Talking stocks, trading, and investing in general - Page 179

I had some Brk.b's a couple years ago but sold them. I like Buffett, but I'm not keen on his policies regarding buybacks and dividends for his own company. It's the exact opposite policy of most of the companies he choses to invest in.

As far as the stocks that overlap with buffets portfolio I have PG, GE, XOM, KO, WFC, KFT, among others that do not overlap with his portfolio. Over 5 years all of which have outperformed Brk.b when you include dividends (especially if you reinvest them) and most of which have outperformed his stock on capital gains alone.

Its certainly not my intention to patronize, but rather, to debate. Why did you chose Brk.b?

I don't have the ammo to pull the trigger on BRK.A

I'm kidding. I just started investing in July, so I don't have a lot of experience, so please bear with my reason.

I understand your point about WB preferring buybacks over dividends, completely opposite to the companies that BRK invested in (KO, WFC to name a few). I have a few dividend stocks on my portfolio, mainly Canadian stocks, and I do like the regular cash dividend.

WB recently sold some of his holding (JNJ, KFT and PG) and completely disposed of INTC to free up some cash. I read some estimation that BRK currently has $40 billion cash on hand, and that WB is ready to fire his "elephant gun". I believe that he's looking for a megadeal that'll increase the stock value of BRK.

I know that WB sometimes pick a stinker, but he wins more than he loses. I also believe the management is looking out for the shareholders, and that they're doing half the work for me. Instead of me buying all the holdings of BRK, I can just buy their stock instead.

pandora reports next wed, who's got their shorts on? could see a squeeze perhaps

Explain....why would Pandora be squeezed? I figured this Spotify thing that every single Facebook users seems to love would be eating Pandora's lunch...


AMRN looking good today. Up 7.5% so far.

Currently looking for a re-entry point for GLUU.

 

For a beginning investor it's not a bad choice. Investing in Brk is akin to investing in a portfolio of diverse stocks. Don't forget about BAC . Glad we got in when we did.

 

I have my finger on the trigger to sell just about every equity I own. I really believe in the complete inability of Congress to reach a compromise until just before or after the deadline. I'm bullish on September though.

Pandora is totally free and doesn't require you to install anything on your computer....so they still have a pretty good market position.

Spotify is great, but their radio service isn't anywhere near as good at picking music you might like and requires you to install software (although they recently just made the radio-only version of their mobile app free when before, mobile was only available to premium-level subscribers). For a lot of people looking to listen to some music at work, having to install software is a no-go.

Well my point was actually that he does neither buy backs nor does Berk pay dividends. However all of the stocks that they buy do one or both to the best of my knowledge.

I understand one's interest in owning Brk, it's performance over a longer time frame is nothing to discount, and I don't consider it only for the newbs.

Red, BAC is the only stock I own that at the moment that is neither buying back shares or paying a dividend of any significance. I own it for that reason in this case. It is the industry norm in yesteryear to pay a hefty dividend (iE banks pre crisis) and it's likely that in 5-10 years we'll see a dividend nearer to the norm for the industry. Moynihan over promising on the dividend early in 2011 was pretty annoying but his project new BAC has helped out the company in my opinion.

That being said my true feeling on BAC is that if I were offered the break up value of it tomorrow I would take it. I would do so rather than wait for value to be returned in the form of dividends or capital gains that are well into the future.

I'm OK with holding equities through this deadline and through the election, they'll likely reinvest some dividends during that time frame, while it's likely that many will receive a haircut if they do I will gladly purchase them again. IMO on the other end of this it's likely that people will still be fueling their car, buying consumer staples, using financial services, and so on.

Pulled another trigger today and bought some Sandstorm Gold (TSX venture: SSL, NYSE.MKT: SAND) Currently it's about 10% of my portfolio, I bought it at CAD $9.70 after a big drop yesterday.

If you know Silver Wheaton (SLW on both TSX and NYSE) you'll know why. SLW and SSL are both streaming companies, for silver and gold respectively. Streaming companies don't directly mine or manage mines themselves, what they do is provide upfront and cash financing for mining companies that want to develop, explore or increase production of their own mines. In exchange, the mining companies will sell a percentage of silver or gold, over the life of the mine, to the streaming companies at a fixed price.

The founders of SSL were two of the original founders of SLW, so they have experience in running a streaming company, screening and picking the right projects, and overall give investors confidence in their leadership. SLW stock price has increased by 14% YTD, due to their income from silver streaming. With silver price trading at 10% increase YTD, SLW financial looks pretty good, which explains the recent jump in it's price (30% increase in the last month alone, I'm sad that I didn't pull the trigger back in July).

SSL is similar to SLW with it's streaming projects. Currently SSL has 7 projects on the go, they're in Canada, US, Brazil and Mexico, where the countries are politically stable. On their most recent Q2 financial report, SSL pays from $300 to $500 per oz of gold, or the current gold price, whichever is the lowest, to the mining companies for a percentage of gold refined. SSL then sells its gold to large corporations with good debt rating to reduce risk. SSL has a $50 million revolving credit with Bank of Nova Scotia, which SSL hasn't tap into yet. This week, SSL announced a $75 million finance deal, which later increased to $130 millions, by selling its shares at $10 each to underwriters. The recent drop is price is probably due to these underwriters dumping their stocks in the open market, causing a 10% drop in price. Overall I'm bullish on SSL, it is a speculative buy, but I believe SSL will follow SLW's footstep and become a great steaming company.

I loaded up on T, VZ, and S today.

I'm hoping the Iphone5 will bring these guys up.

Great, but is there any chance of them actually being profitable?

I thought about this, but opted not to for a few reasons.

 

The iPhone 5 will be heavily subsidized by the carriers.

You're making a pretty much industry wide play. Majority of new iPhones will be sold to existing subscribers who are currently on premium plans.

 

Think about picking a winner out of those three. Who stands to gain market share with this launch? Great opportunity for a pair trade imo.

 

It will come down to:

 

Who is best able to keep iPhones available and in stock.

 

Who's 4G network is best able to handle the juggernaut that is about to hit it.

 

I haven't done the research, so I won't make an uninformed suggestion. Just some food for thought.

I've had both T and Vz for a few years, if you bought them thinking that the iPhone will boost the stock than you may be disappointed. They subsidize the phone heavily.

I like both and own them for what used to be a near 6% dividend, it's now about 4.5% due to share appreciation.

Thanks for the advice and comment guys.

I wouldn't be looking at the single release of a phone to really have substanial effect on these stocks. I mean you've got to look at cable and internet issues with VZ, and you have to take into account the horrible deal S signed just to sell the Iphones. I'm kind of cold on phone stocks now to be honest, I feel like the Iphone is going to become the "Madden Football" franchise of phones.

+1
I have been told just about the same thing.

Red, you work in ibanking?
Edited by CalTex - 8/30/12 at 8:25am