issue in my view is that Kraft has not been successful in
> identifying and participating in categories and trends with staying
> power. Witness Nestle, who has the benefit and strength of having
> driven strategic investments in vibrant, consumer aligned categories.
> It's pretty hard to pull out consistently strong organic growth from
> mature to declining businesses...no matter how brilliant the merchandising
> in drive time periods. I wish I could be more bullish about the
> prognosis for the company and brands. I don't believe they'll be
> able to continue to line-extend and achieve superior sustained growth.
> There needs to be more fundamental change and this is certainly a
> tough environment in which to attempt such a feat.]]> http://seekingalpha.com/article/118716-kraft-earnings-the-hurt-is-organic?source=feed#comment-381215 381215
svosavvy, great question. lower input costs are generally great for KFT. the big brands are managed for Share, Gross Margin % and $, Contribution Margin $ (gross margin less marketing/sales), and cash flows. (Sales dollars are an after-thought versus these; sales dollars often go down if input costs go down, unless volumes led by share recapture were so strong they countered a, say, 20% drop in costs and a 10% reduction in sales list prices.)

so holding percentage margins the same, and lowering input costs, means that Kraft can reduce prices. on-shelf, the consumer notices less "price gap" between private label and Kraft products (say, price gap down from 75 cents to 45 cents).

further, the consumer may feel richer in his other grocery purchases in a world of lowering costs, so "trading back up" to a Kraft/Nabisco brand for cookies, mayo or cheese is one of the first luxuries he pursues.

there can be negatives in lowering sales prices due to lower input costs (share moves back up gradually; in the meantime, lower $ in Gross Margin means less marketing A&P $ to spend if you're going to hold "Contribution Margin $").

but since Share is the big banana, and the greatest risk today, if input costs lower, it's time to reignite Field Sales, make smarter but lesser investment in advertising, and regain Share over the next 2 quarters. blame so-so profit results on "aggressive share recapture" and position the brands for Q3-Q4 events.

weird stock at a weird time, $25-27 range is fair value. in a bull run, $30 attainable. in a bear, $22 floor (unless a bad first-half that management doesn't guide appropriately; problem: it didn't guide well for this past Q4).

On Feb 07 09:50 PM svosavvy wrote:

> Thanks author for the article, very informative
>
> In your opinion, How do you feel a potential drop in soft commodities
> would affect kft? In other words cheap corn, soy , milk, etc...
> If the softs were to bottom out say this growing season. Would this
> help like in the instance of low oil helps the crack spread of refiners.
> Would low input costs and possibly a slowing to lower prices on kft's
> part help margins and revs? Crazy question ,but, I wonder if deflation
> and the potential for overproduction of soft commodities won't linger
> a bit in light of massive (inflationary) spending. Thanks]]> Mon, 09 Feb 2009 12:45:17 -0500
svosavvy, great question. lower input costs are generally great for KFT. the big brands are managed for Share, Gross Margin % and $, Contribution Margin $ (gross margin less marketing/sales), and cash flows. (Sales dollars are an after-thought versus these; sales dollars often go down if input costs go down, unless volumes led by share recapture were so strong they countered a, say, 20% drop in costs and a 10% reduction in sales list prices.)

so holding percentage margins the same, and lowering input costs, means that Kraft can reduce prices. on-shelf, the consumer notices less "price gap" between private label and Kraft products (say, price gap down from 75 cents to 45 cents).

further, the consumer may feel richer in his other grocery purchases in a world of lowering costs, so "trading back up" to a Kraft/Nabisco brand for cookies, mayo or cheese is one of the first luxuries he pursues.

there can be negatives in lowering sales prices due to lower input costs (share moves back up gradually; in the meantime, lower $ in Gross Margin means less marketing A&P $ to spend if you're going to hold "Contribution Margin $").

but since Share is the big banana, and the greatest risk today, if input costs lower, it's time to reignite Field Sales, make smarter but lesser investment in advertising, and regain Share over the next 2 quarters. blame so-so profit results on "aggressive share recapture" and position the brands for Q3-Q4 events.

weird stock at a weird time, $25-27 range is fair value. in a bull run, $30 attainable. in a bear, $22 floor (unless a bad first-half that management doesn't guide appropriately; problem: it didn't guide well for this past Q4).

On Feb 07 09:50 PM svosavvy wrote:

> Thanks author for the article, very informative
>
> In your opinion, How do you feel a potential drop in soft commodities
> would affect kft? In other words cheap corn, soy , milk, etc...
> If the softs were to bottom out say this growing season. Would this
> help like in the instance of low oil helps the crack spread of refiners.
> Would low input costs and possibly a slowing to lower prices on kft's
> part help margins and revs? Crazy question ,but, I wonder if deflation
> and the potential for overproduction of soft commodities won't linger
> a bit in light of massive (inflationary) spending. Thanks]]> http://seekingalpha.com/article/59933-a-most-bearish-view-on-bear-stearns-in-a-bear-market?source=feed#comment-377635 377635 Thu, 05 Feb 2009 19:02:45 -0500 http://seekingalpha.com/article/112658-another-big-bank-failure-more-likely-than-not-to-occur?source=feed#comment-377626 377626
That said, I'd love to hear some BULL predictions from Reggie. Any?]]> Thu, 05 Feb 2009 18:57:10 -0500
That said, I'd love to hear some BULL predictions from Reggie. Any?]]> http://seekingalpha.com/article/118689-tax-breaks-for-new-cars-but-not-doctor-bills?source=feed#comment-377464 377464
Examples:

1) The "self-employed health insurance" deduction doesn't help if you work at, say, an auto repair shop where the owners won't pay your insurance... unless you become "self-employed" and make that shop your "client". Then, in most states, your "self-employed" self forfeits unemployment benefits should the shop lay you off.

2) The code that "if you have self-employment income, you can take a deduction for health insurance expenses" also doesn't help if you haven't worked for awhile (laid off, sabbatical, etc.) and don't have any self-employed income in that 12 month tax year.

3) The limits of 7.5% of AGI ensures that for most of us, if your employer moves to a lower-cost, higher-deductible plan (say, from $10 per office visit to $30 per visit) you are out-of-pocket not only that $20 difference, but since you have paid income and employment taxes to earn that $20 extra, even more. ]]> Thu, 05 Feb 2009 16:27:09 -0500
Examples:

1) The "self-employed health insurance" deduction doesn't help if you work at, say, an auto repair shop where the owners won't pay your insurance... unless you become "self-employed" and make that shop your "client". Then, in most states, your "self-employed" self forfeits unemployment benefits should the shop lay you off.

2) The code that "if you have self-employment income, you can take a deduction for health insurance expenses" also doesn't help if you haven't worked for awhile (laid off, sabbatical, etc.) and don't have any self-employed income in that 12 month tax year.

3) The limits of 7.5% of AGI ensures that for most of us, if your employer moves to a lower-cost, higher-deductible plan (say, from $10 per office visit to $30 per visit) you are out-of-pocket not only that $20 difference, but since you have paid income and employment taxes to earn that $20 extra, even more. ]]> http://seekingalpha.com/article/118729-introduction-to-best-portfolio-for-2009?source=feed#comment-377425 377425 Thu, 05 Feb 2009 15:52:20 -0500 http://seekingalpha.com/article/118804-tech-vs-credit-bubble-bursts?source=feed#comment-377421 377421 Thu, 05 Feb 2009 15:49:43 -0500 http://seekingalpha.com/article/118414-buffett-saddles-up-his-hog-stay-away?source=feed#comment-376315 376315
Thanks for the comments and the readership. ]]> Wed, 04 Feb 2009 22:32:03 -0500
Thanks for the comments and the readership. ]]> http://seekingalpha.com/article/114707-questioning-the-relevance-of-abercrombie?source=feed#comment-376311 376311
EU and other international will be great, but there's a 2-year payback at best on the cash used to create the stores.

My bigger point is that you can't really use ANF's "cash hoard" as a support to its stock valuation, because the money is already spent.

I will follow this up with an article prior ANF release of Q4, which will draw on the "cash is spent" theory. I expect the numbers to tell the story.

Thank you again for your comments. Keep posting.]]> Wed, 04 Feb 2009 22:24:09 -0500
EU and other international will be great, but there's a 2-year payback at best on the cash used to create the stores.

My bigger point is that you can't really use ANF's "cash hoard" as a support to its stock valuation, because the money is already spent.

I will follow this up with an article prior ANF release of Q4, which will draw on the "cash is spent" theory. I expect the numbers to tell the story.

Thank you again for your comments. Keep posting.]]>