Green Energy Waste Is Spoiling The Bunch [View article]
I agree that these technologies will inevitably be the way of the future, but how long will it take? And as shareholders, how much will we be diluted/and or own bankrupt companies before it happens? Will investors of RTK be rewarded in 10 years if they hang on?
Impact On Alcoa From $1,863 Aluminum And Production Cuts [View article]
I appreciate everyone's insight and believe that this has been one of the better discussions on SA in a while regarding Alcoa. I just can't agree with a policy of not hedging against aluminum prices which I contacted IR at Alcoa about numerous times and had to complain to the SEC about them before getting a response. No joke, they did not take it lightly either which I thought was good. I actually did a project in business school that studied the effects of hedging on the returns of gold mining companies and the results were pretty much unanimous that over the long term, companies that hedged their gold positions had better overall returns. We could talk about the results forever, but that policy is really on the CFO, and I think is causing a lot of pain for LT shareholders. When IR finally did contact me, they invited me to their office which happened to be about 4 blocks from where I work on Park Ave. across from the JPM building but I never went in. To their credit it turned out they had some turnover in the department and were backlogged on responses to investors. But one thing that is sad is that the Aluminum Company of America (ALCOA) has so much of its future depending on China. Just another wonderful result of lax globalization policy.
Gun Stock Shootout: Smith & Wesson Vs. Sturm Ruger [View article]
OK well let's assume you are correct. I don't know Smith and Wesson very well, but it seems that their highest point was in 2007 and then they were crippled by the recession like every one else. It was a nice steady climb from 2005-late 2007. Why haven't they rebounded with the vigor of the rest of the market when conditions for them should be good right now? RGR is a different story, it seems like they have grown exponentially since 2007 while SWHC has been stagnant at best. What will be the catalyst for S&W? Like I said before if their debt load carries a low cost of capital and they are using it wisely, then they should do well long term if they have superior products and a good business plan. But the catalyst of gun control fear has passed. So other than coming out with superior revenue and earnings growth, or at least EBITDA growth that is significant, over a few quarters, I don't see a ton of upside in 2013 at least. Of course one blowout earnings call could prove me wrong, but I don't see an edge.
The OS might be refined but I still don't like it compared to the iPhone. I will be trading in my Samsung and going back to Apple when my contract is up. The phone is too big, flimsy, annoying to type with, even if you use the feature where you just slide your thumb around to different letters, they don't always get it right. Its not a horrible phone, the Apple products are just better.
Impact On Alcoa From $1,863 Aluminum And Production Cuts [View article]
This position in Alcoa has been the absolute worst investment I have made in 5 years. The company is so poorly run, how could a company that relies so highly on metal prices not have put in place hedges against their exposure to aluminum prices? I had a nice gain and kept buying at higher prices all the way into 2011 and then aluminum prices broke, and I am sitting on shares with a $14 cost basis that look like they are going nowhere. As you said, not one "higher high" in two years. Originally I was going to just hold the position as I had faith that the auto industry rebound and aviation contracts would boost FCF and that expectations were so low that management could possibly eke out a few earnings surprises. They just continue to cut production, and as this article says, have a heavy debt load. Sad for a U.S. company that has been around for over 100 years. This stock is a dud and it might be time to just bite the bullet and take the loss. If it was in a taxable account I would have done it last year.
I bought a Galaxy S3 and at first, I liked it a lot. Then I slowly started to realize, the big screen made the phone too big. It was not made nearly as well as my iPhone, (but the service was better than the iPhone 4). The user interface was ok, but iOS is just more user friendly. In fact, I eventually gave up on the phablet idea (I bought the s3 in part for the larger screen), and just bought myself an iPad because I really wanted an iOS device. I suspect that there are going to be a lot of iPhone defectors like myself going back to Apple in the coming years. Many people are happy after they switch to Android, but I just haven't gotten used to it. I use my phone only as a phone pretty much now, the apps are just not as good as Apple's.
Gun Stock Shootout: Smith & Wesson Vs. Sturm Ruger [View article]
I don't really care for either of these stocks as I do think eventually there is going to be more strict gun rules, it is not necessarily "bad" that S&W has 64M in cash and 44M in debt while Ruger has no debt. If the debt has been refinanced at today's low rates, which it probably has been, they have a lot of capital to put at work to fuel more growth. But the question is will the debt capital be used to improve the product line and what exactly is the cost of debt? Yes it is safer to be debt free, but many companies that are in a growth phase that use debt capital efficiently end up growing faster than more mature companies without. As long as their interest coverage is reasonable, I wouldn't worry so much about S&W's debt. There are other reasons that make both of these companies risky investments as 1) either gun laws will eventually become stricter with more and more violence in the news everyday. (Look at Hofstra, the argument that guns stop violence is easily refuted when a cop can't even control a situation and ends up shooting an innocent young girl), 2) gun laws don't change, and the fury of gun buyers slows because they are no longer afraid of losing their guns.
Benjamin Graham's Rules For The Common Stock Component: The Walt Disney Company [View article]
The above comments illustrate exactly what I was saying. Disney is a Valuegrowth stock. You need to value the GROWTH assets of a stock such as Disney that has diversified itself way beyond what it was 14-20 years ago. It is no longer a stalwart like Walmart or Home Depot that you can use a Graham-like analysis on to determine whether it is fairly valued. The best estimation you could do is value the assets of the "orginal Disney" such as the theme parks, merchandising revenue from characters like Mickey or the Little Mermaid, older movies and DVD sales and royalties for those (including streaming rights) and try to do a separate DCF analysis to figure out the present value for those cash flows that have a low-stable growth rate, say maybe 2-3%. To value the growth assets you would have to take the revenues for ESPN, Marvel, Lucasfilm (estimated), Pixar, etc. and do another DCF to come up with a present value for those assets. From most analyst reports I have seen, although they are always taken with a grain of salt, the present value for Disney is between $73-75. And that is using conservative growth rates. Instead of "Diworsification" Disney has had remarkable success on return from investment on its acquisitions, and its older assets as well. This is extremely rare for such a huge company and is really a testament to Bob Iger and the management team. Steve Jobs was also on the Board while he was alive if I recall, so you have had a pedigree here. Going forward after 2015 if Iger leaves, we will see. I also worry a bit about shares being dumped in large amounts from the Steve Jobs trust but I am sure there are restrictions on how much can be sold in a particular time period.
The 'Retire Young' Portfolio: Which Gun Company To Add? [View article]
The best investment thesis for S&W is the strong liquidity position for such a small company and a 21% short interest that could easily start covering after the gun law bonanza is over. The biggest threat is institutions dumping the stock over moral issues, etc. The company will HAVE to deliver growth in the short term to get a serious pop and short covering, which there is a strong probability of. I just don't think the long term growth estimate is correct, once people relax and realize their guns are not being taken from them, they will stop buying new guns and sell their old ones on the secondary market. Its a tough call. I wouldn't put it in my "Retire Young" portfolio, but then again, I wouldn't sell calls against my strong positions limiting my upside and generating more trading fees either for a LT retirement growth strategy either.
Benjamin Graham's Rules For The Common Stock Component: The Walt Disney Company [View article]
The reasons why Warren Buffett strayed from using stringent Graham rules (but still adhering to most) are well illustrated with Disney. Disney very well may be overvalued at $67 and change. But looking at the past 10 years of earnings does not take into account the phenomenal growth that a company of this size has created from within and through acquisitions. You can look at history all you want, but then you are not valuing the GROWTH assets of Disney correctly. Furthermore, even though you could say there is a fair amount of competition in the media space, Disney does have an economic moat in many different ways. Nobody has been able to penetrate ESPN's grasp of sports coverage. Nobody does the theme park experience better. Classic movies that will always be owned by Disney (and characters like Mickey of course) cannot be replicated. And now, with exclusive rights to Marvel and Star Wars, an entire source of film, merchandising, video game, theme park attractions, etc. has been secured by Disney. This creates a moat that is probably discounted right now at the current market price. The only question to the wide moat's sustainability is the fees that Disney can charge for ESPN, if the current cable TV structure erodes. Still, ESPN will draw revenue from its web and mobile applications, and will probably get a larger subscriber base than a lot of channels. (This legislation will probably not get through anyway). ESPN deportes will only grow as the Hispanic population does. So, in essence, not everything is in the numbers, historical numbers or estimates. Businesses are complicated entities, especially one the size of Disney.
The 'Retire Young' Portfolio: Which Gun Company To Add? [View article]
You are right. Institutions and certain pensions won't touch either of these with a 10 foot pole. Might be hypocritical, but the gun issue will not go away as quickly as some think. And, I don't know RGR and SWHC's product lines that well, but I'm assuming that most people buy rifles and shotguns because they are for hunting and you don't need a permit in most areas. SWHC would be a good candidate for a neutral option strategy, one where you sell both puts and calls and make money as long as there are no big price moves because there probably won't be in the next 3 months at least. Long term they could work out better but all this political drama and less defense spending can't be a positive. You could shoot Mickey Mouse in your portfolio with your .45 Magnum S&W though. Honestly, buying a few guns and selling them (legally) to some wackos in a few months might make a nice return.
You should not have sold covered calls for that low of a strike price on this one. I keep telling myself to sell covered calls but then she just keeps moving up. I think DIS is probably going to hit the $70 range and then I will re-evaluate. I also have 200 shares but at a price of $31.86 so I am sitting on 110% gains as of this writing and still don't want to sell. I also bought calls before earnings that I sold out of prior to, unfortunately because those are still rising. Only thing worrying me is the new legislation where people may be able to opt out of ESPN, but the future streams of cash from Lucasfilm and all the other things that make this company great seem like too much to miss out on. Macro forces could push the price down which is why I have thought of collaring the stock but I would rather wait for a break in trend than miss out on any upside. For me to justify selling the stock now I would have to think of a better place to put my money and I just don't see that many opportunities right now. So, a put spread or collar may just have to be answer if things get dicey. I would sell some puts for your portfolio at a price you are comfortable with and profit with the possibility of loading up at a better price.
6 Reasons Why Las Vegas Sands Is Tempting: Yet No Buy [View article]
I'm just saying literally you can stay at MGM properties for 25-50 bucks a night when a few years back it was at least over 100. I get offers from Wynn now for $139 rooms during the week and $239 on the weekends. I would assume the Venetian in Vegas is pretty similar. Maybe more people are staying and gambling at the MGM casinos because the rooms are so cheap, I don't know.
Actually a lot of times stocks keep making higher highs after all time highs. Buy high and sell higher has certainly worked in the past. All about sentiment and valuation.
Green Energy Waste Is Spoiling The Bunch [View article]
Impact On Alcoa From $1,863 Aluminum And Production Cuts [View article]
Gun Stock Shootout: Smith & Wesson Vs. Sturm Ruger [View article]
Apple's Magic Is Broken [View article]
Impact On Alcoa From $1,863 Aluminum And Production Cuts [View article]
Apple's Magic Is Broken [View article]
Gun Stock Shootout: Smith & Wesson Vs. Sturm Ruger [View article]
Benjamin Graham's Rules For The Common Stock Component: The Walt Disney Company [View article]
The 'Retire Young' Portfolio: Which Gun Company To Add? [View article]
Benjamin Graham's Rules For The Common Stock Component: The Walt Disney Company [View article]
The 'Retire Young' Portfolio: Which Gun Company To Add? [View article]
Disney Has Another Great Quarter [View article]
Walt Disney: Strong Price Momentum Is A Warning Sign [View article]
6 Reasons Why Las Vegas Sands Is Tempting: Yet No Buy [View article]
4 Reasons To Buy Disney Right Now [View article]