Forum Insights - All Comments

Re: Opportunities in Spin-offs

Sandy8it — Sun, 21 Feb 2010 17:25:35 GMT

Entergy's Vermont Yankee plant will be denied a 20-year extension by the state Legislature this coming Wednesday, Feb. 24, 2010.

Re: Enexus, I wouldn't hold my breath on that spinoff as NY has all but denied the request and in light of the investigation by VT's Attorney General into the tritium spill and lying to the state Legislature and the state Public Service Board, NY's not likely to change their mind.

The NRC has told Entergy that 1) their decommissioning funds are billions of dollars deficient and 2) the parent company will be held liable.

The spill in Vermont is estimated to be 2 football fields in size and will run another $1/2 billion to cleanup on top of the $1/2 billion the fund is deficient. Right now it's only groundwater and tritium but cobalt is another candidate that's been mentioned and that would escalate costs as well.

A year ago the likelihood of their obtaining a 20-year extension was much better than 50%. Then the LLC spin was put on hold in NY and VT and the latter caught them lying to officials and an insider just blew the whistle on their covering up a spill a couple of years ago.

Because of depressed energy prices in the Northeast, renewable alternatives coming online in the regional grid and the unlikely approval of an Enexus spinoff in at least 4 of their nuclear plants, I wouldn't look for any short or long term growth.

Enexus, btw, was to be highly leveraged with a parental company guarantee, which based on their past, would be litigated into obscurity. I wouldn't put a nickel into their stock right now.

Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

IANSAYS — Thu, 05 Nov 2009 18:21:26 GMT

Josh's bottom-line doesn't take into account society's bottom-line. I know many people ultimately don't care, but in the long run I believe they might wish they had.

All three companies he picks for their great dividends are, or have been, involved in questionable environmental and social practices. I'm glad Josh mentions that he is concerned about Altria's 'ethics,' but doesn't mention NSTAR's past history of dumping oil into the Charles River, or the fact that Clorox's products contribute significantly to the pollution of the environment, although they have more recently made a push to develop more natural "green" products.

In my opinion, investors looking for sustainable dividends should consider all the environmental, social and corporate governance risks involved in their investments because of the headline risks that could arise as society pays more attention to what's good for them, and the government begins to internalize some of the external costs associated with negative practices.

Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

tom.lander — Thu, 05 Nov 2009 20:02:49 GMT

Thank you, profusely, for passing along some of the results of the 2009 Forum. I wanted to be there, but could not make it this year.

Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

kakatiya — Fri, 06 Nov 2009 17:48:20 GMT

I really like MO. I have retail interests and can tell first hand MO is finally getting act together on UST products it bought.

Right now they are dropping the prices on UST products dramatically to gain market share but knowing how well MO dominates the smoking sector (I do not know of any other company that executes as well as MO in retail space) I know in long run they will kick some butt with UST products.

On Tax side I am not too worried I think the govt and others have pushed the envelop as far as they can prudently push. Any further push and they cut themselves.

I do not see too much ethics issue with it. Its a choice - if I want to smoke or drip knowing fully well all the risks involved which way is it a concern of anyone else. On warning labels, the reasoning behind wishy washy warnings has always baffled me. I think MO should just put it out there - This product will cause Cancer and be done with it. I don't think it will make any difference in demand. The cost on society for caring for health issues as a result of use of their products is more than adequately compensated by all the tax and revenue.

I think MO is a sleeper stock (or pressure cooker in M* language) that is not on too many folks radar. The best part is you get paid rather handsomely to wait.

Re: Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

jm7700229 — Sat, 07 Nov 2009 02:01:58 GMT

Altria and MO did not cause your lung cancer. Or did they hold you down and force smoke into your lungs?

Re: Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

romeInvest — Sat, 07 Nov 2009 03:16:39 GMT

Kakitiya's cavalier attitude toward the risk plus choice to smoke and developing lung cancer might be amusing in a perverted fantasy--but a pulmonary cancer is one of the most devastating fatal , human tumors and it is no fantasy. This lesion breaks the spirit of each patient;it bankrupts families. It robs the surviving spouse and children of a mate and parent. It places untold stress on hospital facilities, physicians and nurses. It causes secondary damage to the lungs of surviving family members. Commonly the monetary cost exceeds the benefits of any insurance the patient may have--and then the rest of us pay.Ninety five per cent of patients die--slowly. Over the last year of life they are damn sick and slowly smother to death gasping for air--with no relief.

Altria is going full steam ahead overseas. What a gruesome export from the United States.

And you want to invest in Death Incorporated. You are supporting homicide . That has to be a felony murder rap.Do not forget to take deep slow breaths if you smoke or if you are in the near vicinity of a smoker. After all you have earned the right to experience what you provided others.

Mel S.,MD

Roseville, CA

Rome@surewest.net

Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

kakatiya — Sat, 07 Nov 2009 10:30:02 GMT

My attitude was indeed cavalier in that I did not acknowledge the personal and emotional toll on one and their near and dear; For that I apologize (particularly to Herbdeno and those like him).

I have no issue with any social restrictions or like that influence the right choice by people in a positive manner and in fact encourage it. If anyone has a solution that will work I am all for it. There is always another way to make a buck.

Short of that in an objective (abet narrow) sense, accepting the reality that is on ground for what it is, I think MO is a investment worthy of consideration from dividend perspective (if your ethical concerns allow for it).

At the risk of going off the topic. A couple of notes.

1. Its always easy to advocate something especially when ones own money is not at stake in an explicit manner. But I do not begrudge you (romeInvest or others with same views) for that, seeing what you see - I think its a fair and valid opinion to have. And something that should not be discarded without consideration.

2. My own view is tempered with cynicism to certain extent; When the recent price hike (to pay for kids healthcare) passed. The state government authorities knocked on our doors conducting survey to evaluate the impact on volumes long before MO rep did. They also followed it up with restrictions to make sale of cheaper cigarettes by smaller firms (that do not yet participate in the settlement to same extent as MO, RJR and other big ones) extremely hard (read the bill). If its a sin we all (as citizens) are facilitating and benefiting from it in multiple ways (not just the retailers).

3. Not too long ago, we did at one store stop selling beer on the (ultra conservative) neighbourhood request (petition drive to local council, weekly church sermons and all nine yards, actually). When the cost of gas and other items went up to keep the place open (gas is a loss leader, revenue from cigarettes and other items is what keeps your local gas station open and gas prices so competitive - its not uncommon to loose 6 cents a gallon to keep traffic coming in), I found the very same people (who raised all the hue and cry) travelling a few miles to another store that sold beer because the price of gas was a few cents cheaper per gallon. Needless to say we went back to selling beer but the whole nightmare cost me over 10k.

4. I think the endevour to find socially ethical companies is both nobel and daunting - worth of its own focus and a separate newsletter from M*.

eg:- In the above situation, you can knock off big oil, any creditcard issuer or processer among others - all benefit from the volume of transaction subsidized and facilitated by tobacco retailing in more ways than you can imagine.

Even with all the wonderful drugs if you look a bit deep - you will find the issues of human testing in third world nations (how much information, education and choice does a third world patient have?), donation of expired medicine in form of aid and untold horror stories lurking just below the surface.

Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

bugahamike — Sat, 07 Nov 2009 15:54:11 GMT

Yikes.....and here I thought this was an investment website. I was under the impression we would be discussing investment ideas and not social agendas.

Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

snakeflake — Thu, 12 Nov 2009 13:59:36 GMT

I think there is a fine line between trying to better your life by making more money and trying to be socially responsible. I agree with the fellow who said what you put in your body ( tobacco) is a choice; however, if those choices are raising the costs of healthcare and affecting other members of families in a detrimental way, it is more than one persons choice. I have invested in MO from time to time and I do not use tobacco in any form. Furthermore, Altria is not only in the tobacco business, but that's all people associate with them. I kow my view is a bit wishy-washy but the more money I make the more socially responsible I can be.

Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

TravellinThru — Fri, 13 Nov 2009 08:40:20 GMT

Thanks to the OP for these tidbits. I have JP's book (which has been helpful), but I need a lot more real world examples and feedback to feel comfortable buying individual stocks.

Re ethical investing I have 2 points. First, it is much more efficient for societal costs to be allocated to the products of polluters etc. than to try to invest around them. Further, I am generally in favor of people making their own choices. However, I draw my line at investing in a company whose products, correctly used, kill 50-80% of their users.

Keep up the good investment info!

Re: Josh Peters Kicks Off 2009 Morningstar Stocks Forum

HerbDeno — Fri, 06 Nov 2009 22:28:10 GMT

I am a long term lung cancer survivor, ie. over 18 years. You do not want to know my feelings for MO, or alteria, or whatever they want to call themselves.

Re: The Big Picture: Economy Looking Healthier

dredlox — Fri, 06 Nov 2009 04:23:54 GMT

nice read, thanks Jeremy. For whatever my useless opinion is, I am not banking on commercial real estate failures, quite the opposite, holding steady in Realty Income.

Did anyone else notice in Realty Income's quarterly that they actually finally purchased a property - three in fact? They are so conservative and so well managed, that I was actually using them as an indicator for commercial RE. Meaning, when they started purchasing, it must be the bottom or very close.

Re: The Big Picture: Economy Looking Healthier

az9713 — Fri, 06 Nov 2009 01:32:20 GMT

Jeremy

Would it be possible to provide some of Bob & Matthew's evidence
on their optimism ?

For example, what substantiate their view that "the vast majority commercial real estate owners will be able to ride out the storm" ?

What are the new industries that will help us back to more normal employment
level ?

Thanks.

- az

Re: The Big Picture: Economy Looking Healthier

aeropater — Sat, 07 Nov 2009 00:56:30 GMT

Improved productivity is not bad, it is eccential to a continuing enterprise. Without productivity improvements, the only path to improved earnings is increased prices. Yes, there is growth,??but how do you fund growth??, borrow money or improve productivity and fund growth internally.

Re: The Big Picture: Economy Looking Healthier

njscolo — Sat, 07 Nov 2009 15:50:08 GMT

I agree with your take on jobs and productivity, but I'd like to get your assessment of the potential political overreaction to the unemployment rate, especially as we enter the 2010 election cycle for representatives in the House. It seems that short-term political actions to "look good" for the upcoming elections could push more stimulus funding for unemployment and consumer support and hold the Fed back in its reasonable steps to wean us from our reliance on low interest rates, which could harm the economy longer-term.