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New Buy
Biogen (BIIB) made an offer for Facet (FACT) last week and shares soared >70%. Guess who was the big winner? Yup, the value guy.
When really smart people keep getting money thrown at them to invest, the already high interest level I have in the situation becomes even larger.
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Bruce Berkowitz Talks To Forbes
Bruce Berkowitz who run the Fairholme Fund (FAIRX) is one of the best out there. This is great video in which he talks about specoific holdings and his philosphy in general.
One had to wonder how receptive business will be for the next gov’t program when folks participating in this one can’t get what owed them.
One had to wonder how receptive business will be for the next gov’t program when folks participating in this one can’t get what owed them.
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A Juicy Addition?
Almost dismissed this one out of hand…..glad I didn’t:
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Time To Invest in Real Estate
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SEC Report on Madoff…..Stunning
Don’t know whether to laugh, cry or become a criminal after reading this as the chance of the SEC catching me is virtually nothing…
Disclosure (“none” means no position):
I just love good information coming in from readers, thanks “bhall” for the email…..
Online– Yesterday STORES Magazine released the list of its 50 Favorite Online Retailers of 2009 and we’re happy to announce that www.Sears.com – #10, www.LandsEnd.com – #15 and www.Kmart.com – #23, all made the top 25!
Kmart.com showed the biggest improvement moving from #34 to #23. STORES commented, “Living paycheck to paycheck is a sobering reminder of the need to stretch every dollar. With improved assortments and an easy-to-navigate Web site, Kmart.com provides a value-oriented option.”
STORES Favorite 50 Online Retailers is a list of e-Commerce Web sites as ranked by the consumers who use them. The survey polled 8,635 consumers and asked two open-ended questions: “What Web site do you shop most often for apparel items?” and “What Web site do you shop most often for non-apparel items?” No merchants’ names were listed or suggested. The final list was assembled by ranking online companies in order of total mentions.
This recognition joins Online’s earlier recognition by Acquity Group as the Overall Best-in-Class company for adaptation of mobile e-commerce initiatives in its mobile study of the 2008 Internet Retailer 500 and e-Tailing Group’s Annual e-Commerce Gauge Top Customer Experience Web Site where www.sears.com received the top score of 88.25.
Full chart:
09FAV50chart
Now we have posted here a bit lately both about Sears Corporate online strategy and our thoughts on where we think it is going and the changes made. Throughout is all we have said that none of it matters unless it resonates with customers. Survey like this give us insight that it just may be.
The key now is to watch and see where it goes. Again, month to month variations need to be discounted but large moves up, like the one Kmart.com made are worth noting.
We’ll keep an eye on this…
Disclosure (“none” means no position):
Still no whiff of a Dow Ag sale from Dow Chemical (DOW)
The Detroit Free Press Reports:
Dow Chemical Co., the largest U.S. chemical maker, said it is ahead of schedule on its plan to repay by year-end a $9.2-billion bridge loan that helped finance the April acquisition of Rohm & Haas Co.
The sale originally announced in May, to reflect inventory values, Bob Plishka, a spokesman at Midland-based Dow, said Tuesday in an interview.
Proceeds will be used to repay the bridge loan, which had a balance of $4.1 billion at the end of June, he said.
CEO Andrew Liveris secured agreements to sell $3.3 billion of assets, including the refining stake, which were among a dozen units valued at as much as $26 billion that the company considered divesting.
The company spent most of a $2.75-billion debt issue in August on payments, trimming the loan’s balance to about $2.1 billion, Plishka said.
“We have more gross proceeds due us from definitive divestiture agreements already in place than the outstanding balance of the bridge loan,” Plishka said. “We are way ahead of schedule.”
The sales of Morton Salt for $1.68 billion and a stake in the Optimal Group of Companies for $660 million are expected to be approved by regulators and close this year, Plishka said.
Disclosure (“none” means no position):Long DOW
Davidson” submits:
With the 2007’s Total Mortgage level over $14.5Trillion of which more than $11.1Trillion were home mortgages it would be hard to find a stronger connection to the financial system than this. Data from US Census Bureau most current information.
Equity REITs are publicly traded investment vehicles which use mortgage debt in the purchase of investment properties and form the REIT asset class that is used as part of your balanced portfolio. The market capitalization of the Equity NAREIT holdings has grown from 1972’s year end $332Mil to 2007’s year end $288.7Bil. This ~870 fold increase results from a combination of growth and increasing holdings from 12 REITs at inception and to 118 REITs at the end of 2007. Data from http://www.reit.com. At the end of 2008 the Equity NAREIT market capitalization had fallen to $176.2Bil. A comparison of the NAREIT Total Return vs Equity Indices in Chart 1 makes clear that ~94% of returns are derived from dividends which in turn by law are 90% of FFO(Funds From Operations).
Chart 2 of the NAREIT Equity Index vs. Ttm(Trailing12mos) Dividend Yield shows that the dividend yield which had held in the 6%-9% for much of the period fell almost to ~3% in 2007 during a period of low cost mtg funding. The subsequent correction of 2008-2009 forced dividend yields to 10.08% in Feb09 which was at a historically high level and was a signal that the Return/Risk had become attractive. The recent fall in dividend yield to July ‘09’s 4.92% is a function of recent changes in the tax law that currently permit REITs to issue stock in lieu of cash which increases their financial flexibility. This change is expected to be a temporary forbearance, a bridge during the current economic period. Most expect regular 90% dividends to be paid in cash once this difficult environment has moderated.
My view is that these dividends will return although it is difficult to predict their timing and their magnitude till there is greater clarity. I continue to recommend REITs as an attractive allocation in balanced portfolios with a strong preference for Global REIT exposure.
Disclosure (“none” means no position):
Davidson” submits:
With the 2007’s Total Mortgage level over $14.5Trillion of which more than $11.1Trillion were home mortgages it would be hard to find a stronger connection to the financial system than this. Data from US Census Bureau most current information.
Equity REITs are publicly traded investment vehicles which use mortgage debt in the purchase of investment properties and form the REIT asset class that is used as part of your balanced portfolio. The market capitalization of the Equity NAREIT holdings has grown from 1972’s year end $332Mil to 2007’s year end $288.7Bil. This ~870 fold increase results from a combination of growth and increasing holdings from 12 REITs at inception and to 118 REITs at the end of 2007. Data from http://www.reit.com. At the end of 2008 the Equity NAREIT market capitalization had fallen to $176.2Bil. A comparison of the NAREIT Total Return vs Equity Indices in Chart 1 makes clear that ~94% of returns are derived from dividends which in turn by law are 90% of FFO(Funds From Operations).
Chart 2 of the NAREIT Equity Index vs. Ttm(Trailing12mos) Dividend Yield shows that the dividend yield which had held in the 6%-9% for much of the period fell almost to ~3% in 2007 during a period of low cost mtg funding. The subsequent correction of 2008-2009 forced dividend yields to 10.08% in Feb09 which was at a historically high level and was a signal that the Return/Risk had become attractive. The recent fall in dividend yield to July ‘09’s 4.92% is a function of recent changes in the tax law that currently permit REITs to issue stock in lieu of cash which increases their financial flexibility. This change is expected to be a temporary forbearance, a bridge during the current economic period. Most expect regular 90% dividends to be paid in cash once this difficult environment has moderated.
My view is that these dividends will return although it is difficult to predict their timing and their magnitude till there is greater clarity. I continue to recommend REITs as an attractive allocation in balanced portfolios with a strong preference for Global REIT exposure.
Disclosure (“none” means no position):
Categories
Philadelphia Fed's Bullish Report
“Davidson” submits:
The Philadelphia Fed report on the business outlook survey has startled Wall Street and set abuzz chatter regarding the long forecasted V-Shaped Recovery by Wesbury. This report was so far better than expected 4.2 vs. an expected -0.2 that Treasuries fell in value as investors sold to buy stocks. The report can be accessed at the URL here and I have presented the relevant chart below.
The market is if anything anticipatory. On CNBC @4:30PM yesterday John Herrmann of Herrmann Forecast LLP commented that he expected the Sept. Purchasing Managers Index(PMI) to show new orders up dramatically to ~59% level.
It would be convenient if investing could be so simple that we could take these pieces of information and invest with confidence into just the right sectors and asset classes. But, the markets are anything if convenient and predictable. While the Return/Risk appears to favor many asset classes, approaching the market with a balanced portfolio has always proven in the long run to have been a prudent strategy. There is always present no matter how bullish the news seems to be developing the significant uncertainty of unseen events. We always know what we would like to have as a return, but we can never know when an unpredicted event will spook the market confidence and implode our short term needs.
Disclosure (“none” means no position):