Own These World's Leading Brands And Never Fear A Recession Again [View article]
Chuck,
Well done. The many novice investors participating on SA would do well to take your advice seriously. I believe it was also constructive that you pointed out while these are fine companies their current valuation should be considered before taking a position.
You might find it interesting that for many years I used, and I'm personally invested in ING Corporate Leaders Trust LEXCX. As you may know this fund exemplifies your point. Its also called the Ghost Ship Fund, set up in 1935 the original advisers wanted blue-chip dividend paying companies that could thrive for decades, that depended on brands and sustainable competitive advantages. The stocks wouldn't be traded except a handful of cases such as dividend elimination, debt default, or downgrade. And it has outperformed most of its competitors over the last decade. I'm not pushing it, and its not exciting. But can be a core holding, and its certainly a rare existing piece of market history. Pays a dividend, and fees are reasonable as you would expect. (Makes Buffett look like a newbe to this market philosophy, ha,ha)
Selloff has nothing to do with Meredith Whitney prognostications, Detroit or Stockton. Default rate on muni's is insignificant versus even investment grade corporates. Its all about interest rate uncertainty and an overreaction by retail investors. Have been in NUV for over a decade and it rarely trades at a discount to NAV. And it doesn't use leverage.
The question is; how fast and far do interest rates climb? I believe economic facts say minimal if at all for 2013. There is no consistently positive data with this painful recovery.
Berkshire Hathaway Just Bought This Undervalued Dividend Stock: How You Can Profit [View article]
I have it at 22x '13 estimates as well. But the current earnings growth outlook supports a rich valuation. This stock has run a long way since 12/31 so Buffett's cost basis is well back of where the stock or the option would be traded today.
And you should recognize Buffett may have played the put expecting a correction sometime this year where he could close the open put contracts, secure his profits, then buy the stock outright.
All said, the average retail investor/trader and Buffett likely have two different objectives here.
Tesla Motors As The 4th U.S. Automaker, And Why The Future Is Bright [View article]
My fault for ever opening this ridiculous article. You do realize this company is trading as of close today $91.50 with a $0.05 profit estimated for '13. More upside here, Really!?!
Treasury Bonds Still Look Attractive For The Months Ahead [View article]
Interesting article, certainly contrarian.
I would guess you are familiar with Van Hoisington who's firm manages about $6 billion and a small fund. Invests in all long term bonds, longest coupon and zero-coupon bonds. He has been long these bonds since 1990. He believes we are in a deflationary/disinflat... cycle, and his firm are disciples of Irving Fisher who wrote his Theory of Interest in 1930.
Also, in support of your article, Milton Friedman said inflation expectations tend to be a function of the experience of inflation, as you note in this current environment real disposable income is down, and when you get debt-to-GDP ratios that are too high growth rate starts to fall.
Hoisington expects very low GDP growth which is proving to be a little conservative. But his investing premise has been very successful.
Allied World Assurance: Undervalued And Prudently Managed [View article]
I completely agree, this company is well managed, and a good underwriter. The stocks total return has treated me well over the years.
Interesting side note - this stock was a long time favorite of famed asset manager Archie MacAllaster, sadly now deceased. One of the great ones from the old days, he was famous in the industry long before Barron's Roundtable participation.
Qualcomm And The Demise Of The Commodity Processor [View article]
experienced......
You make some good points, & I am also long QCOM, but estimates have come down for '14, I show $4.90 or 8% growth Y/Y. Prior to reading Mark's article I was concerned with more macro issues, global consumer, maturing smart phone market in western economies especially the U.S., etc.
Seems to me this potential development requires watching. Would also note selling of late is unusually high daily volume. A negative divergence from the market. Would hope it can hold the December lows.
George, thanks again for an informed view that differs from the bullish takes of SRPT found elsewhere. Knowledgeable investors will always consider credible views before investing especially with highly speculative issues. You didn't deserve the abuse!
George, good analysis. Interesting to see another view of this company and potentially important compound. As you probably know Barron's has been very bullish on this company given its potential.
junsont & zwerp2000.......your beef should be with the FDA not George Rho. No question DMD is a heart break tragedy for families. But on this site we are discussing investment decisions. If this drug is a failure no one benefits.
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
Dave, I understand what you are trying to do & having read some of your work I admire that you are trying to inform & help average investors. Having been around the block more than a few times myself I am trying to give back too. My heart bleeds for seniors on fixed income. However, after reading may posts on various articles on SA I'm not as constructive as you seem to be regarding the skill & knowledge level of many participants. Although I don't know Cranky It does sound like I may be a bit more of his opinion. Hope that doesn't make us Grumpy-old-men! Ha,ha.
All said, too many seem to think they've figured this thing out...rates go up, dump bonds, they want to be in equities. I started in the 1960's & well remember the 70's with raising rates, you couldn't give equities away. Great company's trading at single digits valuations of forward earnings. Investors didn't want them & dumped them at every opportunity.
Plus, I suggest that unless we see a reemergence of bond-vigilantes rates will be held in-check for a long time to come given our anemic economy.
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
Hi Dave,
I'm not sure I can improve on extremebanker response. And I would add that the "absolute truth" I am reading in the article & many of these posts is to dump bonds, & bond funds, & buy dividend stocks. Some of these posts are almost desperate which has to be concerning.
My thoughts were big picture targeted at average investors including high-net worth investors. If you put these folks on one end of a scale with say hedge fund managers on the other end of the investment scale I would agree you have an entirely different construct. It is all about risk & how it is managed.
If you went back to the late 90's you would have very few contributors & fewer posted comments regarding Warren Buffet's portfolio at Berkshire. It was common wisdom then that the world & technology had passed the old man. The smart guys in the room, & on CNBC, said sell all of those old, yesterdays news industrials, bonds, & you own utilities? What a fool! Back up the truck, & shovel in the shares of tech & telecom stocks.
Many of the same talking heads are at it again. This time sell bonds buy dividend stocks, or stocks in general. The "Great Rotation" it is being called. Therefore I contend with reasonable surety that most investors are best served with a balance of stocks & bonds that allows them to sleep at night. Many years, decades ago I heard a wise old investment guru say 'stocks are your speculation & bonds are the house you live in' your portfolio should contain both.
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
I'm more than a little concerned with the 'advice' here. Least we forget that a balanced portfolio is always the best investment strategy. Warren Buffett is not 100% equities! He has complex derivative strategies in play that I confidently venture no one posting on SA has the horsepower to replicate, & he owns companies outright.
Everyone should have their own allocation strategy which depends on a lot of factors. But, make no mistake some fixed income exposure should be part of a healthy portfolio. Is there inflation risk...of course. But millions were made from the time Alan Greenspan uttered the words "irrational exuberance" regarding tech/telecom as well as the overall market in 1997 & the crash in 2000. Right now the U.S. continues as the flight to safety designation. And when it finally happens don't think increased rates won't hurt equity prices.
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
You could use VWIUX instead of VCAIX. VWIUX are the intermediate muni Admiral shares. Much more broad based with about the same rate of return, & the duration is a little less. I believe Admiral shares require a $50k minimum investment. If a client doesn't have that liquidity level muni's may not be the right answer anyway.
Muni Bond CEFs Take A Beating Again [View article]
Jon,
Actually there are CEF's that don't use leverage too, including Muni CEF's. NUV is one, but it was hammered anyway. Certainly rotation counts for part of this. Duration may be a greater issue. But, note with NUV it was hammered in December too, to about the same level, Then recovered. What happened then is happening again with some discussion in Washington of muni bonds tax exempt status. I suspect this same uncertainty is driving this action.
All said, Washington does a lot of silly things. Eliminating the tax exempt status for state & local muni bonds is not likely to be one of them.
I have also been watching NEV which other than a couple days has really not been hit badly at all. I show NAV at $15.73 so its still trading a slight premium. Invests primarily in investment grade muni bonds & interestingly they will use leverage in the form of tender option bonds.
Own These World's Leading Brands And Never Fear A Recession Again [View article]
Well done. The many novice investors participating on SA would do well to take your advice seriously. I believe it was also constructive that you pointed out while these are fine companies their current valuation should be considered before taking a position.
You might find it interesting that for many years I used, and I'm personally invested in ING Corporate Leaders Trust LEXCX. As you may know this fund exemplifies your point. Its also called the Ghost Ship Fund, set up in 1935 the original advisers wanted blue-chip dividend paying companies that could thrive for decades, that depended on brands and sustainable competitive advantages. The stocks wouldn't be traded except a handful of cases such as dividend elimination, debt default, or downgrade. And it has outperformed most of its competitors over the last decade. I'm not pushing it, and its not exciting. But can be a core holding, and its certainly a rare existing piece of market history. Pays a dividend, and fees are reasonable as you would expect. (Makes Buffett look like a newbe to this market philosophy, ha,ha)
Why Leveraged Closed-End Muni Funds Appear Relatively Undervalued [View article]
The question is; how fast and far do interest rates climb? I believe economic facts say minimal if at all for 2013. There is no consistently positive data with this painful recovery.
Berkshire Hathaway Just Bought This Undervalued Dividend Stock: How You Can Profit [View article]
And you should recognize Buffett may have played the put expecting a correction sometime this year where he could close the open put contracts, secure his profits, then buy the stock outright.
All said, the average retail investor/trader and Buffett likely have two different objectives here.
Tesla Motors As The 4th U.S. Automaker, And Why The Future Is Bright [View article]
Treasury Bonds Still Look Attractive For The Months Ahead [View article]
I would guess you are familiar with Van Hoisington who's firm manages about $6 billion and a small fund. Invests in all long term bonds, longest coupon and zero-coupon bonds. He has been long these bonds since 1990. He believes we are in a deflationary/disinflat... cycle, and his firm are disciples of Irving Fisher who wrote his Theory of Interest in 1930.
Also, in support of your article, Milton Friedman said inflation expectations tend to be a function of the experience of inflation, as you note in this current environment real disposable income is down, and when you get debt-to-GDP ratios that are too high growth rate starts to fall.
Hoisington expects very low GDP growth which is proving to be a little conservative. But his investing premise has been very successful.
Allied World Assurance: Undervalued And Prudently Managed [View article]
Interesting side note - this stock was a long time favorite of famed asset manager Archie MacAllaster, sadly now deceased. One of the great ones from the old days, he was famous in the industry long before Barron's Roundtable participation.
Qualcomm And The Demise Of The Commodity Processor [View article]
You make some good points, & I am also long QCOM, but estimates have come down for '14, I show $4.90 or 8% growth Y/Y. Prior to reading Mark's article I was concerned with more macro issues, global consumer, maturing smart phone market in western economies especially the U.S., etc.
Seems to me this potential development requires watching. Would also note selling of late is unusually high daily volume. A negative divergence from the market. Would hope it can hold the December lows.
Sarepta Therapeutics: Irrational Exuberance [View article]
Sarepta Therapeutics: Irrational Exuberance [View article]
Sarepta Therapeutics: Irrational Exuberance [View article]
junsont & zwerp2000.......your beef should be with the FDA not George Rho. No question DMD is a heart break tragedy for families. But on this site we are discussing investment decisions. If this drug is a failure no one benefits.
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
All said, too many seem to think they've figured this thing out...rates go up, dump bonds, they want to be in equities. I started in the 1960's & well remember the 70's with raising rates, you couldn't give equities away. Great company's trading at single digits valuations of forward earnings. Investors didn't want them & dumped them at every opportunity.
Plus, I suggest that unless we see a reemergence of bond-vigilantes rates will be held in-check for a long time to come given our anemic economy.
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
I'm not sure I can improve on extremebanker response. And I would add that the "absolute truth" I am reading in the article & many of these posts is to dump bonds, & bond funds, & buy dividend stocks. Some of these posts are almost desperate which has to be concerning.
My thoughts were big picture targeted at average investors including high-net worth investors. If you put these folks on one end of a scale with say hedge fund managers on the other end of the investment scale I would agree you have an entirely different construct. It is all about risk & how it is managed.
If you went back to the late 90's you would have very few contributors & fewer posted comments regarding Warren Buffet's portfolio at Berkshire. It was common wisdom then that the world & technology had passed the old man. The smart guys in the room, & on CNBC, said sell all of those old, yesterdays news industrials, bonds, & you own utilities? What a fool! Back up the truck, & shovel in the shares of tech & telecom stocks.
Many of the same talking heads are at it again. This time sell bonds buy dividend stocks, or stocks in general. The "Great Rotation" it is being called. Therefore I contend with reasonable surety that most investors are best served with a balance of stocks & bonds that allows them to sleep at night. Many years, decades ago I heard a wise old investment guru say 'stocks are your speculation & bonds are the house you live in' your portfolio should contain both.
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
Everyone should have their own allocation strategy which depends on a lot of factors. But, make no mistake some fixed income exposure should be part of a healthy portfolio. Is there inflation risk...of course. But millions were made from the time Alan Greenspan uttered the words "irrational exuberance" regarding tech/telecom as well as the overall market in 1997 & the crash in 2000. Right now the U.S. continues as the flight to safety designation. And when it finally happens don't think increased rates won't hurt equity prices.
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
Muni Bond CEFs Take A Beating Again [View article]
Actually there are CEF's that don't use leverage too, including Muni CEF's. NUV is one, but it was hammered anyway. Certainly rotation counts for part of this. Duration may be a greater issue. But, note with NUV it was hammered in December too, to about the same level, Then recovered. What happened then is happening again with some discussion in Washington of muni bonds tax exempt status. I suspect this same uncertainty is driving this action.
All said, Washington does a lot of silly things. Eliminating the tax exempt status for state & local muni bonds is not likely to be one of them.
I have also been watching NEV which other than a couple days has really not been hit badly at all. I show NAV at $15.73 so its still trading a slight premium. Invests primarily in investment grade muni bonds & interestingly they will use leverage in the form of tender option bonds.