Another Rant. (See 1 below.)
+++++++++++++++++++++++++++++++++++++++++++
Arrogant Peter Strzok strikes out again. (See 2 below.)
And:
Latest Islamist Tactic to Undermine Programs Preventing ExtremismThe conversation on preventing extremism can't be led by extremists Watch and Share 
++++++++++++++++++++++++++++++++++++++++++++++++++++
More favorable news about St John's College. (See 3 below.)
+++++++++++++++++++++++++++++++++++++++++++++++++++
DORIS
+++++++++++++++++++++++++++++++++++++++++++
1) As the market continues to set new records, I thought using Home Depot would be a good example of my investing strategy. As you know they hit earnings, but missed analyst forecast a bit on sales and lowered full year forecast. The stock got slammed even though the company is doing very well, and will continue to do very well going forward. However, the issue is, they have been investing in various business building computer programs which have not yet paid off, but will in the future. I have owned HD since November, 2009. My holding is up 729%. That is an average annualized return of 22%. It pays a 2.5% dividend on current market price, but which is a 18.7% yield on my cost. What else pays that return and has such growth. No other companies in my portfolio have nearly as good returns, but ten are in triple digits. Despite the small setback this week, I will continue to hold HD because it is a very well run company, its brand is the best, low interest rates will mean a good housing market for a long time, and it has a sound balance sheet. The point I am making is, find very good companies, and invest for the long term. Do not let small blips like this week in HD throw you off track of long term value creation investment. Monitor the company regularly, so if there is a major change in strategy, balance sheet or industry dynamics, then reassess and sell. Macy being a very good example of one I sold out of long ago for a profit before it totally tanked. Patient investing in very good companies will make you a lot of profit in the long term. It has worked for Buffet and others. It is the old Graham & Dodd strategy.
China will do some sort of deal, and USMCA will pass in January or February because there is huge pressure now on the Dems to get it done. If they do not, they lose the Midwest. Brexit will get resolved and happen by end of January. These, along with a bottoming in the EU and UK will keep the bull market moving higher.
Rent controls across the country have been increased by 83% over the past 10 years. These are mainly in large cities run by Dems. NYC has had rent control forever. However, when it was finally modified many years ago to allow units to go to market rate under certain conditions, then apartment construction jumped. Now DeBozo and the left wing city council passed new, highly anti- landlord, rent controls. The result will be apartments will not be maintained and construction will grind to a halt, so in a few years, deferred maintenance will be a real problem, and a shortage of units will drive up problems for tenants. Whenever you have price controls in any market for any product, it almost always creates shortages and market disruptions which end up hurting consumers. The real issue for affordable housing is gross over-regulation and regulatory delays, which in CA raises costs to a point that new development is often not viable. In CA it takes 3 years to get a single house built, but in many red states it is 9 months. Is anything not clear here as to why there is a terrible affordable housing shortage in CA. Vacancy nationwide in multi-family is just 4.6% which has occurred because it is so hard and expensive in some places where demand is high, (San Fran) to build new units.
Some commercial leases are now being written as various versions of having the tenant as a partner or participant in value. This makes no sense to me. What if the tenant goes BK, or defaults, or needs to be evicted. (think Arthur Anderson). What rights does the tenant have if the owner wants to sell. Who needs another partner whose incentives are opposite of the landlord.
Carl Icahn is betting big that mall loans will default over time. Many other hedge funds have tried this and lost a lot of money. While it is true that many malls are hurt by so many store closings, many of the good landlords have been creative, and have repurposed the empty units with all sorts of non-retail uses, and have been able to service their debt. What Icahn and others fail to understand is that many mall owners are smart, driven guys who are used to adversity in development, and are good at finding work arounds. I would not bet against most major mall owners. It still very good, well located real estate in many cases, and can be used for other rent generation uses. TBD if Icahn will be a big loser betting against the credit default swaps index for malls.
Flex office space (We Works) never made economic sense in many cases. Like We Works, the space operators have added so much amenities that the cost of the space fit out is so high, and maintenance of the amenities is so much, it is not economically viable in many cases. There are some major developers who are adding some flex space of their own in their buildings, but they own it, and are not trying to make a spread on subletting to a subletter, which is what the We Work model is. They also know how to control costs in a building. For the flex space companies, there is little to no margin on the rent. Operators like Regus try to make a profit on the services provided. Generally the whole concept is not profitable unless you own the building, and can do a floor at minimal cost, and keep the spread for yourself instead of paying most of it to the building owner.
Blacks are defaulting on student loans at a 20% rate vs white defaults at 10%. I believe this is largely due to diversity in admission. Blacks get admitted to elite private universities that are very expensive just because they are black, even though in many cases they do not have the SAT scores nor academic background to compete. Result is they drop out, or do not do well, and so when they get out they do not get jobs that pay enough to carry the loan. They would be far better off if they attended state schools where there is low tuition, and so low loan amounts, and then they would not only get better grades, but they would have lower loans by far. So in the end these minority kids end up being frustrated because they can't compete in class, and they end up with crushing debt that ruins their start in life. They pay a heavy price, but the university can say, look at how inclusive and diverse we are. The schools say- Aren't we wonderful, when in fact they are ruining the lives of some of these kids.
Major law firms are really large businesses doing hundreds of millions in revenue. They choose partners by selecting those associates who they think do high quality work, and who can bring in a lot of new business-fee income. Lawyers are the people who produce the product that is being sold, legal advice, but each lawyer is also the sales and marketing department who is expected to generate new business on his own. Big law firms are more akin to franchise operations with each lawyer doing his own book of business, with his own associates and assistant, and his own revenue generation. So when they choose new partners, they choose those franchisees that can generate big fees to what amounts to the brand company- the law firm. While these firms bring in minority and female associates to look good for "diversity", they rarely make these people partners because they simply often do not have the skills nor the contacts to bring in big new clients, which is the whole point of making partner. The firms need to show minority and female associates so they tell corporate or non-profit clients -look at our diversity. Some General Counsels at big companies will not retain a law firm that does not have "diversity and inclusion" as opposed to who has the best lawyers to handle their needs. That is really stupid, and boards should demand retaining professional firms purely on merit, not diversity quotas. You see how campus ideology is permeating the workplace and causing some companies to move to the lowest common denominator, just like law schools are doing. The problem is, in many cases, the minority associates got into top law schools because they are a minority, not because they can achieve top of class ranking, which they rarely do. (The whole Amy Wax Penn Law case). So the whole chain starts in undergrad where they get admitted because they are a minority despite lower SAT scores, then they get into law school for the same reason, even though their LSAT scores say they cannot compete, and then they get recruited to top law firms even though their law school performance does not justify that, and then they finally do not make partner. So now, of course, the mobs are claiming discrimination as the reason they do not make partner. Merit has no place for the mob. The Lakers staring five are all black, but nobody says that is discrimination. Nobody says how come there are no white guys in the starting lineup. Because everyone knows it is all on merit and the five starters happen to be the best players on the team. Someone needs to explain to me the reason merit matters in the sports business, but not in the legal profession nor anywhere else.
Now the mob is attacking Google for hiring a former DHS executive. So now the mob thinks it has a right to tell a company who it can or cannot hire. Be aware, this is where things are headed, and it is all a direct result of the left wing ideology and activist tactics they are learning on campus. It is a secret, but many schools now require professors they are considering to hire, to fill out a form proving they have done a lot to promote diversity and inclusion. It is scored 1-5, and if you get less than 3 you are not hired no matter how good you are at your subject or as a professor. If we all don't pressure our universities to stop training kids to think they can control the world around them to do as they demand, and if the far left ideology now present on campus is not stopped, we are going to see much more of this sort of protest in the workplace and politics. It is what they were taught on campus is OK. Just wait until the kids come home for Thanksgiving and demand that you believe what they believe. You will get a taste of what is happening.
The long awaited Horowitz report is coming soon and will have criminal referrals. This just as the Judiciary Committee has its own kangaroo court to impeach Trump. Then will come the real big report and indictments from Durham just as the trial is underway. It is going to be a very wild few months in DC and a very bad situation for the country just as we are trying to convince the Chinese that Rump is who they need to deal with, and the Iranians who is ready to blow them away if they attack Israel. Iran is under siege now, both internally and in Syria, Lebanon and Iraq. The impeachment hearings just encourage Iran and China and the Russians who will be stirring the pot as much as they can. This is Putin's dream situation, thanks to the Dems. There is no chance Trump is convicted so this all only harms the country.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
2) Strzok-Page Using Unsecure Devices for Sensitive Info; JW Sues DOJ for Ohr & Strzok Comms.; JW Statement on Firing of Strzok
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
2) Strzok-Page Using Unsecure Devices for Sensitive Info; JW Sues DOJ for Ohr & Strzok Comms.; JW Statement on Firing of Strzok
|
| |||||
3)Yesterday, the Wall Street Journal ran a travel article on four great summer adult education programs—and St. John’s Summer Classics was one of them. The article also explores the many ways that these intellectual retreats can provide interesting housing options that get attendees off-campus and off-the-beaten path. For us in Santa Fe, that means dozens of charming Airbnbs and downtown heritage hotels. When you combine these options with Santa Fe’s great food scene, opera, art galleries, hiking trails and more, you have a truly stimulating vacation awaiting.
++++++++++++++++++++++++++++++++++++++++++++++++++++++
No comments:
Post a Comment