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poortorich

poortorich
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  • These Were Some Of The Warning Signs Before Herbalife's 3rd Quarter Disaster [View article]
    A company a few days ago reported these numbers
    - 1% decline in sales
    - 15% decline in operating income
    - net earnings down 25%

    Another company reported these numbers
    - 2% decline in revenues
    - 13% decline in eps
    - volume growth of 1 %

    Clearly, those two companies have reached their saturation point. What are the names of the two companies? General Mills and Coca Cola.

    Perspective is very important. KO and Gis still have a PE of 17-20. The PE of hlf is about 8.


    One last point that is fascinating. Despite all the negative pub surround hlf, the sales in N America only declined by 4%.

    Compare that to other consumer staples where sales/volume in many cases have been declining despite massive marketing efforts.
    Nov 4, 2014. 10:58 AM | 4 Likes Like |Link to Comment
  • The Toll Booth Businesses Of Visa And MasterCard [View article]
    Scuttle
    Any thoughts on MCX/CurrentC ?
    Oct 28, 2014. 04:29 PM | Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    Dividend House

    Glad to hear you had an epiphany.
    I have experience with real estate also. There are pros and cons of owning real estate.

    1)Growth of dividend vs growth of rent....advantage stocks (usually).
    2)Price increase of stocks vs increase in price of property .....advantage stocks
    3)Convenience...advantage stocks. Here is a real life example. A few years ago, one of my companies got bought out leaving me with me a 6 figure cash. If i wanted to use that money to buy real estate, that would have taken me several months (finding a property, visiting the property, getting a loan escrow etc). However, because of the beauty of the internet, I was able to buy another company within a few minutes with the click of my mouse.
    The headache of dealing with tenants, finding a good property management co etc can be a problem.

    Real estate, however, has its advantages.
    1)highet initial cash flow yield
    2)you can use leverage. (other people's money)
    3) tax deductions.

    If one does not have the right temperament, real estate is a fine way to invest.
    Oct 23, 2014. 10:21 AM | 1 Like Like |Link to Comment
  • For Retirees, Have The Last 15 Years Been The Worst Of Times? Ever? [View article]
    vinly

    It appears your mother's portfolio is big enough that the income it generates meets all her needs. I would venture to that say most retirees do not have enough to do this.

    Thats why SOME investors need a way to protect their capital/seek other ways to increase income.
    This is where the following can be helpful
    1) asset allocation
    2) diversification ( stocks/real estate. Although Im not a big fan of real estate. Im also not a fan of bonds)
    3) rebalancing
    4) buying stocks with big margin of safety
    5) options
    Oct 8, 2014. 11:53 AM | 1 Like Like |Link to Comment
  • For Retirees, Have The Last 15 Years Been The Worst Of Times? Ever? [View article]
    A one million dollar portfolio would not have generated enough dividends to support a $55000 a year lifestyle in 2000. The yield on dividend stocks was too low. At some point, the selling of shares was bound to happen, thereby jeopordizing once's nest egg.

    What if one had bought a rental property, fully paid with a million dollars. Perhaps one could get 100,000 a year in rent free and clear at the time. A retiree who did that in 2000 would now be getting 140,000-160,000 in rent a year. His building would now be worth $1600000.

    Unless you've reached the Golden Finish Line, preservation of capital in retirement is very important. If you've reached that line, capital preservation is secondary to dividend growth
    Oct 7, 2014. 10:22 PM | 2 Likes Like |Link to Comment
  • Herbalife's New Compliance Hire Is No Safe Harbour [View article]
    Most of the news on hlf is just noise. Thats why its not worth even commenting anymore. However, todays announcement is very significant...on par with Stiritz buying shares.
    You have here a former FTC commisoner, who is very familiar with pyramids, who im sure has seen what has been going on for the past 2-3 years and has done her DD and now has decided to join HLF. Why would she do such a thing and risk her outstanding reputation ?
    Oh. And by the way, did i mention she has been a consumer of the product for the past 10 years? I thought real consumers didnt exist. So clearly, she has a very good grasp of the issue from both sides.
    Oct 6, 2014. 11:51 AM | 9 Likes Like |Link to Comment
  • Johnson & Johnson: Growth-Growth-Growth; Win-Win-Win - Part I [View article]
    $5000 in cash in 1944 is about $67000 in todays money inflation adjusted.

    If instead $5000 were used to buy JNJ in1944, it would be worth approximately $155,000,000. You would be getting dividends of 3-4 million dollars a year.
    Keep in mind JNJ was already a very well established company even before its IPO.
    Oct 2, 2014. 10:32 AM | Likes Like |Link to Comment
  • Johnson & Johnson: Growth-Growth-Growth; Win-Win-Win - Part I [View article]
    Better yet.

    Calculate what $5,000 dollars would be if it had been invested in JNJ in 1944 when it became a public company.

    $5,000 in 1944 would be around $67,000 today inflation adjusted.
    Oct 1, 2014. 09:34 PM | Likes Like |Link to Comment
  • Retirees, Don't Count On Stocks To Deliver From Here [View article]
    Several points to consider
    1) If stocks are held long enough, the tax "hit" if one sells could be substantial because the cost basis is so low. In my nonretirement account, I generally leave things alone unless the stock is grossly overvalued with poor future prospects. Obviously, in a nontaxable retirement account, this is not a problem.
    2) It is hard to predict when the top and bottom are going to be
    3) If one has reached the "Golden Finish Line", the point where dividends exceed one's expense, then there is no need to sell. The price of the stocks may not go up as quickly as before, but the dividend will likely continue to grow 7-8%/year.
    Sep 30, 2014. 01:36 PM | 2 Likes Like |Link to Comment
  • Coke chooses caution, sees too much risk in swallowing all of Monster [View news story]
    Having closely followed both Ko and MNST and being a shareholder of both I do believe that Ko wanted all of MNST. The management could say all they want about wanting to distance themselves from MNST's image. This sounds quite ridicoulous when they've just purchased 17% with the option to buy more.

    Here are my prediction over the next several years
    1) the earnings Ko gets from the brands acquired from MNST will be substantially lower tham the earnings MNST will get from the KO highway
    2) you will see an marked acceleration in MNST growth internationally. They will now be using the autobahn. MNST had a hard time expanding internationally not because of lack of demand but because of distribution problems
    3)within 10 years, if and when Rodney retires, you will hear an announcement that Ko will buy the rest of MNST at a higher premium.
    4)Pep will look into buying Rock Star, perhaps even Soda. They have to if they want to stay relevant in this duopoly. Red Bull is privately held. I doubt the family wants to be acquired.
    Aug 16, 2014. 12:05 PM | Likes Like |Link to Comment
  • How Buffett Is Changing The Future Of Berkshire's Float - From Insurance To Uncle Sam [View article]
    In real estate, many property owners after fully depreciating the building look to exhange their property for another (1040 exchange). They want the benefit of more depreciation. They dont want to sell because they would be liable for the taxes on the depreciation. Essentially, thats another form of "float".
    Aug 15, 2014. 09:33 PM | 3 Likes Like |Link to Comment
  • How Buffett Is Changing The Future Of Berkshire's Float - From Insurance To Uncle Sam [View article]

    Good article.
    All of us who have owned stocks long enough have "float" in the form of unrealized gains. As time goes on the possible tax hit becomes even larger. The tax hit can sometimes become more painful than a market crash.
    Aug 15, 2014. 09:00 PM | 6 Likes Like |Link to Comment
  • Monster Beverage: Coca-Cola Transaction Supports Bull Case [View article]
    Its good for both KO and MNST.
    For KO, they get brands that have been a bit underappreciated. With the marketing power of KO, they will get a new lease on life.
    For MNST, they know how to expand the energy drink sector. MNST will have a free ride on the KO freeway now. This deal also eliminates a competitor in the energy drink market.


    "meaning KO values MNST at 18 billion ". I have a feeling KO wanted to buy the whole thing, but MNST is playing hard to get. In 10 years, KO will have to pay a much higher price in my opinion. Should have bought it when its market cap was only 400-500million.

    The question now is what will PEP do now that KO has a piece of GMCR and MNST. PEP may have to consider gulping down SODA? ROCK STAR? RED BULL?
    Aug 15, 2014. 12:52 PM | 1 Like Like |Link to Comment
  • Coca-Cola buying 16.7% stake in Monster, transferring businesses [View news story]
    Capt

    If youve followed mnst long enough you would realize KO was considering buying MNST. Then the whole lawsuit thing came about at which point KO backed out. As Long Term Value alluded to why in the world would you slam down 2 billion if you thought MNST would go out of business? Pehaps Ko wanted to buy the whole thing but MNST management resisted. Its hard to understand Rodney, the ceo sometimes during earnings conferenc call because he speaks too fast,but he aint no dummy. He knows he's got a good thing in MNSt and is not willingly to give it up so easily.
    Aug 14, 2014. 06:57 PM | Likes Like |Link to Comment
  • 2 Key Tests For The True Dividend Growth Investor [View article]
    Patrick

    You gotta read man. Buy books and read read read.
    Aug 14, 2014. 06:37 PM | 10 Likes Like |Link to Comment
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