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September 2008

Recs

1

JP Morgan Chase might now be the best positioned US bank

September 26, 2008 – Comments (5) | RELATED TICKERS: JPM , WAMUQ.DL

Not long ago, I wondered which of three firms, AIG, Lehman and Wamu, would be next. As we know, the order of failure was Lehman closely followed by AIG, with Wamu today.  [more]

Recs

1

GE: nothing to worry about

September 25, 2008 – Comments (2) | RELATED TICKERS: GE

In the link below, Morningstar contends that General Electric's finance arm is fine. No exotic securities that we know about and the department is in decent shape. And GE is expected to profit handsomely from increasing global infrastructure growth. I believe GE is a buy today. Even after popping 5%, the stock is still yielding 5% and the company is maintaining it.   [more]

Recs

2

What Warren really said by investing in Goldman

September 24, 2008 – Comments (0) | RELATED TICKERS: GS

It's notable that Warren invested in preferred stock plus a warrant, instead of common stock. Morningstar has its take on what Warren's saying by investing in Goldman:

http://link.brightcove.com/services/link/bcpid1184614598/bctid1815616936

Recs

2

F5 Internet Networks: a pitch

September 24, 2008 – Comments (0) | RELATED TICKERS: FFIV

I bought a couple of odd lots of F5 internet works at around $25 a share on average. I sold out at $31 with mixed feelings. This was in my IRA.  I had wanted to lock profits in and invest in something more diversified, but I am confident in F5's strategy and growth prospects. Today, I had the opportunity to buy more at $23 a share in my taxable account.   [more]

Recs

1

Morgan Stanley comments

September 19, 2008 – Comments (1)

Morgan Stanley looks like it might change its mind on merging with Wachovia. It's exploring a capital raise with China's sovereign wealth fund.  [more]

Recs

2

Market and my picks commentary

September 18, 2008 – Comments (0)

It's been an up, down and up market today. US Bancorp and Wells Fargo are up over 10% each on what I think is a flight to quality. Neither bank has heavy derivatives exposure or significant counterparty risk with AIG or Lehman. Both are in good financial condition and stand to take significant marketshare as weaker players come into difficulty ... or go bankrupt. I've picked USBand own the stock personally. I nearly pulled the trigger on WFC at the market low in July, but didn't. I regret that.   [more]

Recs

0

Took advantage of market chaos to buy Apple

September 18, 2008 – Comments (2) | RELATED TICKERS: AAPL

I bought some shares of Apple and made it a pick in CAPS. For the first time in a long time, Apple has hit 5 stars in Morningstar.  [more]

Recs

1

Realty Income raises its dividend

September 17, 2008 – Comments (0) | RELATED TICKERS: O

Realty Income, which leases commercial properties on a triple net basis, increased its dividend for the 4th time in 2008. The latest increase is a bit less than a cent per share annualized, but that speaks to excellent management and a strong financial position.   [more]

Recs

0

Morningstar doesn't like Bank of America + Merrill

September 16, 2008 – Comments (0) | RELATED TICKERS: BAC

 It looks like Morningstar isn't overjoyed about the combination of BoA and Merrill.    [more]

Recs

0

So, Lehman Brothers is next after all, and comments on Merrill/BoA

September 15, 2008 – Comments (3) | RELATED TICKERS: LEH , MER.DL2 , BAC

Looks like Lehman Brothers is indeed next.   [more]

Recs

2

Pitching Magellan Midstream Holdings LP

September 14, 2008 – Comments (1) | RELATED TICKERS: MGG

MGG is one of my CAPS picks, and it's down 23% from when I picked it. I think the selloff is overblown.  [more]

Recs

1

Revisiting Lloyds TSB Group

September 13, 2008 – Comments (0) | RELATED TICKERS: LYG

I've taken a 45% loss in my position in Lloyds TSB, a UK bank with a dominant consumer banking franchise. The UK, like the US, is suffering a housing downturn and a broader economic slowdown.  [more]

Recs

5

Lehman Brothers, Washington Mutual and AIG

September 12, 2008 – Comments (3) | RELATED TICKERS: LEH , WAMUQ.DL , AIG

As we all know, the market seems to have lost confidence in Lehman Brothers and in Wamu. Both stocks are under $4. Morningstar released a note today saying that they see an increased possibility that Wamu doesn't have sufficient capital at present to continue operations, and that any capital raising would essentially wipe out existing shareholders. Before that, they'd projected a 25% chance of a capital raise.   [more]

Recs

4

Bought more Chesapeake and Compass Minerals

September 09, 2008 – Comments (2) | RELATED TICKERS: CHK , CMP , POT

Today, all of yesterday's gains were wiped out, and then some. In my personal portfolio, I sold Mastercard yesterday. I used some of the proceeds to add to my holdings in Chesapeake and Compass Minerals.  [more]

Recs

1

Betting against a 4 star stock, MEMC

September 08, 2008 – Comments (0) | RELATED TICKERS: SUNE

MEMC sells silicon wafers to semiconductor companies, and lately to solar companies. Silicon wafers are a commodity, and this is the centerpiece of my underperform thesis.

Lately, pricing has been very strong for wafer suppliers. People are starting to get bullish on alternative energy, and MEMC's recent contracts with some large solar producers have made a lot of folks bullish.

However, there is little to differentiate the wafer suppliers. They supply a commodity and the industry is cyclical. Folks ought to remember that during the last round of the cycle, MEMC nearly went into bankruptcy after a bout of overinvestment followed by a price decline. It's no stretch to imagine that there could soon be a glut of capacity on the market.

One can succeed in a commodity industry by being the largest supplier. For example, Potash Corp of Saskatchewan controls a huge proportion of the world's potash supply, similar to Saudi Arabia controlling a large part of the world's oil supply. POT can afford to wait out a downturn. MEMC doesn't have the same dynamics going for it. It isn't the largest supplier. It is more or less in a perfectly competitive economic environment with its peers.

So, sure, the recent solar contracts are a boon, and recent pricing has been strong. However, at some point, that's going to change. Excess capacity will eventually lead to a decrease in prices. MEMC has no durable competitive advantages to keep it going - any of its competitors could sign a contract with any of the big solar firms.  [more]

Recs

1

Update on American Express

September 08, 2008 – Comments (0) | RELATED TICKERS: AXP

Some time ago, I enthusiastically pitched Amex's prospects.  [more]

Recs

0

Banging the table on Enterprise GP holdings

September 08, 2008 – Comments (0) | RELATED TICKERS: EPE.DL2

I've picked a number of energy master limited partnerships. So far, they haven't lost as much as regular energy stocks, but they're still underperforming the S&P.  [more]

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