Sunday Reads April 23, 2017

  • Agree or disagree, this thesis is very similar to mine and why i have CSCO in mutliple accounts 
  • More confusion in the CAH narrative, though this article reflects my thinking … i had a small position at $69, sold half of it at >$82, and now am leaning toward eliminating the remaining at a small gain rather than add more.  It may not be a value trap, but i regret not selling my full position above $82.
  • Housing costs rising 2x income growth (without factoring inflation) – one would think that an opportunity exists to provide more supply at lower prices if land and construction costs work out favorably.
  • From Jeff Miller’s weekly post
    • i think this ratio between earnings (GAPP i like better) and revenue is material in either a micro or macro analysis.  I could entertain a socratic discussion on if the delta between the two or their trends (and the corrleation between them) is the more important metric – i am not sure if i have an opinion yet.   <quote> “To date, 6% of the companies in the S&P 500 have reported actual results for Q1 2017. In terms of earnings, more companies (76%) are reporting actual EPS above estimates compared to the 5-year average. In aggregate, companies are reporting earnings that are 6.7% above the estimates, which is also above the 5-year average. In terms of sales, more companies (59%) are reporting actual sales above estimates compared to the 5-year average. In aggregate, companies are reporting sales that are 0.2% above estimates, which is also above the 5-year average.”
    • Jeff also pointed here, and i echo his comments – sad that this was not more widely discussed and we each should read –
  • Blackrock opines about favorable market segments for investors … i tend to agree with most of it but i am not a fan of Japan (i just cannot get my head around the growth potential and interest rate return for the risk)
  • Overweight into Tech and Financials – i agree but add a  third:  healthcare
  • Not associated with a specific reading but plotting the plan over next 7 days.
    • Two reductions planned:
      •  INTC allocation is too high at 9.5% of taxable account – reviewed selling near term calls, but the prices do not justify holding the capital risk captive – i will sell 50% of the targeted reduction before earnings and accept the risk with the remainder
      • CAH as indicated earlier i think its time to exit 100% – just wish i had done it when i sold 50% above $82.
      • I can easily re-acquire the income (dividend) from both with adding to PFE or starting new position in BMY (or both)

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