Every year since 2002 I have closed out the year with my satirical look at the world through the eyes of a professional investor poking fun at what has transpired in our global society in the year we are about to turn the page on. You can access a complete list of all prior years’ articles at www.lakeviewasset.com. 2011 has certainly been a topsy turvy year no matter where you may call home. I hope that 2012 will be a year of health, happiness and prosperity for all members of my family, clientele, students, co-workers and readers. So without further ado, here is my List of 10 Things I Won’t Miss About 2011 (and never want to hear about ever again), in no particular order:

1. GREECE – Since the death of Alexander the Great in the 4th century BCE, Greece’s contributions to the Western World have diminished in importance. I would not say that the country was irrelevant but let’s just say that Greece was more valued as a travel destination than economic, political, academic or military powerhouse for many centuries.  My father-in-law would disagree to some extent by saying that the advent of the diner was a valuable contribution to the development of the State of New Jersey. But, let’s not digress any further. All of a sudden, in 2011 the country of Greece became the single most important focal point in the global economy with the country’s fiscal mess a fulcrum between global economic collapse and prosperity. If I manage to hear about Greece again before I plan a trip with my wife over there then it will be all too soon.

2. THE PROGRESSIVE INSURANCE COMMERIAL – Every year there is some commercial that really gets on my nerves. While I can’t get enough of the Geico (a Berkshire Hathaway (BRK/A; BRK/B) company) gecko commercials, the Progressive Insurance (PGR) commercials starring its Flo character are just too painful to watch or listen to. If you don’t believe me then see for yourself Thankfully I have Verizon FIOS (VZ) and we can freeze, skip or fast forward through these commercials at will. 

3. PROFESSIONAL SPORTS LOCKOUTS / STRIKES – So let me get this straight, professional athletes who get paid millions of dollars but work less than schoolteachers need to get paid more from their billionaire bosses. We have nearly 9% of the workforce unable to get a job in the United States but we should feel sorry for the NBA and NFL athletes who need to make that much more. Of course, we also can’t feel sorry for the owners, many of whom buy their sport franchises with pocket money and manage them like they are playing an EA Sports (EA) video game.

4. ELECTRIC CARS – Here is the good news – they might be more energy efficient. I will emphasize might because I am yet to be convinced that they are when you examine it in detail.  Here is the bad news – they are prone to spontaneous combustion. I will take my automobile fires the old fashioned way. That is by driving an old Ford (F) Pinto and getting rear ended. Otherwise, I feel safe by sticking to gasoline powered engines in my cars. I do not think that the world will be charging up General Motors (GM) Chevrolet Volts like they do their Apple (AAPL) iPhones anytime soon.

5. OCCUPY WALL STREET – Your parents spent $150,000 so you can study art history or literature. Dad and mom want to enjoy time together after working hard their entire life so you can go to school, eat out at restaurants, drive a nice car and carry around the latest technological gadget. You graduate and dad says that you should get a job. Reading Shakespeare in your room or playing Zynga (ZNGA) games like Farmville on Facebook is not a productive way to spend your life.  You could not get a job on Wall Street. You could not get a job on Main Street. So complain. Act spoiled and jealous. Blame Wall Street. Let me explain something to those OWS protesters. Without Wall Street, you would not have had the capital to: build schools; build roads and bridges; finance research for life saving drugs; and, produce heat and electricity. Those are a few examples that barely scratch the surface. Did Wall Street get bailed out by taxpayers? Some companies did and others did not. The world did not end though it might have deteriorated rapidly into financial and political chaos had the banks not been bailed out. Get over it. It happened. Life goes on. Move on with your lives. Do something productive. Help feed the poor, house the homeless or teach the illiterate. Just stop whining. If you don’t like it here in the US may I suggest you move to North Korea, Somalia or Syria where Wall Street is less pervasive. Thank your parents for their hard work and take a cue from them by working hard and not complaining. Repay them by doing something productive with your lives. One last thing, life is not fair. Some people get paid more than others. It happens. Just ask those athletes I talked about before. Accept it.

6. ANGRY BIRDS – It is like an Alfred Hitchcock movie. Those Angry Birds. They are everywhere you look – in stores, the internet, on mobile devices. I have to wear, even indoors, a hat so that Angry Bird droppings don’t fall on my head. I thought Pac Man was just fine. For the sake of sexual equality Ms. Pac Man was OK too. The Super Mario Brothers can still be quite entertaining. I wonder if they had any sisters. Somehow in 2011 I was made to feel that my life was incomplete without Angry Birds. I like my life just fine the way it is and will stick with pinball. 

7. JUSTIN BIEBER – What does Justin Bieber have that Ricky Nelson, David Cassidy, Shaun Cassidy, Davy Jones, Joey Lawrence, Leif Garrett, and Zack Efron don’t have? Nothing but current media attention. That too shall pass and Bieber will be just wind up as another washed up teen heartthrob. He will either get a sitcom or star on a reality show. Time will tell. 

8. QUIKSTER – What happens when you introduce a new product that nobody wants and jack up the price of a product that is a bit hit? You get a marketing disaster brought to you by Reed Hastings and Netflix (NFLX). Netflix ended last year at $175.70, rocketed to $304.79 in the summer and then collapsed to as low as $62.37 before rebounding a few points into the end of the year. I have seen plenty of company meltdowns that were caused by fraud or improprieties – do you remember Enron and WorldCom?  Never have I seen a company disintegrate before our very eyes in such a short period of time that was caused by a management screw up as happened with Netflix. Did Hastings think that Netflix had the New Coke (KO)? Even Coke learned this year that they could not pull a New Coke once again when they sent out holiday cans of regular Coke that looked like Diet Coke cans. 

9. ANGELA MERKEL & NICOLAS SARKOZY – There was Lucy & Ricky, Ralph & Alice, Sonny & Cher, Fred & Wilma, George & Gracie. Now we have to deal with the Angela & Nicolas show. However, this comic duo affects hundreds of millions if not billions of lives around the globe. If Merkel’s girdle is on too tight then the markets go into free fall. When Sarkozy savors a fine Bordeaux then the markets will rebound. There are more unnamed sources in the European Union than one could imagine and each can move the markets by a few percent when they pass wind. Then again, who are we to criticize the Europeans? After all we have the Three Stooges running our government over in Washington. 

10. DICTATORS –Hosni Mubarak, Muammar Gaddafi (is there an accepted way of spelling his first and last name?), Ali Abdullah Saleh, Zine El Abidine Ben Ali, Kim Jong Il are all gone from power (or life). Adios. Good riddance.

Posted By Scott Rothbort at December 28, 2011

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Some excellent results were delivered by one of my oldest holdings, Dicks Sporting Goods (DKS) this morning. DKS reported non-GAAP diluted EPS of 32 cents versus 22 cents a year ago and expectations of 26 cents. Same store sales rose 4.1% and total sales rose 9.3% year-over-year to $1.18 billion. Analysts expected net sales of $1.16 billion in the 3^rd quarter.

For FY2011 the company increased guidance by 7 cents for non-GAAP EPS to a new range of $2.01 to $2.03. An additional penny was added to 4^th quarter guidance for a range of 87 to 89 cents versus consensus estimates of 87 cents. Toward the end of the 3^rd quarter and in early 4^th quarter DKS opened several new stores which are not in the current quarter’s results but point to strong forward growth. A total of 25 new stores were opened in the second half of 2011 bringing the total store count to 474 Dick's Sporting Goods stores in 42 states and 81 Golf Galaxy stores in 30 states. As I mentioned, there is still plenty of room for growth at Dick’s.

In what was a bonus announcement for shareholders, Dick’s Sporting Goods’ board of directors declared an annual dividend of 50 cents payable on December 28 for shareholders of record on December 7. In the future, the company intends on paying dividends on a quarterly basis. At the 50 cent payout, the yield is 1.26% based on yesterday’s closing price. However, it appears that Dick’s Sporting Goods stock will open about 5% higher in trading today.

As I mentioned, Dick’s Sporting Goods is one of my oldest holdings. I still own stock from the IPO for several clients having bought more stock on the opening day in the secondary market and for new clients thereafter. I like the company’s business model, strategy, management team and balance sheet. A year from now I have a preliminary price target in the range of $50 to $52.50

Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long DKS stock — although positions can change at any time.

Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com 

You can access more daily commentary from Scott Rothbort, on Wall Street All-Stars.

Posted By Scott Rothbort at November 15, 2011

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Crocs (CROX) the footwear company stunned investors with a significant earnings warning. The company provided guidance well below previous EPS expectations of 40 cents a share. CROX now expects to earn 31 to 33 cents for the September quarter. Revenue is expected to range between $273 million and $275 million, below expectations of $280 million. Shares of CROX are giving up nearly 1/3 of its value as a result of these revelations. 

So what do itchy finger traders do? They begin to attack shares of Deckers Outdoor (DECK). Understand that the similarities between CROX and DECK end at footwear. CROX, for all intents and purposes has one product, a rubberized sandal which is primarily used in warm weather. Sure they are trying to diversify to boots and sneakers but let's get serious, this is a one trick pony. DECK on the other hand is a far more diverse footwear company with seven brands transcending a variety of styles and weather conditions. I am a long time owner of DECK stock,  with a cost basis less than half of the current market price, even when factoring in today's several point decline. 

DECK sells for 21 times trailing earnings and 17 times forward earnings. Earnings are expected to grow by 20% in 2011 and 21% in 2012. Earnings growth for DECK has come both from organic sources and acquisitions over the long term. I expect that despite the CROX revelations, DECK will continue to drive that long term growth of a least high teens to low twenties percentages.

Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long DECK stock — although positions can change at any time.

Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com 

You can access more daily commentary from Scott Rothbort, on Wall Street All-Stars.

Posted By Scott Rothbort at October 18, 2011

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PepsiCo (PEP) reported its earnings earlier today. I tuned into the conference call earlier this morning. The company reported EPS of $1.31 versus consensus estimates of $1.30. Revenues of $17.58 billion exceeded expectations of $17.19 billion. Strong results in Latin America, Europe and Asia helped to spur 7% year-over-year division operational growth. PepsiCo America Beverages continues to struggle with operating profit declining 2.5% for that segment. Interestingly enough, Operating profit at Frito Lay North America (FLNA) of $918 million is catching up to PepsiCo America Beverages (PAB) operating profit of $992. It is only a matter of time until FLNA overtakes PAB. I would note that volumes for PAB came in flat during the quarter but are showing some improvement. 

The company maintained its full year guidance but refrained from providing 2012 guidance due to the uncertainty in the commodity markets. As a side note, the company still expects to pass on higher prices to customers in the next year, despite recent declines in commodity costs. 

PepsiCo when last reporting quarterly results hit the market with a confusing accounting change. The accounting change was just putting the company on an apples-to-apples comparative basis with Coca Cola (KO). However, it was interpreted as a negative bombshell. The stock was up close to 2% after the conference call and held those gains in early trading today. 

Coca Cola has outperformed PepsiCo but I would not chase Coke on that basis. PepsiCo sells at about 13 times 2012 forward earnings estimates. Coca Cola on the other hand is a bit richer at 16 times forward earnings estimates. The dividend still favors PepsiCo by about 50 bps in yield per year. I am inclined to hold PepsiCo here, but would scale out of the stock, as a source of cash when the stock gets back to about $66. 

PepsiCo is a long term holding and pick in the Lake View Restaurant & Food Chain Report newsletter

Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long PEP stock — although positions can change at any time.

Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com 

You can access more daily commentary from Scott Rothbort, on Wall Street All-Stars.

Posted By Scott Rothbort at October 12, 2011

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While everyone is looking over to Europe, some of the worst damage these last two days occurred in the emerging markets. Take Brazil for example. The Bovespa dropped 5.5% over the last two days. You might think that is not so bad. However, the Brazilian Real also declined dramatically, about 5.1%. Taken together the total loss in US Dollars was about 10.3%. That is evident when looking at the iShares Brazil ETF (EWZ) which declined 10.9% over the past two sessions.

Apparently the BRIC nations may be getting a bit hostile toward one another. That is not helping the emerging markets either. Last week Brazil placed a 3000 basis point increase in automobile tariffs. This comes after Brazil jacked up tariffs on steel imports. Presumably, the target was Brazil’s largest trading partner, China. Maybe some side discussion between Brazil and China will take place this weekend at the G-20 meeting to calm down these trade issues.

Arcos Dorados (ARCO), the Latin American franchiser of McDonald’s (MCD) restaurants took a 16% hair cut over the past few days.  Just last week ARCO announced an approximate 6 cent per share dividend. I would note that MCD has performed extremely well, declining 3.7% the past few days and rising about 14.5% on a total return basis for 2011 year-to-date. Today, Raymond James (RJF) initiated MCD and Yum Brands (YUM) with Outperform ratings. MCD was given a $95 price target and YUM a $60 price target. One thing we do know about MCD is that the company performs well in challenging economic conditions. My point is that the decline in ARCO is an opportunity to pick up a strong company at a severely discounted price.

Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long ARCO and MCD stock — although positions can change at any time.

Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com 

You can access more daily commentary from Scott Rothbort, on Wall Street All-Stars.

Posted By Scott Rothbort at September 23, 2011

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