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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: RumbleFish who wrote (37085)	3/26/2010 12:52:06 PM
From: Paul Senior	Respond to of 78751

Thanks for the TAXI article. The golden goose medallions are there because of NYC laws. If laws change, the good times can disappear. Two things seem to have happened. One, the spread of money (cost for TAXI to borrow vs. what they can loan money out for) has been high, and TAXI is a very niche business. So management has concluded, how can we expand either the taxi business to other cities or something else where we can invest this cheap money at high rates? Well, they tried a sports franchise SPAC, and that didn't work. Ultimately, they had to cut the dividend. These guys just couldn't sit still and stick to their wonderful little niche business. Anyway, I don't trust management's business acumen now. So I've greatly reduced my position. Still worth looking at and holding for the dividend. Which I assume will not be cut again. And the assumption that management won't blow the business with another failed diversification attempt.