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Eric Parnell, CFA  

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  • 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 | 12 Likes Like |Link to Comment
  • Gold Is In A Bull Market And Stocks Are In A Bear Market [View article]
    Hello whowho77,

    Thanks for your comment. I appreciate it. And you raise the excellent counterpoint to the stock/gold secular debate, which is the possibility that the secular bear market in stocks and secular bull market in gold ended in March 2009. This is definitely a possibility and only time will tell if this is indeed the case. But a secular market cycle at roughly 9 years would be very short by historical standards. Moreover, stocks have typically arrived at the end of secular bear markets following three major corrections and with valuations that have fallen into the 5x to 12x earnings range. To date, we have only seen two major corrections and valuations were never allowed to fall to this level thanks in part to the policy support provided in recent years. But with that said, the last few years have shown that new historical precedents are being created with each passing year.

    Great points. Thanks again!
    Feb 6, 2015. 11:21 AM | 1 Like Like |Link to Comment
  • Gold Is In A Bull Market And Stocks Are In A Bear Market [View article]
    Hello cfetrader,

    Thanks for your comment and for sharing these charts. These are very informative. And your point about central bank action is also excellent, as this remains one of the most important points to watch as we move forward in today's markets.

    Thanks again!
    Feb 6, 2015. 06:22 AM | 1 Like Like |Link to Comment
  • Gold Is In A Bull Market And Stocks Are In A Bear Market [View article]
    Hello Thomas,

    Thanks for your comment. You raise some excellent points here. I agree that central banks remain bullish for stocks despite the Fed stepping away. Central bank action remains as the primary downside risk for anyone that is bearish on stocks, and these are risks that cannot be overstated for those that are even considering shorting stocks right now.

    As for the impact of these QE programs, U.S. stocks have been flat since December 18 when the final asset purchases came through the system from the Fed's QE3 program. And while Japan continues to purchase assets, the net impact of the program both on U.S. and Japanese stocks has been largely neutral to this point over the course of the program (not unlike the influences of Operation Twist I and II out of the U.S. a few years back).

    As for central banks buying stocks, this is an important point worth monitoring, although it is notable that the Bank of Japan has been both using QE and buying stocks for years with mixed results at best. In the end, just as Treasury purchases by the Fed did not necessarily lead to rising Treasury prices, central bank stock purchases only help at the margin. For if private investors decide to reallocate capital elsewhere, there's only so much demand that central banks can create to offset this change in the tides.

    These are all great points that are worth monitoring going forward. Thanks again.
    Feb 6, 2015. 06:20 AM | 1 Like Like |Link to Comment
  • Gold Is In A Bull Market And Stocks Are In A Bear Market [View article]
    Hello Alex,

    Thanks for your comment and for your perspective. I think you make a number of good points here including your conclusion, as another major leg lower is very possible before it's all said and done.

    While he has been gone from SA over the last few months, Avi Gilburt continues to do good work in tracking the precious metals. The following is a link from Tuesday for those that are interested.

    http://on.mktw.net/16E...

    Thanks again.
    Feb 6, 2015. 06:13 AM | 1 Like Like |Link to Comment
  • Gold Is In A Bull Market And Stocks Are In A Bear Market [View article]
    Hello Arthur,

    Thanks for your comment and for sharing your perspective and strategy in the current market. I appreciate it. And I do not disagree that stocks have the potential to continue to rise in the months and years ahead. But given that current valuations largely discount much of the economic growth we are likely to see in the coming quarters, it is my view that the risk-reward profile for stocks are more neutral and even biased to the downside looking ahead over the next couple of years. Of course, central bank action going forward will play a big part in the final outcome. It will be interesting to see.

    Thanks again.
    Feb 6, 2015. 05:29 AM | 4 Likes Like |Link to Comment
  • Gold Is In A Bull Market And Stocks Are In A Bear Market [View article]
    Hello mkemac,

    Thanks for your comment. I appreciate your perspective, but I always think it is notable how so many investors have scorn for gold. Given that so many asset classes exists that offer an attractive potential rate of return over time, I would actually contend that stocks get so much more disproportionate coverage relative to everything else. It's not that I don't like stocks. In fact, it is my favorite asset class. But incorporating a view on all asset classes can be very useful from an information standpoint.

    Thanks again for your perspective. I appreciate it.
    Feb 6, 2015. 05:26 AM | 4 Likes Like |Link to Comment
  • Gold Is In A Bull Market And Stocks Are In A Bear Market [View article]
    Hello Strike,

    Thanks for your comment. I appreciate it, as it actually proves the point that I was trying to make with the article, as I would contend that you are right with your points just as I continue to stand by my own conclusions. It's not a matter of one needing to have their eyes tested, but instead opening themselves up to see different vantage points on a capital marketplace that becomes far too dominated by near-term thinking and extrapolating the trends of the last few years forward.

    And you are right that all of these stock markets are higher on a nominal basis, but given that we are theoretically investing our money in order to at least maintain our long-term purchasing power, I would contend that outperforming inflation and focusing on real returns is more important. And by the DJIA, Russell and S&P measures that you've cited here, gold is up +384% since 2000 on a nominal basis over the same time period, which gets to my point about why it is in a bull market while stocks are in a bear market.

    My intent with this article is not to bash stocks and promote gold. Instead, it is to observe that both go through extended secular phases that tend to trend opposite of one another and since 2000 the forces continue to favor gold. With that said, perhaps we are at the beginning of a new secular phase, but history suggests that this is unlikely. It will be interesting to see.

    Thanks again for your comment.
    Feb 6, 2015. 05:22 AM | 6 Likes Like |Link to Comment
  • Gold Is In A Bull Market And Stocks Are In A Bear Market [View article]
    Hello Michael,

    Thanks as always for your comment and thanks for sharing your latest Instablog post. I agree that gold has not yet bottomed. Perhaps sometime over the next few months as it appears to have rolled over from recent highs and is prepared to once again test the $1130 to $1180 range. New lows also would not be a surprise, as a stronger dollar and a Fed that seems eager to notch a few rate hikes this year is bearish for gold in the short-term, although it is notable that the dollar and gold have been moving with positive correlation so far in 2015. It will be interesting to see how it all plays out, but in the meantime I remain on the sidelines with any gold allocation.

    Thanks again Michael. Hope you are doing well.
    Feb 6, 2015. 05:10 AM | 3 Likes Like |Link to Comment
  • Time To Consider Regional Banks [View article]
    Hello Seth,

    Thanks for your comment. Just to confirm, is this FNB Bancorp out in the San Francisco area or FNB Corporation out north of Pittsburgh near Youngstown, OH? Interested to take a look.

    Thanks again.
    Feb 2, 2015. 03:14 PM | Likes Like |Link to Comment
  • Time To Consider Regional Banks [View article]
    Thanks Matthew - I appreciate it. What names in particular are you finding interesting? Thanks again.
    Feb 2, 2015. 03:11 PM | 1 Like Like |Link to Comment
  • The Bull In Winter [View article]
    Hello cfetrader,

    Thanks for this great comment and extensive chart set. I appreciate your sharing this information on this article and I look forward to exploring this chart listing based on your recommendations. Excellent information.

    Thanks again
    Feb 1, 2015. 05:41 AM | 1 Like Like |Link to Comment
  • The Bull In Winter [View article]
    Hello Rseye - Thanks for your comment. As for the US dollar, while recent bear markets have been generally dollar bullish, the recent spike in the dollar may have already discounted some of this move. I expect increased global currency volatility as well along the way too.

    Thanks again!
    Feb 1, 2015. 05:40 AM | Likes Like |Link to Comment
  • The Black Cloud Still Looms Large [View article]
    Hello Alex,

    Thanks for your comment and I agree. Assets will be on sale for those that have the cash to put to work at the end of the day. But to your point, I do not think we are close to fire sale prices at this time. Perhaps later in 2015 depending on how much lower oil prices go and how long they stay there. It should be interesting to see.

    Thanks again.
    Jan 28, 2015. 01:57 PM | 2 Likes Like |Link to Comment
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