In Search of the Perfect Investment

We saw Disney’s new movie “Inside Out” last night. Disney rewarded us this morning with a handsome rise in their dividend and news they’re now paying dividends twice a year. Nice of them. The movie’s had great reviews. It’s OK. Take the grandkids.

Lewis Black plays Anger — the red guy in the middle. He’s great.

Movie theaters and real theaters now provide “assistive hearing devices” — headphones for alta kakas, like me. Get them when you go. You’ll be able to hear the dialog, maybe even catch the plot. At home, my Sennheiser headphones make TV watching a real pleasure.

Here’s the little you should know about Greece:

+ It’s run (presently) by a populist socialist government. That means businesses are the enemy. It would prefer to tax businesses than to cut pensions. It’s totally oblivious to sensible ideas about making doing business in Greece easier. A businessman was quoted in today’s New York Times

To his frustration, Mr. Tziritis found that the biggest obstacle to his company’s growth was the thicket of regulations and requirements in Greece that make it difficult to invest and enlarge a business.

As he walked around the company’s sprawling compound, he pointed to a 27,000-square-foot enclosure packed with Isomat products. It was a nice, airy space but not high tech by any measure.

Still, it took 20 months to get all the permissions and licenses to begin construction, as papers moved back and forth between Thessaloniki and Athens.

One reason for the delay, Mr. Tziritis said he was told, was that one of the government employees examining the request was on maternity leave and no one else was authorized to look at that specific Isomat file. The project remained in limbo for more than six months until the civil servant returned to work.

Building the warehouse was a snap, by comparison. It took just half a year.

“With all this bureaucracy and now with all this taxation, who would want to invest here?” Mr. Tziritis said, shaking his head.

+ Greek GDP has fallen by 25% since 2010. That’s huge drop.

+ Unemployment in Greece is 27%. That’s higher than it was during Great Depression in the U.S., where it hit 25%.

+ More than 20% of the Greek population is over the age of 65 — making it the world’s 5th oldest nation — and only 14% of the population is under the age of 15.

+ The Greeks have quaint idea of their world:

+ The Greek government is playing a high-risk chicken game. I suspect they’d really be happy to stiff their creditors. After all, borrowing money is a capitalist idea. Secretly they’re not unhappy with the idea of leaving the EU and bringing back the Drachma, and starting from scratch — having erased all their debts by simply defaulting on them. In the U.S. it’s called Chapter 11 bankruptcy. Once in it, the company reorganizes, gets its act together and emerges as a new, hopefully viable, entity. This approach is best for Greece, and for us, clearing up all the uncertainty and letting our stockmarket once again concentrate on corporate earnings and their prospects.

+ Today’s New York Times piece is called “Businesses Worry About Shouldering Burden of Greek Debt; Virtually broke, Greece looks to raise taxes on businesses to fill its gap.” Click here.

Is Whole Foods worth buying? It was once a favorite stock. Hot area — organic foods, rich yuppy customers, etc. etc. But then everyone and their uncle — from Kroger to WalMart — jumped on the healthy food bandwagon and competition soared. (Now the money is in manufacturing, e.g. Hains and WhiteWave.)

Here’s Whole Foods chart for the past year.

My friends tell me this is a classic “island” chart. If the stock climbs everyone who got in at higher prices will look to sell their stock. In short, don’t touch WFM.

Favorite recent New Yorker cartoons.

Harry Newton, who watched Carl Icahn hurt yesterday’s market by saying it was “overheated” and high-risk junk bonds were too high-risk and would crash. Which sounds like his latest about-to-be successful bet. His previous one was Netfflix in which he made several billion dollars (for himself and his investors). The man is talented. He keeps pounding the table for Apple, which he says is cheap, wonderful, without par, run by the best management in the Kingdom, etc. I hope he’s right. Apple is my biggest holding. We all forget that Apple, unlike most technology companies, actually pays a dividend. Its yield is 1.62%. That’s a lot  better than money market funds or bank savings accounts. And far better than a slap in the belly with a cold fish. (Australian expression.)