Month

April 2012
Procter & Gamble (PG) reported disappointing earnings last week and cut its earnings forecast to $3.88.  PG is struggling in terms of their pricing as competition is stealing market share by being lower in price.  This in turn has PG on the defensive having to lower prices which obviously has a negative impact on margins....
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One of the biggest problems with mutual funds is that investors chase past performance.  They get in at the worst times when the stock in the funds are most expensive, and they get out when stocks are cheap and short term performance has lagged.  Despite Bruce Berkowitz’s excellent long term and current year track records,...
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In a very average economic climate the European banks put out excellent numbers this week.  I was particularly impressed by Barclays and Santander’s respective performances.  It seems like Barclays investment banking operations are starting to perform better, and Santander’s Latin American operations are still thriving.  Santander could be a compelling investment at these levels.  As...
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Earnings are getting a lot stronger in the home builder industry as increased traffic and closings is certainly helping financial performance.  Profits are still lagging due to the lack of pricing power and lower volumes, but I certainly wouldn’t be surprised to see volume pick up quite dramatically over the next two years.  The large...
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Having unfortunately worked in the commodities industry I can speak from experience that the vast majority of people lose money buying or selling commodities.  This is particularly accurate when brokers are charging high commission fees and are aggressively trading accounts.  Commodities are much more difficult to value than businesses so it is inherently a more...
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One of the investors that I admire most Prem Watsa, discussed his belief that RIMM can potentially right the ship.  RIMM is a cheap stock with an excellent balance sheet.  The company generates plenty of cash and has 77 million users.  They do have a lot riding on the Blackberry 10 coming out later in...
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This was a really interesting take on some of the social issues that are impacting the economy in Japan. http://www.bloomberg.com/news/2012-04-25/three-reasons-japan-s-economic-pain-is-getting-worse.html INVESTING IN THE FINANCIAL MARKETS INVOLVES RISKS. OPTIONS ARE NOT SUITABLE FOR ALL INVESTORS.
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It looks like due to all of the negative press coverage and the dropping share price, Chesapeake CEO Aubrey McClendon is agreeing to negotiate an early termination for a program that allows him to invest in new wells.  This really doesn’t seem like enough as he owes over $1 billion on these wells.  Chesapeake has...
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We’ve been documenting the resurgence in AIG and the absurd valuation that “Mr. Market” is placing on the stock.  Another key cog of that value is their stake in Maiden Lane III.  Once the Fed sells these securities to repay the loan the balance will belong to AIG.  This could be anywhere from $4-$7 billion...
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Lloyd Blankfein was interviewed on Bloomberg today and I though he made some salient points.  One thing that I thought he was right on about was the fact that while everybody is predicting dire returns on equity for financials including the investment banks, Goldman Sachs (GS) had a 12.2% ROE in the first quarter despite...
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