Seeking Alpha

Chowder

 
View as an RSS Feed
View Chowder's Comments BY TICKER:
ABT, AFL, APD, ARCP, ARLP, AT, BDT, BF.B, BMO, BP, BRK.A, BRK.B, C, CBRL, CINF, CL, COP, CTL, CVX, D, DE, DIA, DRI, ED, ENB, EPD, EXC, FSP, FTR, GD, GE, GILD, GIS, GPC, HCBK, HCN, HGIC, IBM, INTC, JNJ, KMB, KMI, KMP, KO, KRFT, LEG, LINE, LNCO, LO, MAA, MCD, MDLZ, MDT, MHR, MKC, MMM, MMP, MO, NFLX, NHI, NLY, NNN, O, OHI, PBI, PEP, PG, PM, PNY, PSX, RIG, RY, SBSI, SDRL, SDY, SNY, SO, SPY, SYY, T, TE, TGT, TIP, TOT, TUP, UHT, UNP, UNS, UTX, VIG, VVC, VZ, WAG, WEC, WM, WMT, WU, XLU, XOM
Latest  |  Highest rated
  • AT&T And 'Losing' To Inflation [View article]
    Placing T in a tax deferred account and especially a Roth is ideal. Scrap the tax efficient argument. It's meaningless.

    People have a tendency to look at companies like this on a stand alone basis and that's just silly.

    T's dividend is as safe as it gets and having a solid, safe dividend, yielding more than 5%, is just one piece of the portfolio puzzle.

    After all, isn't T also part of SPY?

    Just as T is a piece of the puzzle in SPY, it's a piece of the puzzle in my portfolio, and with a yield north of 5%, and as safe as it is, T is an overweight position in my portfolio.
    Dec 25, 2014. 07:44 PM | 13 Likes Like |Link to Comment
  • Peter Lynch On Dividend Growth Investing [View article]
    It would take too much work to put an article together that could easily explain and show how effective technical analysis can be if you know what to look for.

    A good technical analyst only needs price volume and candlestick charting. Everything else is bells and whistles.

    I can provide an example though from back in 2013 where I announced such a situation in real time and have witnesses! ... Ha!

    The company was PG. It was trading at an all-time high in Jan 2013. No self-respecting value investor, contrarian investor, or most dividend growth investors are giving PG the time of day at an all-time high, yet I called the buy at the time and I added to position at the time.

    When I look at volume patterns, and I see volume up or down more than 50% of the normal daily volume average, you are seeing Institutional buying or selling when dealing with large cap companies. The retail investor doesn't have the juice to drive the volume necessary to reach a level 50% or more above average.

    On Jan 25, 2013 PG opened the trading session at $68 per share. The previous close being $66.74. The volume was incredible during the first hour of trading. It traded a day's worth of volume in the first hour or two! That's your buy point! I don't care what the valuations are, I don't care what your limit order is, it doesn't matter at this point. PG ain't coming down!

    I think PG came out and beat earnings and guided higher looking forward, if I recall correctly. Whatever valuation you thought PG was worth was now moot. Smart money knew that and smart money was buying that gap even at an all-time high. (I wrote about this in one of my instablogs.)

    Anyway, PG gapped at the open and trade higher all day and closed at the high of the day on volume that was almost 200% above average. That my friends is Institutional buying. (Normal daily volume at the time, 10.15 million, on that day 30.34 million).

    I hope this chart shows up as I tried to show it.

    http://bit.ly/1CDKYov

    The next chart, I hope, shows what price did following that big volume day.

    http://bit.ly/1CDKYow

    Ignoring Institutional Investor buying, regardless of valuations, can limit people's success over the long term.
    Dec 24, 2014. 06:40 PM | 3 Likes Like |Link to Comment
  • Managing Risk To Help Achieve Long-Term Goals [View article]
    >>> Interesting re T vs CVX. My process brings me to the opposite conclusion primarily because the whole sector is being beat up and often one can find the best values at that time. <<<

    I thought someone might bring up that point. I was going to address it earlier but didn't want to wander off the reservation with regard to the point I was making about information gathering.

    There is no question that CVX is the better valuation right here. ... None!

    However, I want to buy more of both companies, and I'm already over-weighted on both. I don't place myself in a position anymore where I have to get "hero price." I don't need to be a hero of getting bottom dollar on one of them and losing the opportunity to get the other at a decent value.

    I only need decent valuations, not "hero price" with my Core positions since I have no intention of selling them. I'm buying them for their income generating qualities.

    I need "hero price" on my Speculative positions.

    I look at it like an NFL draft. I can draft best player available, or draft based on need.
    Dec 24, 2014. 03:10 PM | 1 Like Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    It's the bloody sock that confirmed it! ... The epitome of being a Red Sox. ... Ha!
    Dec 24, 2014. 01:48 PM | 2 Likes Like |Link to Comment
  • Peter Lynch On Dividend Growth Investing [View article]
    >>> Why is it argued that using a DGI strategy allows for the investor to ignore stock price fluctuations and maintain income, yet the stability of bond yields is a negative? <<<

    Because the strength of the the dividend growth investing strategy is dividend growth. When you type out DGI it means absolutely nothing and why you get nothing from it. Type out dividend growth investing and you get a slap upside the head V8 moment. It's that the dividend grows annually regardless of what the price does. Got that? Dividend growth, not price volatility, is the key to the dividend growth investing strategy.

    The bond dividend does not grow and why most (repeat after me) dividend growth investors, are so positive about (again) dividend growth investing, and avoid bonds or are down on bonds at this time.
    Dec 24, 2014. 01:37 PM | 4 Likes Like |Link to Comment
  • Managing Risk To Help Achieve Long-Term Goals [View article]
    Miguel, one of the best tactics I use regarding analyst ratings isn't the buy, sell or hold ratings, it's the number of analysts that agree with the direction of share price over the next 6 to 12 months.

    This is even more important when there are several companies I would like to own, but only have the cash for one right now.

    I will use Fidelity's StarMine ratings as "part" of the final process in deciding what to buy today and what could probably wait for the next purchase two months from now.

    Before I explain this concept, I want to again state it is just "part" of the process.

    The Equity Summary Score (StarMine) provides a consolidated view of the ratings from a number of independent research providers on Fidelity.com. It uses the providers' relative, historical recommendation performance along with other factors to give you an aggregate, accuracy-weighted indication of the independent research firms' stock sentiment.

    Each equity is given a score from 10 Very Bullish to 0 Very Bearish based on the top 10 firms for rating each specific company. Anything with a 7.0 or more is Bullish and means most firms think that the share price will outperform the market over the next 6 to 12 months.

    T and CVX are two companies that pass all of the criteria for purchase at this time for me to add to my positions. All of the DD has been accomplished and it's now down to a flip of the coin.

    According to StarMine, CVX has a rating of 3.8 Neutral. T has a rating of 8.8 Bullish. ... I would go with T right now because two months from now the odds are that T will outperform CVX and CVX will still provide a discount to fair value while T may not.

    I would then come back to CVX in two months and this way I get both companies at a decent value as opposed to only capturing one.

    EVA Dimensions has a 98 relative accuracy score when it comes to T and they have an Outperform rating. Jefferson Research has a relative accuracy score of 90, Buy and Columbine Capital Services has a relative accuracy score of 89 and also has an Outperform rating.

    McLean Capital only has a relative accuracy score of 6 when it comes to T and they say Neutral. I give them no weight since they are so inaccurate when it comes to analyzing T.

    When it comes to CVX, McLean has the highest relative accuracy score of 93 and they have a Sell rating on CVX. Ford Equity has an 88 and Buy rating. Eva Dimensions has an 85 and Outperform rating.

    I would want to know why the number one firm for accuracy still has a Sell rating and why the others don't. I give McLean more weight for their accuracy with CVX but no weight with their inaccuracy with T.

    All of this is just part of the final decision process.

    Yes sir! I love hearing what the analysts have to say. It's their job to share information, it's my job to accept it or not. Easy Peasey.
    Dec 24, 2014. 01:09 PM | 3 Likes Like |Link to Comment
  • Managing Risk To Help Achieve Long-Term Goals [View article]
    >>> If all peers move downward as a whole, you won't see that trend, you only see what happens relative to each other, which is nothing. <<<

    I wanted to address this separately.

    Again, I could care less if all peers move downward. That isn't my concern. My concern is if a sector moves downward, are the companies still maintaining high quality ratings in the face of falling prices.

    For example, if I held a position in ESV and wanted to hold it during adverse times, I see the following ratings:

    Earnings Quality ... Strongest
    Cash Flow Quality ... Strong
    Operating Efficiency ... Strong (up from Weak over last quarter)
    Balance Sheet ... Strongest
    Valuation ... Low Risk

    With these ratings, even though price has fallen over 50% from its peak over the last couple of years, they are still showing quality earnings and cash flows. I wouldn't fear ESV going out of business.

    When I saw SDRL with Earnings Quality ratings of Weakest down from Strong and Operating Efficiency drop from Strong to Weak to Weakest over 3 quarters, it was a screaming sell to me. I knew that dividend was at risk.

    ESV's ratings weren't trending down although price was. SDRL saw the quality trends turning for the worse, and the dividend being suspended confirms that.

    Now again, I looked at this information through a wide lens. I wasn't just depending on Jefferson to tell me to sell. Jefferson was a piece of the puzzle, a very important piece.
    Dec 24, 2014. 08:29 AM | 3 Likes Like |Link to Comment
  • Managing Risk To Help Achieve Long-Term Goals [View article]
    I actually use four sources. I would never rely on one. I don't look for short cuts.

    I use Value Line, Morningstar, Jefferson Research, McLean's Research and then combine those with F.A.S.T. Graphs. And this is important, I look for consensus before making a decision.

    If the rating services are wide apart, I move on.
    Dec 24, 2014. 08:10 AM | 1 Like Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Voting for Yankees players should be illegal.
    Dec 23, 2014. 07:29 PM | 3 Likes Like |Link to Comment
  • Managing Risk To Help Achieve Long-Term Goals [View article]
    I don't use Ford. I prefer to stick with S&P, Jefferson and McLean.

    This doesn't mean the other information isn't useful, but I like the contrast between the 3 I use.
    Dec 23, 2014. 07:23 PM | 1 Like Like |Link to Comment
  • The Real Values Of Dividend Growth Investing [View article]
    That's good Mikee. I was going to ask you for a meet anyway and talk stuff again when you didn't have to rush off.
    Dec 23, 2014. 03:58 PM | 1 Like Like |Link to Comment
  • Peter Lynch On Dividend Growth Investing [View article]
    When I have cash ready to invest and pull up my watch-list, I look first for any company that is currently being bid up by Institutional Investors.

    I'm not looking to beat them, I'm looking to ride their coattails.
    Dec 23, 2014. 03:54 PM | 5 Likes Like |Link to Comment
  • The Real Values Of Dividend Growth Investing [View article]
    Don't worry Mikee, O will issue a special dividend in the first quarter of 2015 because I said so. Book it. (Or, I'll owe you a beer and I don't lose beer bets.)
    Dec 23, 2014. 03:42 PM | 3 Likes Like |Link to Comment
  • Managing Risk To Help Achieve Long-Term Goals [View article]
    Does Vanguard have McLean's Research? They rate cash flow strength and trends. They show whether a company is creating share-owner value or not.

    I like the different view or angle that Jefferson and McLean take from S&P, Zack's and others that are basically the same thing.

    I do like S&P though.

    Fidelity has another feature I really like. It's called StarMine and it rates each rating firm on the accuracy of their Buy, Sell Or Hold calls.

    When I see S&P with a Buy rating and only a 7% accuracy rating on their call for a particular company, I'm going to discount their opinion. When I see Jefferson with an 85% accuracy rating on the same company and they have a different rating, I'll give more weight to Jefferson's analysis.

    In the end the final decision is mine, but I like to get various views and styles as opposed to the cookie-cutter analysis put out by most firms.
    Dec 23, 2014. 03:36 PM | 4 Likes Like |Link to Comment
  • The Real Values Of Dividend Growth Investing [View article]
    Uncle Eddie, we turn out because it's silly to put dividend growth investing in a category that isn't looked at as total return.

    Dividend growth investing is total return investing.

    Some people want to assume that non-dividend paying companies, designed for growth, will do better overall in total return. Maybe they will, maybe they won't. They want to refer to it as total return, but not include dividend growth investing as total return investing and that's silly.

    It depends on what one is trying to accomplish that determines which strategy is the better strategy to pursue.

    If I wanted to chase the highest number wins approach, I wouldn't be choosing T, KO or GIS. I'd be selecting companies from the Investor's Business Daily Top 100. That would be my Holy Grail of investing if my goal was biggest number wins.

    My primary objective, the thing that matters to me most, is building an income stream that is reliable, predictable and increasing. In order to achieve my goal, instead of looking at the IBD Top 100, I'm looking at David Fish's list of companies that have paid and raised the dividend for a specific number of years.

    In achieving my objectives, the dividend growth investing strategy is my Holy Grail for its simplicity, it's reliability, it's low risk exposure and the ease it takes to monitor it.

    Any rebuttal arguments I make have to do with those who think dividend growth investing doesn't create high total return. I consider high total return anything that beats the S&P 500 over a period of 10 years or more.

    I don't think my way of investing is for everybody. I don't see anything wrong with those who are dividend agnostic, even though I think dividends are paramount to me. It all depends on what one is trying to achieve. Everything is relative.
    Dec 23, 2014. 03:25 PM | 9 Likes Like |Link to Comment
COMMENTS STATS
8,374 Comments
29,733 Likes