Leon Cooperman’s roadmap for Arbor Realty: With a tangible
common equity ratio of 20, if Arbor was a bank you would say they should go out
and make more loans. And that is basically the story here. They are
currently constrained with the equity that is tied up in CDO’s and swaps, but as
that equity frees up they will be able to deploy it in higher return
assets. Return on equity right now is 7.5% and there is a fairly clear
path to how that ROE can be increased to the 12-13% range (ie. make more loans
and don’t take any write-downs). At those level of ROE’s, the company is
going to earn between $40-$43 million of funds from operations, or pretty close
to $1 per share. In comparison, the company announced their second
quarter dividend at 13c (or 52c annually), up from 12c in the first quarter…
The potential for price appreciation is a bonus; if Cooperman is right and they
can increase their loan book we could be looking at a $12-$13 stock in a year
or two [Note: Sales Notes Only, just relaying, no comments]…Source: http://reminiscencesofastockblogger.com/2013/09/28/leon-coopermans-roadmap-for-arbor-realty/
Carlyle to Invest
$500 Million in Dr. Dre's Beats Electronics: According to people familiar with
the matter, the Washington-based private-equity firm is investing $500 million
for a minority stake in Beats Electronics LLC, which makes pricey headphones
branded by American rapper Dr. Dre….Source: http://online.wsj.com/article/SB10001424052702304526204579100711774280296.html
How Popeyes went
upscale: Or
rather, here’s their cook book to turnaround a struggling joint: (1) figure out
what people think of you, (2) decide how you want them to think of you, (3)
introduce the new stuff, (4) weed out the bad stores, (5) get good ones to
expand into new markets, (6) Figure out Pepsi vs. Coke, (7) go national.
Source: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/27/how-popeyes-went-upscale/?wprss=rss_ezra-klein
How The Economic
Machine Works by Ray Dalio: In 30 minutes. Note: http://www.youtube.com/watch?v=PHe0bXAIuk0
Why Would Anyone Buy
Credit Default Swaps on the U.S.? Essentially long left-end tail risk where if
the disaster strikes, one will have little way of getting paid. But people may
just be paying for technical defaults, especially when you consider the
owest-dollar-priced U.S. government bond is the 2.75 of November 2042, trading
at a yield of about 3.72 percent or a dollar price of around 82.75, and there is
interest / principal payment due by the US gov every 3-7 days….Source: http://www.bloomberg.com/news/2013-09-26/why-would-anyone-buy-credit-default-swaps-on-the-u-s-.html
Why Ford CEO Alan
Mulally Is A Good Choice To Run Microsoft (Despite His Lack Of High-Tech
Chops): When it comes to a CEO of big, big tech companies, maybe they need a
capital allocator, a man of focus, instead of a tech guru. Microsoft is
overflowing with really smart people building amazing technology. We've been in
the company's labs on off-the-record briefings and seen some really cool stuff.
Microsoft doesn't need a great visionary to think of the next major product. It
has plenty of those people at the company already. What Microsoft needs is an
executive who can streamline operations, get everyone working together, and
decide which projects get oxygen and which products get drowned. Source: http://www.businessinsider.com/alan-mulally-as-microsoft-ceo-2013-9
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