Thursday, August 9, 2018
Friday, July 20, 2018
Curbed My Enthusiasm
I can’t get worked-up over nonsense.
I have no idea why some people get crazy over who wins an award, a game, or some other so-called expert who proclaimed a champion prior to the game being played.
As it is, I cannot get worked-up over any game or competition that does not involve me or my capability to earn a living. As it is, the only things I can get motivated for are my job, paying my bills, eating, and exercising - which would appear to be the minimum requirements for living in the world today.
Once I lose that motivation, you’ll see me on Broad Street, across from Wawa looking for a few pennies to get a breakfast sandwich or some coffee.
Perhaps it won’t be long? So, remember what I look like, and stop by and see me sometime next year when I’m holding a sign and squatting on a grate.
It might represent the last thing I care about.
Thursday, July 12, 2018
Tuesday, June 19, 2018
Starbucks is closing 150 stores, and General Electric has been removed from the Dow Jones Industrial Average. That’s a big day.
Perhaps Americans have enough coffee, perhaps Starbucks has achieved their growth target, or maybe it’s just a sign of the times? After all, old brick-and-mortar retail is suffering, and while you cannot buy a cup of coffee on the Internet (yet) there is plenty of competition over the coffee space, and consumers might be tiring of paying eight dollars for a product that they can get at home with a Keurig or someplace else cheaper.
Perhaps they are coming to their senses? Or, perhaps I give consumers too much credit? Either way, the joke about a Starbucks across the street from a Starbucks is too real to ignore, and it might be time for them to step back and try to re-invent the company in some way. It’s coffee, after all, and how much renovation can they make?
As for investing in SBUX - if it gets to $48 start sniffing around. Now, at $56 it’s an expensive stock, and trading at too high a multiple to be attractive.
The stodgy old Dow Jones Industrial Average is making a long overdue change. It’s a price-weighted average, so a $13 stock like GE has no place in an average of companies that are either higher priced or actual growth stories. Why they picked Wallgreen’s Boots Alliance is beyond me, but that may be a story for another day.
In the investing world, the Dow is antiquated, and real-life traders and analysts don’t really pay attention to it. It’s more of a newsy-news story when it reaches some new plateau like 25,000 or whatever number is next on the zero list. You should be paying attention to the S&P 500 and the NASDAQ 2000 for a real read on what “the market” is doing. The Dow is price-weighted, so a move in a $300 stock like Boeing matters more than a move in a $66 stock like Walgreen’s.
So, it’s not really a big deal, it’s a cosmetic change to something that only matters to the people keeping track of numbers. The problems at GE won’t be hurt or solved by this. It’s a giant battleship that will take years to turn - if it can be turned - and whether or not it is in an arbitrary average of stocks is neither here nor there.
Don’t buy or sell GE or WBA based on this. WBA is slightly undervalued, and if you believe that people will still be doing major business at drug stores in ten years, have at it. As for GE, if you have a time horizon and don’t mind watching the stock go to perhaps $9 or $10, start dripping money in. You’ll have to trust that management can divest itself of the bad aspects of the business and make the best of the good parts. After all, that’s what good management does, right?
Thursday, May 24, 2018
Stand, kneel, sit, take off your cap ... do whatever they tell you, right?
Tuesday, May 22, 2018
I sold my position in Extreme Networks (EXTR) after a double over the past year. In retrospect, I could have sold it much higher, but I usually wait for earnings, and this latest report was absurdly negative, so I decided to cash-in my profit rather than wait for the upturn, which may take more than a year.
I also sold 25% of my stake in Square (SQ). As much as I love the company I felt like the stock had run-up to $55 from my purchase price of $26, so I felt it prudent to take some profits and watch it go, if it does. There has been some selling over a recent battle with PayPal (PYPL) and frankly, I’m not worried. The way things are today, the market reacts negatively to any sort of competition. Whether it’s Amazon, Costco, or WalMart, it seems that there is little tolerance for any sort of competitive interference.
it’s odd, because the market itself is based on competition, and companies like Square have been able to prosper in the face of it - so, I just turn a deaf ear to it.
Where is the new money going? General Electric (GE), which I have been buying since its seeming low at around $12. It’s difficult to turn a battleship, and GE may be one huge battleship that will take years to turn. As for me, I’m still buying now that the stock is at the $15 range, and I continue to be looking at it as a turnaround story.
UnderArmour (UA) has run-up too much for my liking recently. I started buying it in the $11 range, and was hoping it would stay there for a while so that I could accumulate more. Unfortunately, a couple of positive earnings quarters and upgrades have sent the stock into the high-teens, and I’ll hold it here waiting for either a positive catalyst or a negative that would prompt me to buy more.
DelTaco (TACO) continues to be a hold. The stock has been quietly gaining ground as the casual dining segment begins to find its footing. As I have said, I have faith in management, and I own enough that I don’t look to add more, but merely hold on and wait for the market to catch up with this wonderful story. It may take a year or more, but - where am I going?
Regional banks are a new story. With rates rising, and tax breaks making the space a reliable place to be, I continue to hold Key Bank (KEY) and have put in an order to buy more if it goes to $20. The stock is fairly valued here, but could dip into the 20-range, which I feel would make it a buy. There are other regionals, including Regions Financial (RF) Huntington Bancshares (HBAN) Philly-local The Bancorp (TBBK) and OFG Bancorp (OFG) that are compelling, but - do your due diligence.
Oil continues to go higher, and my investment in Cenovus (CVE) has been a winner, running from $7.25 to $11.00 as the price of oil has risen. The thing about investing is, you can’t get worked-up over short-term pain that you may experience as a consumer. Rather, you have to appreciate that it’s going to happen, and take advantage. I hate oil like a passion, but there’s no doubt that the place to be is in the oil and natural gas space. It’s not too late. CVE is valued at $21 a share. Wait for a dip and get in.
Meanwhile, long-term holdings Pfizer (PFE) and Cisco Systems (CSCO) continue to chug along. Even though it appeared that there was a selling opportunity in Cisco after their latest earnings report, I felt like the CEO had enough positive things to say that the long-term outlook was sunnier than the short-term, which is where we tend to look.
As for Pfizer, the long-term story is more compelling than the short-term selling opportunity. Both CSCO and PFE pay an appealing dividend, so I’m content to be paid to wait.
Meanwhile, I’m looking for an opportunity to sell Acco Brands (ACCO) as I feel that I’ve waited long enough for something to happen. Looking in the $13 range to get out.
Still compelling: Microsoft, Salesforce, Hanes Brands, Allergan, and Slumberger. Do your research.
Sunday, May 20, 2018
Some things are just too hard to figure out with our small people brains.
Lawn darts killed three children between 1970 and 1994, and as such, they were made illegal in the United States and Canada.
On 19 December 1988, all lawn darts were banned from sale in the United States by the Consumer Product Safety Commission after they were responsible for the deaths of three children since 1970. In 1989, they were also banned in Canada.
In 1982, some nutjob poisioned some Tylenol capsules. As a result, we can’t open a bottle of pills or a beverage without going through a major operation, even though authorities never identified who was responsible.
The Chicago Tylenol murders were a series of poisoning deaths resulting from drug tampering in the Chicago metropolitan area in 1982. The victims had all taken Tylenol-branded acetaminophen capsules that had been laced with potassium cyanide. A total of seven people died in the original poisonings, with several more deaths in subsequent copycat crimes.
Cigarettes kill us (supposedly) with second-hand smoke. As a result, people can’t smoke in public places because that endangers the general public, although not immediately.
Meanwhile, children are being shot and killed in schools across America, and little or nothing is being done about it. If cigarettes, lawn darts, or Tylenol had the political power of the National Rifle Association, (why isn’t it the National Gun Association?) we’d still be able to smoke in public, open a bottle of pills, or play a game on our lawn without violating the law.
As it is, there is a dedicated band of gun nuts (yes, nuts) who feel like our Constitution allows them the right (Right) to kill people with their weapon of choice, while other less offensive weapons have already been deemed illegal by whatever law you want to apply.
Your right to form a militia has been replaced by our military, and your right to "bear arms" has been replaced by the military’s ability to do the same thing in lieu of your living room. It’s simple, really.
The Second Amendment is an antiquated idea whose time has come and gone. It is time for the NRA and their financial supporters to realize this, and come to the conclusion that our so-called rights infringe on others’ rights to life, liberty, and the pursuit of happiness - which I also know is in that Constitution that you so heartily support.