| Thu, May 16, 2013 |
| 05:28 PM |
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Netflix and Tesla: Early Signs of Froth in a Bull Market
It is quite common for a bull market to last far longer than many would have thought, and even more so after the brutal economic downturn we had in 2008-2009. Only just recently did U.S. stocks surpass the previous market top reached in 2007. Although it does not mean that a correction is definitely imminent, the current stock market [...] The post Netflix and Tesla: Early Signs of Froth in a Bull Market appeared first on Peridot Capitalist. |
| Tue, May 14, 2013 |
| 03:22 PM |
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CBO Projects U.S. Budget Problem Solved For Now
It’s amazing what some tax hikes coupled with spending cuts can do for a $1.1 trillion annual budget deficit (just kidding… actually, it’s pretty logical). The Congressional Budget Office (CBO), the leading group of nonpartisan budget number-crunchers, now projects that the U.S. federal budget deficit will shrink by an astounding 41% this year, from $1.087 [...] The post CBO Projects U.S. Budget Problem Solved For Now appeared first on Peridot Capitalist. |
| Tue, May 07, 2013 |
| 04:09 PM |
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Qualcomm Now Hoarding More Cash Than Apple On Relative Basis
Qualcomm (QCOM), the leading provider of chipsets for wireless consumer devices, has seen its stock price underperform the S&P 500 index over the last year (see chart below), which could prompt shareholders to get more vocal about the company’s sub-optimal capital allocation practices later this year. We have seen with Apple that hoarding capital can negatively impact [...] The post Qualcomm Now Hoarding More Cash Than Apple On Relative Basis appeared first on Peridot Capitalist. |
| Wed, May 01, 2013 |
| 01:01 PM |
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J.C. Penney To Customers: We’re Sorry
A good sign for those investors who think J.C. Penney can reverse course and fix most of what Ron Johnson screwed up: So let’s be optimistic for a moment (I still believe these bullish assumptions are possible but far easier said than done), and assume the company can get back half of the sales it [...] |
| Fri, Apr 19, 2013 |
| 11:55 AM |
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Even With Ron Johnson Out As CEO, No Closer To JC Penney Turnaround
Less than 18 months since he was hired to lead JC Penney (JCP), Ron Johnson has been replaced by his predecessor, Mike Ullman. Given that many industry people thought Johnson would be given all of 2013 to show signs that his store transformation plan was starting to bear fruit, the fact that he was fired in the first quarter [...] |
| Tue, Apr 02, 2013 |
| 12:39 PM |
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Alright Apple, Let’s Tackle This Cash Issue Once And For All
I am drafting my quarterly letter to clients right now and given the poor performance of Apple (AAPL) shares during the first quarter, it is a stock I have been adding to lately on the long side, even as it has clearly negatively impacted portfolio performance so far in 2013 (down 16% vs S&P 500 [...] |
| Wed, Mar 06, 2013 |
| 10:56 AM |
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As The Dow Jones Industrial Average Hits A Record High, Is The Stock Market Overvalued?
How can we tell if the U.S. stock market is getting too pricey? Well, if you watch CNBC long enough or read enough stories in the financial media, you are likely to learn dozens of ways people will try and answer that question. There is not one right answer. If there was, successful investing would be easy [...] |
| Mon, Mar 04, 2013 |
| 10:39 AM |
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Best Section of Warren Buffett’s Annual Letter to Berkshire Hathaway Shareholders: Why Buybacks Are Preferred Over Dividends
This weekend I had the pleasure of reading Warren Buffett’s annual shareholder letter (an annual exercise for me) and I wanted to share a section of the 23 page document with my readers. In it, Buffett discusses why he prefers share buybacks over dividends (Berkshire has never paid a dividend). Not only did he present a clear [...] |
| Fri, Mar 01, 2013 |
| 12:38 PM |
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Until JC Penney CEO Ron Johnson Admits Reality, It’s Hard To Be Bullish
The entire premise of the JC Penney (JCP) turnaround effort, led by former Target and Apple executive Ron Johnson, has been to do away with sales and just give consumers everyday low prices, a la Wal-Mart (WMT) and Target (TGT). That all sounds well and good, unless you actually learn anything about the core JCP [...] |
| Fri, Feb 08, 2013 |
| 11:17 AM |
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Would David Einhorn’s Apple Preferred Stock Idea Really Create Shareholder Value?
This week hedge fund manager David Einhorn, whose investment management firm owns more than 1 million shares of Apple (AAPL) stock, publicly urged the company to take more meaningful action on its ever-rising cash hoard of $137 billion. Since management is not really taking the matter very seriously, despite the fact that every dime of that $137 billion belongs [...] |
| Tue, Jan 29, 2013 |
| 11:58 AM |
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S&P 500 Index Reaches 1,500 Again: A Multi-Decade Triple Top
If you are thinking we have seen this level on the S&P 500 index before, you are absolutely correct. As you can see, the last 16 years or so has been a roller coaster ride, with three separate bull runs to around these levels, and the prior two have ended badly thanks to bubbles bursting (dot-coms in [...] |
| Fri, Jan 25, 2013 |
| 07:47 PM |
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The Most Entertaining CNBC Segment Ever: Ackman vs Icahn
Yeah, I don’t think they like each other. It’s rare that two hedge fund titans are on the opposite side of such a controversial trade (Herbalife HLF) and in this case the result is an on-air feud. If you have any interest or follow Ackman, Icahn, Herbalife, and/or activist hedge funds, you might find this [...] |
| 11:32 AM |
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Wow: Apple’s Round Trip Back Below $450 Brings Trailing P/E Down To 7x
That kind of looks like a mountain landscape I would see from higher elevations out here in Oregon, but instead it is a 1-year chart of Apple (AAPL) stock. After Tuesday’s solid but uninspiring fourth quarter earnings report, Apple’s quick fall from perceived market darling to “just another large cap tech stock that is being passed [...] |
| Thu, Jan 24, 2013 |
| 08:08 AM |
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Netflix Stock Repricing Overdone
Netflix (NFLX) stock is soaring this morning, up 36% ($37) to $140 per share in pre-market trading. The company’s fourth quarter financial results were above expectations, but at first glance do not appear to warrant a 36% stock price increase. Revenue rose 7.9% year-over-year, leading to a very small quarterly profit of 13 cents per [...] |
| Wed, Jan 23, 2013 |
| 11:17 AM |
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Dell LBO: A Logical Move That Others Might Mimic
Investors have been speculating for a couple of years now that Michael Dell could eventually take his computer company private, after leaving the option on the table in multiple press interviews. His large stake as founder and CEO (about 15% of the company) coupled with his transformation plan and lack of respect on Wall Street [...] |
| Thu, Dec 20, 2012 |
| 09:04 AM |
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Apple Shares Now Nearly As Cheap As Microsoft: Which Would You Rather Have?
That’s right. With the recent share price plunge in Apple (AAPL), from over $700 to around $525, the stock is rapidly approaching the valuation of 1990′s tech darling Microsoft (MSFT). While clearly facing near-term headwinds, both on the product side (a narrowing of their technological lead over rivals) and the financial side (fiscal cliff, tax-related selling before year-end), among others, I find [...]
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| Wed, Dec 12, 2012 |
| 12:47 PM |
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Why 6.5% Unemployment Is The Fed’s Magic Number
Today Ben Bernanke and the Federal Reserve announced that they would keep the fed funds interest rate near zero as long as the unemployment rate remained above 6.5%. Why pick that number? They did not say for sure in their press release, but I can take an educated guess. Over the last 40 years, the [...]
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| Mon, Dec 03, 2012 |
| 09:34 AM |
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Would Going Over The Fiscal Cliff Really Be That Bad?
Easily the most frustrating thing about being a long-term investor nowadays is how short-term focused Wall Street has become in recent years (or more accurately, the last two decades). Quarterly earnings reports and whether companies slightly beat or slightly miss estimates made by a bunch of number-crunchers in New York result in huge share price volatility. Owners of [...]
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| Mon, Nov 26, 2012 |
| 09:19 AM |
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Typical Warren Buffett: Logical, Factual, and Fair
“A Minimum Tax for the Wealthy“ – By Warren Buffett (11/26/12 – NYTimes.com) Enjoy this post? Subscribe to this blog and never miss another one: In Your RSS Reader | By Email | On Your Kindle | Via Twitter Related Posts:NYT Economics Reporter Details Personal Credit CrisisWarren Buffett Op-Ed Explains Why He Is Buying, [...]
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| Tue, Nov 20, 2012 |
| 01:39 PM |
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A Challenging Global Outlook for the Next 50 Years
The above is never something I would venture to take a stab at, but GMO’s Jeremy Grantham has made a name for himself by making bold predictions about the future. His latest quarterly letter, entitled “On the Road to Zero Growth“ is one of his best, in my opinion. A highly recommended read if you [...]
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| Wed, Oct 24, 2012 |
| 09:10 AM |
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Does Marissa Mayer Make Yahoo Stock A Worthwhile Bet?
Granted, I am a numbers guy, so even asking whether a new CEO is enough to warrant buying a stock is a stretch for me. While quality leadership is certainly important, successful stock market investments require the numbers to work and no matter how great the CEO, they can’t magically make the numbers work all by themselves [...]
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| Fri, Oct 19, 2012 |
| 09:37 AM |
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Chipotle Stock: Rapidly Approaching An Attractive Level
Hedge fund titan David Einhorn has been on fire in recent years with his bearish calls (Lehman Brothers, St Joe, Green Mountain, etc) and his latest presentation at the Value Investing Congress detailed a negative outlook for Mexican fast casual restaurant chain Chipotle Mexican Grill (CMG). Some of his points on CMG were easier to [...]
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| Wed, Oct 03, 2012 |
| 03:20 PM |
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Investors in Sarepta Therapeutics Should Think About Selling Some
Today’s big stock market winner is Sarepta Therapeutics (SRPT), a small biotech company developing Eteplirsen, a novel therapy for Duchenne Muscular Dystrophy. Shares are rocketing higher by a stunning 175% today, from $15 to $41 each, on news that a phase 2 study showed promising results compared with placebo. There are some red flags though, that should [...]
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| Wed, Sep 05, 2012 |
| 09:10 AM |
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An Inside Look at the New Retail Strategy at J.C. Penney (Part 2)
As was discussed yesterday, the much-talked about turnaround strategy at J.C. Penney (JCP), being led by Ron Johnson, is going to take a lot longer than many initially thought. Renovating two-thirds of their store base will take 3-4 years. Getting customers to understand and appreciate their new pricing model will take time, if it happens [...]
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| Tue, Sep 04, 2012 |
| 10:25 AM |
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An Inside Look at the New Retail Strategy at J.C. Penney (Part 1)
On September 1st, J.C. Penney (JCP) debuted more new “shops,” bringing it about 10% of the way through a transformation plan aimed at having 700 of the chain’s 1100 department stores offer shoppers 100 distinct “store within a store” experiences by 2015. My wife and I used part of our Labor Day holiday to do some market [...]
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| Wed, Aug 29, 2012 |
| 03:01 PM |
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Consumer Debt Paydown Crimps GDP Growth
It’s election season so both candidates would love for you to think that the POTUS has a lot of control over economic growth, but this week we got a report that sheds light on one of the major reasons the U. S. economy is growing at around 2%, down from its long-term average of around [...]
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| Fri, Aug 24, 2012 |
| 12:21 PM |
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Apple Sets Market Value Record As iPhone 5 Debut Nears
Earlier this week I wrote a piece on Seeking Alpha that outlined why I believe investors are likely to value Apple (AAPL) shares similarly to other blue chip consumer brands, which would mean a valuation of 10-12 times trailing cash flow (defined as EV/EBITDA). Bulls on the stock have a multitude of reasons why Apple should trade at [...]
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| Fri, Aug 17, 2012 |
| 02:21 PM |
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Bubble Bursting 2.0 (Part 2): Isn’t Groupon Worth Something?
Last November, in a post entitled “Numbers Behind Groupon’s Business Warrant Caution After First Day Pop”, I cautioned investors that the IPO of daily deal leader Groupon (GRPN) looked sky-high at the initial offer price of $20 per share, which valued the company at an astounding $13 billion: “It is not hard to understand why skeptics do [...]
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| Tue, Jul 31, 2012 |
| 01:06 PM |
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Bubble Bursting 2.0: Coming To A Dot-Com Stock Near You
By now you probably know the poster children for the bursting of the 2012 Internet bubble: Facebook (FB) IPO price: $38.00, Current quote $21.75 (down 43%) Zynga (ZNGA) IPO price: $10.00, Current quote: $2.95 (down 70%) Groupon (GRPN) IPO price: $20.00, Current quote: $6.66 (down 67%) And as was the case in 2000, we are [...]
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| Fri, Jul 20, 2012 |
| 11:35 AM |
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Chipotle: A Lesson in High P/E Investing
Shares of Chipotle Mexican Grill (CMG) are falling more than 90 dollars today after reporting second quarter earnings last night. Revenue rose 21%, with earnings soaring 61%, beating estimates of $2.30 per share by an impressive 26 cents. However, light sales figures (same store sales of 8% versus expectations of double digits) are causing a huge sell-off [...]
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