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David I. Templeton, CFA  

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  • Equity Risk Premium In A Rising Interest Rate Environment [View article]
    Rockstar,

    I think the unknown variable is what is the "true" risk free rate." Has the Fed artificially forced this rate down to a level that is below what the rate should actually be? If the the rate were at a level that is equivalent to its long run average, what would your required rate of return equal? Dr. Damodaran of NYU notes:

    "The danger, though, is that the US T.Bond rate is not only at a historic low but that it may be too low, relative to its intrinsic level, based upon expected inflation and expected real growth (a topic for another blog post coming soon). If you believe that the T.Bond rate is too low, then you have the possibility that you are in the midst of a Fed-induced market bubble(s) and that script never has a good ending. The scary part is that there are no obvious safe havens: gold and silver have had a good run but don’t seem like a bargain and central banks around the world seem to be following the Fed’s script of low interest rates. You could use derivatives to buy short term insurance against a market collapse but, given that you are not alone in your fears about the market, you will pay a hefty price."

    The entire post is a good read.

    http://tinyurl.com/kt2...

    David
    Jul 28, 2015. 08:10 PM | 1 Like Like |Link to Comment
  • Share Buyback Investment Strategy Beginning To Underperform Broader Market [View article]
    open...,

    Thanks for your comment.

    I did review the RSI for both the S&P and PKW. The RSI in the 2007 -2009 time period you noted began the period at a level above 70. However, the RSI for the S&P and PKW is around 50. This would suggest both the S&P and PKE have not necessarily peaked. The bottom chart in the below link is the RSI for the S&P 500 Index.

    http://bit.ly/1daCVFi

    David
    Jun 1, 2015. 07:12 PM | Likes Like |Link to Comment
  • Divergent Performance Between Transports And Industrials Likely Not Indicating Broader Economic Weakness [View article]
    Avol,

    Expectations are it will take several, if not more, months to clear the backlog. A large number of items left stranded on vessels either rotted and or became obsolete and not ultimately transported. Holiday orders for some products are not needed by retailers. Additionally, many shipping vessels have been delayed in making their round trip; thus, delaying what would be normal import volume at the moment.

    Just some initial observations.
    May 29, 2015. 04:11 PM | Likes Like |Link to Comment
  • Anemic Economic Growth Since The Great Recession And Some Causes [View article]
    David de los Angeles,

    Apologize for not responding sooner to your comment. It has been a busy week on our end. I do appreciate you comments and links. From the data I review, taxes on corporate income have indeed increased on both an absolute dollar basis and as a percentage of GDP. Below are links to two charts noting these increases.

    http://bit.ly/1Ebiuhq

    http://bit.ly/1EbisGn

    David
    May 16, 2015. 09:17 AM | Likes Like |Link to Comment
  • Higher Yield And Value Oriented Strategies Underperforming Broader Market [View article]
    Dave,

    I will see if I can get the exact calculation in the outside program we use. I know it is taking price and yield and linking the returns for a total return calculation. I believe this implies reinvestment. I am not sure what compounding period is being used, i.e., monthly, quarterly, etc. Give me the weekend to see if I can come up with the compounding/linking period.

    Thanks,
    David
    Apr 23, 2015. 09:27 PM | Likes Like |Link to Comment
  • Higher Yield And Value Oriented Strategies Underperforming Broader Market [View article]
    Dave,

    Below is a link showing total return for each ETF. The change in performance order is the dividend ETF (SDY) slightly outperforms the S&P 500 Value ETF (IVE). Both Value and dividend focused investments still under-perform the Growth ETF and the S&P 500 Index. I hope you find this helpful.

    http://bit.ly/1KaIDSZ

    David
    Apr 23, 2015. 08:38 PM | 1 Like Like |Link to Comment
  • Higher Yield And Value Oriented Strategies Underperforming Broader Market [View article]
    Dave,

    The returns are price only.

    David
    Apr 23, 2015. 05:31 PM | Likes Like |Link to Comment
  • Emerging Markets Not Out Of The Woods Yet [View article]
    The TW$ does include emerging currencies. Below is a link to relatively current weights.

    http://1.usa.gov/1aCDo1R

    Some emerging economies do benefit from a stronger dollar, but mainly through lower imported oil costs. Many emerging economies have debt denominated in Dollars and the stronger Dollar makes it more costly for emerging countries to service the debt in Dollars. There is more at play here; however, broadly, a strong Dollar is a negative for most emerging economies.

    David
    Apr 11, 2015. 03:44 PM | Likes Like |Link to Comment
  • How To Profit From An Increase In Oil Prices When It Occurs [View article]
    drftr,

    Below is a link to the charts for 2009-2010 and the year 2014. XLE does outperform over the years you inquired about. Again, the shape of the future curve is important in the ultimate performance of USO.

    http://bit.ly/1vcEA5S

    David
    Jan 29, 2015. 11:03 PM | 1 Like Like |Link to Comment
  • Shale Oil And Gas Production Projected To Increase In February [View article]
    Benni,

    First, thanks for your comment. I do believe fracking technology will continue to improve (refracking) that will drive down the cost of extracting hydrocarbons in the various shale formations and provide access to additional energy resources within formally capped frack wells. To me a longer term issue is the decline rate for fracking fields and wells and the well life extension resulting from this newer technology. In the short run (over next several years?) this technology is likely to keep pressure on supply growth.

    David
    Jan 21, 2015. 03:21 PM | Likes Like |Link to Comment
  • Strong Rebound In Third Quarter 2014 Buybacks [View article]
    pumpkins3,

    All data points are quarterly period figures and not cumulative.

    David
    Jan 1, 2015. 11:08 AM | Likes Like |Link to Comment
  • Is The Recent Market Decline Really A Rout? [View article]
    Deepv,

    I appreciate your commenting on the article. We do not believe the sky is falling as you noted in your earlier comment. As we noted in the opening of our article,

    "These dramatic headlines can cause investors to lose sight of the real market action, and more importantly, the potential direction of the market as one looks ahead. I would not argue with the fact that one market sector has "tumbled," the energy sector. Other than the energy and telecom sector, investors have enjoyed respectable returns to date in 2014. Also, the S&P 500 Index remains up 11.8% in 2014 through today's close. This double digit return is on top of the 32+% return for the S&P 500 Index in 2013."

    We believe investors must take a longer view of market/economy as the hour to hour gyrations can lead investors to make incorrect conclusions about the long term market direction.

    David
    Dec 11, 2014. 10:10 AM | 1 Like Like |Link to Comment
  • Dividend Payers Return Trailing Non-Payers Through November [View article]
    adaireag,
    The return for the payers and non payers is the average return, i.e. not cap weighted. The index is capitalization weighted.

    David
    Dec 9, 2014. 08:06 PM | Likes Like |Link to Comment
  • Shareholder Yield Investment Approach: The Best Of Both Worlds - Dividend Payers And Buyback Companies [View article]
    As noted in the S&P white paper (page 9), the Shareholder Yield portfolio contains a subset of both the buyback and dividend yield portfolio. The Shareholder Yield portfolio does not simply combine the buyback and dividend yield strategies.
    Dec 1, 2014. 11:17 AM | Likes Like |Link to Comment
  • Shareholder Yield Investment Approach: The Best Of Both Worlds - Dividend Payers And Buyback Companies [View article]
    jgrever621: Thanks for your comment.

    The article's intent was to show that investing in companies that both pay a dividend (prefer a growing one) AND buyback their shares is a combination that results in an outperforming strategy. I obviously did not make this crystal clear in the article. This is S&P's shareholder yield portfolio in the first chart above. We have noted in prior comments on our blog that buybacks alone are least preferred compared to dividend growth stocks.

    http://bit.ly/12hk9qf

    David
    Nov 30, 2014. 11:00 AM | Likes Like |Link to Comment
COMMENTS STATS
147 Comments
77 Likes