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(05-02-2020, 07:58 AM)fenders53 Wrote: (05-02-2020, 07:49 AM)divmenow Wrote: So Warren Buffet bought nothing with all that cash in recent months. Interesting
Warren Buffett has been waiting years for stocks to look more attractive. He apparently didn’t think the first-quarter plunge was that opportunity.
The famed investor’s Berkshire Hathaway Inc. spent the quarter building its massive cash pile to a record $137 billion as the coronavirus slowdown started to grip the U.S. That was up almost $10 billion from the end of 2019, while Buffett spent just a net $3.5 billion buying shares of his and other companies.
The window was brief for a a big move, but I find it very odd he didn't do something a little more substantial. I get it that even he has never seen anything like the virus in his investing career, but he knows his actions have been questioned. They have lost a bit of their edge. Almost like he is trying to "protect a lead". I still love Uncle Warner buy he's lost his competitive edge. He probably thought the market had another 10% like many of us, but that would be market timing which he has preached against his entire life.
I would doubt he has lost his edge. He has access to more information that all of us combined here. He has access to most of the C executives, fed officials, politicians and what not. He is definately talking to gates as well to get his opinion on the virus and gates has committed substantial amount of money in research. So the likelihood that he missed the opportunity is very unlikely. He also might have a different play here(speculation) due to distress in certain sectors in coming days, he will get calls and he might have better loan shark moments like what he did with oxy.
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While I wouldn't short DIS, I have very little interest in buying it either.
DIS was having trouble growing even before the pandemic hit, as it had flat EPS growth in 2017, then a 24% bump in 2018 on the back of corporate income tax reform, then dropped 19% in 2019. It's currently projected to drop 54% in 2020, and in the current economy it may end up even worse than that. It just reported a GAAP EPS of just $0.26 for Q1, which had roughly two good months before the pandemic hit. Have to guess that Q2 will be worse, with some improvement possible later in the year.
The only business that is working for DIS right now is streaming, which isn't terribly profitable as it's had to increase spend on tech and marketing to get it ramped up. Meanwhile it's facing losses in theme parks, its movie business, and in ESPN and live sports. The biggest advertisers (consumer discretionary) are also struggling, meaning ad revenues will likely be down for some time.
Levering up for the Fox acquisition was unfortunate timing, as net interest expense more than doubled in Q1 to $300 million. It's headed even higher now after issuing another ~$1B in Canadian bonds and an additional $5B credit facility after quarter's end. Those numbers start to add up after awhile, hurting future growth.
Disney is a great brand and company, but it's going to have a tough go of it for the next several quarters, and it doesn't seem that's priced into it yet.
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Eric, It may even be more than a few quarters. I don't really know how you properly discount DIS right now. They are probably going to end up about 50% off their high at some point soon. The market probably takes a chance from there. They have struggled to grow for decades, and I thought 2019 was the first sign of life. The pandemic was the perfect storm for DIS. Still one of the premiere content providers. It's going to require some great leadership to deleverage themselves.
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(05-05-2020, 10:43 PM)vbin Wrote: (05-02-2020, 07:58 AM)fenders53 Wrote: (05-02-2020, 07:49 AM)divmenow Wrote: So Warren Buffet bought nothing with all that cash in recent months. Interesting
Warren Buffett has been waiting years for stocks to look more attractive. He apparently didn’t think the first-quarter plunge was that opportunity.
The famed investor’s Berkshire Hathaway Inc. spent the quarter building its massive cash pile to a record $137 billion as the coronavirus slowdown started to grip the U.S. That was up almost $10 billion from the end of 2019, while Buffett spent just a net $3.5 billion buying shares of his and other companies.
The window was brief for a a big move, but I find it very odd he didn't do something a little more substantial. I get it that even he has never seen anything like the virus in his investing career, but he knows his actions have been questioned. They have lost a bit of their edge. Almost like he is trying to "protect a lead". I still love Uncle Warner buy he's lost his competitive edge. He probably thought the market had another 10% like many of us, but that would be market timing which he has preached against his entire life.
I would doubt he has lost his edge. He has access to more information that all of us combined here. He has access to most of the C executives, fed officials, politicians and what not. He is definately talking to gates as well to get his opinion on the virus and gates has committed substantial amount of money in research. So the likelihood that he missed the opportunity is very unlikely. He also might have a different play here(speculation) due to distress in certain sectors in coming days, he will get calls and he might have better loan shark moments like what he did with oxy.
I don't mean to be disrespectful of Buffett. I never miss an interview. I just feel like he's lost of bit of his competitive edge. I really did think he would pick up a few more equities in March. The FED surprised him and this wasn't 2008 needing emergency financing from him, yet.. It may not be too late. It will be curious to see where BRK goes the next decade. I realize they own a huge stake in APPL. BRK will need a little more 2020s and a little less 1980s going forward or they are going to lag the SPY more substantially. I think they will limit the loan sharking. That carries with it considerable risk during recessions. He may end up a major shareholder in OXY as they are not paying that interest in cash anytime soon. Time will tell if that's good or bad.
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added to MO, WM and took a new position in WFC
Sold my ATVI. Made a nice 25% move
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I was hoping somebody was awake lol. I literally added to MO an hour before it dropped yesterday. I need to add a garbage hauler soon. I've traded them but I need to make room for one in my long-term basket. It fits my boring core holdings thesis.
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Nice buy on MO. I just added under $36.
As far as trash stocks go. I own RSG and WM. Boring stocks but ones you can count on. I will probably add some WM shares at $95 today.
Bought FANG and MO things morning
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Did something I never thought I'd do - I sold half of my DIS shares at $104.65 just now.
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(05-06-2020, 09:45 AM)DividendGarden Wrote: Did something I never thought I'd do - I sold half of my DIS shares at $104.65 just now.
Pretty sure you'll get a chance to buy them back cheaper if you decide to. DIS debt is a problem for awhile. I usually don't buy my Div cutters back, but when I do it is VERY rare I don't get back in 10% lower. That is the equivalent of missed Divs.
I do hate to over handle my long-term positions, but skimming 5 or 10% here and there usually works out when a Div cut is in play. I predict DIS will not pay a DIV again for 18 months.
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So what companies are left that are both raising their dividends and still buying back shares?
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(05-06-2020, 10:06 AM)DividendGarden Wrote: So what companies are left that are both raising their dividends and still buying back shares?
Apple just announced a 6.5% raise and a $50B buyback.
Pepsi just announced a 7.1% raise and remained committed to buying back $2B in shares.
Those are two off the top of my head, but I'm guessing there are still others.
Sold my small DIS position, I actually made 16% on it in a few weeks. Sad and good at the same time
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