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  • Orexigen Therapeutics: A Bargain After Selloff On 'Bad News' [View article]
    They have been approved and on the market for a long time because when used as single agents, they are safe.

    When you start combining two or more drugs, you can not accurately anticipate whether or not there will be any toxicity once you start treating patients. As these two agents have been prescribed together for years to combat weight loss, and there has been at least anecdotal evidence of combinatorial toxicity, OREX was required to perform follow up monitoring as a condition of approval to establish that their proprietary combination and formulation is in fact safe.
    May 29, 2015. 10:59 AM | Likes Like |Link to Comment
  • Investors Need To Think Twice About McDonald's [View article]
    Re 1. I'll give you that. But the 'yet to prove any results' dig is a little premature. Easterbrook hasn't even reported on his first full quarter of being CEO. I'll admit that I didn't think much of the turnaround plan but until there are actual numbers to indicate whether or not something is/isn't working, you're just talking out your cakehole and making any conclusions.

    Re 2. MCD has had the stigma of being a total and complete craphole many times in the past 20-30 years. It didn't affect their ability to grow then and it won't now. If you need to know why I'm so confident, you need to brush up on your analysis of human behavior. Oh wait, 'this time it's different'. Got it.

    Re: 3. This depends on your perspective. Are revenues today more than they were in 2010? Yes, so by that measure revenue is growing. Are revenues more today than they were last year? No, so by that measure it's declining. You have one data point that points to a decrease and 3 that point to an increase. If anything, I think it says revenue is flat. Not doom and gloom but not worth paying a premium for either.

    Re 4. Much of the increased debt has gone towards share repurchases not paying out the dividend (which is paid out as a % of earnings). Since 2010, in an extremely low interest environment, MCD has repurchased $10B in shares, which has the effect of reducing dividends paid (while revenues have been about the same).

    Disclosure: I sold out my holdings because I didn't like the turnaround plan (I was looking for them to simplify everything - they didn't) and didn't feel it warranted the premium on the share price. But I won't hesitate to jump back in if it hits a price point I'm comfortable with (<$90) or if there are clear signs/additional strategies revealed that I'm on board with.
    May 28, 2015. 03:44 PM | Likes Like |Link to Comment
  • Investors Need To Think Twice About McDonald's [View article]
    That depends what I want. If I want a shake and fries, I still go to MCD. If I want breakfast, I go to MCD. If I want a cheap ice cream, I go to MCD. No, their burgers aren't the best but I'm not spending $10 on a crappy Five Guys burger either.
    May 28, 2015. 03:22 PM | 2 Likes Like |Link to Comment
  • Investors Need To Think Twice About McDonald's [View article]
    Totally unfounded. The easiest way to sustain the dividend is to borrow money for share buybacks, which reduces the payout. MCD is already doing this. That's discounting the fact that MCD has had 38 years of dividend growth through many trying times. In an uncertain market, it is one of the surest things you can find. There is nearly a zero chance of the being reduced, let alone go away.
    May 28, 2015. 03:19 PM | Likes Like |Link to Comment
  • Why I Bought More American Airlines Today [View article]
    T and VZ have generated huge returns for investors over the years. And many of Buffet's key holdings have large CAPEX requirements (IBM, VZ, BNI, GM). If you avoid stocks simply because of CAPEX, you're discounting a huge swatch of the economy.

    The airline industry IS behaving like an oligopoly today. In 2005, the top 11 airlines had 96% of the domestic market (American, Delta, United, Continental, Northwest, Southwest, U.S. Airways, America West, Alaska, Jet Blue, and AirTran. Today 6 airlines make up 95% of the domestic market and many of them have virtual monopolies at local hubs. Competition goes down, prices and profits go up.
    May 28, 2015. 11:53 AM | 1 Like Like |Link to Comment
  • What Workday's Reaction To Earnings Proved [View article]
    As someone who's used it a lot in the past, I wouldn't call it a great company. I and many coworkers found the software and support absolutely terrible but it just happens to be the best of a bad bunch.
    May 27, 2015. 01:54 PM | 1 Like Like |Link to Comment
  • Thoughts On The Unexpected Resignation Of Lumber Liquidators' CEO [View article]
    It's actually up 5% not 10%. Either way, it's a dead cat bounce.
    May 27, 2015. 07:14 AM | Likes Like |Link to Comment
  • Why Goodyear Tire & Rubber Co. Stock Is A Buy Right Now [View article]
    Yes, Hewitt, I'm well aware of the tax credit but again, this seems rather nitpicky as you're harping over one blip on the screen amongst a sea of many data points that aren't affected by tax credits indicating GT is cheap by all measures.
    May 26, 2015. 02:16 PM | Likes Like |Link to Comment
  • Why I Bought More American Airlines Today [View article]
    Buffet's a smart guy and he's more often right than wrong but he has continuously led a bad experience blind him to the industry as a whole.

    1) Energy companies and telecom companies have some of the largest recurring CAPEX requirements as do car manufacturers and railroads - it doesn't make them bad investments when they're beaten down.
    2) Large fixed costs (employees and energy) are a problem for most businesses. It is not airline specific.
    3) Consolidation, reduced routes and overbooking and has reduced the commoditization of airline travel from when Buffet made his investment in 4) Ask almost anyone who's flown Spirit if they would do so again willingly to save a couple bucks. Then you'll see how much there really is competition on the extreme low end. I'll give you a hint - it's not much.
    5) With a strong dollar and lower gas prices, leisure travel is on a huge upswing.
    May 26, 2015. 12:34 PM | 3 Likes Like |Link to Comment
  • Thoughts On The Unexpected Resignation Of Lumber Liquidators' CEO [View article]
    His compensation was pegged at $858K last year and he's made tens of millions in stock option sales. We'll just agree to disagree on the status of this being a plush job then.

    Board members don't exist in a vacuum. They are often friends and colleagues of the CEO. I stand by my comment that a board being caught off guard by an embattled CEO resigning is a major red flag.

    We'll have to wait to see how lawsuits play out (the SEC and DoJ are the ones to worry about) and how this affects customers before knowing whether LL is a bargain or a value trap.
    May 26, 2015. 11:59 AM | Likes Like |Link to Comment
  • Why Goodyear Tire & Rubber Co. Stock Is A Buy Right Now [View article]
    This seems like a rather nitpicky comment. Good investors never take one single data point and hold it up as the truth, they (and Arie did) take a view of everything from a company's finances past, present and future and take into account long term industry outlooks and trends. GT is cheap by all measures.
    May 26, 2015. 11:53 AM | Likes Like |Link to Comment
  • Why Goodyear Tire & Rubber Co. Stock Is A Buy Right Now [View article]
    A good summary on a great long term hold.
    May 26, 2015. 08:12 AM | 1 Like Like |Link to Comment
  • Thoughts On The Unexpected Resignation Of Lumber Liquidators' CEO [View article]
    TMFDeej,

    Evidence and similar do not belong in the same sentence. It's conjecture. Do other companies selling Chinese laminate floooring? Absolutely but China is a big country with millions of different manufacturers - they are not all painted with the same brush.

    Are other companies knowingly mislabeling CARB compliant flooring? Doubtful.
    May 23, 2015. 02:54 PM | Likes Like |Link to Comment
  • Thoughts On The Unexpected Resignation Of Lumber Liquidators' CEO [View article]
    Mark, it's a difficult job right now but it is still a plush one. It's not like the board was going to cut his salary to 0 and take away his options. He was doing extremely well for himself.

    As for other reasons - sure there could be some but health, family, and other reasons NEVER should catch a board off guard. If they do, there's a fundamental lack of communication between the CEO and the board, which is arguably as bad, if not worse than a company-wide cover up. There's a lot more going on here than you want to admit and it all points to a very bad situation.
    May 23, 2015. 02:49 PM | Likes Like |Link to Comment
  • Thoughts On The Unexpected Resignation Of Lumber Liquidators' CEO [View article]
    TMF,

    you're making an assertion in the absence of evidence - "I honestly am not convinced that if the Chinese flooring if installed correctly and not crushed up into tiny pieces is dangerous. It certainly isn't more dangerous than the formaldehyde glue that is being used in things like baby furniture sold by that industry." What we do know is that other suppliers flooring was tested along with LLs and found to be in compliance with industry regulations and standards. That's it. If you "feel" others are just as guilty in other industries, by all means, go and perform your own testing and begin initiating your own short positions.

    I don't think Tilson took any high ground in this. He's clearly laid out his short case for a while now - it just ended up being a much bigger opportunity than he initially realized. He's found many discrepencies in the company and continues to find them so he's keeping his short position. If his investors are happy (I'm sure they are), why should he cash out of his short position and donate to charity? That's not in anyone's best interest.

    Yes, if LL goes to 0 people will be out of jobs but that's capitalism for ya.
    May 21, 2015. 02:13 PM | 3 Likes Like |Link to Comment
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