Wednesday, March 22, 2017

Investors Are At Heart Greedy People

Investors are at heart greedy people. Greed often works against us, especially when we stray from our working business models and venture into areas where we have little experience or expertise.

I’ve seen this happen time and again with investors. I know one investor who has a successful long-term track record, but every time he gets involved with a short-term trade for a quick profit, it usually results in a loss.

When King Solomon was a young man, he didn’t pray for money or long life. Instead he acknowledged he was but a little child who did not know much, that he was to become a servant among a great people. He prayed, “Give therefore thy servant an understanding heart to judge thy people, that I may discern between good and bad." And God said because his servant did not ask for riches or long life or to destroy his enemies, but instead understanding to discern judgment; he gave Solomon a wise and understanding heart. God also gave him what he did not ask for, riches and honor. There was relative peace during his reign, many leaders from other nations came to him to seek his advice.

How do we discern from good and bad investments? We have the advantage of numbers, mathematics, balance sheets, income statements and financial ratios. These all help us. More than anything, however, I think investors need a solid investment model that works over time. Stick with the plan, do not veer off into some get-rich-quick scheme.

I actually think it is easier to discern between good and bad investments over good and bad people, because we have the advantage of mathematics, balance sheets and income statements. People are not always what they seem. I recently got a friend request on Facebook from a good looking man with a big title. He said he was the founder and CEO of a real estate firm. OK. Well, I checked out this guy, I found out he has 25 cases against him in Shawnee County Court, Topeka, Kansas, owes back taxes to the government, has a restraining order against him and is part of a ruined business. The pictures of fancy vacations make him look like a rich man of leisure, but I imagine all those fancy dinners and good times on the beach were funded by debt.

Too many people now think it is cool to be ignorant, to make judgments without facts, to speak without research, to accuse others of crimes without any evidence. Alternative facts and ignorance will lead to disaster. Ignorance is not a virtue. Hard work, honesty and patience are real virtues.

When my children were growing up, we had a family dinner every evening. My wife and I asked our two children to tell us about their day. When a child, usually my daughter, would exaggerate or stretch the truth, my son would destroy her story in five seconds. We all learned that if you want to talk, you better know what you are talking about. Remember, there is no wisdom in lies, falsehoods or ignorance. Ignorant people get run over by scam artists. I have spent a lot of my life as a journalist uncovering scams. I sometimes get called the Scam Buster.

I pray for wisdom, I pray to know the truth, to live with the truth and to make the most of this truth. The truth will give us the freedom to make good choices. Without it, we are lost.

Saturday, March 18, 2017

Hunter Harrison Plans Major Overhaul of CSX

Hunter Harrison Plans Major Overhaul Of CSX

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4 comments
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 About: CSX Corporation (CSX)Includes: BRK.BCNICPNSCUNP

Summary

E. Hunter Harrison Takes Over As CEO of CSX.
Harrison Will Drive Down CSX operating ratio.
Harrison Will Try to merge CSX with Union Pacific or BNSF Railway.
There has been a lot of talk about E. Hunter Harrison and his partner Paul Hilal taking control of CSX Corp. (NYSE:CSX).


To read more click here.

Tuesday, March 14, 2017

The Shrewd Investors of Nebraska

The Shrewd Investors Of Nebraska
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1 comment
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 Includes: APHQFBRK.ABRK.BCHDDFIZZHSYKOPEPSJMUNP

Summary

Living in Nebraska I followed Warren Buffett.
Fellow traders help me test ideas, take chances.
I focus on consumer stocks, utilities and railroads.
Early in my investing career I was lucky to meet other traders who had tremendous skills in the market. These shrewd intelligent investors taught me valuable techniques for making money. They taught me it is easier to be profitable if you test your ideas against the best in the business.

Thursday, March 9, 2017

Simon Sold West Ridge Mall At Right Time

By Michael Hooper

It's all about timing.

When Simon Property Group (SPG) sold off West Ridge Mall in Topeka in 2014, the property had already declined substantially from when it opened in 1988. But it was a good time to get out.



In 2014, Simon Property Group completed the separation of Washington Prime Group Inc, which became an independent public company traded on the NYSE under the symbol "WPG".

Washington Prime (WPG) owns interests in 120 shopping centers, including West Ridge Mall, 1801 SW Wanamaker Road in Topeka and West Ridge Plaza at 21st and Wanamaker Road.

You can see at the bottom of this Web page that West Ridge is managed and leased by Washington Prime Group.

Vanna White took part in the ceremony to dedicate the opening of West Ridge Mall  in 1988.

West Ridge Mall was a spectacular success in the beginning. Briman’s Leading Jewelers operated for 22 years in the mall before leaving around 2010.

“We were losing money,” Rob Briman told me in a recent interview. “The economy tanked.” Briman said the company focused its efforts on its already existing downtown location. “We own the building downtown. It’s cheaper to operate.”

Briman said business was good for many years in the mall but near the end traffic had really declined substantially. 

“That place is a ghost town,” Briman said.



He’s right. I took a walk through the mall recently and found a few old people walking around the mall. Some sat in the food court and drank coffee. The food court used to have 10 to 12 restaurants, now there was just four. Chick-fil-A moved out of the mall into a stand-alone restaurant and doubled or tripled its business, with the drive-through constantly with traffic. 

Many of the stores still remaining in the mall aren’t doing very well.

For awhile the teen market did well in the malls, many kids went there in the 1990s through the mid 2000s. But then something happened. Youth decided to take their business elsewhere.

There is a disturbing trend among mall-based teen fashion retailers. The Limited and Wet Seal went out of business completely in the past couple months. Vanity Shop of Grand Forks Inc. recently announced plans to close 140 Vanity stores across the country after filing for bankruptcy protection. The only reason Aeropostale (NYSE:ARO) is still in business is because mall owners bought a piece of the company out of bankruptcy. Teen fashion retailer The Buckle (NYSE:BKE) is struggling and headed for disaster if it doesn't change course quickly.

Jessica Rankin, a Washburn University student, recently told me young people's shopping habits have changed. "I think it's also partially due to my generations changing mindset when it comes to consumerism.," she said. "Most of my friends who I go to Washburn University with shop local, and at used clothing stores like God's Storehouse on Wanamaker. For them and myself included, it's not only cheaper helping us save money, all of us are also more interested in buying second hand items to help reduce the amount of trash we create. Minimalism is a big topic that becoming more well known, and I hope it becomes more then just a trend. A lot of my friends also focus more on ethical shopping- as most of the clothes in the mall and other name brands come from free trade zone companies who exploit underprivileged women forcing them into horrible working conditions with little pay. I'm hoping the fast shopping trend will die away completely."

Consumers also are shopping over the Internet. You can buy anything in the world over the Internet. Amazon has probably killed more retail brick and mortar businesses than any other competitor except perhaps Walmart.

Stock in West Ridge Mall's owner, Washington Prime (WPG), is down 60% since it began trading at around $20 per share in 2014. Its $1.00 per share annual dividend does not look sustainable given that its earnings was only $0.29 cents in the past 12 months. WPG stock recently closed at $8.08 per share. Be careful. This stock will decline further if the dividend gets cut.

Meanwhile, Simon Property Group (SPG) stock is up 11.4% in the past three years. Its dividend looks fairly reliable, but REITs are struggling right now because of rising interest rates and the secular decline in mall traffic. Simon still owns a lot of commercial real estate. Simon owns an interest in approximately 210 properties in the United States, which consists of approximately 110 malls, 70 Premium Outlets, 15 Mills and 12 other retail properties in over 35 states and Puerto Rico. 






Wednesday, March 8, 2017

SEC Will Likely Approve Winklevoss Bitcoin ETF

I'm confident the U.S. Securities and Exchange Commission will approve theWinklevoss Bitcoin Trust ETF (Pending:COIN) by Monday.
The following SEC memo about a Feb. 14 meeting between SEC officials and the Winklevoss Twins implies the SEC plans for approval of the Winklevoss Bitcoin Trust ETF. 

Monday, March 6, 2017

Teen Fashion Retailers Are Dying

Summary
The Limited and Wet Seal shut down. The Buckle's same-store sales fell 23% in February.
BKE is closing one of its oldest stores in Lawrence, Kan.
BKE needs to use its capital to build new business model.
There is a disturbing trend among mall-based teen fashion retailers. TheLimited and Wet Seal went out of business completely in the past couple months. Vanity Shop of Grand Forks Inc. recently announced plans to close 140 Vanity stores across the country after filing for bankruptcy protection. The only reason Aeropostale (NYSE:ARO) (OTCPK:AROPQ) is still in business is because mall owners bought a piece of the company out of bankruptcy. Teen fashion retailer The Buckle (NYSE:BKE) is struggling and headed for disaster if it doesn't change course quickly.

To read more click here