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  • The Hurdles Are Getting Higher For Active Management [View article]
    Seems like your article flips back and forth between actively managed funds and actively managed investments. So your quote of Mr. Sharpe "the average actively managed dollar must under perform" is only true if you include all the non passive investments including those purchased directly (outside of funds) by individual investors. There is nothing that keeps all actively managed mutual funds (as a group) from outperforming as long as the total of individual investors buying stocks directly under performs. In the same article you mentioned another academic study that says "on average, individual investors have perverse security selection abilities". This statement seems to question the efficiency of the market but in any case if the small investor, selecting his own stocks, under performs badly that seems to say that ignoring costs, the total of actively managed funds have to outperform. Hope this helps!
    Jun 17, 2014. 10:39 AM | Likes Like |Link to Comment
  • Good Results In The TMS Plus The Iraq War May Be Just What The Doctor Ordered For Halcon Resources [View article]
    My guess is that there will be a release from the Petroleum Reserve long before U.S. oil prices go up 20% (consumer spending is too fragile to handle it). And Wilson knowing this, will increase his hedge all the way up, if he hasn't already-don't spend those new revenues.
    Jun 15, 2014. 10:34 AM | 3 Likes Like |Link to Comment
  • Devon Energy: Jim Cramer And Analysts Say Buy [View article]
    Bret: Hope you are right. I bought DVN starting in 2011 agreeing with many pundits of that time that DVN would be a takeover candidate of an Exxon or other multi--obviously never happened and I am just getting back to even.

    Could you expand on your BAC statement that Devon is worth more when "adjusted for the value of its public holdings"? Can't quite figure out what that means. Does "public" mean government land that is leased or are they just saying that their mineral right leases from local land owners are more valuable than that held by the competition?
    Jun 11, 2014. 11:47 AM | Likes Like |Link to Comment
  • Merck's Acquisition Of Idenix Pharmaceuticals Is An Admission Of Inferiority To Sovaldi Regimens [View article]
    Dr. DeSantis: Looking at the comments, including that of DoctRx, your articles seem to be well received but I wonder who you are writing for? This article is full of medical terminology and jargon that is meaningless to me and probably 98% of the SA audience. How many readers can draw useful information from a statement such as "mean maximum 4.2-4.3 log"?. This might be a fine article for the investment section of a medical journal but why not take a cue from DoctRx and make your articles of value to the average reader.
    Jun 11, 2014. 08:22 AM | 1 Like Like |Link to Comment
  • Deere & Company's Hidden Source Of Value [View article]
    Tuliptown: Very good question but I can't give you a good answer. I think analysts got a very bad rep in the 90s for giving out way too many buy ratings--especially in the tech world--think a few might have gone to jail. I don't pay too much attention to buy ratings (especially for large caps) but do pay attention to sell ratings since they are probably dangerous for analysts to give. If there is any incentive to give out sell ratings I am unaware of what it would be other than trying to provide value to customers. Would love to see some good research on the value of analyst ratings but for now I will go with my gut.
    Jun 3, 2014. 07:35 PM | Likes Like |Link to Comment
  • Deere & Company's Hidden Source Of Value [View article]
    Zacks provides analyst ratings for many stocks. DE has one of the worst ratings I have seen. Out of 19 analysts, 6 are strong sells and 2 are sells. I don't remember the last time I saw a big cap stock with 6 strong sells. Analysts, as a group, tend to be overly optimistic (mostly to cover their butts with management). Stay away from this cow manure.
    Jun 3, 2014. 06:08 PM | Likes Like |Link to Comment
  • Financial Stresses Appear In Fracking Companies: Investment Implications [View article]
    You seem to place a lot of trust in Bloomberg and their two articles. Seems like there are a lot of sources with more expertise than Bloomberg. The insiders would be the first to know if Bloomberg is correct. I haven't seen any great amount of insider selling in the oil and gas industry. If Bloomberg is correct however, than I would add pipelines to the list. There seems to be some over building based on an assumption of ever growing transportation of oil&gas.
    Jun 1, 2014. 09:35 AM | 2 Likes Like |Link to Comment
  • Zen And The Art Of Market Cycle Maintenance [View article]
    I wonder if your "romantic" viewpoint isn't just another take on the "efficient-market hypothesis"? If all publicly available information is priced into the price of the individual stock it is also priced into the market as a whole. So is your left brain rational investor that you call "classical" someone who thinks they can pick stocks to beat the market? Is that really any different than timing the big moves of the market? I am guessing that the "romantic" is someone who realizes that they can't beat the market--they can't pick individual stocks to beat the market nor can they time the big moves to beat the market--they typically invest in low cost index funds and hold through highs and lows. I find myself after 30 years of investing, slowly moving to the side of your romantics.
    Jun 1, 2014. 07:54 AM | 3 Likes Like |Link to Comment
  • Is It Time To Sell These PIMCO Closed-End Funds? [View article]
    One last comment and then I will give it up. Your point is still not clear. We already have an SA author with the name of Factoids. Yes, Gross is a great salesman--that's a major part of his job. And yes, he has an ego as all billionaires probably do. And yes, PIMCO didn't start PDI as a hobby. But how does any of that explain how Gross is buying PDI, not to make money but to do---? Exactly what? When he touts PDI at the Barron's Roundtable isn't he going to pick an investment that is most likely to make him and PIMCO look good in the end of year reviews? When he buys the fund for his personal accounts doesn't he want the same great results? What possible benefit can there be to pushing a poor fund on the public?

    Your comment left the impression that Gross did something underhanded but you leave it just fuzzy enough to get away with. And he is a California Boy!
    May 26, 2014. 04:37 PM | Likes Like |Link to Comment
  • American Realty Capital Properties's Valuation Is Lower Than Its Peers - While Justified, It Still Is A Buy [View article]
    REITs don't have to distribute AFFO as dividends. They have to distibute 90% of taxable income (which has been greatly reduced by depreciation). Most REITs distribute far more than required.
    May 26, 2014. 03:41 PM | 5 Likes Like |Link to Comment
  • Is It Time To Sell These PIMCO Closed-End Funds? [View article]
    The world loves conspiracy theories. PDI has a market cap of $1.5 billion and PIMCO has AUM of close to $2 trillion so PDI is a gnat. And it's a closed end gnat so Gross pushing it doesn't directly gain any assets for PIMCO unless you think they will have a secondary offering.

    Let me suggest a more plausible conspiracy. The small investor you speak of hasn't bid up PDI because its published distribution is less than 7% and many small investors don't bother looking at the actual performance numbers and often aren't aware of special dividends unless they hold the fund. PDIs actual 2013 distribution (and I am guessing for 2014), including special distributions is closer to 10%. After Gross and other insiders make their purchases, what happens if PIMCO announces an increase in the PDI distribution (and elimination of the specials) to 9-10%? I am guessing the premium jumps up into the range that other PIMCO funds with similar distributions/performance numbers have. Those premiums range from 20% to 60%.

    That's a conspiracy worth messing with. I'm along for the ride.
    May 26, 2014. 02:18 PM | 2 Likes Like |Link to Comment
  • Is It Time To Sell These PIMCO Closed-End Funds? [View article]
    Left Banker: It is instructive and valuable to see how different investors can look at the same data and come up with totally different conclusions. You, and a lot of other SA investors, seem to focus on the distribution rate of a CEF (which you call "yield"). Take a closer look at PDI and you will see that in its short two year life the price (& NAV) has gone up from the IPO of $25 to the current price of $33. That tells me that PIMCO could increase the "Yield" quite a bit from the current 7% (if you look at PGP its price is the same $25 now as its IPO price of 2005 which means its 8.9% distribution matches its long term average return).

    The one year return for PDI (14.96%) is almost exactly the same as that of PGP (15.12%) but PGP sells for a 50% premium and PDI sells at it NAV.

    PIMCO, based on past performance, will arrive at a distribution rate for PDI that they think will match its long term real return. They haven't done that yet only because the fund is too new to have a long term return.

    In the short term the distribution rate tells us almost nothing. In the long term it will be determined by its performance and so far PDI's performance is in a class with PGPs--that is why Bill Gross is buying PDI in such large quantity.
    May 26, 2014. 08:30 AM | 5 Likes Like |Link to Comment
  • Shareholder Value Goes Global [View article]
    Left Banker: Thanks for the research and heads up on the two foreign funds. I can probably find out on their site but do you know if the PKW and IPKW stock selections are based on an index or are they actively selected by the managers?
    May 25, 2014. 07:12 PM | Likes Like |Link to Comment
  • How Articles Can Affect The Share Prices Of Stocks Like Sirius XM And Capstone Turbine [View article]
    Crunching: Another way to look at the impact of SA authors--have you ever bought a stock based on an article on SA? You make the point that you seldom "uncover meaningful non public info" and I'm sure that is true but most investors (including me) aren't aware of the vast majority of PUBLIC investment info. An example--before I started reading SA some three years ago I was totally unaware of Business Development Companies (BDC)--now I own three of them. Those articles didn't provide non public info but they did provide information that led to the purchase. Does that not move the market in some small way? Quantifying all those small impacts is a different story.

    If you look at the portfolios of many SA readers you will find far more ownership of MLPs, BDCs, dividend stocks and closed end funds than non SA readers--because those are topics that are heavily followed. On the other hand since SA avoids open end funds like the plague they are probably under owned by SA readers.
    May 22, 2014. 09:35 AM | 1 Like Like |Link to Comment
  • Caution Advised If Investing In Floating Rate Loans CEFs [View article]
    John: You make the statement that none of the distribution "was from ROC". Not sure what you are basing that on unless you are only looking at 2013 or 2014. I looked at the first three on your list on Morningstar and their NAV is far below their IPO price and that tells me that on average their distribution has exceeded their earnings and that to me is ROC. For example, VTA had an IPO of $20 and its current NAV is $13.90 (price $12.89). Now at the time of IPO there is some loss of NAV to grease the palms of the brokerage crowd but nowhere near six bucks. Most of that $6 is ROC. Any thoughts?
    May 21, 2014. 07:28 AM | 1 Like Like |Link to Comment