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  • Bank Of America: Is The Bottom In?  [View article]
    The banking industry is far less attractive than it used to be. They are banned from activities that make money and regulation is killing them, along with higher capital requirements. Many trading businesses have packed up and moved to London where banks are regulated somewhat more intelligently. I would like to have a Dollar for every article I have seen the last few years about the coming BAC turnaround. The stock is trading at under $14 and I sold my last position at $42 in 2008. I should have sold at over $50. I went from 15-20% of assets in the banking sector to near zero today, that holding being a modest amount of Wells Fargo. I see no reason to invest in the industry long term and that includes BAC. Why swim against the current?
    Feb 1, 2016. 10:56 AM | 1 Like Like |Link to Comment
  • Procter & Gamble: It's Not Just Currency  [View article]
    Good article Vince. I have avoided PG for all the reasons you give. I am not so sure about your comments about margins. If PG has trimmed its product line and raised prices where it has pricing power, that is a good thing. It won't necessarily go away. A company like PG will always have currency and commodity prices to deal with. At the end of the day success depends on the strength of their brands and execution. Market share may not be that important. Apple has lousy market share on cell phones and makes all of the profits. PG needed to get down to strong brands with pricing power. If they successfully raised prices that should be a big positive. I don't think your essay gives me what I would want to make an investment decision. I would want to have an understanding of the key brands and why they will maintain share and margins down the road. Too many articles ignore the qualitative factors. I note that when we go to Costco my wife walks right by the cheaper house brands to load some Tide in the cart. I blink at the price but pay it anyway.

    I am going to wait and have a good look at the 10K, then at the Q1 numbers in April. Few investors summon the courage to examine a 10K closely but it is a wealth of information and management risks incarceration if they lie. The auditors also have to sign off. The upshot is your analysis is a good starting point but lacks all the information I need to make an investment decision. I am not ready to shun PG as a potential long. It has fabulous brands and distribution, and may have gotten its act together. If so, it will be good buy for the next ninety days and expensive thereafter. The 10K should be out by the end of February or shortly after.
    Feb 1, 2016. 10:46 AM | Likes Like |Link to Comment
  • PPG Is My Choice In A Solid Stable Investment Industry  [View article]
    Great comments. I bought PPG at $35 in early 09 and am up 172%. 4% yield on book. Great company and best to buy when the overall market is down. For RK, beware of buying cyclical stocks when they have high PE ratios. You have to be patient and wait for a downturn. Then you can make out like a bandit after making sure the basic business is safe. I am down as much as you were from the high point but am confident it will go back there. I would not sell if I were you. If you would buy at this price you should not sell at this price.
    Jan 31, 2016. 06:32 PM | Likes Like |Link to Comment
  • Nucor Has Raised Its Dividend For 43 Consecutive Years  [View article]
    Good analysis but beware of walking backwards into the future. A high yield is the reciprocal of a low share price. The share price may be low for a good reason, aside from the business cycle. China produces 27% of the world's steel. At 10% growth China absorbed a huge percentage of that steel to build plants and infrastructure. No more. There is a huge surplus and no one expects 10% growth to return. That could affect NUE's markets for a long time.

    10 years ago the auto industry was importing brakes from China. Now it imports entire frames. I like NUE but I am far from certain it will bounce back as in the past. Quantitatative analysis is a good thing but it relies on a continuity of assumptions. I will pass. It may bounce back but the business risks are higher this time round.
    Jan 31, 2016. 06:22 PM | 1 Like Like |Link to Comment
  • Amazon: Two Steps Forward And One Step Back  [View article]
    The primary purpose of a company is to make money. The primary purpose of Amazon is to grow. Until it does make serious money it has not proven itself to be much more than a Ponzi scheme. Anyone can grow a business by giving away the product. I predict that Amazon will launch itself into a series of new businesses, each of which will be marginally profitable. Cloud is the latest. What allows them to do that is the billing cycle. Amazon gets paid immediately by credit card companies while paying its suppliers in a month or two. I love them as a customer but will not invest. Lots of companies have grown like a weed until proven to be a weed. Amazon has a huge franchise but there is no evidence so far of it being profitable. A 470 times PE is ridiculous.
    Jan 31, 2016. 06:11 PM | 2 Likes Like |Link to Comment
  • McCormick: A Flavorful Dividend Growth Investment  [View article]
    Good company but priced for perfection at 28 times PE. Anything goes wrong and you lose half your money in a day with no yield protection. I have looked at the company many times and passed. As it turns out I would have done better to buy but I don't like high PE stocks. Too much potential downside. I don't usually go by anecdotes but I buy my spices in bulk these days and refill MKC containers. About 25% of the cost of MKC. The spices are as overpriced as the stock.
    Jan 31, 2016. 06:00 PM | 1 Like Like |Link to Comment
  • Apple's Problem Is That It Has Conquered The World  [View article]
    Nothing like an article on Apple to excite people. I have no idea how Apple will do and neither do the contributors to this forum. What do we know about what Apple needs to succeed as an investment in the medium term? It needs some volume growth beyond what it achieved this last quarter. It needs to maintain its wide margins. It needs to expand I Phone sales because that is where it makes its money. So the question for me is whether it can maintain sales and margins for a mature product and that would seem to depend on continued meaningful innovation as well as brand image. No one is more status conscious than a Chinese consumer. The I Phone itself does not appear to be superior to its leading competitor, purely as a phone.

    In buying/holding Apple stock you are laying a bet that Apple will adequately innovate in its future 2 or 3 generations of I Phones to maintain its huge margins and increase sales. Since I have no idea I will pass. Sales and margins would crash if it became uncool to pony up for one.
    Jan 31, 2016. 02:39 PM | Likes Like |Link to Comment
  • Why You Should Look Past Philip Morris' Dividend Appeal  [View article]
    I have to admit some bias as my PM stock is up 99% since I bought it and my yield on book is over 9%. Aside from arguments made in this article, I went into PM to get into tobacco while avoiding US litigation risks, the same reason PM was formed in the first place. I would add one other factor for optimism. Many parts of the world have state owned tobacco companies, including China. Status requires smoking private brands which are in any case better products. The Chinese are not going to stop smoking any time soon and it is the only place where business suits are sometimes tailored with shorter left sleeves to better show off your Rolex. PM should continue to do just fine.
    Jan 31, 2016. 02:22 PM | Likes Like |Link to Comment
  • Cintas: A Stodgy Dividend Aristocrat With Excellent Dividend Growth  [View article]
    I have always liked the company but I can't see making a big deal about a 1.25% dividend yield. Coverage would be even better if it paid a 0.5% yield. This is a growth play, not a dividend play, and you either accept a growth story or you do not. At my stage of life I rarely invest in companies withy a paltry dividend although I may have 3 out of 85 stocks with no dividend. The story has to be very compelling and then I buy half the normal hold number. If you are right you get to the hold number in a few years. If you are wrong you give up less income. If you like the story I would suggest buying a quarter of your normal hold then adding to it over the next year to get to a half. if the stock edges up you are less likely to lose money with some cash in the bank. If it goes down or does nothing you might reconsider holding the stock if it happened because of lack of growth.
    Jan 31, 2016. 02:12 PM | Likes Like |Link to Comment
  • Kinder Morgan Changes Course  [View article]
    Given Richard Kinder's incompetent management of the group the last few years, I wouldn't touch anything he manages with a barge pole. Among other things he took on huge commodity risk instead of running his pipelines and he hammered his loyal long term KMP investors with massive taxes when he merged the MLPs with KMI. The directors should be sacked along with Kinder but I expect they are still enjoying being overpaid for their dubious oversight.
    Jan 25, 2016. 11:47 PM | 1 Like Like |Link to Comment
  • Oil Is In A Bull Market  [View article]
    In the long run low oil prices can stimulate the economy but commodity prices spike up and down in a volatile situation so the increase means nothing. Supply is still increasing globally faster than demand so prices are more likely to get worse rather than better. Iran is back in the game and Iraq is setting production records. The only positive is I filled my car tonight below $2 a gallon.
    Jan 25, 2016. 11:40 PM | 1 Like Like |Link to Comment
  • Crude Oil Finally Bounces, Is It Time To Purchase Exxon Mobil?  [View article]
    This is a supply driven oil market and there is no sign whatsoever that supply will not continue to increase. Iraqi production is setting new records and Iran is lining itself up as a major supplier to China. The supply/demand situation should get worse for producers unless OPEC and Russia cut production. They could do that out of desperation but it requires that deadly enemies cooperate. The Saudis are bombing Iran's allies in Yemen and Russia is bombing Saudi allies in Syria. It could still happen but it seems unlikely. No one can afford to cut production by themselves to stabilize markets.

    Until supply and demand come into balance, oil producers are dead meat. I will not be going long absent a solid agreement to cut production. The majors have zero influence on prices, Their production is miniscule compared to the national oil companies.
    Jan 25, 2016. 11:35 PM | Likes Like |Link to Comment
  • I Was Wrong About General Electric  [View article]
    How about the Viking kicker who missed a chip shot field goal to win the game. A walk off win.
    Jan 25, 2016. 11:26 PM | 1 Like Like |Link to Comment
  • I Was Wrong About General Electric  [View article]
    Not sure about never a sell. I sold 6 years ago at $35.
    Jan 25, 2016. 11:25 PM | 5 Likes Like |Link to Comment
  • Jeffrey R. Immelt, GE's Wunderkind  [View article]
    Jack Welch built a house of cards that came crashing down in 2008. GE's financial empire was built on cheap funding which came entirely from the strength of the industrial side of the company which had no debt. Perhaps the reason GE has limited digital skills is that Welch the genius sold its silicon chip business. He preferred financing used cars. Countless skilled managers left GE because Welch created few opportunities for the great engineers he had.

    GE should have been reducing its financial holdings well before 2008 but I did it myself by selling GE at $35. I am now long GE because they have good technology and can now concentrate on it instead of financing mom and pop stores. Immelt now has a chance to prove himself and we will see how good an acquisition he made with Alstom. The French have good technology and access to places GE knows nothing about. Managing Frenchmen can, however, be a learning experience. Note to Immelt: Frenchmen will work like dogs from Monday to Friday. Touch the weekend and you are in trouble.
    Jan 18, 2016. 02:15 AM | 1 Like Like |Link to Comment