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

To: Spekulatius who wrote (1896)	7/14/2012 1:03:43 PM
From: bruwin	Respond to of 4719

" .... I am not suggesting it as another stock for the challenge" Well, .... I don't think it will do any harm to put it to "the Board" for a vote, so I'll be bold and recommend it. If both VZ and VOD make it to the final it will be interesting to see how they compare over the long haul. And it's always interesting to read what you feel compelled to say, Clownbuck.

To: Spekulatius who wrote (1896)	7/14/2012 1:15:24 PM
From: E_K_S	Read Replies (2) \| Respond to of 4719

Re: Verizon Communications Inc. (VZ) I assume we are measuring our long term returns in $US. First, In my 3-5 year time horizon, I want to limit my Non-US exposure but still want to participate in a double digit growth market. According to Buffet this week, “The general economy in the United States has been more- or-less flat, and so the growth has tempered down,” . So, VZ operating as a quasi utility should benefit in such a "slow-growth" environment (relative to other investments). If Buffet's time horizon was only 3-5 years, then he might pass on VOD simply because of the uncertainty in Europe. I am not sure Buffet looks at the large macro economic picture in his buy and never sell investments, but even with a time horizon of 3-5 years, my 10 stock portfolio must still have limited exposure in Europe. I am a firm believer that the $US will be much stronger in 3-5 years and if the majority of my revenues are $US denominated, then I have limited currency exchange risk. In February 2011, VZ did announce a $100M (about 3.5% of outstanding shares) stock buy back program. This remains in place until completed and/or increased. VOD generates $1.07/share FCF vs $1.13/share for VZ. One could make the argument that VOD is a better "value" candidate based on it's BV (1.32x vs 3.30x) and low forward PE (13.5 vs 16). I still have to go with the slight premium you pay to own a 100% $US revenue stream vs Euro/China/Brazil revenues streams from VOD and most of their LT debt is denominated in $US. This to me is too much currency exchange risk. Both companies should benefit from the growth in wireless digital data. I would expect both companies to show 25% annual return (capital gain & dividend) but VZ should be the winner when translating back to $US normalized returns IMO. According to the article below, if we were looking at a 10 year or longer horizon, then VOD might be in my ( and Buffet's) target sites. For now, my 3-5 year period will error on $US exposure as I am limited to a 10 stock portfolio. FWIW, VOD'd dividends are subject to the Foreign Country Tax (for UK) with holding (and transfer bank management fees) so their 7% dividend might really only be an effective 5.8% before currency translation. Still VOD has a very friendly shareholder policy: Vodafone Turns Top Dividend Payer goo.gl . EKS Buffet may agree w/ me on this one. . . . Warren Buffett Turns Bearish on the Economy July 12, 2012 goo.gl Billionaire Investor and chairman of Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), Warren Buffett told CNBC today that he is not too optimistic about US growth despite the housing sector showing signs of recovery. In the interview he says, “The general economy in the United States has been more- or-less flat, and so the growth has tempered down,” and on housing, “we’re seeing a pickup, and it’s noticeable. It’s from a very low base and it doesn’t amount to a whole lot yet, but it’s getting better.” Commenting on the Europe, Buffett said things are beginning to “slip pretty fast” in Europe, especially over the past six weeks. The 81-year-old says that the crisis will be resolved in another ten years as in the short term there seems to be no solution. According to him an unclear authority and absence of any printing press in Europe exacerbates the Euro-zone crisis.

To: Spekulatius who wrote (1896)	9/21/2012 5:00:51 PM
From: E_K_S	1 Recommendation Respond to of 4719

Verizon Communications Inc. AT&T, Inc. (NYSE: T) Vodafone Group Public Limited Company (NasdaqGS: VOD) All three 4G wireless suppliers showed good gains after APPL announced solid sales for the Iphone5 which require 2 year service contract. I was surprised to see that VZ is at or near a 10 year high and T hitting a 4 year high. The market is pricing in more 4G subscription contracts which is growing by the day. Worldwide 4G demand is strong too. I took you suggestion and started a position last week in VOD. I still maintain my T and VZ positions too. Many do not realize that in that two year service contract, almost four months (16%) of the service agreement revenues go to Apple for their Iphone5 subside. Samsung and many of the Android phones have smaller subsides, so the service providers make more on these phone deals than w/ Apples. The key is all of these next generation phones have 4g and/or 4g lite "radios" that need continuous data. T, V & VOD have tweaked their pricing plans to get subscribers to pay full price for all this data. It will be interesting to see just how long the subscribers will pony up to pay these huge monthly fees. It seems like two years is the payment plan that they are currently willing to pay. EKS