Notes From All Over, Part 1 -- US Existing Home Sales Vault To Near Two-Year High -- January 22, 2020

From Reuters:  wow, what an incredible report. Ironically, this week's edition of The Economist has a special report on the "broken" housing sector in the US. From the linked Reuters article:

• US home sales jumped to highest level in two years in December, 2019
• Reuters attributes it to lower mortgage rates; in fact mortgage rates have been low for quite some time
• perhaps it's the wealth effect; the equity market has surged in the past year
• forecast: existing home sales would increase 1.3% to a rate of 5.43 million units in December
• actual: existing home sales increased by a whopping 3.6% -- almost 3x forecast -- to a rate of 5.54 million
• on a year-on-year basis, existing home sales surged 10%
• existing home sales make up about 90% of US home sales
• sales rose almost everywhere; fell in the Midwest;

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Making America Great

This is really, really clever.

But first, the disclaimer:

Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

From Bloomberg:

AT&T Inc.’s obsession with paying down debt has led to some financial creativity.

Right before the end of 2019, AT&T took a collection of cell-tower rent payments that it will receive in the future, rolled them into a subsidiary, then sold shares of the unit to investors for $6 billion.

The new entity is called AT&T Investment & Tower Holdings LLC, and the preferred shares pay as much as 5% annually. The proceeds will go toward general purposes and paying down debt, AT&T said.

The move is the largest in an ongoing effort by AT&T to turn assorted assets into cash that it can use to whittle away at its borrowings. AT&T has set a goal to lower its leverage ratio to between 2 and 2.25, a target it promised shareholders, including activist investor Elliott Management Corp.

In this case, with the tower receivables, AT&T raised $6 billion up front, which requires an interest payment of 4.75% to 5%. While that’s a higher interest rate than nearly any loan AT&T could have received, the one significant advantage is that the $6 billion doesn’t add to its $165 billion debt pile.

So much more at the linked article, but I find the whole story so interesting. Very clever, very creative. 

I think Trump wishes he had thought of this. LOL. Having said that, $6 billion is a small part of $165 billion. Wow.

T is up 1.57% today but still trading below $40. Pays 5.4%.

Elsewhere, analysts forecast Comcast (CMCSA) to announce a 10% hike in its quarterly dividend, from 21 cents to 23 cents.

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Barrons Round Table

Paywall.

Interview with Rupal J. Bhansali, CIO, International & Global Equities portfolio manager.

Some highlights:

• Over the next decade, equity returns will be challenged. Dividends will play a far bigger role, so my picks are high dividend yielders, with the potential for dividend growth. All are international stocks, which speaks to the U.S. market being very rich. And with market returns hard to come by, investors will have to look for absolute return.
• I started my career at the hedge fund Soros and have always thought about the long and short side of a thesis, so I thought I might talk about some stocks that I would personally short. 
• Picks/longs: Subaru (she owns it); Baidu; China Mobile, a repeat from last year, down 12% over the past year; GlaxoSmithKline, an oligopolistic franchise in vaccines.
• China Mobile down 12% this past year when it was hard not to make 25% in equities in the US this past year
• Shorts: Softbank; AAPL; Netflix; GlobalPayments;
• Comments at the site by other readers: 
• Was she short on Apple and Netflix for the last 3 years? If she was, why she has not lost her job?
• LOL Who is person? Short Apple and long Subaru LMAOOO. What a terrible investor!
• I'm sorry, calling Apple a "consumer electronics company" simply misses the essence of Apple's business, which is building on and extending a product and services platform. Ten years ago, many said Apple could become the first trillion-dollar company, or even $2 - 3 trillion, but it wasn't because of the clever "gadgets" they make: it was (and is) because by then they had established the platform, which is infinitely extensible, and continues to grow into areas like medical/fitness, automotive, entertainment and a dozen other areas of which we are not yet aware. Really, I suggest you spend some time in the Bay Area and you'll soon be disabused of these outdated perceptions; there is much going on here that isn't making it into the headlines.

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More Snow Than Fargo Has Ever Seen?

Mt Fargo.

Link to The Dickinson Press. 

As of Monday, January 20, 2020, it stands at 75 feet.
It's only January, and the pile holds about 14,000 truckloads of snow.