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Falling off the "Fiscal Cliff" just accelerated in speed and potential damage as Eric Cantor threw you an anchor when you really needed a life preserver.
Hey, no problem, Eric. Mid-term elections are just 2 years away and TV ads "thanking you" for your efforts are barely a year off.
Stock bargains coming, dudes. Get ready to snap at the collapse.
GLTA,
Yank
Thanks, wickedone, should be fun. I hope milo will get in before Wednesday and maybe some other board visitors would like to play for bragging rights, as well.
Happy New Year and a Great 2013 to all of you!
Yank
Hi wickedone,
There didn't seem to be any accord on the contest milo proposed so I thought the idea had faded away. Simple S/P change for 2013 sounds fine to me... 3 picks, simple buy and hold.
My picks for the contest will be OSTK, CLNE and COST.
Winner earns bragging rights! How about some other board followers joining in for a little fun.
Happy New Year!
Yank
robb,
Just remember my bet and potential payoff. I really do have hope that the "Day of Reckoning" is fast approaching. My family member that has huge Walgreens holdings is standing fast and I really hope that the outcome is positive... with grave reservations expressed, notwithstanding.
Happy New Year.
Yank
wickedone, I too like Panera. It has much of the same consumer cache as does Darden. .. it's what I call "upscale/downscale" meaning a cut above fast food but a modest price point compared to an Applebee's or Chili's. Chipotle fits the same relevent model, but I think its $300 share price is toppy entering 2013.
I LOVE Costco for 2013. robb is correct, I do see a split in the next two forward quarters. Don't overlook Overstock.com which is over its problems and is well positioned to give AMZN a run for their money in many categories such as fashion and home furnishings.
I recently transferred two Rx's for my dog from Walgreens to Costco. The Costco membership fee is slightly higher than the Walgreens Prescription Savings Club cost... $55 vs. $35. However, The Gengraff (cyclosporin/60 count) cost was $44 vs. $77 at Walgreens. The Lataniprost was $13 vs. $81 at Walgreens. I buy these two Rx's every month so the savings is HUGE, and the service at Costco is superb, other than their pharmacy hours being somewhat limited (opens at 10AM).
Costco membership renewal was over 90%, even during the economic downturn, their 10 year S/P performance is absolutely stellar compared even to Walmart or Target, and they plan on opening another 30 new stores in 2013. They recently paid a $7/share special dividend, showing management alignment with shareholder interests.
Happy New Year to all,
Yank
My 2013 picks are: CQP, CLNE, WSPT, OSTK, COST, DRI, AGNC, BG, HOV and JPM. My longshot picks for fun are BLDP and Chinese micro-cap LPH. I have traded in and out of all these issues except OSTK, COST and HOV for quite some time.
I would consider a position in WAG only with a management change and some clarity on earlier investments which were only further obscured during the last CC where Wasson basically "took the Fifth" in responding to the Credit Suisse analyst.
GLTA,
Yank
I still believe that Skinner will make a move shortly after New Years. Remember that, earlier in his career, Skinner was the only CEO at a certain fast food giant with enough guts to FIRE both "The Hamburglar" and "Mayor McCheese" which would have been an unthinkable heresy under prior regimes and the Kroc Family era of control. If Skinner succeeded in nailing "The Hamburglar" can Wasson and Miquelon be comfortable that they aren't next?
I'm just sayin'...
GLTA,
Yank
LOL, robb, my cash position would NOT move the Federal needle very much! Besides, I am getting my appetite whetted for some bargains of epic dimension if these morons can't come to some meaningful agreement in the next week-or-so. I am actually looking at week 1 of February as a likely re-entry point.
I will offer you guys up one more candidate for the watch list after New Years... Costco (COST). I have another I'll comment on when I have completed my research.
GLTA and drink some fine wine for the New Year,
Yank
The Fiscal Cliff draws ever nearer with no compromise in sight. The media "creeps" are spinning it as they do best... "Oh, it's Boehner's fault"... "Oh, it's Obama's fault"... hey, let's have the talking heads tell us what the future holds...
Bad news, dudes. The moderates like Boehner and Obama are NOT the problem. In a vote of two, these guys would have solved this mess months ago.
Just be sure to thank the extreme right and the extreme left for the impasse (with special emphasis on The Tea Party) for a lack of agreement that will drop the DOW by 100+ points/day (or more) after New Year's.
JMHO. I would personally like to send Nancy Pelosi, Harry Reid, Eric Cantor and Lyndsay Graham for a few tours in Afghanistan without body armor for their narrow-minded destruction of Congressional jurisprudence and the concept of plurality. The party of "No" and the party of "Mo'" need to figure out that this country is going down the tubes because of their intractable intransigence.
Glad to be mostly in cash!
JMHO,
Yank
Thanks, Milo. By the way, it's a 2007 Chateau Lynch-Bages. Just drank up an '85 of the same from my cellar (the LAST one, boohoo). It had a lot of sediment but was incredibly good after decanting. For Thanksgiving we drank our last 1985 Caymus Vintners Reserve which we bought at the winery, 20 years ago... it was the best bottle of red we ever drank.
May Santa bring you a Chateau Petrus if you weren't too naughty!
Merry Christmas,
Yank
Milo, I was not that surprised at the modest reaction to poor metrics. I think the market is obsessively preoccupied with the "fiscal cliff" and just can't grasp the difference between SAFE stocks with good divvy return in today's market and the ravages that these same stocks may suffer in January if cap gain rates treble.
Mr. Market always, eventually gets it right.
I bet that Skinner will make a BIG move, right after the holidays. I have a Morton's steak dinner bet on this outcome with an investor/friend which includes a special $300 bottle of wine from the Captain's List. I DO NOT LIKE TO LOSE when it comes to fine wine!
Hey, Merry Christmas, everyone. God Bless us all in 2013!
Happy New Year, my friends.
GLTA,
Yank
I have been predicting against some opposition that the DC impasse is likely to prevail and impact equity trading. I do NOT believe that this is a forever scenario, but I don't see any comprehensive agreement until public outcry ensues in January and these politicos on both sides of the aisle fear their re-electablity and agree to "something" in February or March.
The legacy holders are both numerous and huge, IMHO, many being old WAG employees and Walgreens family members like Manta who have held in toto MILLIONS of shares going back to 1985 and the NYSE recap with acquisition costs valued as low as around $1.10/share. I have one family member who has still not "pulled the plug" and holds beaucoups shares at this cost basis. If they sell, they pay 15% on the gain; if they wait and Congress stalls on cap gains, they could pay 37% or more. Who wants to play "CHICKEN"?
You asked for my prediction on sector growth for 2013. Again, the fiscal cliff question must be resolved, or I will remain largely in cash. If a prudent outcome is agreed to, I obviously favor nat gas production/infrastructure/conversion/export. I favor some commodity plays as I identified, yesterday. I like casual dining restaurants. And I especially like hard-coming online retail factors like Overstock.com who could well be the next Amazon. If AAPL drops below $500, I will be a major buyer.
Walgreens is an enigma to me. Wasson and "stooges" need to go before I would take another serious position. I could run this company to $100 per share with almost no risk... so could many seasoned managers whose interests were aligned with all shareholders. WAG better PRAY that an activist investor like Carl Icahn doesn't make a move here because the sacred cows could go to the slaughterhouse, real fast.
A "Sushi-Mobile"? Omigod, how much more STUPID can it get?
GLTA,
Yank
Disturbing numbers for the quarter, especially in light of even poor Rite Aid announcing a marked improvement against most of the same market forces that Walgreens identifies to rationalize its subpar metrics.
Major questions remain regarding 2013 and healthcare spend and taxation rates. The next 2 weeks could be most interesting and wildly fluctuating in both S/P and volume for Walgreens. I remain concerned about the potential dump of legacy shares that could actually bring this down markedly lower than today's action.
GLTA,
Yank
My 2013 strategy will depend, first, on the fiscal cliff resolution. Depending on outcome I will likely return to a long position in mReits although I expect yields to drop to closer to 10-11%. My strongest interest remains in diversifying my portfolio in nat gas, nat gas pipeline, nat gas equipment and LNG oceangoing tankers. My next biggest interest is in nat gas infrastructure and vehicle conversion technology.
I am now out of retail and I see a weak 2013 for most established players in this sector. I do like casual-serve restaurants like Darden which I have traded in and out of for years, and Cheesecake Factory. I also like Chipotle, though its valuation is relatively high.
I am also tracking several commodity and related trades like Freeport-MacMoran, Potash, Bunge and Rio Tinto.
GLTA,
Yank
robb, I think you are way too dramatic with your three card monte analogy and expresed fears of losing your money... you pick 3 stocks and see how they do for a year. The last 2 years I did the CNBC Million Dollar Portfolio Challenge and really had a good time with it (I actually did very well last year, came close to some prize money).
It's no big deal. I think a contest would be fun, and the fewer rules the better. Up to you guys...
Regards,
Yank
Hey, Milo, I like the idea of the contest. To make it simple, we could each agree to a dollar amount... say $10,000... and invest it in three equities. Dividends should be counted in total return. Investment can be long or short but must be held for the year or sold and kept in cash through 12/31/13. I am thinking of real money investments, but we could just do a virtual fantasy-funded game if anyone is risk averse.
What about it, guys? Sounds like fun to me!
Yank
I am about 90% cash, but still holding Cheniere in nat gas. I even sold off my Walmart which I owned at a weighted cost of just over $30/share. I have had a great 2012, with huge gains from JCP and JPM on swing trades and a healthy profit on most of my mReits. I also had a great year on divvies!
I am HUNGRY for some equity bargains. I am betting that Boehner will deliver on an obstinate plunge over the fiscal cliff. "If the President wants to raise taxes, he must cut entitlement spending." Okay, John, then YOU offer up where these cuts should be made; remember, it was the RNC that villainized Obama with TV ads during the campaign for cutting Medicare spending. Remember?
It's all a sick joke and I fear that it is all going to implode. When it does and the Dow drops 1,000 points, I will be loading up before the jerks in the House repair the damage they created before they get voted out.
GLTA,
Yank
There is a HUGE battle brewing on healthcare costs and outcome-based value in healthcare spend. I have bad news for Greg Wasson... the cost of all this crapola does not justify higher reimbursements for Rx's. That position is likely to be uniformly enforced by payers and PBM's, alike.
I really believe that CVS will begin crushing Walgreens nuts in 2013... and I don't mean the Delish Pistachio's, either.
GLTA,
Yank
Beware the Fiscal Cliff and Walgreens legacy shares! There is a LOT of Walgreens stock held in family trusts and in legacy accounts carried at ridiculously low valuations, IMHO. Shares sold in 2012 will be taxed at 15%. Shares sold in January may be taxed at up to 43%. If the impasse continues, I think we will see a run for the exits of stunning dimensions. This phenomenon is precisely what has driven AAPL shares sharply lower, even before the precipice is imminently visible. The recent S/P run-up actually makes this outcome more likely.
GLTA,
Yank
Milo, keep your powder dry. I bet U will be able to buy this @ $33 or less, shortly. Might buy some, myself, if it goes to below $31.50 or below.
You need to trust me on this!
Yank
Steffano holds a lot of shares... but Vanguard in all its various investment iterations owns around 80 million shares. Are the natives getting restless?
That, to me, is the question of the day as funds add and close out holdings for next year's portfolios.
Then there is the fiscal cliff...
GLTA,
Yank
By recollection, PCIP only covered around 350K people and was slated to be scrapped in 2014 as the ACA takes root. I fail to see how this blip would have any meaningful impact on ESRX numbers.
The insider trade data is interesting and rather condemning. Thanks for sharing it.
Now at $.97 and looking wobbly.
Look out below.
Now at $.97 and looking wobbly.
Look out below.
About one year ago many of us were asking the question: "Who is driving this bus and where is it headed?" Now the more appropriate question seems to be: "Who is driving the lunchtruck in Phoenix and will it become as omnipresent as The Oscar Mayer Weinermobile, all across America?" Speaking of that lunchwagon, does it carry sushi on the menu?
Q1 earnings are due out on 12/21 and will be the first #'s with 45% of Alliance-Boots baked into the results. Is share price today anticipating a spike with earnings? I, for one, would be very skeptical.
GLTA,
Yank
Milo, the numbers were worse than I expected. Today is all about flu "opportunity" in my mind, and may make for a good short term play. But it's like musical chairs... eventually those that play too long get frozen out of a comfy place to sit and enjoy their investment's rewards.
GLTA,
Yank
With the fiscal cliff getting worn out as a by-line after weeks of being beaten into the ground, most major news services and national media networks have been focused on THE FLU as lead news item over the last 36 hours. Institutional buyers always grab onto this phenomenon, such as happened during the H1N1 possible pandemic a few years back. When "The Tooth Fairy" fails to deliver huge rewards then the S/P cycles back down to less euphoric levels.
That is not to say that there definitely will not be a flu bonanza for Walgreens but, rather, stating that such a windfall is unlikely and would be shared with more players like CVS, Walmart and grocery and Indy pharmacies if it actually materializes vs.rior active flu years.
For pharmacy retailers, the flu is a mixed blessing when it breaks out in a major way. There is a short-lived spike in cold remedy demand and Rx's plus 11th hour flu shots BUT the backend impact is reduced forward customer traffic (home sick, can't get out to shop) and enormous store-level challenges as store employees call out sick and replenishment deliveries are slowed as distribution employees suffer equally.
Looking at history, I think WAG could continue to see upward momentum for another 90 days if the flu story remains topical. I would recommend a short strategy barring an epidemic with an April timeline for harvesting the over-exuberant S/P elevation.
Today's heavy share volume tends to corroborate my theory. This is not retail-driven interest.
GLTA,
Yank
The tax rate on dividends could potentially grow to your regular nominal tax rate which is determined by how much you earn. It would be like the tax rate today on short term dividends on equities held less than one year.
I am not sure how dividends paid to institutional share holders would be affected. Anyone out there know?
What a hoot. Now Walgreens wants to be a delicatessen? Their first baby step needs to be to learn exactly what a "deli" is and what it does. I have yet to see a WAG flagship store that makes deli sandwiches, offers a deli salad case or offers delicacy items for sale. There is a huge difference between selling a few packages of Oscar Mayer packaged bologna and chopped ham at Walgreens and offering up a real delicatessen experience.
The true deli mavens at Wolfies in Miami or Carnegie Deli in NYC must be laughing their butts off at so preposterous a proposition put forth by these Waggies.
LOL!
Yank
Milo, barring news $33.79 will be breached tomorrow and a clear path to $31&change exists during tax-loss-selling season.
Just a word to the wise...
AMZN is another great play in this "fiscal cliff clipjoint!"
GLTA,
Yank
Interesting to note yet another flagship store with NO Take Care Clinic. Looks to me like the clinic experiment died, except Wasson elected to skip the obituary notice and funeral service open to shareholders.
Clinics are a $BILLION investment in shareholder resources and yet nobody seems to have any accountability or transparency to explain what is going on with this key business segment.
Something stinks, IMHO.
GLTA,
Yank
Milo, I urge you to read my many posts on the CQP message board in support of robb's thread.
I will shortly approach 7 figures in equity holdings in this very narrow sector. I bet it does a lot better than wickedone's FB adventure (sorry, dude, I would have warned u if I knew you were going this route).
Beware 12/21 and Walgreens earnings.
I think that the prior miss may look like a PARTY by comparison.
GLTA,
Yank
Tom Ward now under intense scrutiny as the class action wolves zero in on Sandridge and management/board misalignment with shareholder interests.
CHK trending down to $17 where I might take another bite.
Cheniere is trading at bargain basement prices. Interesting to note that LNG & CQP do not trade up or down in a linear relationship, at least partially explained by the different posture on dividends.
Milo, robb's post is factually accurate as borne out by John Boehner's Op-Ed in The Cincinnati Enquirer on November 21st.
On nat gas, I am accumulating CQP and its sister Cheniere cousin LNG. I am close to moving into a position on SD, CLNE and WPRT. I especially like CQP with its divvy at around 8% and huge upside potential as its new liquifaction facility begins to fill already contracted export orders in 2015.
GLTA,
Yank
It will be interesting to watch the D.C. political drama play out.
If an impasse develops, RAD will be a great year end short as big players holding gobs of common bought at around 25 cents/share flee before the tax man castrates them.
I recommend following AMZN for the same reason.
Milo, good luck going forward. Just be carfeful to follow the fiscal cliff dialog because I expect a huge end-of-year sell off among WAG $28's if it appears a big upswing in cap gains rates is possible. I hedged my own position by selling all my mReits in October and remain long nat gas and related, plus lottsa cash if the market takes a dump, creating bargains for the New Year. I had a REALLY good 2012 with lots owed Uncle even with the low current cap gains percentage.
I am bullish on 2013. However, I will be shorting RAD in the next 2 weeks if the fiscal cliff gets closer with no resolution; there are beaucoups shares held at around 25 cents that will run for the exits if the tax rate seems likely to go up in a major way.
GLTA,
Yank
Anybody know if these huge, new flagship stores include Take Care Clinics?
I am still trying to reconcile the image compatability of Walgreens stores with sushi bars vs. those with Subway sandwich stores as are commonly found in gas stations. What's next... Slurpee Brain Freezes? Hey, maybe Wasson & Joe LaMonsta already had one!
Yank
Happy Thanksgiving, everyone. Let's all eat some turkey and avoid investing in one!
I am long CQP and longer in cash until the fiscal cliff gets resolved. The oil short play looks sound based on the ceasefire, if it holds.
Yank
How embarassing to put out a PR item on Maxwell Technologies. The self-same partnership has been in effect for almost 15 years and goes back to the Bob Lutz era where Exide went bankrupt.
The "Broaden Your Base" strategic retail fallacy is driven by the seemingly logical belief that you increase basket size with no growth in customer count by having more to sell the customer on each visit. It only seems logical that "the more you sell, the more income you drive." Unfortunately, history paints a less rosy requiem for many retailers that pursued this strategy.
I enjoyed wickedone's comments on the Walgreens convenience initiative and the other messages in that thread. However, I must dissent on the pursuit of these so-called higher margin goods on the frontend to offset lower Rx reimbursements and generics as a surefire profit driver. Southland, the originator of robust Seven-Eleven c-store expansion did exactly the same thing, except its bread and butter/decreasing margin category was gasoline, not pharmacy. They later went bankrupt and retrenched because they fell victim to overstoring (cannibalization) and the much higher cost of delivering teensy quantities of goods to lots of locations across a broad geography against a backdrop of thousands of c-store competitors also adding locations in a flat market.
I think that there is a pertinent lesson for Walgreens to learn from the demise of Hostess Bakeries aside from the stupid action contributed by 6,000 Confection/Bakery Union employees that put their legacy costs ahead of the future of 18,000 current workers and countless thousands of collateral casualties among Hostess suppliers and route operators that will also become displaced. By explanation, I'll dub the parallel to Walgreens "The Twinkie Effect".
Hostess grew by rapid expansion and acquisition, layering in new product category after new product category, retaining multiple and regional brands and incurring huge debt in a consumables marketplace that was only growing with the census. It then decided to expand its distribution to virtually anyone with a retail store... c-stores, dollar stores, neighborhood markets, bodegas, gas stations... you name it. Since the market for bread and snack cakes was slow growth and affected by wellness trends like Atkins diet, their rate of sales growth never materialized and their costs of distributing these products to so many additional, small locations rose dramatically. The other thing that grew geometrically was spoilage/out-of-code goods that went from bekery to store to dumpster, at enormous cost.
Anyone see a parallel, here?
GLTA,
Yank