Icahn vs. Cook Today Carl Icahn and his Icahn Capital LP wrote a letter urging Apple CEO Tim Cook to buyback more AAPL shares (below). Icahn is an aggressive stakeholder who has transformed many smaller companies. Apple is surely the biggest Icahn has ever attempted to crack. We are pleased that Apple has directionally followed our advice and repurchased $80 billion of its shares (yielding the company’s shareholders an excellent return), but the company’s enormous net cash position continues to grow while the company’s shares are still dramatically undervalued. With Apple’s shares trading … [Read more...]
Archives for May 2015
Good Morning from Newport, RI
If you live in New England, or are visiting, there’s plenty of reasons to come visit Newport, RI. This weekend was buzzin’ from the Volvo Ocean Race stopover. The boats left port yesterday. Next stop Lisbon, Portugal. You would never know our business is in the heart of it all. Our office is on William Street—a neat little street away from the hustle and bustle of Thames St. Give me a call if you’re planning a visit. … [Read more...]
Spring Still Not Here for the Economy
The early economic data for the second quarter is beginning to come in and it doesn’t look promising so far. Industrial Production data was released today and it declined for the fifth consecutive month. Yearly momentum in industrial production is trending down as well. The Michigan Survey of Consumer Sentiment came out this morning and it showed the largest monthly decline in more than two years. It is still a bit early to call this a trend for the second quarter, but the absence of a bounce back from the winter doldrums is nonetheless disappointing. … [Read more...]
$100 Million Room with a View, or Not
You just gotta love the obnoxious real estate prices in Manhattan. Vornado Realty Trust’s 220 Central Park South has already secured $1.1 billion, or one-third of the building, making it already profitable reports the WSJ. “We are doing beyond well,” said Vornado CEO Steve Roth. Yawn. Then you have the penthouse at the building called One57 (how clever) which sold for $100 million in January. The view must be really pretty, or not. Read this comment from a WSJ reader: Actually, looking at the building (One 57) from Central Park on Saturday it appeared that the top ten or so floors were … [Read more...]
Vanguard GNMA Outlook 2015
Originally posted May 22, 2015. (See Part II by clicking here). With long-term interest rates rising sharply in recent weeks, many investors are wondering what they should be doing with their bond holdings. How do bonds perform in a rising interest rate environment? That answer of course depends on the type of bonds you own. Are they short-maturity bonds or long-maturity bonds. Are they corporate bonds, Treasury bonds, or mortgage backed securities? What are the ratings of the bonds? Are they dollar denominated bonds or foreign currency denominated bonds? Lots of variables to … [Read more...]
“The Moment” I Lost Money
If you’re over 50 and lived in or around the Boston area during the 70s then you know the moment. 45 year’s ago, Mother’s Day 1970, Bobby Orr took the pass from Sanderson, scored to clinch the Stanley Cup, and “The Flying Bobby” was born. That was the defining moment in Boston sports for Boston Globe sports-writer Kevin Paul Dupont. In describing his most important moment in Boston sports he talks about winning and losing. It made me think about making and losing money. I lost money at a very early age and it hurt. The summer between my Junior and Senior years at Babson I had an … [Read more...]
Yellen Takes Blame for “Quite High Equity Valuations”
Fed Chair Janet Yellen apparently roiled markets earlier this week when she said that equity valuations were generally quite high, but added that they were not so high when you compare the returns on equities to the returns on bonds which are also very low. So stock valuations are quite high, but not when compared to bond yields which are also quite low. Isn't that just another way of saying that low interest rates have inflated stock values? And who is responsible for “very low” bond yields? That would of course be Mrs. Yellen’s Federal Reserve. The Fed is holding short-term … [Read more...]
Bond Bubble
I've been hearing, and reading a lot, and I mean a lot, about the bond bubble. But you know what? I’m not concerned in the least. I’ll tell you why. Yes, I know the Fed is talking about raising rates this year. But you and I know the economic reports they gloss over, and wax and wane about, have zero to do with the economy you and I deal with—the one we live and breathe everyday— you know, the real world. And yes, I know how bonds work: when interest rates go up, prices go down. I get it. But the Fed has almost no control over interest rates that you and I care about. They control the … [Read more...]
Is Economic Momentum Slowing?
The release of the ADP Employment Report today confirmed, once again, a trend of decelerating growth in job creation in the United States. It's too early to tell if it's part of a wider slowdown, or simply a blip. The report should put investors on alert for other economic data that could confirm economic trouble. … [Read more...]
Be Great at One Thing and…
You may know Mark Knopfler, the “Sultan of Swing,” from his years fronting the rock band Dire Straits. Well he’s still pickin' that guitar. He released another solo album this year, Tracker. Talk about being great at one thing. You don’t have to be great at just one thing to create wealth, but it definitely helps. I was speaking with a prospective client last week who is great at one thing. But he didn't start out that way. He said he remembers dumping change on the dining room table to come up with enough money for a gallon of milk when he and his wife were raising their young family. … [Read more...]