Investments

It has been a rough couple of days in the markets with one of the sighted culprits being the rapid decline of the Argentine peso. Ironically, I will be spending the next three weeks in Argentina and hope to provide some insight while I am there. In the interim, if the weather and the markets are giving you a bit of a chill, I thought I would try to warm things up a bit by sharing Carl Icahn’s letter to Apple shareholders. Apple’s keenly anticipated results are scheduled to be released after the market close on Monday and I have many reasons to believe that they will be great. Here’s the letter and watch for those results: NEW YORK, Jan. 23, 2014 /PRNewswire/ VOTE “FOR” PROPOSAL NO. 10 CARL C. ICAHN 767 Fifth Avenue, 47th Floor New York, New York 10153 January 23, 2014 Dear Fellow Apple Shareholders, Over the course of my long career as an investor...

To the clients of Padlock, I thank you once again and trust that you are as pleased as I am with your equity returns this year as the equity portion of your portfolio continues to creep up toward a 40% return for the year. As 2013 draws to a close, it will go down as one of the best years in history for the US equity market with returns for most major indices in the mid to high 20% area. The heavily resource weighted Canadian market did not fare as well, with the price of gold and gold stocks weighing heavily on the returns. After a year of such robust returns, it is very tempting to ring the register and realize the gains across the board. As tempting as that may be, I remain very constructive about the markets for 2014 and will continue to invest the equity portion of clients’...

This link is to the Report on Business article following my Market Call Appearance last night. On this quiet US Thanksgiving Day (& Chanukah), I thought I would elaborate on the Top Picks. In case you missed the show, here is the link to the Top Picks segment. These can also be accessed through the Library section of this website. NCR Corp (NCR-NYSE, $34.79) As you can see from the chart below, NCR has been weak since holding its Analyst Day on November 11th. The company provided their outlook for the next three years and there was some concern the outlook was somewhat cautious. NCR has tended to be conservative in the past and I feel that investors have over-reacted in the short term to their conservative outlook and that a great entry point for new investors has been provided. As I mentioned on the show last night, a year ago NCR was...

In previous issues of The Lato Letter I have mentioned both the work of Dr. Ed Yardeni and the possibility of a market melt-up. The latest issue of Barron’s brought these two thoughts together with an article entitled “Lifting the Odds for a Market Melt-Up”, in which Dr. Yardeni is interviewed. Dr. Yardeni started his career as an analyst at the Federal Reserve before moving to the investment industry in positions such as the chief economist at E.F. Hutton and Prudential Securities, chief investment strategist at Deutsche Bank, and now president and chief investment strategist of Yardeni Research. In the article, Dr. Yardeni says, “Since the beginning of the year, I've been forecasting 60% probability of a rational exuberance scenario, 30% melt-up, and 10% meltdown. I'm still there, but I'm wavering and leaning toward the melt-up.” He forecasts that the S&P 500 Index currently at 1771 could hit 2014 in 2014, a rise...

Carl Icahn opened a new website today called “The Shareholders’ Square Table (shareholdersquaretable.com) and unveiled a letter he sent to Apple’s CEO Tim Cook suggesting that Apple borrow $150.0 Billion and purchase Apple shares at $525.00. I do not agree with Mr. Icahn that Apple should go to this extreme amount of a buyback but I thought you would be interested in seeing the arithmetic behind Mr. Icahn’s proposal. My work is based on a series of assumptions along with material taken from Apple’s latest quarterly report on July 23, 2013. Food for thought as we wait for Apple’s next quarterly earnings which will be announced late Monday afternoon (Oct. 28th). This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change without notice. To receive The Lato Letter by email from now on, please click here....

For the past three days, I have attended the Peters & Co. 2013 Energy Conference and have enjoyed many presentations by a wide range of North American energy companies. After seeing these presentations, I was struck by the wealth of enterprising, very capable, and shareholder friendly management teams that we can be proud of in Canada. The level of ownership by management is very comforting as was the knowledge that the stewardship of Canadian oil and gas assets is in the strong hands of these men and women. I won’t attempt to review every presentation but rather present my thoughts on some of the broader themes that I felt were evident. The first overall theme is that the future growth of oil production in Canada will essentially come from oil sands and heavy oil projects. There are still numerous conventional oil areas of growth but they are dwarfed by the magnitude...

The answer to the subject line of the email you just received is “NO” or at least not yet. It has been a while since I have written about Apple (AAPL-NASDAQ, $498.50), the last time being on April 24th after their 1st quarter earnings announcement. It is certainly time to discuss the company and the stock again after this week’s news. Fuelled by the news, Apple has enjoyed its best three-day move in over three years, rising 10% this week. In case you missed it, on Monday it was reported that Apple will be having a presentation on September 10th to apparently announce the release of the next iPhone. That was followed on Tuesday by the “tweet” from Carl Icahn, the billionaire activist investor, that he has invested over $1.0Billion in Apple and has initiated conversations with Apple’s CEO Tim Cook with respect to capital allocation within Apple. As an aside, there...

NCR Corp. (NCR-NYSE,$34.76) was added to the Padlock portfolios several months ago. The stock has performed very well since then and this week’s Barron’s provided a little icing on the cake by featuring its president, Bill Nuti, in its CEO profile. The article details NCR’s transformation from a cash register company to an electronic services provider and Mr. Nuti’s role in that transformation. Here’s the article: Saturday, July 13, 2013 (c) 2013, Dow Jones & Company, Inc. All Rights Reserved Barron's Online Restoring NCR's Ka-ching! By Dyan Machan Even by the rough-and-tumble standards of the Bronx, William Nuti was a clever and resourceful kid. As a nine-year-old newspaper boy in New York City's northernmost borough, Nuti would work his way up an apartment building until he got to the roof. Then he would leap to the roof of the adjacent building, and work his way down again. Nuti's Batman-like days might be over, but the same problem-solving instincts...

The most recent issue of Forbes magazine (June 24th issue) featured its 2013 Investment Guide.  As with most publications of investment guides there are any number of well-presented ideas of both a bullish and bearish nature.  One of the articles was titled “Money Magic – Top Secrets from 20 Wealth Wizards”.  The article contained insights and advice from investment “wizards”, financial planning “wizards”, economic “wizards” and others. I won’t go through them all but I did want to quote some words of wisdom from a few of them (in order of appearance in the article). The words of wisdom cover varied subjects from investing to saving and so can be heeded by both current investors and future investors.  Some names might be familiar and others will not. Warren Buffett (no introduction needed) on investing: “Don’t let the mood swings of Mr. Market coax you into speculating, selling in panic or trying to time...

There are many adages thrown around the investment industry. One is constantly in the press these days and the other should bring warning signs when it is uttered. The first adage that I am sure you have heard many times recently is “Sell in May and go away”. I will ignore the warning that I mentioned above and use the other adage to make the following utterance, “it’s different this time”. Unlike 2010, 2011 and 2012, I do believe that this May is different. I will highlight some of the points made last week by Thomas Lee, the JP Morgan equity strategist on this subject, in his weekly piece. Lee wrote that there is a significant difference among what investors are being offered by stocks, high grade bonds and high yield (junk) bonds. The comparative measure that was used was the Price/Earnings (P/E) of each category. To better understand this comparison, let...

Padlock Investments is ready to take on your investment portfolio. Ask us how!