Why Intel Shares Might Be Headed Below $25 Again [View article]
Don't think you're gonna see $22.50 anytime soon, but hey, you never know, I've been wrong before! :-) The way the Asian markets and Australia are looking right now, tomorrow could be a stinker of a day on Wall Street....
Thanks, keeladog. You're right about the growth; I included those numbers in the table of data, but I didn't discuss them in any detail. I plan on writing a follow-up article (or make this a series) where I show how these Divas are doing in a quarter.
I don't know much about Windstream, Michael. My telecom background is in cellular, and I had a cellular slant to the telecom companies I chose to include in this analysis.
I would love to have positions in most or all of those companies you listed, but, alas, I have limited resources, and with my old broker I was constrained by their high commissions such that I really couldn't make a purchase (or sale) for anything less than $2,500 to $3,000, and that's a lot of scratch for me. Now that most of my tradable assets are out of there, I should be able to start more, smaller positions, but I don't want to have too many positions just from a managability standpoint. I mentioned JNJ in the article, and would like to eventually take up a position in them. I might pick Chevron (CVX) over Exxon-Mobile; I looked into both a while back and liked CVX better, and it is on my watchlist, and ranking very well using My Mad Method at #7 out of 30. I'd also probably take Proctor & Gamble (PG) over Colgate Palmolive, but they're both good. I'd also probably take Pepsi over Coke, as Coke's yield is a bit low for my personal goals. But, all good choices, thanks for your suggestion. Hopefully, over time as I accumulate more dividends from my current positions I'll be able to branch out into some of these "Aristocrats"...
Thanks for your comments. Please see my reply below about EXC. Seeking Alpha is reporting 3.9% on my portfolio page, but I just checked Google Finance and it shows 5.41%. Sorry for the error, but it's a "happy" error that they're actually higher than what I reported. :-)
Thank you, all good comments about EXC. I must admit I'm a little confused about them as well, as what I've received as notifications of their dividends and what I'm seeing on SA in my portfolio shows their yield at 3.9%, and that ties out with what I have in my spreadsheet. It had been higher, at the 5.5% level mentioned by several of you, but based on what I'd received (April), heard was coming (June) and read on SA, I went with the 3.9%. I'm very happy to be wrong about that and have it turn out to be 5.5%. (That would make it the Belle of the Ball out of these 5 Divas!)
Thanks for taking the time to read the article and post your comments...
LOL! Thanks for your comment. No, I don't think he'll go hungry, but I'm glad to have moved most of my positions out of that brokerage and into Interactive Brokers. I had to leave some of them over there because IB couldn't transfer them (tricksy foreign stocks), and as a group the remaining ones are actually doing very well, so for the time being I'll leave them there and continue to keep an eye on them. But, lesson learned: with a little bit of study and research, and the help of sites like Seeking Alpha, I've learned how to fend for myself and as a result I'm gonna save a huge amount on commissions from here on out...
"one would need a historical study to see whether this system of rating has produced a positive alpha in the past"
I plan on doing just that, Rookie, providing periodic articles on companies I've bought into based on this method and how well they perform over time. Good suggestion!
Thanks for your comments. Yes, it is a lot like Moneyballing (loved the movie).
I tried to keep the metrics in MMM to be "hard" numbers that I could back up with real data. I'm not sure if I could quantify the first two of your suggested additions, although I address the foreign tax situation below. If you can come up with a way of assigning a number to your "gut feelings", geo/political risk and/or the macro-economic picture, go ahead and add them to the other metrics, or replace one or two that you don't like as much, and please let us know how you do it (come up with a numerical value).
I didn't know about VOD's special dividend, but I wouldn't have included it in its Yield score unless it was something like National Presto that has become a consistent, annual event (although they dropped it a bit this year, but I'm still long NPK and will be adding more shares later in the year, as they've pulled back so far from folks being disappointed that their special dividend didn't meet their historical expectations).
FTE is pretty well diversified in the Middle East and Africa, but its base currency is the euro, this is true. I think I pointed out in the article that that's a risk, but telecommunications is becoming a global necessity for nearly everyone, on a personal level, and their wider presence across EMEA reduces the risk of something happening in France. Also, something I forgot to mention is that FTE is 50% owned by the French government (I think it's 50%), which gives them a modicum of protection in their value.
Didn't know about America Movil, but I started out the article intentionally limiting the US telecoms to T and VZ so that I could illustrate a broader world view and keep the number of stocks to evaluate to a reasonable number (10). Along those lines, I included CHL on purpose; it's one of those things you have to take into consideration after you've got your ranking, whether you think their growth possibilties make them a better candidate for purchasing than their actual score on MMM came out, similar to how I eliminated TEO.
How do you measure the performance of stocks during 2002 and 2008? Is the a metric that you derive, or a number of them? If so, you could include these in My Mad Method as new metrics and add them to the =AVERAGE() calculation used for the final ranking (or replace one or more of the existing metrics that I use, if you don't want to dilute the overall ranking too much). I hope that helps.
With regard to spreadsheets, I've found that the best way to learn is to jump in and get your hands dirty! I have a "sanitized" version of the My Mad Method spreadsheet that I've provided to about a dozen other readers who requested it when my first 2 articles came out last week. If you'd like a copy of that spreadsheet, then please send me a PM with your email address, and I'll get it off to you.
Thanks everyone for your great comments! You are absolutely correct about the foreign tax considerations, and I apologize for excluding that from the article. A couple of points along those lines:
- I invest primarily through my rollover IRA, so, as noted in other comments here, any dividends paid by a Canadian company do not have foreign taxes witheld. I don't have any UK investments, so wasn't aware that in this situation you would also not have to pay any foreign tax on dividends from VOD. That makes VOD more attractive.
- If you are using an IRA, then you CANNOT deduct any foreign tax paid on dividends because the IRS rule is (according to TurboTax) that you can't claim them if they wouldn't be subject to US tax law. In other words, because you're using an IRA you don't pay US tax on the dividends you receive, therefore you don't get a break on the foreign taxes that are paid out of your IRA for foreign dividends.
- If you invest in a taxable account, *it is my understanding* that you can claim a tax credit on the foreign tax paid on your US income taxes, however, I AM NOT A TAX PROFESSIONAL, I'm just going by my recent experience doing my own taxes using TurboTax (but it seems that gig49 said the same thing above).
-From what I can tell from my own records, Australia charges approximately 9.37% tax on dividends, and German charges a whopping 26.37% tax on dividends.
Now, what I do using My Mad Method to help monitor my portfolio is that I subjtract the tax paid from the dividend when I calculate the yield of positions I hold, so that gets factored into their MMM score in my portfolio. What I suggest is, if you are considering a foreign stock and you find that you will be subject to tax on your dividends from that company's country, that you subtract the tax from the dividend when calculating the Yield, so that Yield gets ranked on its "net effect". I will amend MMM to do the same thing for foreign companies that I'm considering so that their Yields are more fairly ranked vis-a-vis the other stocks in the watchlist. Thinking out loud, I think this strategy would work best when you are investing through an IRA, as otherwise in a taxable account you will be subject to US tax rates on your US companyies' dividends, so that might be a net zero effect compared to foreign taxes. Up to you how you want to handle it in a taxable account.
Death and Taxes are inevitable, unfortunately, so, it's something we all need to live with and adjust our investing strategies accordingly. I insulate myself from US tax consequences on dividends received, I invest through a rollover IRA. Once I retire, depending on the tax structure in place then, I'll have to reconsider how much income I want to generate from dividend stocks.
Thanks again for all your comments, and for taking the time to read the article.
Dell (DELL) says its $999 XPS 13 ultrabook, launched to reviews that praised its looks but criticized its display, is receiving nearly "3x the expected demand," with interest coming from both enterprises and consumers. Intel (INTC) has to be pleased a pre-Ivy Bridge ultrabook is faring this well, given its huge investment. NAND flash memory vendors SNDK and MU also benefit from ultrabook adoption. [View news story]
Ex-div day is 5/3 (tomorrow for me here in MST, but technically today, I guess). Look for the sell off on Friday, would be my guess..
The Rebalancing Of The U.S. Coal And Natural Gas Industry [View article]
I wasn't talking about the LNG export facility, NonSurfer. I was talking about the reluctance to drill for oil or dig for (mine) coal or anything else that might disturb the pristine beauty of Alaska, even though the reason we (as a country) bought it from Russia was for its vast natural resources.
Why Intel Shares Might Be Headed Below $25 Again [View article]
5 Dividend Divas From My Portfolio [View article]
I agree; you just can't beat dividends!
Thanks for your comments!
My Mad Method: A Telecom Example [View article]
Anyone else have feedback/input on WIN?
5 Dividend Divas From My Portfolio [View article]
5 Dividend Divas From My Portfolio [View article]
5 Dividend Divas From My Portfolio [View article]
Thanks for taking the time to read the article and post your comments...
5 Dividend Divas From My Portfolio [View article]
My Mad Method: A Telecom Example [View article]
I plan on doing just that, Rookie, providing periodic articles on companies I've bought into based on this method and how well they perform over time. Good suggestion!
My Mad Method: A Telecom Example [View article]
I tried to keep the metrics in MMM to be "hard" numbers that I could back up with real data. I'm not sure if I could quantify the first two of your suggested additions, although I address the foreign tax situation below. If you can come up with a way of assigning a number to your "gut feelings", geo/political risk and/or the macro-economic picture, go ahead and add them to the other metrics, or replace one or two that you don't like as much, and please let us know how you do it (come up with a numerical value).
Thanks again!
My Mad Method: A Telecom Example [View article]
I didn't know about VOD's special dividend, but I wouldn't have included it in its Yield score unless it was something like National Presto that has become a consistent, annual event (although they dropped it a bit this year, but I'm still long NPK and will be adding more shares later in the year, as they've pulled back so far from folks being disappointed that their special dividend didn't meet their historical expectations).
FTE is pretty well diversified in the Middle East and Africa, but its base currency is the euro, this is true. I think I pointed out in the article that that's a risk, but telecommunications is becoming a global necessity for nearly everyone, on a personal level, and their wider presence across EMEA reduces the risk of something happening in France. Also, something I forgot to mention is that FTE is 50% owned by the French government (I think it's 50%), which gives them a modicum of protection in their value.
Didn't know about America Movil, but I started out the article intentionally limiting the US telecoms to T and VZ so that I could illustrate a broader world view and keep the number of stocks to evaluate to a reasonable number (10). Along those lines, I included CHL on purpose; it's one of those things you have to take into consideration after you've got your ranking, whether you think their growth possibilties make them a better candidate for purchasing than their actual score on MMM came out, similar to how I eliminated TEO.
Thanks again for your comments. Hope this helps!
My Mad Method: A Telecom Example [View article]
How do you measure the performance of stocks during 2002 and 2008? Is the a metric that you derive, or a number of them? If so, you could include these in My Mad Method as new metrics and add them to the =AVERAGE() calculation used for the final ranking (or replace one or more of the existing metrics that I use, if you don't want to dilute the overall ranking too much). I hope that helps.
With regard to spreadsheets, I've found that the best way to learn is to jump in and get your hands dirty! I have a "sanitized" version of the My Mad Method spreadsheet that I've provided to about a dozen other readers who requested it when my first 2 articles came out last week. If you'd like a copy of that spreadsheet, then please send me a PM with your email address, and I'll get it off to you.
Thanks again, and good luck!
My Mad Method: A Telecom Example [View article]
- I invest primarily through my rollover IRA, so, as noted in other comments here, any dividends paid by a Canadian company do not have foreign taxes witheld. I don't have any UK investments, so wasn't aware that in this situation you would also not have to pay any foreign tax on dividends from VOD. That makes VOD more attractive.
- If you are using an IRA, then you CANNOT deduct any foreign tax paid on dividends because the IRS rule is (according to TurboTax) that you can't claim them if they wouldn't be subject to US tax law. In other words, because you're using an IRA you don't pay US tax on the dividends you receive, therefore you don't get a break on the foreign taxes that are paid out of your IRA for foreign dividends.
- If you invest in a taxable account, *it is my understanding* that you can claim a tax credit on the foreign tax paid on your US income taxes, however, I AM NOT A TAX PROFESSIONAL, I'm just going by my recent experience doing my own taxes using TurboTax (but it seems that gig49 said the same thing above).
-From what I can tell from my own records, Australia charges approximately 9.37% tax on dividends, and German charges a whopping 26.37% tax on dividends.
Now, what I do using My Mad Method to help monitor my portfolio is that I subjtract the tax paid from the dividend when I calculate the yield of positions I hold, so that gets factored into their MMM score in my portfolio. What I suggest is, if you are considering a foreign stock and you find that you will be subject to tax on your dividends from that company's country, that you subtract the tax from the dividend when calculating the Yield, so that Yield gets ranked on its "net effect". I will amend MMM to do the same thing for foreign companies that I'm considering so that their Yields are more fairly ranked vis-a-vis the other stocks in the watchlist. Thinking out loud, I think this strategy would work best when you are investing through an IRA, as otherwise in a taxable account you will be subject to US tax rates on your US companyies' dividends, so that might be a net zero effect compared to foreign taxes. Up to you how you want to handle it in a taxable account.
Death and Taxes are inevitable, unfortunately, so, it's something we all need to live with and adjust our investing strategies accordingly. I insulate myself from US tax consequences on dividends received, I invest through a rollover IRA. Once I retire, depending on the tax structure in place then, I'll have to reconsider how much income I want to generate from dividend stocks.
Thanks again for all your comments, and for taking the time to read the article.
Dell (DELL) says its $999 XPS 13 ultrabook, launched to reviews that praised its looks but criticized its display, is receiving nearly "3x the expected demand," with interest coming from both enterprises and consumers. Intel (INTC) has to be pleased a pre-Ivy Bridge ultrabook is faring this well, given its huge investment. NAND flash memory vendors SNDK and MU also benefit from ultrabook adoption. [View news story]
The Rebalancing Of The U.S. Coal And Natural Gas Industry [View article]
I still don't see how including "LOL!" and a smiley face in my original reply indicates that I was pouting, but, whatever...
:-)
(Still not pouting...)
The Rebalancing Of The U.S. Coal And Natural Gas Industry [View article]
And I don't pout...
:-)