Preparing for the Likely Scenario of Deflation [View article]
Thanks for the feedback.
As I said in the article, this is not a call for history to repeat itself - I acknowledged that the conditions are different now, but rather simply evidence that Japan is not the only scenario we could be looking at in terms of slow growth and low inflation.
AAII Investor Update: Dividends and Buybacks- A Good Use of Corporate Cash? [View article]
tweedn - Thanks for the kind words. I personally prefer dividends over buybacks as well, though buybacks are preferable to bad business ventures and they do provide greater flexibility for a company undergoing strong growth.
Preparing for the Likely Scenario of Deflation [View article]
Larry,
The scenario of low inflation and slow growth, but not deflation is based on what many economists are currently projecting. As to whether they are being too optimistic or too pessimistic is for each investor to determine.
I'm not making a forecast, just presenting the data and giving investors factors to consider should the U.S. continue experiencing such an environment.
Dollars withdrawn from dividends are shares that could have been purchased, which would have paid additional dividends. Either way, money is coming out of the portfolio.
Income Strategies for a Low Yield Environment [View article]
Kenji,
I purposely left covered calls out of the article, because most of members (but certainly not all) do not use options. As to your comment about risk, a covered call strategy still leaves you exposed to a big drop in a common stock's price. Though covered-calls do provide some income, the post-transaction and post-tax profit may not be to provide much a cushion. (And yes, I realize this statement depends on several factors.)
It is important to consider the prevailing yields at the time you are investing. If a stock's yield is considerably higher than the prevailing range for most quality stocks, then questions should be asked. Specifically, why is X stock yielding so much? What risks are other investors demanding compensation for.
In the current environment, yields above 3.5% on quality stocks are hard to fine.
Howard did not publish a list of the companies. Rather, he just sent me the numbers on how many companies have declared dividends, both regular and special.
The two are not contradictory statements. Weak technicals are a sign something is wrong, but when everybody is fearful that the market is a in a freefall, buying opportunities often exist.
AAII Investor Update: Stocks Are Pricey, But Inexpensive [View article]
Table 2 has been updated. I incorrectly sorted the stocks when the article was first published, from high to low P/Es, when it should have been from low to high P/Es. Sorry for the confusion.
As far as the comments, anchoring is a very common error among investors of all skill levels--and it is very important to be aware of it.
Just look at all of the current chatter about Facebook. Yes, the stock is now $6 below its offering price, but it is still very expensive on a valuation basis. But, how much do you hear about the stock's P/E ratio?
So is the article simple, yes? But, it's underlying point is very important.
Preparing for the Likely Scenario of Deflation [View article]
As I said in the article, this is not a call for history to repeat itself - I acknowledged that the conditions are different now, but rather simply evidence that Japan is not the only scenario we could be looking at in terms of slow growth and low inflation.
AAII Investor Update: Dividends and Buybacks- A Good Use of Corporate Cash? [View article]
Preparing for the Likely Scenario of Deflation [View article]
The scenario of low inflation and slow growth, but not deflation is based on what many economists are currently projecting. As to whether they are being too optimistic or too pessimistic is for each investor to determine.
I'm not making a forecast, just presenting the data and giving investors factors to consider should the U.S. continue experiencing such an environment.
-Charles
Focus On The Fundamentals, Not The Story [View article]
Model S priced at $62k after federal tax rebate - Telsa website: http://bit.ly/uVaZUY
Consensus earnings estimates don't show a profit being made until 2014 - Yahoo! Finance - http://yhoo.it/ZiR9db
The Shrinking Dividend Yield [View article]
Income Strategies for a Low Yield Environment [View article]
I purposely left covered calls out of the article, because most of members (but certainly not all) do not use options. As to your comment about risk, a covered call strategy still leaves you exposed to a big drop in a common stock's price. Though covered-calls do provide some income, the post-transaction and post-tax profit may not be to provide much a cushion. (And yes, I realize this statement depends on several factors.)
-Charles
AAII
AAII Sentiment Survey: Bullish Sentiment at 42.5%, Stays Above Historical Average [View article]
AAII Sentiment Survey: Neutral Sentiment at 7-Week High [View article]
Only AAII Members are allowed to participate in the survey. We have approximately 125,000 members.
-Charles
Streaks, Observations And Notes [View article]
It is important to consider the prevailing yields at the time you are investing. If a stock's yield is considerably higher than the prevailing range for most quality stocks, then questions should be asked. Specifically, why is X stock yielding so much? What risks are other investors demanding compensation for.
In the current environment, yields above 3.5% on quality stocks are hard to fine.
-Charles
AAII Sentiment Survey: Optimism At Second-Highest Level Of The Year [View article]
The June AAII Journal will discuss the survey's response rates and how it has performed historically as a contrarian indicator.
-Charles
Dividends' Unintended Consequences [View article]
Howard did not publish a list of the companies. Rather, he just sent me the numbers on how many companies have declared dividends, both regular and special.
-Charles
Lessons From Black Monday [View article]
AAII Investor Update: Stocks Are Pricey, But Inexpensive [View article]
As far as the comments, anchoring is a very common error among investors of all skill levels--and it is very important to be aware of it.
Just look at all of the current chatter about Facebook. Yes, the stock is now $6 below its offering price, but it is still very expensive on a valuation basis. But, how much do you hear about the stock's P/E ratio?
So is the article simple, yes? But, it's underlying point is very important.
-Charles Rotblut
AAII
AAII Sentiment Survey: Bullish Sentiment Near A 2-Year Low [View article]
It should have read, "This is also the seventh consecutive week that bullish sentiment has been below its historical average of 39%."
Unfortunately, the typo slipped by both me and my editors. I've asked Seeking Alpha to correct.
Sorry for the confusion,
Charles
AAII Investor Update: How I Monitor My Stocks [View article]
We have not announced the location yet. We'll probably make an announcement near the end of this year or early next year.
-Charles