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393934

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  • Royal Bank Of Canada: 3 Strong Reasons To Buy [View article]
    Here is the perspective from a US mortgage loan officer: "Subprime" in the US means loans that are made to borrowers for whom the ability to repay cannot be documented through income/debt analysis, or who have low credit scores due to a history of mishandling of credit (defaults, short sales, bankruptcy, late or non-payments, judgments, etc.). Post-housing crash in the US, subprime mortgages are rare. The federal government now requires that the paramount consideration in making a loan is an analysis (according to government/agency guidelines) of the ability to repay. If that is substantiated, then it is not a subprime mortgage.

    On the other hand, there are hundreds of thousands of loans that require mortgage insurance, and it is always due to a high loan-to-value (i.e., less than 20% down payment). FHA loans require as little as 3.5% down and automatically require government (FHA) mortgage insurance. Conventional, non-FHA loans with less than 20% down also require mortgage insurance according to government guidelines, but that insurance is issued by private mortgage insurance companies.

    It seems to me that commenters in this thread have been using "subprime" often to mean that a loan requires mortgage insurance. That is not true in the US. There are few to no subprime loans being made, but there are plenty made that require mortgage insurance due to having less than 20% down (loan-to-value > 80%).
    Jan 24, 2015. 09:46 PM | 5 Likes Like |Link to Comment
  • How To Play Gilead In 2015: It's Going To Be A Bumpy Ride [View article]
    The lowest trade was $85.95 at one moment on December 23, but it traded under $90 for parts of December 23 and 24. I added two lots on December 23, 1,000 shares at $86.94 and 1,000 more a little later at $88.01.
    Jan 16, 2015. 02:01 PM | 3 Likes Like |Link to Comment
  • ConocoPhillips: How Risky Is The Dividend? [View article]
    Does anyone wonder what happens if oil is $40? History indicates that there could be a substantial period of time with oil lower than even current prices ($48 Brent).
    Jan 12, 2015. 11:04 AM | 2 Likes Like |Link to Comment
  • Oil's Effect On Ford [View article]
    Anyone counting on higher oil prices to prop up F-150 sales is speculating. My read of the situation is that we have entered an era of lower oil prices, where $50-$60 may be the ceiling, not the floor, and that this era could last several years.

    I am long F 10,000 shares, but am concerned about

    1. the impact of low gasoline prices on sales of the F-150;
    2. on changes in the China auto market (strong move toward electric cars);
    3. on the slump in Europe.

    I understand that there are other reasons to be hopeful, but Ford failed to forecast Europe profits, recall problems, and presumably oil prices. Thoughtful, bold engineers, but not infallible.

    I'm struggling with this one.
    Jan 2, 2015. 03:37 PM | Likes Like |Link to Comment
  • Be Careful With Gilead - It May Be Time To Take Profits [View article]
    129 comments and no one brought up the ABBV patent lawsuit. There has been a good deal written about it, and I worry that ABBV might come out with a royalty on Harvoni. Most people think this won't happen, and that it will take years to be finalized, but are other readers concerned? (BTW, I am long GILD, sizable position -- not trying to generate short pressure).
    Nov 26, 2014. 11:58 AM | Likes Like |Link to Comment
  • Heinz May Be A Buffett Stock, But This Isn't A Buffett Price [View article]
    HNZ is my largest position, and I too am shocked that the company would sell itself for so small a premium. HNZ is probably the best single company for an dividend growth investor out there. Superb management, organic growth, shareholder friendly -- until now. HNZ would have earned that premium in dividends and capital gains in about two years. Instead we are being cashed out by a company that pays out nothing to shareholders and depends entirely on the vagaries of the market for returns if one has to gradually liquidate for retirement income.

    I sincerely hope that there is either another, higher offer, or better yet, a shareholder revolt.
    Feb 14, 2013. 11:03 AM | 4 Likes Like |Link to Comment
  • Wal-Mart Remains Built To Last Regardless Of Competitive Threat Of Amazon [View article]
    I am long WMT, but have always worried about what would happen if unions were ever successful in organizing the company. Surely that would drag down profits and erode WMT's competitive position, as unionization has done in the past to all companies.
    Feb 11, 2013. 02:49 PM | Likes Like |Link to Comment
  • Pres. Obama's re-election doesn't bode well for the odds of a tax holiday on overseas cash, notes Eric Savitz. That's problematic for large-cap tech names such as Apple (AAPL), Microsoft (MSFT), and Cisco (CSCO), which respectively have $83B, $54B, and $42.5B stashed overseas (per their most recent financials). As Savitz observes, there's a good chance some of that cash will be used on foreign acquisitions, especially in light of recent deals such as Microsoft/Skype and Cisco/NDS. [View news story]
    Most of these comments miss the point of the original post: (1) If there is not going to be an opportunity to repatriate foreign cash under the current administration, then the money cannot be used for dividends or other forms of return U.S. shareholders. (2) Blocking repatriation of funds creates the incentive to use the money to make acquisitions, most of which turn out to be unwise. For these two reasons, U.S. refusal to adopt international standards of corporate taxation are destructive of shareholder value.
    Nov 7, 2012. 11:37 PM | Likes Like |Link to Comment
  • A plan by General Electric (GE) to put 85K workers on a high-deductible health care plan in order to lowers its mult-billion dollar health costs falls in line with the trend of other major corporations, but not without a painful side effect. The company's heath-care business has fallen off sharply as the use of advanced imaging including MRIs and CT scans slows down. By at least one estimate, spending on advanced imaging fell 28% over the last five years as more families are forced to cover the costs of the expensive service. [View news story]
    I'm a physician, and I can tell you that you are right--doctors order lots of tests to reduce risks of lawsuits. Getting lawyers out of medicine means outlawing malpractice suits as a matter of public policy. Caps on awards bring down insurance premiums for doctors, but do nothing to reduce defensive ordering of tests--fear of lawsuits is the same whether awards are high or low (they are paid by the insurance company in either case). It is the public accusation of incompetence and uncaring that doctors fear.

    If malpractice suits were outlawed, there would be a lot less unnecessary testing -- many billions per year less -- and this, in my view, would be of greater value to society than adequately compensating those patients who were legitimately harmed by careless doctors.

    State medical boards, not lawyers and uninformed juries, should decide whether doctors are incompetent.

    By the way, I have never been sued, so this is not personal.
    Sep 19, 2012. 08:52 AM | 2 Likes Like |Link to Comment
  • A plan by General Electric (GE) to put 85K workers on a high-deductible health care plan in order to lowers its mult-billion dollar health costs falls in line with the trend of other major corporations, but not without a painful side effect. The company's heath-care business has fallen off sharply as the use of advanced imaging including MRIs and CT scans slows down. By at least one estimate, spending on advanced imaging fell 28% over the last five years as more families are forced to cover the costs of the expensive service. [View news story]
    This is why people should be free to choose their doctors and pay their own costs through HSAs--intelligent people like you can tell whether they are being overcharged or unnecessary tests are being ordered. By choosing wisely, costs come down.
    Sep 19, 2012. 08:44 AM | Likes Like |Link to Comment
  • A plan by General Electric (GE) to put 85K workers on a high-deductible health care plan in order to lowers its mult-billion dollar health costs falls in line with the trend of other major corporations, but not without a painful side effect. The company's heath-care business has fallen off sharply as the use of advanced imaging including MRIs and CT scans slows down. By at least one estimate, spending on advanced imaging fell 28% over the last five years as more families are forced to cover the costs of the expensive service. [View news story]
    If health benefits were paid into pre-tax personal/family health savings accounts, then people would indeed shop for price and make better judgments about whether tests or treatments are worth it to them. That advanced imaging spending has gone down with more patients having out-of-pocket exposure proves this. If patients were paying imaging centers, doctors, pharmacies and labs cash directly (via debit cards linked to HSAs), the prices would also decline, due to competition, transparency, slack capacity, and decreased collection expenses for providers -- i.e., by the usual market forces that operate elsewhere in the economy. High-deductible policies for catastrophic illnesses would be necessary for all people, but are relatively cheap.

    Government means-tested HSA funding for lower-income people would put them on a footing with wealthier people instead of dumping them into a 2-tier system with Medicaid. In fact, both Medicare and Medicaid could be eliminated in this fashion.

    Tony is right--there is no MRI fairy.
    Sep 18, 2012. 08:10 AM | 2 Likes Like |Link to Comment
  • How To Raise Portfolio Income By Selling Overvalued Companies [View article]
    I appreciate your explaining your process for determining whether a company is undervalued -- i.e., by using the FAST Graphs analysis. I wonder whether there is any empirical evidence of how FAST Graphs forward-looking predictions of future return have panned out, and if so, could you direct me to it? Thanks.
    Sep 17, 2012. 08:57 AM | 1 Like Like |Link to Comment
  • How To Raise Portfolio Income By Selling Overvalued Companies [View article]
    I agree with your observation that overvalued stocks constitute a risk to a portfolio. But the notion that one can buy an "undervalued" stock without also adding risk is not so straightforward. "Undervalued" means that one knows more than other investors about the value of a company, and that their down-bidding of the price of the company is unjustified. Not an easy concept to accept on a routine basis.
    Sep 15, 2012. 09:40 AM | 1 Like Like |Link to Comment
  • The iPad Mini, subject of endless rumors and speculation, will have a 7.85" display and sell for "significantly less" than the $499 version of the new iPad (AAPL), the NYT claims. Some prior reports have suggested a 7.85" display will be used, while others have been less specific. Surveys have indicated strong pent-up interest for a sub-$300 iPad.  [View news story]
    I think there may be a significant market for a mini-tablet that is very light to be used primarily as an e-reader. All readers currently on the market (Nook, Kindle) fail as readers: primarily on the basis of weight, and to a degree on functionality, glitches. If Apple could get it right--lightweight, glitch-free reading, email and browser functions, and add some way to lock the screen on a page while holding it to read, so that one's fingers or thumbs didn't inadvertently turn pages or bring up other functions, then it would take the reader market. If they could do that for $299, I'd buy it.
    Jul 16, 2012. 10:07 AM | Likes Like |Link to Comment
  • Microsoft Surface roundup: 1) Steve Ballmer sends an upbeat memo to Microsoft (MSFT) employees about the news. 2) Acer claims Microsoft just wants to boost Windows 8 tablet adoption, and will eventually exit the market. 3) Ashlee Vance thinks Surface drives home the failure of PC OEMs to compete with Apple (AAPL). 4) Mary-Jo Foley notices a lot of big questions remain unanswered. 5) Jesus Diaz gushes over Surface's design. 6) #1 Apple fan MG Siegler is as unenthusiastic as you'd expect.  [View news story]
    Is it just me, or is the Surface simply not that good-looking? It looks clunky, the colors are either space-junk black or garish bright -- nothing pleasing or subtle. It looks (and is) heavy. It looks like a tiny, industrial laptop.

    Maybe that's what enterprise users (field sales force, etc.) want, but I can't see retail consumers being all that excited about it. The real advantage is the ability to run Office applications--but who does that using a mobile device?
    Jun 20, 2012. 10:51 AM | Likes Like |Link to Comment
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