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Philip Morris International, Inc. Message Board

  • habanero65000 habanero65000 Oct 23, 2008 8:26 AM Flag

    NO business is recession proof: PM's CFO.

    This is a bear market. Nothing will do well, as you have experienced by getting incinerated in PM.

    PM is being sold and will continue to be sold due to:

    1) Continued fears of a rising dollar ( PM gave NO GUIDANCE FOR 2009 ) will reduce net earnings.

    2) The fear that the global slowdown could eventually find its way to PM's volume number or a trade-down, as no business is recession proof, according to Hermann Waldemer.

    3) Year-end tax-loss selling by mutual funds and hedge funds, which are ALL underwater in this name, as they piled into PM along with the "savvy" individual investors at the "when issued" prices in the $47-$49 range, or higher, 31 March and later. PM will be inder significant pressure for the remainder of this year. Don't get washed away by it.

    There are no defensive names in a bear market; only those names which will go down 25% when the market is down 30%. P/E's matter little also, when fear determines the mood of the day. Cash, and nimble trading. For now, buy and hold will lead to monstrous losses.

    One more thing. Some here point to insider buys from months ago ( in the $50's ) as a sign that "management" is on-board here. "Management" has access to an incredibly generous stock option plan ( which is offset by an aggressive buyback program: stock options issued to "management" are then absorbed by the plan ). You do not. "Management" comp is reckoned in seven figures; a 1,000 share "buy" likely costs less than any year-end bonus to these executive millionaires. A drop from $50 to $40 is meaningless to them, when their strike prices are probably low also, and a one-time $400,000 "investment" is insignificant when your salary is in the millions. It is not meaningless to the small investor trying to keep up in an IRA or a taxable investment account. For most, this is money gone, and many may not have the time to wait around for the "great global franchise" to make them whole again, let alone eeke out a small gain. Retirement comes on fast - especially when you don't have an option program backing you up.

    Yesterday probably wiped out many small investors' gains to-date, unless of course they were the buyer of PM at $33.30 ( a price which the stock hheld for about two seconds ). Think hard about this one, how poorly it has fared in the bear market so far even though it is supposedly "defensive' in nature, and mind the cash balance. It may not earn much from a yield perspective, but it won't drop 20% in two weeks either.

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    • wow your a genius

    • Good move! There is a ton of money on the sidelines that no one ever talks about.

    • You are funny. They have pricing power too you idiot. If you are a trader then sure you should be worried. If you are buying a strong company with a great product that pays you to wait then this is the stock. I just buy more when it takes a dive. I am not worried. All things turn and since you have no advice on where to invest I will trust my research. This company will not be gone in 20 years like so many others which will be gone in the next two years. You might be making points for those who are retiring broke...not me. If you are retiring, and thought you had a triple coming in a year with PM, and invested every nickle you had to your name then you are not smart enough to retire and need to keep that job at McDonalds.

    • Year end tax [ loss ] selling will be yet one more factor pressuring the entire market heading into the close of 2008. In that light, PM will not be immune, and at the current collapsed quotation, will probably be a hedge fund favorite to unload into any rips -- like today.

      **** Question for Herr Waldemer: Are you authorizing repurchase at these depressed levels yet, or is PM whistling "Edelweiss ?" ( They do not whistle "Dixie" in Lausanne. ) ****

 
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