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  • GM: Trading on Bankruptcy Expectations [View article]
    I was reading the site of Motors Liquidation Company:


    There is the following message right when you open the site:


    Management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios. Stockholders of a company in chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, management strongly believes all such claims will not be fully satisfied, leading to its conclusion that the common stock will have no value."

    The only reason why I believed longer term puts (aka Sep or Dec 09) are the way to go bearish, is because I knew it would take time for the original GM stock to go worthless. Of course liquidations take time, so there's a chance that those longer dates puts could also expire worthless.

    On Jun 10 03:18 PM The Small Trader wrote:

    > This is the typical case where unexpected factors can kill a good
    > idea.
    > The author analysis was correct, GM finally filed Chapter 11, but
    > at the end there were too many June puts open. This was a great incentive
    > to MMs to manipulate the stock price and drive it above $1 untl expiration.
    > It is aroung $1.60 right now, and it looks that June $1 puts will
    > expire worthless.
    > The right move would have been to buy Jul $1 puts. The bankrup procedure
    > schedule probably will stop trading 6/24. Jun puts expires on 6/19,
    > so they'll become worthess just for 4 days. The perfect move would
    > have been a calendar spread, buying Jul puts and selling Jun puts.
    > I am losing some money with this trade, althought I bet properly
    > for the bankrup.
    Jul 10, 2009. 02:26 PM | Likes Like |Link to Comment
  • 10 ETFs, 5 Equities for Optimized Asset Allocation [View article]
    Nice article. I do hold some fixed income as well, striving to have at least a 25% allocation there.

    It is nice to see the fixed income allocation question from one perspective. Another perspective to look at is by analyzing fixed income allocation through the portfolio longevity and annual distributions from the portfolio lense. Some researchers have found that it doesn’t really matter if your fixed income allocation is 25% or 50% – your portfolio longevity is almost the same with both.
    Jul 8, 2009. 08:22 AM | 2 Likes Like |Link to Comment
  • 9 Stocks Giving Dividend Raises in Q209 [View article]
    I second OldTrader on MFA. The dividend yield is fat at 14.70%, but the payment has fluctuated greatly between 0.32 in 2002 to 0.05 in 2005/2006.

    On Jul 05 11:20 AM Old Trader wrote:

    > In regards to MFA, I'd be leery of anything that has anything to
    > do with mortgage-backed paper, given current economic conditions
    > (both residential, as well as commercial).
    Jul 6, 2009. 11:18 AM | 1 Like Like |Link to Comment
  • Ten Top Principles of Dividend Investing [View article]

    Your list is a great starting point for any novice or knowledgeable dividend investor. It always pays to be reminded of the core principles of any dividend strategy.

    Keep up the good work!

    Dividend Growth Investor
    Jul 6, 2009. 05:10 AM | 5 Likes Like |Link to Comment
  • Comparing Stability of Dividends and Stock Prices over Time [View article]

    Check this post on SeekingAlpha for an S&P 500 dividend index:

    And here's some dividend information on the SPY ( the ETF that tracks the S&P 500 index). The amounts below show the ex-dividend dates ( source Yahoo finance). Looks like the dividends overall are down, but not that much.

    19-Jun-09 $ 0.518 Dividend
    20-Mar-09 $ 0.561 Dividend
    19-Dec-08 $ 0.719 Dividend
    19-Sep-08 $ 0.691 Dividend
    20-Jun-08 $ 0.669 Dividend
    20-Mar-08 $ 0.642 Dividend
    21-Dec-07 $ 0.775 Dividend
    21-Sep-07 $ 0.719 Dividend
    15-Jun-07 $ 0.656 Dividend
    16-Mar-07 $ 0.551 Dividend
    15-Sep-06 $ 0.579 Dividend
    16-Jun-06 $ 0.555 Dividend
    17-Mar-06 $ 0.519 Dividend
    16-Dec-05 $ 0.672 Dividend
    16-Sep-05 $ 0.522 Dividend
    17-Jun-05 $ 0.488 Dividend
    18-Mar-05 $ 0.467 Dividend
    17-Dec-04 $ 0.568 Dividend
    15-Nov-04 $ 0.351 Dividend
    17-Sep-04 $ 0.469 Dividend
    18-Jun-04 $ 0.414 Dividend
    19-Mar-04 $ 0.395 Dividend
    19-Dec-03 $ 0.516 Dividend
    19-Sep-03 $ 0.40 Dividend
    20-Jun-03 $ 0.36 Dividend
    21-Mar-03 $ 0.354 Dividend
    20-Dec-02 $ 0.436 Dividend
    20-Sep-02 $ 0.378 Dividend
    21-Jun-02 $ 0.353 Dividend
    15-Mar-02 $ 0.331 Dividend
    21-Sep-01 $ 0.37 Dividend
    15-Jun-01 $ 0.346 Dividend
    16-Mar-01 $ 0.316 Dividend
    15-Dec-00 $ 0.36 Dividend
    15-Sep-00 $ 0.375 Dividend
    16-Jun-00 $ 0.348 Dividend
    17-Mar-00 $ 0.371 Dividend
    Jul 4, 2009. 12:19 PM | 1 Like Like |Link to Comment
  • 4 Dividend Stocks for 2009: Q2 Update [View article]
    The contest is purely educational Dave. I would most certainly have the four stocks picked next year as well if we decided to hold the competition again.

    The competition has shown some interesting results however which confirm my earlier research- during a bear market dividend stocks fall less than the market or other riskier stocks. The dividend gives some support and investors are less likely to sell.
    When markets hit a bottom, the riskiest stocks shoot up to the moon mainly due to short covering. Dividend stocks trail in the initial stages of the rally, but after it is exhausted the next round of bullish support for the markets come from the quality companies. I think that now is still a good time to initiate positions in the four stocks above.

    Last but not least, the list shows a benchmark for investors to check if I am worth following or not. While dividend investing is a long term process, there usually are minor setbacks which could result to investors panicking and selling out at the worst possible moment. A quarterly review of investment performance is helpful in that it lets you write down your strategy and keep sticking to it through good and bad periods.

    On Jul 03 08:27 AM David Van Knapp wrote:

    > What kind of a contest is it that doesn't include dividend returns
    > in the total returns for scoring? Entering dividend stocks in a short-term
    > price-only contest is never going to win. Dividend strategies take
    > years to play out. This makes no more sense than judging baseball
    > players on the results of Home Run Derby, or NBA players on the results
    > of the dunking contest.
    Jul 3, 2009. 01:19 PM | Likes Like |Link to Comment
  • 4 Dividend Stocks for 2009: Q2 Update [View article]
    Not necessarily. I hold about 38 stocks in my portfolio and I wouldn't call myself rich. If you have a $25,000 portfolio you can easily get several free trades/month at places like Zecco.

    While it sounds easier to be risky with $10,000 than with $100,000, since I am in the early stages of the accumulation game I don't want to lose it all by reckless concentration in 10-15 stocks.

    On Jul 03 12:26 AM bolt turner wrote:

    > if you have 30 stocks in your portfolio you already rich - you just
    > need to keep your money
    > if you got less than 25k in the market you cant spread out like that
    > - you have to be ready to lock in some gains and rotate and then
    > spread out
    Jul 3, 2009. 01:11 PM | 1 Like Like |Link to Comment
  • European Dividend Trends [View article]
    I second L4D, that the charts could also be showing out the absolute dividend payments as opposed to merely showing dividend yields. For example if a stock is trading at $100 and pays a $10 annual dividend it yields 10%. Investors looking for retirement income would be buying this stock for the dividend yield. If the stock went down to $50 and the dividend was cut to $5/share, the dividend yield is still 10%, but the person who bought at $100 is actually making only 5% off his/her original investment...
    Jul 2, 2009. 10:39 AM | 2 Likes Like |Link to Comment
  • 6 High Yielding Companies Boosting Distributions [View article]
    I actually mutliplied the latest distribution by 4. I doubt that AGNC would maintain a 1.50 dividend/quarter, since I believe 1/5th of that was a one time gain.

    On Jun 30 01:05 AM THofler wrote:

    > I took AGNC's just declared dividend & added it to the last 3
    > paid dividends. Today's (Monday) yield is 19.2%. Huge, but not quite
    > as crazy as 25.4%.
    Jun 30, 2009. 01:09 PM | 1 Like Like |Link to Comment
  • 6 High Yielding Companies Boosting Distributions [View article]

    I was mainly complaining against the volatility in dividends and their not being smooth. PSEC has a pretty smooth and non-volatile dividend payment. HTS and AGNC do not have a long enough history of paying out a distribution, but based off the data I have, it is volatile. It's true that REITs and BDC have to pay out almost all of their earnings. But if the earnings and their cash flows are volatile, then your dividend income form them would be subject to volatility, right?
    Some investors are fine with that, as the high current yield provides some buffer. I personally like companies with a smooth and steady dividend stream. It makes my budgeting much easier.
    Jun 30, 2009. 01:03 PM | 1 Like Like |Link to Comment
  • Realty Income: Excellent Dividend Growth REIT [View article]
    Realty Income is one of my positions in my dividend growth portfolio. Another REIT i own with a similar business model is NNN.
    Jun 29, 2009. 11:13 AM | 5 Likes Like |Link to Comment
  • Why Buy and Hold Is a Dreadful Mistake [View article]
    If you added the effect of reinvested dividends on the investment in S&P 500 at the end of 1996, a $1000 investment would have turned into something like 1510, excluding taxes and commissions.
    The SPY ended 1996 at 73.84 and has thrown out $22.30 in dividend income since then.

    Buy and hold does work. Most of the people who try to "time" the market are always on the lookout for bear markets, and most often they miss out on the bull runs.

    Another fact to miss is that an investment in a properly diversified mix consisting of US large, mid and small caps plus some international stocks plus some domestic and international bonds could have done a little better than the S&P 500 over the past 12 years. Isn't that what most passive investors purchase in their diversified portfolio mix?
    In addition to that, chances are that few investors ever entered their whole positions all at once - chances are they bought stocks/mutual funds etc over time..
    Jun 28, 2009. 11:07 AM | Likes Like |Link to Comment
  • Four Inflation Hedging Investment Strategies [View article]
    The best inflation hedge available to investors is common stocks. Stock represent small portions of real businesses which buy and sell stuff/services to consumers. If a business sells a hot dog at $1 and it costs $0.50 to produce it, then it earns $0.50/hotdog. If inflation happens, a hot dog could sell for $2 and it could cost $1 to produce. At the same time the liabilities ( debt, accounts payable) of the business would be worth less, while its fixed assets would be worth more.
    Jun 26, 2009. 05:01 AM | 6 Likes Like |Link to Comment
  • Eli Lilly: Dividend Stock Analysis [View article]

    I am not saying that Lilly is going down. Just that the market is pricing some sort of information that some of us fundamentalists might not have an idea about. Could be that the stock was overpriced 10 years ago, and is a bargain now, I would know when EPS hits $4 for 2009.


    Since the EPS were negative in 2008, the Dividend Payout Ratio was going to be negative, but I didn't wanted it to be. It wouldnt' have added much value to distort the dividend payout ratio graph further.
    Jun 22, 2009. 02:13 PM | 1 Like Like |Link to Comment
  • The 30 Best U.S. Traded International Dividend Stocks [View article]
    That's because the company hasn't increased dividends regularly for the past 5 years.
    Jun 12, 2009. 02:48 PM | 1 Like Like |Link to Comment