April 17, 2014

Investing Articles

What AIG Can Teach Investors About Diversification

AIG Diversification

Imagine that back in 2007, you had $3,000,000 to invest on behalf of a private family investment partnership you were running.  You decide to split this into three different companies.  One of these was AIG, the insurance conglomerate. AIG shares fell from a high of $1,459.00 each to $6.60.  The Board of Directors had to do a 20-1 reverse stock split to keep the thing from trading for less than the value of bottle caps.  Even with the stock at $50.84 today and $36.03 in cash dividends you rec … [Read more...]

The Ugliest House in the World

Ugly House

I've been browsing real estate all day for a project that needs my attention.  I ended up wandering from community to community, and at one point, clicking on random states.  I somehow came across what has to be the ugliest piece of property I've ever seen in my life but now I can't look away.  I'm fascinated. What do you think the architect was going for in terms of inspiration?  Barn chic?  Even the placement of the doors; the proportions of the windows.  How does something like this happe … [Read more...]

Warren Buffett Hints That Berkshire Hathaway Shares Are Cheap In Stockholder Letter

Berkshire Hathaway 2013 Annual Report

I'm taking it as a given that practically everyone who reads this site has already gone through Warren Buffett's stockholder letter, which Berkshire Hathaway released today. Personally, I love how, for only the third or fourth time in his career, Buffett essentially provides enough mathematical evidence to say to people, "You're a moron for not buying Berkshire Hathaway at these prices, but I'll never come right out and say it."  He did it in sort of a clever way, too, to encourage people to r … [Read more...]

A Century Later, Ben Graham Still Seems Like a Prophet

Ben Graham Investing

The Wall Street Journal had a recent story detailing the trend of small investors jumping back into stocks, some trading options and futures.  I'm old enough now, combined with twin quirks of being interested in finance at such a young age and having my lifespan line up with some interesting times in the capital markets, that I've watched this play out three times.  At this point, you'd think it would lose its novelty but I still find my mouth dropping open and my head shaking in disbelief, m … [Read more...]

Eli Lilly and the Insanity of Foreign Taxes

Eli Lilly Repatriation

I'm going through the corporate bond filings of pharmaceutical giant Eli Lilly just out of curiosity.  They have a huge patent cliff coming up, during which time as much as 40% of their revenue base will be exposed to generic competition.  I wondered what it would do to the risk metrics on the senior bonds so I pulled the Moody's rating and reading over the figures as I listen to an old 1970's song called Snookeroo. Side note: The song is interesting.  After the breakup of The Beatles, Ringo St … [Read more...]

Investing In Corporate Bonds and Debentures Is a Bit Tricky At the Moment

Investing In Corporate Bonds and Debentures Essay

I spent a big percentage of my day reading indenture documents for corporate debt securities because I was helping someone pick up some additional fixed income investments for a retirement portfolio.  I managed to get my hands on a nice block of high-grade, non-callable debentures from a major packaged foods company with a 4.3% yield-to-maturity on the remaining decade before maturity, but still have a bit of their dry powder left to spend.  I'm not finding anything on the inventory of my p … [Read more...]

Thor and Elsa Just Helped Disney Shatter Profit Records

Thor Asgardian Light Armor

It's clear I shouldn't have been buying 100 shares as a souvenir every time I went to one of the Disney parks.  Instead, I should have added quite a few zeros behind the number.   Thanks in no small part to these two, The Walt Disney Company just reported a record shattering 34% increase in quarterly profits.  I'm at my desk now reading through the results.  Thor brought in the prime male demographic, while Elsa catapulted Frozen to the status of all-time highest grossing animated film, with the … [Read more...]

The Disney Dividend Day Approaches (and the Biggest Stockholder Is Getting a $112+ Million Check)

Disney Dividend Day

This Thursday is dividend day at The Walt Disney Company; that magical time of year, normally occurring in January, when the owners are sent their direct deposits or checks, depending on how they hold their stock.  Last year, each share earned after-tax profits of $3.38, of which $0.86 is being shipped out as cash.  The other $2.52 is getting plowed back in for growth and share repurchases; new rides, new movies, and major acquisitions, such a Pixar, Marvel, and Lucasfilm, or enhancements such a … [Read more...]

Instantly Sort SEC Filings with BamSEC

BamSEC

This is, without a doubt, one of the simplest, coolest, most useful investment tools I've ever come across on the Internet.  Enter a ticker symbol and - Bam! - the records for the company filed with the Securities and Exchange Commission and divided into their own boxes, separating financials such as the 10-K and 10-Q from the News (8-K), the Prospectuses and other Registrations (424B2), Proxies, Credit Agreements, Bylaws, Ownership Disclosures, etc. It's funny how such basic improvements - … [Read more...]

Annuities Can Be a Good Choice for the Financially Irresponsible Despite The Drawbacks

Million Dollar Annuity Quote

Imagine you have a profligate son.  He's 31 years old and married.  He's a screwup.  You love him, but facts are facts.  He can't hold down a job.  He can't save money.  He can't stick with a plan.  He doesn't hang around the right people.  Still, you want the best for him. Through an incredible stroke of luck, he finds himself sitting on $1,000,000.  Maybe he won it in a lawsuit.  Maybe he was given stock as a gift through a UTMA account that paid off due to an early investment in Wal-Mart.  Ma … [Read more...]