ikkyu2's Blog

Review

ikkyu2 — Tue, 21 May 2013 14:37:54 GMT

I like to do a little investment review from time to time. This takes the form of a few folders in my computer, filled with little text file scribbles - one of my file names is 'investment scribble' - and maybe a few Excel files, often .csv files exported from Fidelity, where I maintain my investment accounts.

I try to put a date on these documents, and enter in my thoughts at the time - pretty much anyt...

SIRI's metrics

ikkyu2 — Sun, 12 May 2013 19:28:03 GMT

Originally posted as a comment to this blog, in which it was proposed that Assets to Liabilities was a reasonable way of valuing SIRI, the Sirius XM Corporation.

Assets are a funny thing. I don't see Sirius' satellites as "fixed assets." I own a corp...

Yet another note on AAPL and the market in general

ikkyu2 — Wed, 08 May 2013 13:00:28 GMT

I put my money where my mouth is last month; when I posted about AAPL's insanely low valuation, I doubled my stake. I was already overweight AAPL to begin with, even though I was playing with 'house money' - I had had my starting capital back years ago; doubling my stake resulted in a 20% allocation to AAPL.

Well, the additional shares, purchased at $402, were showing a 15% gain for 3 weeks of exposure. ...

Apple's buyback and bond issue

ikkyu2 — Wed, 01 May 2013 20:09:59 GMT

This is all about taxes, so bear with me.

Let's, for the sake of argument, say that AAPL has $50 billion overseas - out of the USA, where they are based - and that they desire to return this money to shareholders for shareholder benefit. This is, by the way, true as far as I can determine in terms of what was said by Ti...

The turn of the tide

ikkyu2 — Tue, 30 Apr 2013 14:41:37 GMT

I recently had a chance to view a home refi close up. This was an FHA streamline refi: jumbo, low-down-payment on the original 30 year fixed loan which was 3 years old and originated with both a Federal and State first-time buyer credit.

The original rate was 5.25%. The new loan was 30 year fixed with a 3.25% rate and 1.5 points credited towards closing costs.

FH...

AAPL valuation

ikkyu2 — Wed, 17 Apr 2013 14:59:21 GMT

Apple reported $44 in earnings over the last 4 quarters. The current stock price is $400 and they have $140 billion in cash on hand. They pay approximately a 1% dividend, maybe a hair more, maybe as much as 1.5% dividend yield at this depressed price, but let's just say 1%.

Therefore TTM P/E is 6; for a back of the envelope calculation, I like to subtract a point from that for every % of dividend y...

Relativity

ikkyu2 — Sat, 09 Mar 2013 16:10:35 GMT

I like Alex Dumortier - TMFAleph1 - a lot, and I always read his Fool articles and I usually like them too. The most recent - Is This the Fed's Rally? - is currently in the blog sidebar and can be read by clicking my link (if it works; hopefully it will.)

His point ...

Next Big Thing, and on the topic of "Hold"

ikkyu2 — Fri, 25 Jan 2013 11:07:21 GMT

This is my blog, and I ain't gettin paid for it, so I can cram two wholly separate concepts into one entry if I want.

Two entries ago, I posted about AAPL's valuation, which was unusually low at the time and has now sunk to historically quite low levels - P/E 10, closer to 8 net of cash on hand and 7 if you do my quicky trick of subtracting the dividend yield. That's pretty low for a company that has bee...

Back to BAC

ikkyu2 — Sun, 20 Jan 2013 13:15:45 GMT

As you may recall - I can't find the blog post myself - two years ago, maybe a little more, I acquired a small position, what I think of as a 'half-stake', in both BAC and C, two bank stocks that had taken a colossal whooping during the subprime crisis. At the time WFC and JPM were trading at small premiums and I decided that, BAC and C being too big to fail, and being valued lower than other issues that were also too big to fail, I'd take...

AAPL valuation

ikkyu2 — Tue, 15 Jan 2013 11:05:02 GMT

I like to keep an eye on AAPL valuation.

Right now at a price of $489/share the company's market cap is $472 billion. Let's do a back of the envelope Peter Lynch style quickie on it. P/E at this price, TTM is roughly 11.3.

Now let's back out AAPL's cash pile of $130 billion (cash and very non-volatile marketable securities.) There is no debt. That gets us t...

Sanofi's Lemtrada

ikkyu2 — Wed, 09 Jan 2013 16:00:53 GMT

Lemtrada is a drug developed as Campath in the Cambridge University pathology department. It was commercialized by Genzyme for use in rare lymphomas, in which it is spectacularly successful. The drug, a biological agent (like Humira, Tysabri, Enbrel, Rituxan and a few others) is a humanized antibody that is infuse...

Amazon's sky-high valuation

ikkyu2 — Tue, 08 Jan 2013 05:18:09 GMT

AMZN is a fantastic company that has disrupted one business after another and leveraged technology in places where most businesses didn't even know there were places.

Trouble is, everyone knows it, and has known it since I started watching the stock in the mid-90's. I have watched and watched and never really felt like the stock was a good value - 'priced to per...

Content Cat has left the building

ikkyu2 — Thu, 20 Dec 2012 04:17:48 GMT

In 1999 I wrote a little piece on my blog - can't remember if it was called a blog then, I used to call it a web journal, hand-coded it in HTML 1.0 - about Napster. The key sentence, which I enjoyed writing, was "the cat is not only out of the bag, he is out of the barn and clear over to the next county."

As of this writing there is a sidebar pitch about John Wiley, a publisher of technical boo...

Gender gap wage disparity

ikkyu2 — Fri, 14 Dec 2012 20:12:32 GMT

Every so often you hear about gender gap wage disparity. Women make less than men at nearly any job you care to name.

I run a small shop. This year, two employees have come to me after taking their FMLA leave to have a baby, and notified me that they did not intend to return to work. When I asked why, they pointed out that the value of the benefits paid them by the state to be an unemployed s...

Fortune interview with Larry Page

ikkyu2 — Wed, 12 Dec 2012 04:07:01 GMT

I posted last week about an interview with Tim Cook. As luck would have it, today I stumbled across a Fortune Magazine interview with Larry Page. Apparently Page is press-shy and it is only the second interview he has given since taking the CEO job back from Eric Schmidt in April 2011.

BusinessWeek interview with Tim Cook

ikkyu2 — Fri, 07 Dec 2012 16:03:39 GMT

Here's the interview. It's 11 pages, so set aside some time.

I take away a few things from the interview.

a) He's a big nerd

b) ...

INTC: Misvalued again?

ikkyu2 — Fri, 30 Nov 2012 13:21:50 GMT

Intel is once again in the bargain bin. It has bumped along the bottom, hitting 19.50 twice since I first recommended it a year ago.

The company sports a fortress balance sheet, a dominant market position, fab capacity unseen elsewhere in the world, and a best-in-class R+D division that spends more money annually than most countries produce in GDP. Historically the result has been that they dominat...

Hewlett-Packard: The Worst Company?

ikkyu2 — Wed, 21 Nov 2012 15:31:59 GMT

HP hasn't been a going concern for years; any one unfortunate enough to have been their customer quickly discerned this.

The current CEO carousel has lined the pockets of many with generous recruitment and, usually immediately, severance packages. Meg Whitman caught on quick enough that the dead horse wouldn't take much more flogging, and so she fished up a red herring. Supposedly previous management (and th...

AAPL: part the latest

ikkyu2 — Thu, 08 Nov 2012 17:04:01 GMT

I have written extensively in this space about AAPL, including some SWOT-style analyses and an occasional value pitch.

I won't recapitulate that; none of my basic ideas have changed. I wanted my constant readers to know that I have a limit order to buy AAPL stock in at $498. The figure represents a 15% margin of safety for a scenario that I would describe as 'worst business case' over the nex...

Inflation

ikkyu2 — Sat, 20 Oct 2012 15:21:18 GMT

Gas is $5 in the little town where I live - at least 91 octane, the stuff I have to put in my turbocharged car, is - and CMG's food input costs have gone up 32% in the last year, according to their recent earnings transcript.

Given these facts, I am delighted to learn that inflation is under control. See, Mr Bernanke uses the 'core' CPI to track this, on the way to accomplishing his quest for low inflati...