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  • Navios: Not For Novices, But The Dividends Are Safe [View article]

    A 24% yield simply means the stock market is pricing in a drastic dividend cut (or worse). Either the stock market is dead wrong, or the CEO's repeated statement that the dividend is secure through 2016 is wrong. Take your pick.
    Aug 27, 2015. 04:08 PM | Likes Like |Link to Comment
  • Navios: Not For Novices, But The Dividends Are Safe [View article]
    I bought another 1k worth myself. They're making enough now with India to offset the China slowdown, and I think the market is selling NMM simply because it's dropping and there is rampant investor terror. Sort of my favorite time to buy.
    Aug 27, 2015. 07:26 AM | 1 Like Like |Link to Comment
  • Navios: Not For Novices, But The Dividends Are Safe [View article]
    The market may know something the rating agencies don't. Wouldn't be the first time, right?
    Actually, Navios has a huge slog of bonds falling due in 2018. That concentration of maturities coming up in the not too distant future would have me worried if Navios was shut out of the capital markets at the time and couldn't roll the debt. The issue I see is that it is sort of vicious cycle. The stock goes down, and the door to raising equity shuts, and that makes the bonds riskier from a rollover perspective since there's one less avenue open to the company to raise capital, the bonds sell off, and that drives down the stock price. That sort of dynamic is tough to trade with a larger company, but NMM volumes are low enough that a trader with a large enough book could run something like that. For a while at least. At some point, the assets are too cheap and you can get a short rally that will put a swift and expensive end to the bond short/ stock short trade. I wouldn't care to bet on when or if that will happen.
    I own the stock, and will continue to do so. I don't see it as a safe investment or a safe trade. I'm willing to ride it down to zero, but if you're looking for safety, maybe look elsewhere.
    Aug 26, 2015. 07:09 AM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: The Start Of Something Big? [View article]
    My plan remains unchanged: spend less than I earn, invest the savings into dividend paying companies with stable earnings, collect more income next month so I have more savings to invest. Repeat cycle for 50 years or until I die. The condition of the stock market has NOTHING to do with my plan. The only reason I even bother looking at the stock market ever is to find the best priced deal I can find at the time. I virtually NEVER check the net worth of my portfolio - I just tabulate the expected dividend income, subtract my expected living expenses and consider the difference between the two to be what I'm worth. That number pretty much only goes up, slowly, to be sure, but consistently up. That number actually goes up FASTER when markets are crashing.
    I haven't lost sleep over stock market crashes and corrections since 2007, when I finally honed my investment plan down to what I have described above. I'm quite vague on whether I've outperformed or underperformed the S&P500 in terms of my portfolio price (doesn't help that I have no idea what it is), but my income has grown far quicker than the rate of dividend appreciation for the S&P500. That 's largely a function of buying stalwart companies that other investors are desperate to sell at rock bottom prices.
    I enjoy reading Jeff's articles, but in truth, the information is fairly useless in terms of my approach. I generally place just one trade per month - once my bills are paid and dividends have all come through. In between those trade days, I read quarterly reports, articles, Fed publications, and more or less whatever other information I have time to digest. 90% of everything I read has no direct bearing on what I will invest in at the end of the month. Why do I read it? I love it. I don't care if it's directly applicable, but if it helps me think clearer, it's well worth my time.
    So, on that note, thanks again Jeff for a great article.
    Aug 24, 2015. 03:57 AM | 4 Likes Like |Link to Comment
  • This Dividend Stock Yields Over 12%, Has 70% Cash Flow Growth, And Will Raise Its Next Dividend [View article]
    I've discovered liquid deserts here. Ginja is a cherry liquor. They pour it into small cups made of chocolate. Very nice after a sardine and pata negra feast.
    Aug 23, 2015. 02:02 PM | 1 Like Like |Link to Comment
  • This Dividend Stock Yields Over 12%, Has 70% Cash Flow Growth, And Will Raise Its Next Dividend [View article]
    I live on the Iberian peninsula, where it's all about sardines, octopus, olives and various forms of dried cured piggy. Haven't quite graduated up to deserts yet - unless the desert happens to be made of any one or more of the foregoing ingredients. I think the chocolate around here is supposed to be good, so once I break free of my mollusk and porcine shell and branch out into what the locals refer to as "sobremessas", rest assured, the similes will concommitantly broaden out. Particularly where energy firms are concerned (midstreem MLPs, here I come), as those little morsels are turning out to comprise my entire investment diet these days.

    Curious, is it Milbank as in the law firm of Milbank Tweed?
    Aug 23, 2015. 04:38 AM | 1 Like Like |Link to Comment
  • Get Your Smart Beta Here! Dividend Growth Stocks As 'Strategic Beta' Investments [View article]
    I think Buffet is pretty well convinced that Superinvestment opportunities are not easily accessible to those with enormous sums to invest. Most Superinvestment game is the sort that you take out with BB guns, rather than elephant guns, and it's not economic for Buffett sized pools of capital to use BB guns.
    Buffett has also commented that for most investors, S&P500 investments make sense, but the reason is not because Superinvestment opportunities no longer exist. It's because he believes (correctly) that most investors are focused on stock prices, rather than earnings. Buffett desires investments in companies with growing earnings and crashing stock prices, and his investment behavior reflects that. By contrast, most investors recoil at the notion of stagnant or dropping stock prices, and simply don't have the temperament to pursue a value-oriented strategy such as the one Graham and Dodd taught. That's not a repudiation of his earlier Superinvestors speach, but more of a recognition that 99.999999% of investors care more about stock prices than they do about earnings. To Buffett, that means the best you can do if you're like 99.99999% of investors is keep your fees and costs down - hence the low cost S&P500 fund.
    Aug 22, 2015. 06:22 PM | 6 Likes Like |Link to Comment
  • This Dividend Stock Yields Over 12%, Has 70% Cash Flow Growth, And Will Raise Its Next Dividend [View article]
    Not long enough track record for me. I invest in energy related names, but with a view that there will be waves of bankruptcies in the not-too-distant future. Years ago, the Saudis flooded the market with oil to try and shake out the weak hands, and the price dropped from $30 to $10. The impact on new, small, untested energy firms was nothing short of utter carnage. The same could and probably will happen this time around too - I have simply no idea. Am I betting on a rapid bounce back to $100 oil? I mean, why would I?
    Because there will probably be carnage, it means that whichever firms are left standing at the trough once the slaughter has passed are going to become very big fat piggies indeed. If you are as bearish as I am on energy, you'd see this is an ideal time to start looking for the biggest, meanest, nastiest piggies at the trough now, since they're probably going to start eating the less big, less nasty, less mean pigs. You can certaintly look for some scrawny little runts that will blossom into 1000 pound pigs once all the other hogs have been hauled off to the smoke house, leaving a wondrous, steaming trough all open and ripe for the taking.

    The question is, how do you pick the good runts? You want firms that have some massive cost advantages, a huge moat around their businesses such as locked in profits secured by long-term leases, very low debt, and proven, battle hardened management teams. So, does KNOP sound like that sort of a runt? I leave that to others to decide, but I will be taking a pass on that opportunity.
    Aug 22, 2015. 06:08 PM | 11 Likes Like |Link to Comment
  • Bargain Hunting At The Mercado [View instapost]
    That would be cool. I don't know if I'll be with the whole gang, or on my own. I don't even have any definite schedule. If it looks like I'll make it over to Paris in the Fall, I'll send you a message via SeekingAlpha, though.
    Aug 22, 2015. 05:54 PM | 1 Like Like |Link to Comment
  • Get Your Smart Beta Here! Dividend Growth Stocks As 'Strategic Beta' Investments [View article]
    A more concise question, David. Suppose you plan to buy and sell widgits. You can decide between buying and selling widgits that have a completely stable price, or buying and selling widgits that have a price that moves by 50% up or down at random, every minute. You have a 50/50 chance of getting a bargain when you buy, and a 50/50 chance of taking a loss when you sell. Why don't the two cancel out? How is the expected return with the stable priced widgits different from the expected return in the volatile price widgits? When it comes to buying and selling widgits, volatility has ZERO impact on your expected return, right? How is it any different with buying and selling stocks?
    Aug 22, 2015. 05:52 PM | 1 Like Like |Link to Comment
  • Get Your Smart Beta Here! Dividend Growth Stocks As 'Strategic Beta' Investments [View article]
    This is one of the most concise histories of finance I've read in a long time. I'd put it up there with Nigel Fergussen's The History of Money.

    One question for David: I don't understand why stock price volatility is viewed as a synonym for "risk". If you own stock, what you own is a piece of a business, and what it pays you are earnings. Accordingly, why wouldn't "risk" mean "the earnings are volatile?"
    It almost seems like the academics think volatile stock prices are somehow bad (which might explain why they're referred to as "risky" rather than "rife with opportunity"). This baffles me. If you told me that the price of shoes at Walmart was stable and only went up, but the price for the same shoes at Sears was volatile and could break to the downside any second, I'd shop for sneakers at Sears without so much as a second thought. I mean, Fama and Markowitz wouldn't? If volatile sneaker prices that can crash at any second is GREAT NEWS for for consumers - why aren't stocks with volatile prices better for investors than stocks with stable prices?
    Aug 22, 2015. 05:06 PM | 6 Likes Like |Link to Comment
  • Portuguese Lessons Today [View instapost]
    I copied the following definition off IRS.GOV. Search "ROTH IRA qualified distributions" and you will find the following:

    "It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and
    The payment or distribution is:
    Made on or after the date you reach age 59½,
    Made because you are disabled (defined earlier),
    Made to a beneficiary or to your estate after your death, or
    One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit).

    There is a fairly comprehensive discussion of ROTH IRAs on the IRS homesite. Do you have a specific question, or are you just looking for general information about ROTHs?
    Aug 22, 2015. 03:52 PM | Likes Like |Link to Comment
  • Portuguese Lessons Today [View instapost]
    Quite a connundrum, Fast Track. Let me see, 3% plus regulatory headaches, missed or late rent checks, and calls in the middle of the night from tenants who can't figure out how to change lightbulbs, or getting paid 7% and 10% while you sleep. Hmmm.
    About 10% of our portfolio income comes from REITs. I tend to favor triple net lease REITs - the income and operating costs are contractually fixed, making the earnings as predictable as the tides. All the depreciation expense ends up shielding tremendous amounts of capital that the REIT can use to fund further acquisitions, which provides plenty of room for income growth above and beyond the escalation clauses in most of the lease agreements. The long term leases also limit competition - for example, a hospital won't break a lease, pack and move to another location simply because a different landlord is willing to offer a sweetheart deal.
    REITs pay no income tax as you know, but shareholders do. That is, unless the shareholder happens to hold the REIT shares in a ROTH IRA. Obviously I don't know and can't advise you on your tax situation (I don't even know if you're a US taxpayer), but the strategy has been useful for me, particularly since I'd own REITs regardless of the tax advantages they can offer.
    Aug 22, 2015. 12:27 PM | Likes Like |Link to Comment
  • Bargain Hunting At The Mercado [View instapost]
    That mindset certainly helps reverse feelings of fear, or the sensation that you better sell before it's too late. I think it can help you make better investment decisions - dividend investors like me tend to be attracted to stable businesses with exceptional and very long track records of success, and we also tend to be attracted to shares of such companies that are trading at a relatively low valuation. I suspect it's a safer way to invest.
    Our life is less predictable and stable than daily life on the golf course. I love what we're doing, but not being able to figure out how to do even the most basic tasks can be a challenge. The language barrier is enormous, too - Portuguese really is not the same as Spanish or French, so my and my wife's language abilities are not helpful to us here. Our days are not predictable, to say the least. Personally, I enjoy that, but it's not a lifestyle everyone would be comfortable with. That said, things in Portugal can be so inexpensive that you can live a very, very comfortable life here on a fraction of what it costs in a typical US city.
    Aug 22, 2015. 12:11 PM | 1 Like Like |Link to Comment
  • Bargain Hunting At The Mercado [View instapost]
    I'll jot those down in my to-do list. I plan to take a trip to Paris this Fall, and it sounds like those are two sites I need to see.
    Aug 22, 2015. 11:58 AM | Likes Like |Link to Comment