Kenneth Fisher joins Warren Buffet

Warren Buffet has been interested in American Express Company, which for a long time has been rendering travel management along with providing charge and credit cards.

This Q2 Fisher Asset Management joined Warren Buffet in the stock and the position for Q2 was 6.6 m shares. In Q2 American Express’ revenue increased by 3 per cent as a contrast to last year’s. The company’s earnings increased from 1.10 to 1.15 dollars per share due to a decrease in share count, whilst net income remained unchanged. The numbers of the company have been more or less good for the first few months of 2011 with EPS being 2.07 dollars and 2.22 dollars for 2012. That is 7 per cent growth rate which is not enough to classify AE as a growth rate stock but it is enough to show that the company manages to get down to business.

It is noted that American Express has a tendency to buy back shares since the share count decrease in 2011.  The company has announced that it will return a half of its return on capital to shareholders through a channel of buybacks and dividends. In the beginning of 2012 the buybacks consumed 4 times as much cash as dividend and cash payments. In order for the company to hit analyst targets, it has to grow very little with having a P/E of 12, which will lead to the stock price being undervalued.

This valuation gives away the ownership of 150 m shares by Berkshire Hathaway. Another investor in American Express is Eagle Investment Management, which has reported 9.9 m shares for June 2012. Adage Capital Management has increased its position by 53 per cent for Q2 to 1.5 m shares.

Visa and Mastercard’s P/Es are much above these of American Express – 18 for Visa and 16 for Mastercard. Moreover, they have a small part in Berkshire’s portfolio. Their growth rate was better than that of American Express in Q2 with their revenue being 10 per cent more than it was in 2011. Discover Financial Services has decreased its earnings for Q2 in contrast to 2011. American Express serves as a medium between Discover, Visa and Mastercard since its valuation doesn’t depend on a strong growth rate.

The Commercial Observer’s interview with Kenneth Fisher

Community approval is perhaps the hardest thing for a developer to do. Whatever the developer does, there will always be naysayers. Should these naysayers intervene when it comes to preventing the bulldozer from moving in?  The following interview with Fisher was carried out by The Commercial Observer.

And here is what the partner at Cozen O’Connor Kenneth Fisher has to say concerning this matter.



The Commercial Observer: It seems that most, if not all, of your work is done outside the courtroom.
Mr. Fisher: A substantial part of my practice is land-use and zoning work, so those usually wind up in litigation only when there is a challenge—and those challenges usually come from some objector in the community.
For me, a recent example would be: I did the entitlements for the Dock Street DUMBO project for Two Trees. There was a litigation, which I handled and won, together with the corporation counsel’s office, obviously. Then there was an appeal for that, and we won the appeal in the Spring. And they’ve started site demolition, and they are going to start construction shortly.
So how essential is land-use litigation for developers, then?
I think the sort of macro observation that I would make is that land-use litigation over the last year or two has been “the dog that didn’t bark.” There have been challenges to most of the major actions, and some minor actions, that have come through City Planning and the City Council. Most of them have failed.
How did the opposition to the Dock Street development fail?
The proposal calls for a 17-story building in close proximity to the Brooklyn Bridge, with a 300-seat public middle school in the base, the core-and-shell of which is being donated by Two Trees. Also some neighborhood retail and parking.
There was some degree of controversy over whether views of and from the Brooklyn Bridge would be impacted. But, you know, I think that the people who were most agitated were the people whose views from their own apartments would be impacted.
While there was active organized opposition, there was also active support—as a result of which, as many people testified for the project has testified against it at the public hearings, and it was ultimately approved not just by the City Council and the Planning Commission, but it was approved by the Community Board.
A lot of the opposition dropped by the wayside when the council gave the go-ahead to the project. But there were a couple of dissidents who brought a lawsuit, and they challenged everything from the rationale of the project to the design solution that we developed with City Planning to the adequacy of the environmental assessment. All of that was dismissed at the trial court level.
If you’re, say, Jamestown Properties, how would you prepare yourself for ongoing community opposition over projects like the proposed Chelsea Market expansion?
I once published a letter in the New York Times; I said I had a dream that the mayor announced an agreement with the Almighty to build a stairway to Heaven. And when they announced the location, half the people said that it would lead to gentrification, the other half said it would bring in the riffraff, and everybody agreed that it would be bad for traffic.
The point of the story is that no matter how benign a project is, it’s going to upset somebody.
What kind of project do you think upsets people the most?
What gets attention are the “baby carriages in front of the bulldozers” projects. NYU is a situation like that, where the people who were opposed to NYU weren’t particularly interested [in] negotiating. They simply wanted to preserve Greenwich Village the way it was [yesterday].
It wasn’t a question [of] putting in a day-care center or making it bigger or smaller for a lot of them. There are others who wanted to engage, and the result was that the council got NYU to make some changes just before they gave the final go-ahead. That’s the give-and-take and the back-and-forth of the process. But it’s not Newtonian, because governments are bodies in motion that don’t always stay in motion, and reactions are never equal and opposite.

Source: The Commercial Observer