Investment Thread - For all your money needs

do you guys do stock or options? i'm thinking about moving into mostly call options for the additional flexibility.

I'm stock only.

i'm primarily etfs with some stock. my additional purchases will largely be stocks as i'm growing my confidence there, but i'll be hesitant to move out of indexed etfs.

all stocks.

I think this is a little old but someone just pointed it out today in the office. Gotta give credit to Bloomberg, this is pretty solid.

Carl Icahn's letter to Tim Cook. http://www.cnbc.com/id/101140466

Friend or foe?

Dear Tim:

It was a pleasure meeting you for dinner at the end of September. When we met, my affiliates and I owned 3,875,063 shares of Apple. As of this morning, we owned 4,730,739 shares of Apple, an increase of 22% in position size, reflecting our belief the market continues to dramatically undervalue the company, even when taking into account the recent market appreciation, which in turn makes our proposal unchanged with respect to a $150 Billion buyback. We were pleased to hear at our dinner that you appreciated our input and that you would speak to us again in three weeks to continue the dialogue. In anticipation of doing so soon, we aim to reiterate in this letter the point of view already expressed to you directly with the hope of effectively summarizing it for the company's board of directors and our fellow shareholders.

From our perspective, Apple is the world's greatest consumer product innovator and has one of the strongest and most respected brand names in history. We consider Apple to be our most compelling investment. I first informed my followers on Twitter on August 13, 2013 of my "large position." I also expressed to you my opinion that "a larger buyback should be done now." At that time, we owned 3,448,663 shares and the stock price was $467. Since then we have purchased an incremental 1,282,076 shares (bringing the total value of my position to $2.5 Billion) and we currently intend to buy more.

We want to be very clear that we could not be more supportive of you, the existing management team, the culture at Apple and the innovative spirit it engenders. The criticism we have as shareholders has nothing to do with your management leadership or operational strategy. Our criticism relates to one thing only: the size and timeframe of Apple's buyback program. It is obvious to us that it should be much bigger and immediate.

When we met, you agreed with us that the shares are undervalued. In our view, irrational undervaluation as dramatic as this is often a short term anomaly. The timing for a larger buyback is still ripe, but the opportunity will not last forever. While the board's actions to date ($60 billion share repurchase over three years) may seem like a large buyback, it is simply not large enough given that Apple currently holds $147 billion of cash on its balance sheet, and that it will generate $51 billion of EBIT next year (Wall Street consensus forecast).

The S&P 500 trades at roughly 14x forward earnings. After backing off net cash, Apple trades at just 9x (not factoring into account that the company has a significantly lower cash tax rate than the rate Wall Street analysts use). This discount (cash adjusted) becomes even more compelling given our confidence that Apple will grow earnings per share at a rate well in excess of the S&P 500 for the foreseeable future. With such an enormous valuation gap and such a massive amount of cash on the balance sheet, we find it difficult to imagine why the board would not move more aggressively to buy back stock by immediately announcing a $150 Billion tender offer (financed with debt or a mix of debt and cash on the balance sheet).

While this would certainly be unprecedented because of its size, it is actually appropriate and manageable relative to the size and financial strength of your company. Apple generates more than enough cash flow to service this amount of debt and has $147 billion of cash in the bank. As we proposed at our dinner, if the company decided to borrow the full $150 billion at a 3% interest rate to commence a tender at $525 per share, the result would be an immediate 33% boost to earnings per share, translating into a 33% increase in the value of the shares, which significantly assumes no multiple expansion. Longer term (in three years) if you execute this buyback as proposed, we expect the share price to appreciate to $1,250, assuming the market rewards EBIT growth of 7.5% per year with a more normal market multiple of 11x EBIT.

It is our belief that a company's board has a responsibility to recognize opportunities to increase shareholder value, which includes allocating capital to execute large and well-timed buybacks. Apple's Board of Directors does not currently include an individual with a track record as an investment professional. In my opinion, any further delay in executing the buyback we hereby propose will reflect this lack of expertise on the board. My firm's success and my expertise as an investor would be difficult for anyone to argue. Per my investment thesis, commencing this buyback immediately would ultimately result in further stock appreciation of 140% for the shareholders who choose not to sell into the proposed tender offer. Furthermore, to invalidate any possible criticism that I would not stand by this thesis in terms of its long term benefit to shareholders, I hereby agree to withhold my shares from the proposed $150 Billion tender offer. There is nothing short term about my intentions here.

Sincerely,

Carl Icahn

Chairman, Icahn Enterprises (IEP)

icahn cracks me up. the thing with his son and netflix is pretty awesome.

http://finance.yahoo.com/blogs/the-...ager-son-might-junior-win-lose-170718309.html

TownieDeac said:

So I was looking at my Mint.com account and I saw I have spent $40.50 on ATM fees this year. Is there any precedent for bank customers to ask their banks to start reimbursing ATM fees or else threaten to leave? Do people do that kind of thing? I have been considering switching from Wells Fargo to Charles Schwab for both the financial planning/advice and for their suite of benefits anyway, and losing brick and mortar locations would be fine if ATM fees were reimbursed. I so rarely need tellers anyway. Maybe I'll try to pull it off and if they can't budge I'll bounce for another bank.

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PNC refunds like $10-15 per month of atm fees.

TownieDeac said:

So I was looking at my Mint.com account and I saw I have spent $40.50 on ATM fees this year. Is there any precedent for bank customers to ask their banks to start reimbursing ATM fees or else threaten to leave? Do people do that kind of thing? I have been considering switching from Wells Fargo to Charles Schwab for both the financial planning/advice and for their suite of benefits anyway, and losing brick and mortar locations would be fine if ATM fees were reimbursed. I so rarely need tellers anyway. Maybe I'll try to pull it off and if they can't budge I'll bounce for another bank.

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USAA will reimburse ATM fees up to a certain amount each month. I'd be surprised if Wells caved to you over $40.50, but good luck and report back.

so are any market timers ready to jump out?

im waiting to jump IN

deacphan said:

so are any market timers ready to jump out?

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I was just thinking about that this morning. What's the deal w/ QE?

i think theyre going to maintain the taper, right?

They're going to continue the taper

has there been a press release or something? the new woman is gonna give a speech and the market is gonna fall right after. #SCOOP

leftcoastdeac said:

USAA will reimburse ATM fees up to a certain amount each month. I'd be surprised if Wells caved to you over $40.50, but good luck and report back.

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Not sure about other small banks around the country but Burke & Herbert here in NoVA is a bonifide solid #1 stud of a bank. Reimburses 100% of all ATM fees no matter what. The only time I pay anything is when I'm in another country, but that is a flat $3 fee I believe, they still reimburse whatever the foreign bank charges. Sure, they only have like 20 locations, but when they reimburse you 100% who cares.

Janet Yellen is largely seen as a continuation of Bernanke, perhaps even more than Bernanke would have been in the next few years. Light taper will continue in the short term for sure, they don't care about the unemployment rate dropping because, they arent buying it with all the people leaving the workforce/giving up the job hunt. Doubtful they cut it off this year, maybe in Q4-14 or H1-15 they'll look at a heavy taper/cut off. Fed Funds rate will remain at zero into at least 15, maybe 16.

deacphan said:

so are any market timers ready to jump out?

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I've been riding FB, TSLA and TWTR but think those are all reaching their tops in the short term. Still like TSLA over the next year. Might start playing around with some of the marijuana stocks, though most are garbage. Still a market that obviously looks to be high growth in the coming year.

http://www.cnbc.com/id/101544772

any #hottakes on this?