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kg82

kg82
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  • "Here's a novel way to drive up a company’s share price," writes the NYT's Jeff Sommer. "Pay billions of dollars in additional taxes." Forensic accountant Robert Olstein reckons that companies such as Apple (AAPL), Microsoft (MSFT) and Cisco (CSCO) should repatriate the tens of billions dollars they hold abroad, pay tax on it, and then use the rest of the cash to repurchase stock. That would boost their share prices by at least 20%. [View news story]
    We should not be so quick to dismiss the comments of CinncinatiRick. It is a fundamental question of "who's money is it anyway?" Applies to both corp and ind taxes, which are just different levels of the same thing.
    Mar 27 07:45 AM | 1 Like Like |Link to Comment
  • "Here's a novel way to drive up a company’s share price," writes the NYT's Jeff Sommer. "Pay billions of dollars in additional taxes." Forensic accountant Robert Olstein reckons that companies such as Apple (AAPL), Microsoft (MSFT) and Cisco (CSCO) should repatriate the tens of billions dollars they hold abroad, pay tax on it, and then use the rest of the cash to repurchase stock. That would boost their share prices by at least 20%. [View news story]
    So, the President, the titular head of the party in power has nothing to do with setting the legislative agenda and signing whatever bill into law (particularly when the same party controls one or both of the legislative branches)? Last I heard they call it "Obamacare" not "Reidcare" or "Pilosicare". Also call them the "Bush" tax cuts. Etc etc etc.

    Maybe you should re-read that 6th grade civics book you reference.
    Mar 26 10:43 AM | Likes Like |Link to Comment
  • "Here's a novel way to drive up a company’s share price," writes the NYT's Jeff Sommer. "Pay billions of dollars in additional taxes." Forensic accountant Robert Olstein reckons that companies such as Apple (AAPL), Microsoft (MSFT) and Cisco (CSCO) should repatriate the tens of billions dollars they hold abroad, pay tax on it, and then use the rest of the cash to repurchase stock. That would boost their share prices by at least 20%. [View news story]
    Why not just buy back the stock over there? Is there a law against that?

    Also, ignores that the US Govt is just creating an incentive to invest in P&E and people abroad thru double taxation. Rather than fix their error, they would rather call smart business people acting in the best interests of their owners greedy and unamerican.

    Apparently in politics you can play the blame game for a full 8 years. In business, we know a CEO get a free pass for a quarter or at most a full year.
    Mar 24 08:56 AM | 5 Likes Like |Link to Comment
  • Annaly, Chimera And CreXus May Soon Combine Into One Diversified Mortgage REIT [View article]
    Does CIM give NLY anything that Crexus does not? If they just want access to the non-agency market, why not ramp up Crexus? FIDAC is a wholly owned sub, can it just be walled off. Probably not. You have to ring fence before the liability issue, not after.

    Is it a given that the CIM issues are due to FIDAC? I'm not familiar with the issues.
    Mar 17 10:37 AM | 1 Like Like |Link to Comment
  • Hello Taxes... Goodbye MLPs [View article]
    The validity of your comment depends on how greedy government gets with taxation. Have you seen the recent articles on tobacco cigarette smuggling from low cig tax states like VA to high cig tax states like NY? the cops call it Smurfing. I first read about it in The Economist magazine 11/24/12 issue). VA tax is 30 cents, compared to $4.35 in NY (I think they forgot about the additional tax in NYC, which brings to per pack state and local take well over$5). They claim the margins for the crooks are better than cocaine, heroin, pot and guns. Also they claim that 40% of NJ cig sold come in from other states, so it is not a small problem.
    Jan 5 09:27 AM | Likes Like |Link to Comment
  • Hello Taxes... Goodbye MLPs [View article]
    Reel Ken:

    Thanks for writing. I found your thoughts helpful. I try to find tax advantaged investments, since my W-2 earnings put me in the top bracket. I have looked at MLP's before hoping that there would be some real tax advantage as is so often suggested and I liked the toll road business model of all the mid-stream pipelines. After looking a little deeper I intuitively felt that the tax advantage was not locked in, but was variable. As you and the other readers point out,"if this happens, it can be better, if that happens it could be worse". You put some math around a specific example, which I appreciated. My feeling was that there was not enough of a potential tax advantage to account for all the variability (both things in our individual control and things out of our control). Most people look at the variability around the things they know, ignoring the potential variability possible from the things they don't know. So, you have to like the company you pick to own, just like other stocks.

    I am wondering, however, about how this analysis would look if you added another factor to your model, like inflation. In some ways, MLP's could be like buying a house with a mortgage. Buy the asset now with today's dollars, pay it back later with cheaper dollars, all while the value of the asset goes up to account for the inflation. I know someone will point out that if you bought the house at the top of the market before the crash, this does not work out, but analysis has to be across a number of scenarios, preferably with some view on the probability of the scenarios. Anyway, do you have any thoughts on this? Or other ideas? A few of my baseline assumptions are slower growth in the US and real inflation (I know, kind of obvious). With this in mind, maybe there is room for some MLP investment, beyond the normal "tax advantages" debated here. I'm assuming this was a major point you were trying to make with this piece - factor in the tax as best you can, but that is not the sole reason (the benefit is not great enough nor sure enough).

    Thanks again for your work.
    Jan 4 09:17 AM | Likes Like |Link to Comment
  • Hewlett-Packard Could Have Recourse Options From The Autonomy Deal [View article]
    People most often tax loss sell to offset realized gains in the same tax year, so many will tax loss sell this year, regardless of the rates IF they have gains to offset.
    Nov 23 10:09 AM | Likes Like |Link to Comment
  • Annaly: The mREIT Investors Love To Hate [View article]
    As many have stated, AGNC has more leverage. More risk means more return - at least over the recent past. The question one must ask is whether the great return (to date) is enough to compensate for the greater risk. There is no doubt that there are icebergs ahead, it is just a matter of time. Will AGNC be able to slow down at just the right time and avoid a crash? Time will tell. The more experienced captain has already slowed his ship. He has scraficed speed for an additional level of safety. NLY is doing it's best to minimize the damage from an impact. Full speed ahead seems like a good strategy when one views the clear ocean behind, but it may not be.
    Jul 25 08:44 AM | 1 Like Like |Link to Comment
  • Could The SEC Be Done With Questions Surrounding REITs? [View article]
    There is nothing in the attached SEC release that says or even suggests that the SEC has reached any conclusion on their review. They do reference that the review is underway. So why send it out? Why not? While all of this is speculation, they may feel a need based on their review to stress the differences between the REIT types and the unique issues associated with them. They go into length on non-exchange traded REITs, for example. Also, they highlight the different types including the mreits. They could be foreshadowing a decision to treat mreits as investment co's. This is certainly an obvious question if you read the original SEC piece annoucing the review and the call for information. They state this. Or they may just want investors to know that all REITs are not the same and mreits have different risks, being interest rate risk and significant use of leverage.

    Has anyone looked into how much of the secondary market securities are held by mreits? If it is significant and potentially disruptive to the housing market, it would be risky for the SEC to change the tax treatment of mreits. IMO this is what will drive the decision one way or the other.

    I have no axe to grind, long NLY and hoping for no change in status.

    The SEC has become more activist in recent years and the government is on the hunt for more tax revenue, so who knows? The point is, this release says nothing about the review.
    Dec 30 01:59 PM | Likes Like |Link to Comment
  • 4-Must Own Dividend Stocks And 3 To Avoid For 2012 [View article]
    Todd:

    Nice piece. Any view on why the board continues to keep Jeff? His reign has been very disappointing for shareholders. Also, his large bet on the movement to alternative energy may prove to be early.
    Dec 28 08:37 PM | 3 Likes Like |Link to Comment
  • 7 MLPs With Magnificent Yields [View article]
    Since this is about investments, I'm more concerned about the math. I found the piece helpful, thank you Sol.
    Dec 27 09:55 AM | 2 Likes Like |Link to Comment
  • 4 Overvalued Tobacco Stocks To Avoid Today [View article]
    Moderate drinking has heath benefits, proven in study after study (the French paradox etc). While moderate smoking is still harmful, only less so than heavy smoking. Also the addictive nature of the two are different. Far more become addicted to smoking than drinking and thus travel down the path of "less bad" to just "bad". So using logic one will see that for users smoking is alway bad, but in different degrees, with a strong trend towards really bad. While drinking goes from being good to bad, with a weaker trend (at least when compared to smoking) towards bad.

    You can apply the same logic to guns, fossil fuels etc. Few will rate as poor as smoking. The benefits to smoking all accrue to groups other than the users of the product (investors, employees, growers, advertisers, govts thru taxes etc). These non-user benefits are obviously there for drinking too.

    Long MO
    Dec 26 10:02 AM | Likes Like |Link to Comment
  • Annaly: Easiest Way to Make a 14.5% Return [View article]
    This is a mortgage REIT. Go to their website, there is a lot of information there. REIT's are not taxed at the company level (that is why they have to pay out the majority of their earnings to shareholders). Your dividends get taxed as income, not at the dividend rate. There is some efficiency there, just like other REITs. You don't get taxed twice, once at the corp level and again at the individual level. The dividends go up and down, as their earnings go up and down (this is not a traditional dividend stock).

    They borrow short and invest long. The risk is the squeeze that can happen when rates go up. The value of the long bonds they own goes down just as their borrowing costs go up. NLY attemps to hedge this with their "bar bell" strategy - a part of their portfoloio will go up just as the other part goes down (again see website), but there is no doubt that their earnings power (and the dividend) go down as rates go up. The question is when will rates go up? The stock prices for this, that's why you can get a yield now in excess of 14%.

    This has been and probably will continue to be a good investment. But remember there is no such thing as free money, there is always risk. Don't over commit, include this (if you want) in a well diversified portfolio. Spread your bets.
    Feb 11 06:27 PM | 3 Likes Like |Link to Comment
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