Moral Investing

Making the headlines this past week was the atrocious scene along our border.  Being an event driven investor, I had to at least take a look at the situation to – at a minimum – determine my exposure and whether strategy adjustments are  necessary.

I’m not a prude by any stretch of the imagination but (outside of ETFs) have never invested in tobacco stocks.  I have minimal exposure to wine and spirits.  While I’m not casting aspersions on those that do, I figure there are more than enough alternatives that better fit my preferences.

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Isn’t the Election Over Yet?

Following the most divisive and cantankerous election I’ve ever seen, I – along with many others – were likely longing for a return to normalcy.  A day where markets are driven by earnings, GDP, or other useful metrics rather than tweets and soundbites.  A time when logic dictates norms rather than bluster and berating.  The ability to take a deep collective breath followed by attempting to figure out how our respective investing strategies need to be tweaked to profit from the new regime.  I’m not referring to the recounts as I suspect they will result in no significant change with Clinton winning a majority of votes cast but Trump winning the Electoral College – and therefore the election.  What I’m referencing is the ability to cipher a meaningful direction that the President-Elect (PE) is going to take the economy.

Three diverse events occurred this week that gave me pause.  On the surface these are likely one-off issues but looked at in total generate more questions than they answer.

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Warren’s Letter

Falling in the dead of winter between the end of football season and baseball’s opening day, the most anticipated spectator sport is upon us.  Berkshire’s annual letter.  There will likely be hundreds of articles parsing Warren’s every word between now and the annual meeting and mine is not the first.  But – as always – there are nuggets of wisdom to be gleaned from his experience.

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When It Rains It Pours

I guess the M&A folks are trying to get another deal done before year end.  Me … nope, not complaining – well maybe a little.  Less than a month ago I added PULB to my stable of potential takeover plays.  And surprised I was to get a headline announcing they were being taken out by First Busey (BUSE).  Geez … I didn’t even get my first dividend check.  Another of my holdings, USB, is providing the financing.

So to break out the benefits – it’s an all stock transaction:

  • .79 sh of BUSE for every PULB share.

With PULB closing at 17.01 and BUSE closing at 21.82 this represents about a 1.5% premium – less than the normal premium.  But considering this is an annualized 11.25% ROI – my guess is I’ll take the deal but hope for a sweetener.