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Christian Magoon
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Christian Magoon is the founder of YieldShares, the income focused ETF Sponsor behind the YieldShares High Income ETF (YYY). He is also chief executive of Magoon Capital, a firm which provides strategic advice on ETF product development. Christian Magoon is an ETF insider, having launched over... More
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  • Buying Apple Shares To Pay Your iPhone Bill? View The Dividend Chart
    When Bloomberg reported on February 29th that an upcoming Apple (AAPL) dividend was "probable," it sparked a question that I had to answer. Exactly how many Apple shares would one have to own for an Apple dividend to pay for an Apple product or related service? To find the answer, a few inputs and assumptions were needed to compose the chart displayed a few paragraphs down.

    The first question to answer was what is the dividend per share that Apple might distribute? Bloomberg is estimating that Apple may pay a $2 per share dividend based off peer group dividend distribution rates in the tech sector. To further put this number in perspective, TechNewsWorld reported this quote in their story on the potential Apple dividend:

    "A $2 quarterly dividend is about a 1.5 percent dividend yield, so it's within range of companies like Microsoft (Nasdaq: MSFT, HP (NYSE: HPQ or IBM (IBM)," Yaniv Grinstein, professor of finance at Cornell University, told MacNewsWorld.
    While this seems reasonable, there is an argument that Apple may only pay a large one time distribution to shareholders in order to retain future flexibility. Accordingly, my assumptions will use a conservative one time dividend distribution of $2 per share. Any additional Apple distributions will just be a matter of multiplication.

    Secondly, the pricing of the products and services needed to be gathered. Fortunately, the Apple store provided all the pricing data on products and third party services cited. In addition, where appropriate, I outlined specific characteristics to identify the device or service. Be advised that none of these prices include associated taxes or fees.

    Finally, it is important to note that Apple has indicated they are only considering a dividend. Thus my examination is 100% based on speculation, but for those who own Apple products or stock I am told this examination can still be considered fun.

    Addicted to Apple? A potential Apple dividend could pay your way.

    When reviewing this chart, I was reminded of a bit of history. In years past, utility stocks were often positioned to investors in a clever way: own enough shares in your utility company and the company's dividends will cover your utility bill. In essence the idea was a great combination of the adage, know what you own and why you own it. Could an Apple dividend create the same investment fervor propelling it to higher levels? Could the pitch, buy Apple stock and pay your iPhone bill, be far away? Only time will tell.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Christian Magoon wrote this article on a MacBook Pro.

    Mar 02 2:34 PM | Link | Comment!
  • India's Economic Concerns Leave Rates Unchanged, Worry Hits Stocks

    The Reserve Bank of India (RBI) has left interest rates unchanged for the first time since March of 2010 as reported by Bloomberg. The RBI had previously raised rates 13 consecutive times to combat inflation caused by close to double digit economic growth.

    Now it appears the risk has tilted away from inflation to a potential stalling in the Indian economy. Recent events including the plunge in the value of the rupee to all time lows, lower monthly food inflation numbers and data that showing industrial production is slowing in India likely caused the RBI to change their stance. “The need to improve business sentiments and recover the growth momentum in the remaining months of the current fiscal necessitated a review of the monetary policy stance,” Finance Minister Pranab Mukherjee said in an e-mailed statement to Bloomberg today.

    In market action both the rupee and India bonds rallied significantly, however Indian equities continued their downward slope as concern over India’s economic growth prospects weighed on investors. Indian markets are now very close to their 52 week lows. The two largest India ETFs, WisdomTree’s EPI and PowerShares PIN are down over 35% in 2011.

    Equity markets fell on worries over the economic health of India.



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Dec 16 5:53 PM | Link | Comment!
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