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Author: stillwater9999 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14486  
Subject: HP Date: 11/20/2012 8:48 AM
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Avery large flaming piano. This morning with large write off/possible fraud at acquired co

Sw
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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12910 of 14486
Subject: Re: HP Date: 11/20/2012 10:48 AM
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A very large flaming piano.

The harder some objects hit the ground the faster, and higher, they bounce back. This is hardly the case with flaming pianos though; they tend to disintegrate and smolder.

I'm still not sure, at this juncture, what kind of object HP is…

kelbon

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Author: JasondinAlt1 Big red star, 1000 posts Old School Fool SC1 Red Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12911 of 14486
Subject: Re: HP Date: 11/20/2012 12:36 PM
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The harder some objects hit the ground the faster, and higher, they bounce back. This is hardly the case with flaming pianos though; they tend to disintegrate and smolder.

I'm still not sure, at this juncture, what kind of object HP is…


I'd wait until after they have to suspend their dividend because they're having trouble servicing their debt.

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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12912 of 14486
Subject: Re: HP Date: 11/20/2012 12:47 PM
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A very large flaming piano.

It sure is! Man, what a nightmare. "Nah, we didn't overpay, the numbers were cooked!"
Even if true, what a boondoggle.

It's trading at $11.83, so I just doubled my position.
From almost nothing to not-quite nothing.

FWIW, the lowest EPS estimate among 33 analaysts is EPS=3.25 for the year ending Oct 2013.
So that most-pessimistic forecast puts them at a P/E of 3.6x.
I don't normally believe analysts at all, but hey, that's a really small number dude.

Should be fun to see what the stock price does when they cut the dividend.

Jim

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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12913 of 14486
Subject: Re: HP Date: 11/20/2012 12:55 PM
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I'd wait until after they have to suspend their dividend because they're having trouble servicing their debt.

Things would have to get a fair bit worse for debt to be a big problem.
They generated over $4bn in cash from operations this past quarter,
and ended the quarter with over $11bn in cash.
With debt only $10bn more than net cash, they have huge coverage.
For a while.

Jim

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Author: rnam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12915 of 14486
Subject: Re: HP Date: 11/20/2012 5:56 PM
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With so many attractive alternatives among IT companies which face short-term, business cycle issues and/or fiscal cliff panic, why bother with HP's seemingly endless list of self-inflicted wounds which might take years to fix. You yourself have suggested STX, INTC and APPL recently. CSCO and MSFT are not bad either.

HP is probably like BP; after years of mismanagement, eventually it might reward the patient investor who bought near the lows.

And taking of oil producers, APA and DVN also look extremely attractive, with APA now selling at book value, an extremely rare occurrence. Both have highly regarded management too.

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Author: richinaz Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12917 of 14486
Subject: Re: HP Date: 11/20/2012 8:09 PM
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This is one of the reasons why I don't believe in a concentrated portfolio. No matter how much you may think you know about a stock you can't know everything. Not even a CEO knows whether someone is committing some kind of fraud, crime, etc. that may seriously harm or destroy the value of a stock for a period of time.

Now if you are worth $10M and have millions in cash and want to invest $4M or so in a concentrated portfolio maybe that works but if you have your entire retirement (assuming a sizable amount) account in 4-8 stocks I would have a tough time sleeping.

I'm sure others may disagree but I'd prefer a more cautious approach.

Rich

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Author: CM001 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12918 of 14486
Subject: Re: HP Date: 11/20/2012 11:25 PM
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I'm sure others may disagree but I'd prefer a more cautious approach.
I am against concentrated portfolio because most average investors don't have the skills and resources for that.

Having said that, if you are running a concentrated portfolio, most likely you would not invest heavily in a company like HP.

BTW, what happened here is not a case of just fraud, we will come to know how much of it is fraud, but gross serious incompetence at the management and board level. You can't make a purchase and write off 90% in such a short time and that is $9B, and sometime back they pi$$ed off $1B on Palm.

The incompetence at this company is freaking unbelievable.

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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12919 of 14486
Subject: Re: HP Date: 11/21/2012 6:52 AM
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With so many attractive alternatives among IT companies which face short-term,
business cycle issues and/or fiscal cliff panic, why bother with HP's
seemingly endless list of self-inflicted wounds which might take years to fix.


Answer: entertainment value!
At 0.1% of my portfolio I can afford to take a flutter.
I went for $13 call options at $1.45. By fat the most likely outcome is that I lose $145.
If they go back to their 52 week high I make $1555. As I say, pure entertainment value.
Plus, it's faintly possible that they will have a very different reputation in a year.
Maybe flattish revenue but rising earnings & share price and a secure looking dividend.
Weirder stuff has happened.

With hindsight the main problem with the acquisition was clear:
you can't successfully take over a company called "autonomy".

Jim

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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13050 of 14486
Subject: Re: HP Date: 12/18/2012 1:02 PM
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Answer: entertainment value!
...
I went for $13 call options at $1.45. By fat the most likely outcome is that I lose $145.


I decided a quick buck on a wounded animal like this was enough for me, so I sold out.
The $13 calls I bought at $1.48 are now at $3.20
The $15 calls I bought at $0.95 are now at $2.23

There really are better fish in the sea, which somehow becomes even more apparent after a doubling.
But it was entertaining, so my investment goal was met.

Jim

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Author: TMFHockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13052 of 14486
Subject: Re: HP Date: 12/18/2012 3:04 PM
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Ha, I love to remember my winners and mostly forget my losers.

Except:

USG: Which taught me that even when you're right the economy can make you wrong. Even though I did make up any losses and got a nice vacation out of it last February.

Fuqi, now Fuqi.pk which taught me the perils of the Orient, where accounting isn't accounting, financials aren't financial, and the goal of a private business to be a stepping stone to a good state job.

Congratulations!

bob

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