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January 2008



Mastercard, Western Union, Church of Satan doing well

January 31, 2008 – Comments (5) | RELATED TICKERS: MA , WU , PG

Mastercard reported excellent results today and jumped to not far below its all time high. Much of the income jump was due to the disposal of their Brazilian credit card investment; not sure why they disposed of it, or even bought it. Anyway, this is a stock where Morningstar covered at its IPO, with a fair value of $80 as opposed to the IPO's price of around $40. and then the company performs spectacularly, and M* keeps raising its fair value. I will say that M* has made some bonehead calls, like New Century and Countrywide. but they did very well on Mastercard. It is now over their fair value, and Paul Larson had trimmed his holdings some time ago to put into undervalued stocks. Paul, btw, used to work for TMF, and had the screen name TMF Parlay.  [more]



Barrons article on Capitalsource, dated 2006

January 26, 2008 – Comments (0) | RELATED TICKERS: CSE.DL2

This is a Barrons article profiling Capitalsource's CEO, John Delaney, who previously ran Healthcare Financial (which I believe was later acquired by Heller Financial, which was later bought out by GE Capital).    [more]



not as bullish on Whole Foods

January 24, 2008 – Comments (0) | RELATED TICKERS: WFM , CMP , FAST

Yesterday, Morningstar made a substantial cut to its fair value estimate of Whole Foods. the stock is still undervalued, it still has defensible competitive advantages, and it is a long way from saturation. but sales growth is not going to be as fast as in the past, and capital expenditures have gone up, which affects their margins. additionally, the macroeconomic environment is weaker, unless Bernanke goes and provokes another bubble.  [more]



JNJ vs BAC today

January 22, 2008 – Comments (2) | RELATED TICKERS: JNJ , BAC

Johnson and Johnson's profit rose 9.5%. the stock is down about 1.5%.

Bank of America's profit fell 95%. the stock is up about 3. 



An arbitrage opportunity connected to an investing opportunity

January 19, 2008 – Comments (3)

There's this fascinating little company, Capitalsource. It's structured as a REIT, but it actually lends out money to medium and small businesses, who use their real estate or cash flows as collateral. CSE yields over 16% right now - normally a sign of a company in severe distress.  [more]



US Bancorp - a good stock for interesting times

January 15, 2008 – Comments (0)

US Bancorp (USB) is a very low key bank that is famous as a Buffet holding. USB missed earnings estimates today, but the stock was up fractionally on an otherwise very bloody day. and its revenues actually increased for the quarter, and it actually hiked its dividend! they blamed the earnings shortfall on writedowns to money market funds, and to charges related to litigation against Visa. Richard Davis said he was "especially proud" of the company's Q4 results, achieved amidst a very bloody banking environment. he has every reason to be proud. I'm happy to hold the stock.  [more]



I bought Realty Income (O)

January 08, 2008 – Comments (2)

I recently purchased some shares of Realty Income (O). I will not be picking the stock in CAPS. I'd like to outline my thesis for buying.  [more]



how to take advantage of the downturn

January 05, 2008 – Comments (2)

Larry Pitkowski, one of the managers at Fairholme (FAIRX) was recently interviewed by Morningstar. The fund tends to put its bets on the jockeys - they buy firms with disciplined managers, many of whom stockpile cash to take advantage of markets like today's. Berkshire Hathaway is an obvious example. More recently, Fairholme decided they would do the same: keep 25-33% of assets in cash in case favorable situations (i.e. blood in the streets) arose. the fund had previously held a lot of cash, but it was mainly because they thought they couldn't find anything to buy. putting money in Fairholme is one good way to take advantage of the downturn; putting money in Berkshire is another way, and FAIRX has about 15% of assets in Berkshire.  [more]

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