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  • Procter & Gamble: Pros And Cons [View article]

    I respect opinions that differ from my own. No one has a monopoly on wisdom. However, you make several point with which I disagree.

    We are in era where companies trade on intellectual property. Therefore, I have no issue with intangibles on the balance sheet of PG or any other company. Tide ran the competition off the North American laundry shelves. CL and UN/UL do not market laundry detergent. Ditto for Cascade in automatic dish washing. Yet there is no value on PG's balance sheet for these two because they were developed internally. If a company or its product is purchased at more than the value of its brick and mortar (which is always the case if the purchase was worthwhile), there will be intangibles. There are intangibles on the books of defense contractors because acquired technology comes at a price greater than brick and mortar. There are intangibles on the books of pharmaceuticals because acquired technology comes at a price greater than brick and mortar. IMHO, much of Benjamin Graham's work is out-of-date. He wrote when manufacturing was the basis of wealth, Plenty of tangible property did not help Bethlehem Steel because Bethlehem Steel was a commodity producer without a proprietary position.

    Current assets at a balance sheet date do not necessarily determine liquidity. The turnover of those assets is more important. PG turns its combined inventory and receivables faster than do its peers.

    Discontinued Operations won't continue to lose money. They are discontinued and will be gone one way or another. PG has done well with discontinuing edible oils, coffee, baking mixes, and fabricated potato chips. It seems that what they throw away, in many cases, is better than what others can create.

    Sorry, but I have no idea what depreciation has to do with dividends. I will say that capital expenditures are greater than depreciation, which indicates that management sees organic investment opportunities.

    I will say that a company with PG's credit rating may well take on debt at today's interest rate to decrease their overall cost of capital. Having earnings that cover interest by 23X indicates that borrowing is far from reckless.

    Why would I not compare PG to AAPL? For the same reason I don't compare it to CVX, which I also hold. A diversified portfolio should be comprised of different segments. My retiree portfolio has a significant weight in consumer products. I will compare PG to CL (which I do not hold) and to PEP and GIS (which I do hold) as they are comparable.

    In any event, I don't wish to change your mind, but I do want to show that there is a reasonable basis for my holding PG.

    Jun 20, 2015. 10:53 PM | 2 Likes Like |Link to Comment
  • High Dividend Stocks And Value Investing [View article]
    My goal is balance. There are stocks a retiree should own principally for current income and others principally for inflation protection. However, all investments should provide some income and some inflation protection.

    There is no one-size-fits all answer.
    Jun 20, 2015. 10:08 PM | 2 Likes Like |Link to Comment
  • Procter & Gamble: Pros And Cons [View article]
    BostonGuy, PG has a market cap of $218 Billion. That's almost twice the market caps of KMB, CL, and CLX combined.

    How many companies could buy it?
    Jun 20, 2015. 08:58 AM | 1 Like Like |Link to Comment
  • Procter & Gamble: Pros And Cons [View article]
    >>>P&G's balance sheet is a disaster (omit the company name and any analyst will tell you the company is illiquid); <<<

    By what measures? Compared to what? PG's Total debt/Equity is 52%. CLX >1000%. KMB is 282%. CL is 508%.

    Long: PG
    Jun 20, 2015. 08:50 AM | 2 Likes Like |Link to Comment
  • Procter & Gamble: Pros And Cons [View article]
    MM and Q, I have my own experience with forward projections. I have prepared or directed the preparation of budgets and forecasts. I have worked in Group HQ's of major corporations where we tried to second guess the projections and forecasts of operating companies. I know that it is not an exact science.

    At the same time, I know that dismissing forward looking numbers is worse. Backward looking numbers have a far greater degree of certainty in their measurement. However, when business decisions that will drive changes in the business model are in play, those issues cannot be ignored.

    Forward looking numbers will be flawed in their final measurement. However, ignoring business drivers is a flawed concept.
    Jun 20, 2015. 08:33 AM | 1 Like Like |Link to Comment
  • Chicago's Downgrade: What Investors Need To Know [View article]
    Always, I don't doubt what you say, but it extends to the traditional colleges and universities as well. I serve as Treasurer of a synagogue with a membership comprised principally of retirees. One of the biggest issues I find is that it takes three generations to pay for higher education at today's prices.

    Training people for jobs that don't exist may or may not be fraud from a legal standpoint. I looked at it from a business standpoint when I went shopping for colleges with my daughter. At every school, I insisted on visiting the placement office to see which and how many companies came to recruit. That was my bottom line.
    Jun 19, 2015. 04:49 PM | Likes Like |Link to Comment
  • Chicago's Downgrade: What Investors Need To Know [View article]
    Always, how does one define "fraud" on the part of schools? How many university degrees are granted, by legitimate institutions, in Journalism as compared to the jobs available in journalism?
    Jun 19, 2015. 03:19 PM | 1 Like Like |Link to Comment
  • Chicago's Downgrade: What Investors Need To Know [View article]
    ....which was the point that James Madison made in Federalist #10. He understood passion within human nature. Jefferson made the same point in the Declaration of Independence.

    Our president seeks to exploit passion while the Constitution was designed to limit its destructive power.
    Jun 19, 2015. 08:47 AM | 1 Like Like |Link to Comment
  • Chicago's Downgrade: What Investors Need To Know [View article]
    The French people did not deserve Robespierre. The Cuban people do not deserve Castro. However, when there is pure rule by a majority (or even a disproportionate plurality), there will be a tendency for fleeting passions to identify a savior and give him or her the power to abuse power.

    The genius of the US Constitution is that the nation is a republic and NOT a democracy. It would be difficult for a demagogue to achieve absolute power. The USA must remain a nation of laws and not of men. This was discussed in the 1780's in a Federalist Paper (#10) by James Madison.
    Jun 18, 2015. 10:21 AM | 2 Likes Like |Link to Comment
  • Chicago's Downgrade: What Investors Need To Know [View article]
    Always, it is very difficult to write truly objective history. Events are always filtered thru our own experiences. Mine are that I served in the Army Reserves from 1969 thru 1975. There are similarities and differences between the Reserves and the National Guard. However, they are comprised of the identical demographic, which you described accurately. It was a group of young men that did not seek a confrontation of any sort with anyone.

    The reports with which I am familiar are that they were called upon to confront a mob that had set fire to the ROTC building and had attacked fire fighters, slashing their hoses, the night before. Rocks and bottles, and chants of "pigs off campus" were hurled their way. They perceived (rightly or wrongly) that elements of that mob were swarming to rush them. They felt their lives in danger. They fired in self-defense. About two hundred years earlier, there was a similar (if not identical) incident of which we learned called "The Boston Massacre". The British regulars were tried and acquitted. The jury deemed that the soldiers were provoked. They were defended by an attorney named John Adams. John's cousin, Samuel, attributed the incident to the mere presence of the soldiers as is stated on a monument on what is know as the "Freedom Trail" in Boston. Into the 21st century, the Boston Massacre is not totally adjudicated in the minds of the public. I don't suppose the Kent State incident will ever be resolved by unanimous agreement.

    To me, but for geography, I could have been one of those guardsmen. That is one of my filters thru which I see the incident.
    Jun 16, 2015. 10:08 PM | 2 Likes Like |Link to Comment
  • Chicago's Downgrade: What Investors Need To Know [View article]
    Always, you and I are about the same age. Perhaps I am a year older, having received my undergraduate degree in 1969. I attended a conservative, business oriented private university in New York City. Even then, some of my liberal arts teachers had liberal orientations.

    I would find it hard to believe that professors followed the lead of their students in adopting political beliefs. The faculty always had the "power of the grade" and it is impossible to write a totally objective essay or to grade one in a totally objective manner.

    It was a good thing that Ohio State had law enforcement personnel in substantial force. The incident at Kent State was caused when only about 75 National guardsmen (not professional soldiers), armed with WWII rifles, had to confront a violent mob that had grown to about 3,000. I led a discussion group where I compared the Kent State incident to when FDR sent two battalions of combat troops to put down a strike at an aircraft plant in June 1941. The 1941 force was sufficient in quantity to avoid the use of deadly force. For example, in 1941, any threatening gesture from a striker was answered with a rifle butt. Such a maneuver would not have been practical given the 40 to 1 ratio. The guardsmen fired only for fear of the own lives. By-the-way, the young woman in the iconic photo with a fallen student, was not a student at Kent State. Her name is Mary Vecchio. In 1970, she was a fourteen-year-old run away who came to Kent State looking for trouble.
    Jun 16, 2015. 09:19 AM | 1 Like Like |Link to Comment
  • Chicago's Downgrade: What Investors Need To Know [View article]
    Always, can you name a tyrant who came to power, starting with Maximilien Robespierre, without claiming to be a champion of the people and without the support of the masses?
    Jun 16, 2015. 08:53 AM | Likes Like |Link to Comment
  • Chicago's Downgrade: What Investors Need To Know [View article]
    Except, the college kids are under the influence of their ultra-liberal professors.
    Jun 15, 2015. 03:44 PM | 1 Like Like |Link to Comment
  • The 5 Best Low PE Companies For Defensive Investors [View article]
    christophe, I used a common online abbreviation idiom: "By The Way".
    Jun 15, 2015. 03:42 PM | Likes Like |Link to Comment
  • Johnson & Johnson Providing Steady Growth With Upside Potential [View article]
    My average cost basis is under 69. However, with the decline, I may spend some of the powder I'm keeping dry.
    Jun 15, 2015. 03:37 PM | Likes Like |Link to Comment