If needed as a yield play, should there be concern on choppiness? You have to think of these as a total return type process. You are employing your capital to gain a return, and part of that return is your dividend. However, another part is the protection of your capital, and hopefully the growth of your capital. There is no question that the North American auto market is mature, and about 17.5 million units is about it. There is some opportunity in Europe, which is a slightly bigger market than North America, and Asia is even bigger than Europe. The total market is around 65-68 million units, so thinks they will continue to do well, but on a capital basis he doesn’t think there is a lot of hope for a rise in the stock price.

This has been a fantastic story and has done extremely well over the years. However, you have to look forward. Today, the upstart is Under Armour (UA-N) and Adidas (ADS-XETRA) which is taking some of their business. On growth, the company is a little challenged on the Profit and Loss statement to grow earnings as fast as they have, yet the multiple of the company has maintained a fairly lofty level. There are better growth opportunities at lower prices.

He wouldn’t hold this. For a number of years, they did well by using cost containment. Had a lot of fat on their bones, and became leaner, but you have to look at not just the bottom line, but also revenue growth. If there is no revenue growth, but you see profit growth, that perhaps means the company is doing a good job of managing their business, but revenue is the fuel of earnings. They got so lean that they couldn’t really cut anymore fat. Revenue growth hasn’t been there for a long while.

Owned this at the time of their fiasco, and sold his holdings. It was not a situation he wanted his clients to be a part of. The risk profile of that bank increased dramatically in comparison to its peers.

Still one of the great companies, but you have to look at what is making it great. It could be the theme parks, or maybe the movie production. When looking at the numbers you see that about 44% of revenues come from ABC and ESPN. ESPN is something you have to look very closely at. Is the cord cutting and the deep bundling of network TV going to continue? Last week, they laid off a huge number of people, which tells you something. At the multiple it is trading at, he would probably pass.

(His theme today is economically sensitive stocks, and ones that have disappointed lately.) This is a homebuilder, a cyclical business. It is an example of one that does not fit the quarterly earnings pattern, because there are a lot of moving parts. Trading at a very reasonable multiple, but the latest quarter was a little disappointing because margins were challenged, as you often see with homebuilders. As margins go like they did last quarter, the price drops, an opportunity for a long-term investor to get involved. Trading at 1X Book and 10X earnings, and grew revenue 13% year-over-year. Dividend yield of 0.5%. (Analysts’ price target is $41.)

(His theme today is economically sensitive stocks, and ones that have disappointed lately.) This has done well over the years. They are in the replacement tire business. Tire volumes are expected to grow 4% annually for the foreseeable future. Recent earnings were disappointing, but it was well understood that rubber prices had risen. When that happens, costs of goods rise and margins shrink. One shouldn’t take a quarterly view of that. This is trading at 9X earnings. Dividend yield of 1.1%. (Analysts’ price target is $48.)