Seeking Alpha


Send Message
View as an RSS Feed
View Bruce7b's Comments BY TICKER:
Latest  |  Highest rated
  • Gilead: Rising Short Interest Provides Yet Another Reason To Own The Stock [View article]
    DoctoRx: I saw mention that Gilead is going to allow an Indian company to develop a generic version of Sovaldi for sale in India. On the surface this seemed very risky--how to keep control of the output to make sure it doesn't end up in the black market in the developed markets (maybe at 10% the cost). Is allowing generic production in the developing market standard procedure for an expensive drug like this? Is the formula for a drug like this public information or is it more similar to the secret formula for Coke?
    Aug 15, 2014. 03:42 PM | Likes Like |Link to Comment
  • Taxes Don't Lie [View article]
    Taxes do lie. Changes in tax law occur and taxpayers avoidance occur. Payroll taxes have increased over the last year in part because of the end of the social security temporary tax reduction. Corporate taxes have been impacted by a growing conversion of C-Corps to REIT status (think Iron Mountain and Weyerhauser) much greater use of MLP status, and tax inversions that have been in the news lately. Individual tax collections have been greatly impacted by the FED keeping interest rates low--pushing investors into MLPs and dividend stocks--which reduce tax compared to interest income.
    Aug 13, 2014. 07:37 AM | 7 Likes Like |Link to Comment
  • What Is The Proper Way To Measure Your Portfolio's Performance? [View article]
    Seems to me the paragraph that you quoted from Sharpe is so generic as to be meaningless. What does it really say? I think there is no perfect benchmark since the typical portfolio has a constantly changing makeup. A mutual fund like those of FPA might have 40 or 50 % cash at times in the cycle--surely that cash reduces the risk of the portfolio and comparing such a fund to a 100% stock portfolio makes no sense, at least in the short term. Many mutual funds have large, small and mid cap stocks, might even have a few REITs and MLPs (which aren't included in most indexes) as well as foreign stocks and cash. I have finally decided on something simple--I use the Vanguard Target Term 2020. It has a blend of bonds, large and small cap US and international stocks that changes as I get older and it even might be similar in makeup to my own portfolio at least once a year. It's not perfect, especially since it doesn't consider tax efficiency, but is close enough for me--if I can't beat it on a regular basis I should (but won't) concede defeat and just buy the benchmark.
    Aug 11, 2014. 04:15 PM | 1 Like Like |Link to Comment
  • Will The High Premiums For The PIMCO High Income Fund Continue To Erode? [View article]
    18: Over the last ten years PHK has a NAV annual return of 12.02%. Seems to me the only way that the long term distribution can exceed long term returns is by using return of capital and that can only last so long. They have already chewed up 44% of their IPO NAV in excess returns--before long there will have to cut the distribution or do a reverse split unless their performance starts exceeding their distribution (which it did over the last year). What surprises me is how many investors have no problem with return of capital, include it in their yield calculations and will actually pay a premium for the privilege. Would love to hear Bill Gross give his honest opinion of the owners of PHK.
    Aug 11, 2014. 01:03 PM | 3 Likes Like |Link to Comment
  • Main Street Is Too Expensive [View article]
    You raise a good question. Is MAIN overvalued? Is 147% of book too expensive? Most of those with comments won't even consider the possibility since the stock (which I own) has a good history, management and dividend. The same could be said no matter what the current price. Buffett won't buy back Berkshire unless the book goes below 120%--it never seems to. I know you can't compare MAIN with any other stock because...So is book unimportant with BDCs? Or is it unimportant just with MAIN? Is there any level where MAIN is overpriced?
    Aug 8, 2014. 09:44 PM | Likes Like |Link to Comment
  • Will The High Premiums For The PIMCO High Income Fund Continue To Erode? [View article]
    Lefty: A few observations on PHK versus PDI.

    One year total return, through Aug. 7, on a NAV basis-- PDI wins 23% to 21% (both outstanding returns).

    One year total return on a price basis--PDI in a landslide 28% to 17% (difference caused mostly by premium contraction of PHK).

    Expense ratio--PHK wins in a landslide 1.14% to 3.15% (including leverage). Why does PIMCO have such a wide variance in expense ratios?

    Cost of Leverage--PHK .09% and PDI .98% (included in expenses above). Why the big difference when leverage is similar for both funds?. How can PHK pay less than a tenth of a percent for 41% leverage? Is PIMCO directing the lowest cost borrowings to PHK? Or does PHK use preferreds which don't show as an expense?

    Return of Capital--PDI's NAV has grown 32% since IPO ($25 to $33). PHK (over a longer period) has had NAV contraction of 44% ($15 to $8.46). That NAV contraction is a return of capital and artificially inflates the distribution (Lefty--distribution is not the same as yield). PDI has a large unrealized capital gain that will have to convert to distribution (real yield this time) at some point. If you use distribution as a basis for valuation than PDI's distribution is greatly understated and PHK's is overstated.

    All numbers from Morningstar and represent my understanding of the numbers on their site.
    Aug 8, 2014. 09:03 AM | 1 Like Like |Link to Comment
  • Short Sellers Are Not The Bad Guys [View article]
    Raven: I think the anti shorts are just a subset of those with a serious case of what academia calls "confirmation bias". Many investors want to read articles that confirm their investment philosophy/selections. How many thousands of articles have appeared on SA telling us that Realty Income (NYSE:O) is a great investment? But they keep getting printed and people keep reading and commenting. If you read a negative article about Kinder Morgan or Linn, scores will show up and start attacking the author. Me, I prefer articles that point out the negatives about an investment--the positives are easy to come by.
    Aug 4, 2014. 05:15 PM | 4 Likes Like |Link to Comment
  • To ETF Or To Not ETF [View article]
    Scott: You make it sound like the etf companies are picking the stocks. Generally not true--there are very few actively managed etfs. Most of them are based on some sort of index and most of them are market cap weighted. The reason both of your defense etfs had the same top stocks is that they are the largest market cap defense stocks. If you want to use your system I suggest you look at actively managed open end mutual funds that cover that industry and then you will really get manager selected stocks.
    Jul 29, 2014. 02:04 PM | 3 Likes Like |Link to Comment
  • How Can This Market Capitalization Be Justified? [View article]
    xpan: You're right but ADRs are not included in the Wilshire 5,000 or the S&P 500 so that makes the comparison of market cap and GDP even more flawed.
    Jul 29, 2014. 09:40 AM | Likes Like |Link to Comment
  • How Can This Market Capitalization Be Justified? [View article]
    The market cap comparison to GDP seems pointless in a time of growing globalization. The GDP is U.S. only but the market cap includes the value of foreign operations of U.S. companies. For example, McDonald's hamburger sales in Europe are largely included in European GDP and only the income from those operations added to our GDP. So unless the Federal Reserve has adjusted either market cap or GDP it's not clear why they would rely on this graph.
    Jul 29, 2014. 09:08 AM | 7 Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Was surprised to hear that SA was paying Yahoo (and MSN, I assume). I always thought that SA was providing content to Yahoo readers and Yahoo would do the paying. So that raises the question of where the funds to operate SA come from? I know the Pro section provides some funds but that is relatively new. The number of ads appearing on SA seems to be growing but is still minimal. How do you do it., SA editors?
    Jul 25, 2014. 03:44 PM | 3 Likes Like |Link to Comment
  • Are P/E Ratios Leading You Away From Your Biggest Winners? [View article]
    You call it a simple test but seldom is financial analysis simple. Are you looking at market price performance or total return? Low PE stocks tend to have the highest dividends and high PE stocks usually have no dividends so if you are only looking at market price your info would seem to be near worthless. Are you including REITs in your analysis. We all know that REITs have very high PEs (35 to 50 is typical ) because of the depreciation--they could easily be included in the top PE category--again flawed info.

    Without knowing the assumptions you used this is just another misleading bit of analysis.
    Jul 24, 2014. 09:56 AM | Likes Like |Link to Comment
  • Special Dividend BDCs For Q3 2014: Total Return Part 6 [View article]
    Guardian: I think you are right if we are in the accumulation phase but once we own the BDC I am thinking I would prefer more price appreciation--so would we not be better off with an accurate yield number and higher stock price? Kinda like the closed end PIMCO funds--the ones with the highest reported yield sell at big premiums and those with "special" dividends tend to sell close to NAV--check out PDI, for example.

    The author thinks special dividends shouldn't by included on investor site quotes. I disagree. Dividends, for BDCs, go up and down--I don't see them locked in the way that c-corps try to never reduce a dividend. So I would prefer the dividend yield reported be as accurate as possible.
    Jul 23, 2014. 12:51 PM | Likes Like |Link to Comment
  • Special Dividend BDCs For Q3 2014: Total Return Part 6 [View article]
    Your discussion of special dividends raises an issue of management prudence versus stock price salesmanship. It appears to me that MSN, Yahoo and other sites only include the regular dividend in the yield number, instead of including the 12 month trailing dividend (that would include the special dividends). There are a lot of investors who purchase on reported yield, whether that is for BDCs, MLPs, REITs or closed end funds (many not even caring if the yield includes ROC). MAIN appears to be the BDC with the largest special dividends so do you think their stock price is understated as a result?
    Jul 20, 2014. 02:12 PM | Likes Like |Link to Comment
  • Being Intelligent About Smart Beta [View article]
    I am just in the early learning stage about smart beta and what I call algorithm investing. I have been reading the articles by Wesley Grey and from what I know the issue of smart beta's value diminishing over time, as more people use it, might be overblown. There seems to be an almost unlimited number of variations of what works (or might work) as smart beta. As investors adopt value or momentum the algorithm will be adjusted to exclude them and move to the next magic bullet. My guess is that in any case the old smart beta will, at worse, approximate the typical index fund even if it doesn't greatly outperform. I see smart beta as similar to the "go anywhere" closed end bond funds run by Pimco and Blackrock.

    I am also enjoying the tribulations of the efficient market crowd. I think they are now up to five exceptions--areas where the market isn't efficient. They now adjust those out of active manager out performance. Not sure why the active managers don't fight back a little.
    Jul 19, 2014. 02:54 PM | Likes Like |Link to Comment