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Eric Parnell, CFA  

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  • Elevate My Market [View article]
    Hello alexscagileri,

    Thanks for your comment and I could not agree with you more on your comment about corrections. Not only are corrections healthy, so too are recessions. For when the economy and financial markets are deterred from the ability to work off unnecessary excess and correct for the misallocation of capital, it only leads to a worse problem down the road as these problems are instead left to fester and grow. Had policy makers allowed the natural business cycle to play out over the last three decades with more oversight/ guidance and less direct intervention, episodes like the tech bubble, the financial crisis and whatever market historians will refer to the next event coming down over the next few years would likely have either not occurred or been far more muted than they actually ended up being.

    Great comment. Thanks again.
    Feb 25, 2015. 08:26 PM | 4 Likes Like |Link to Comment
  • What, Me Worry? [View article]
    Hello jimal,

    Thanks for your comment and your point is well taken. This is one of the reasons why technicals are so important at this stage of the bull market. Investors cannot afford to be complacent and need to have an exit strategy at the ready. And such an exit strategy cannot be simply selling everything into the first downdraft. Instead, I believe it is focusing on stocks that have shown the historical ability to hold up well during the very early stages of a new bear market. Even oil gave investors the opportunity to get out at the end of August and again at the end of September, but investors must act decisively when the technical alarms are ringing. For to your point, once the selling gets fully underway, things can get ugly very fast.

    Thanks again.
    Feb 19, 2015. 02:30 PM | 2 Likes Like |Link to Comment
  • What, Me Worry? [View article]
    Hello Michael,

    Thanks for your comment and great point as always. You are right that Europe appears to be the investment du mois following on the heels of Treasuries in January. It will be interesting to see what flavor March brings.

    Thanks again!
    Feb 19, 2015. 02:23 PM | Likes Like |Link to Comment
  • What, Me Worry? [View article]
    rz2013 - Thanks for your comment!
    Feb 19, 2015. 02:21 PM | Likes Like |Link to Comment
  • What, Me Worry? [View article]
    Thanks gapwedge. I appreciate it!
    Feb 19, 2015. 02:20 PM | Likes Like |Link to Comment
  • What, Me Worry? [View article]
    Hello Strike,

    Thanks for your comment and great points. And I completely agree that 2015 is setting up to be an increasingly volatile and sideways moving market, which can provide for some good opportunities along the way.

    Great point. Thanks again.
    Feb 19, 2015. 02:19 PM | 1 Like Like |Link to Comment
  • What, Me Worry? [View article]
    Hello Ted,

    Thanks as always for your comment and for sharing your insights and perspectives. I appreciate it.

    I also wanted to mention referencing back to a comment from a previous article that I have enjoyed reading your recent articles including the one from a few weeks ago on economic data ringing the bell at the top.

    http://seekingalpha.co...

    Thanks again!
    Feb 19, 2015. 02:17 PM | 2 Likes Like |Link to Comment
  • What, Me Worry? [View article]
    Hello JoeNextDoor,

    Thanks for your comment and I agree. Technicals are particularly important at this stage, particularly given the deterioration in fundamentals. It will be interesting to see how events play out from here in the coming months, particularly with European QE coming on line soon.

    Thanks again.
    Feb 19, 2015. 02:14 PM | 1 Like Like |Link to Comment
  • What, Me Worry? [View article]
    Hello Alpha Man,

    Thanks for your comment and great question. I have been long-term bearish going all the way back to January 2007. But I have had numerous extended periods of being short-term to intermediate-term bullish along the way. And perhaps more importantly, whether I am bullish or bearish at any given point in time does not necessarily dictate my asset allocation, for as the old saying goes, one needs to invest in the market they have, not the one that they think they ought to be. As a result, I have been allocated to stocks nearly all of the entire period from January 2007 and am actually currently overweight to stocks at the moment despite my bearishness. For as I've mentioned in past articles, until the U.S. stock market provides a definitive signal that it is time to move to an underweight position in stocks, it remains prudent to stay long and participate while keeping a close watch on downside risks along the way. Once the ball gets rolling down hill to the downside, things could definitely get ugly. But until then, this market remains determined to move to the upside and investors should seek to participate on both up and down sides.

    Hopefully this makes sense. Thanks again for your question.
    Feb 19, 2015. 02:12 PM | 1 Like Like |Link to Comment
  • What, Me Worry? [View article]
    Hello Thomas,

    Thanks for your comment and for your question. The data source that I used was the data provided by S&P.

    Thanks again!
    Feb 19, 2015. 02:03 PM | 1 Like Like |Link to Comment
  • A Cautionary Tale For Dividend Growth Investors [View article]
    Hello Adam,

    Thank you for your comment. The points that you've made here are at the heart of the points that I was hoping to make with my article. You've said it a lot better in your comment than I did in the article!

    Thanks again.
    Feb 13, 2015. 09:32 AM | 3 Likes Like |Link to Comment
  • A Cautionary Tale For Dividend Growth Investors [View article]
    Hello Land of Milk and Honey,

    Thank you for your comment and you make a number of excellent points. I would only add the following. A continuous assessment of valuation is important in the process. I've noticed that while many on SA are seasoned and experienced dividend growth investors, some are new to the process and have yet to endure a sustained market downturn where 30% or more of their principal value from some previous peak has been wiped away. While stating that they buy into the discipline now is one thing, but it is much harder for many to stick with when the value of their investment is falling seemingly with no end in sight. Thus, an assessment of valuation can help provide some downside protection while also enhancing the long-term returns of one's DGI strategy. After all, it is difficult to argue that a negative real return including dividends over a 17 year period of time the optimal choice for any portfolio even if the dividends are growing along the way. Presumably, monitoring valuations in KO at the time might have led some to reallocate to better alternatives than simply ignoring price and staying the course ever since.

    Great points and thanks again.
    Feb 13, 2015. 09:10 AM | Likes Like |Link to Comment
  • A Cautionary Tale For Dividend Growth Investors [View article]
    Hello Dividend Growth Jedi,

    Thanks for your comment and for raising a good point. The article is not intended to be a buy on the day argument as you suggest. Instead, it is a "for anyone that was holding Coca-Cola as a dividend growth investment in 1998. For if you were a holder at the time, you had the opportunity to make a decision - do I continue to hold KO at its high valuation simply because the dividend is growing, or do I sell and reallocate to another company with growing dividends that better fit the investment criteria. For those that opted to continue holding the name simply because the dividend was growing have experienced a negative real return on their investment including dividends over the near two decades that have followed since that time. One could argue that maintaining a watch on valuations and deciding to sell at the time would have offered one the opportunity to reallocate to a better returning opportunity in the years since.

    To your point, if a dividend growth investors would not have considered buying Coca-Cola at such premium valuations in July 1998, why then should an existing dividend growth investor that held Coca-Cola at the time in July 1998 continue to hold it.

    This point matters today because many stocks find themselves trading at premium historical valuations. As a result, a periodic reevaluation of valuations in one's DGI accounts is a worthwhile exercise.

    Thanks again for your comment.
    Feb 13, 2015. 08:55 AM | 1 Like Like |Link to Comment
  • A Cautionary Tale For Dividend Growth Investors [View article]
    Hello Nathan,

    Thanks for your excellent comment. I agree with most all of the points that you've raised here. The only point that I would emphasize is that valuation should be continuously assessed throughout the holding period to help identify when executing on such points of sale would be prudent.

    Many in the comment section have highlighted the point that KO would not have met their DGI purchase criteria due to its overvaluation. Viewed differently, this would imply that many existing holders of KO for its dividend growth should have been at least evaluating the potential sale of their position for these same reasons. The fact that KO has provided these investors with a negative real return including dividends over the nearly two decades that followed highlights why such an evaluation would have been prudent at the time.

    My primary reason for raising this point in the article today is that valuations for many stocks in today's market are currently at a premium with some particularly stretched as Mike Nadel and others have highlighted in their comments below.

    Thanks again Nathan. Excellent comment and many good points.
    Feb 13, 2015. 08:45 AM | 7 Likes Like |Link to Comment
  • A Cautionary Tale For Dividend Growth Investors [View article]
    Hello Brad,

    Thanks for your comment and for raising a number of good points. The point of my article here is not to suggest anything about KO today, as I am not of the opinion that it is necessarily overvalued and likely to return back lower. Instead, I would contend KO is more fairly valued than many other stocks in the market today.

    Instead, the underlying point of my article is the following: if you were either a buyer (unlikely as many have highlighted in their comments because of the high valuation and low yield) or more importantly a long-term owner of KO prior to July 1998, you have seen a decline in the real value of your investment including dividends in the 17 years since. While some dividend growth investors have a very long time horizon and great patience and discipline, collecting all of the growing dividends along the way has likely not compensated most investors for their wait over this near two decade long time period.

    This, of course, gets to the point that you and so many others in the comment section have reinforced. Dividend growth investing is not simply a strategy where one simply buys dividend growth stocks and puts them away in a drawer forever. Instead, it should include an ongoing valuation assessment of the various positions in a portfolio at any given point in time. For if a position becomes vastly overvalued as Coca-Cola did in 1998, investors may be left with investments that disappoint in the years that follow and may be better served to consider switching to other opportunities that better fit the DGI criteria at any given point in time.

    Thanks again for your comment and for raising some excellent points. I appreciate it!
    Feb 13, 2015. 08:11 AM | 11 Likes Like |Link to Comment
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