Bill Ackman's Favorite Stock: Should It Be Our Favorite Too? [View article]
PG going from 80 to 125 by 2016 is a low probability event. More likely it could go to 98 as you mentioned which is about a 7%/year. But you don't need DCF analysis to know this. Fortunes are not made by returning 7%/year.
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
Not true. Unless your holding period is very short, good companies make higher highs during bull markets and higher lows during bear markets. Think about it.
Are we in a bubble? Consider this. The PE of KO at the height of the internet bubble was close to 40-50. The PE of KO right now is around 19-20. This historical PE of KO has been in the low 20's. Obviously you can't judge a market by one compnay. But you can draw your own conclusion about the current "bubble"
The Whitney Tilson Indicator: Time To Short Netflix? [View article]
A trend can continue longer than one remains solvent, especially when one is shorting a stock and time is against you.
I find it odd that Tilson, who is known as a fundamental investor, made a prediction about company's stock price encompassing such a short period. That is not investing. That is trading.
Time should be one of the greatest friend to a fundamental investor. Tilson made it his enemy.
If you can fully understand the unassailable moats that some companies have, there is no need to diversify. Obviously, a person would probably not put one's entire net worth into just one company.
Nonetheless, for the sake of diversification, would could have split the $50,000 into KO,PEP, JNJ, PG, ABT and XOM and achieved similiar results. These companies were not startups and were considered "mature, stable" companies even back in 1983. I am certain there are investors out there who have owned one or more of these companies since 1983.
The owner of these companies only needed to resist the temptation to sell for fear of a market correction.
Lets say a person was fortunate to have $50,000 in 1983 and he decided to put it in KO. Now $50,000 is not chump change, but not an impossible amount either. It would be around $162,000 in todays money inflation adjusted.
During the 30 years, it underwent numerous corrections, several market crashes. It would now be worth around $3,900,000 right now (dividend reinvested). That is a compounded annual return of 15.6%. Compare that to if you had invested in the SandP which would have returned you about 8.5% and turned your $50,000 into only $590,000.
Can you imagine the taxes one would have had to pay during the past 30 years if one had bought and sold KO multiple times during this period, keeping in mind NO ONE can time the market perfectly ALL the time. I guarantee you that the average person who jumped in and out of KO during the past 30 years did NOT return 15.6%/year
The $3,900,000 would now be generating about $105,000 in dividends this year, enough to pay the average retired person's expenses. His cost basis would be about $1/share. Selling shares now would incur a big tax bill
When the tide rises, everything goes up. When the tide goes down, some things sink much lower than others. Pick the ones that won't sink as much and load up on those as much as possible when the tide does go down.
So why not sell when the tide is high? Because taxes can often make you sink more than the tide.
Monster Beverage Has A 40% Potential Gain In Next 12 Months [View article]
On Sep 27 2009 I said that the biggest risks to Hansen(Now Monster) were 1) lack of distribution system 2) government regulation because of health concerns.
So here we are after a roughly 3X increase in share price since that comment. If the current legal issues had risen when Hans was a small cap company in the early 2000's, the company could have literally been wiped out financially.
However, it is now a formidable cash generating company that is in no danger of suddenly dissappearing any time soon. Management is beginning to understand how the big boys play (ie lobbying, PR etc)
It is quite clear going foward that MNST's international sales, like many multnational companies, will make up an ever increasing percentage of sales. Its business model is very simple. Once beachheads are established in other countries and fixed costs are dealt with, pleasant surprises should await patient owners of this company. Its business model is very simple and scalable.
With regard to the most recent earnings, if you exclude the unusual charges, I believe MNST's eps would have been something like .46, an increase of 12-13% compared to the prior year. Its losses from international operations decreased from 4 million to 2 million I believe.
Bill Ackman's Favorite Stock: Should It Be Our Favorite Too? [View article]
However, fortunes ARE maintained returning 7%/year
Bill Ackman's Favorite Stock: Should It Be Our Favorite Too? [View article]
Fortunes are not made by returning 7%/year.
The Most Nagging Question About Stocks [View article]
I'm starting to like you buddy!
Reasons 6, 8 and 9 are what will keep this thing going higher.
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
Not if you have powerful consistent earnings, which are the fuel that propels stocks higher.
BTW
I love your name!
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
Unless your holding period is very short, good companies make higher highs during bull markets and higher lows during bear markets. Think about it.
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
Inflation is like gravity. It pulls everything down...unless of course you are exempted from the laws of physics
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
Very interesting. Since you are a foreigner, you may have a more objective view of what's going on. Nice article.
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
You're back! I always wondered where you were.
Getting Drunk On The Punch [View article]
Consider this. The PE of KO at the height of the internet bubble was close to 40-50.
The PE of KO right now is around 19-20. This historical PE of KO has been in the low 20's.
Obviously you can't judge a market by one compnay. But you can draw your own conclusion about the current "bubble"
The Whitney Tilson Indicator: Time To Short Netflix? [View article]
I find it odd that Tilson, who is known as a fundamental investor, made a prediction about company's stock price encompassing such a short period. That is not investing. That is trading.
Time should be one of the greatest friend to a fundamental investor. Tilson made it his enemy.
Perhaps he'll be right this time.
A Rising Tide Lifts All Ships [View article]
Nonetheless, for the sake of diversification, would could have split the $50,000 into KO,PEP, JNJ, PG, ABT and XOM and achieved similiar results. These companies were not startups and were considered "mature, stable" companies even back in 1983. I am certain there are investors out there who have owned one or more of these companies since 1983.
The owner of these companies only needed to resist the temptation to sell for fear of a market correction.
A Rising Tide Lifts All Ships [View article]
During the 30 years, it underwent numerous corrections, several market crashes. It would now be worth around $3,900,000 right now (dividend reinvested). That is a compounded annual return of 15.6%. Compare that to if you had invested in the SandP which would have returned you about 8.5% and turned your $50,000 into only $590,000.
Can you imagine the taxes one would have had to pay during the past 30 years if one had bought and sold KO multiple times during this period, keeping in mind NO ONE can time the market perfectly ALL the time. I guarantee you that the average person who jumped in and out of KO during the past 30 years did NOT return 15.6%/year
The $3,900,000 would now be generating about $105,000 in dividends this year, enough to pay the average retired person's expenses. His cost basis would be about $1/share. Selling shares now would incur a big tax bill
A Rising Tide Lifts All Ships [View article]
So why not sell when the tide is high? Because taxes can often make you sink more than the tide.
Monster Beverage Has A 40% Potential Gain In Next 12 Months [View article]
1) lack of distribution system
2) government regulation because of health concerns.
So here we are after a roughly 3X increase in share price since that comment.
If the current legal issues had risen when Hans was a small cap company in the early 2000's, the company could have literally been wiped out financially.
However, it is now a formidable cash generating company that is in no danger of suddenly dissappearing any time soon. Management is beginning to understand how the big boys play (ie lobbying, PR etc)
It is quite clear going foward that MNST's international sales, like many multnational companies, will make up an ever increasing percentage of sales. Its business model is very simple. Once beachheads are established in other countries and fixed costs are dealt with, pleasant surprises should await patient owners of this company. Its business model is very simple and scalable.
With regard to the most recent earnings, if you exclude the unusual charges, I believe MNST's eps would have been something like .46, an increase of 12-13% compared to the prior year. Its losses from international operations decreased from 4 million to 2 million I believe.