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Jeffrey Dow Jones

 
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  • How Far The Gold Sell-Off Could Go, And Strategies That'll Save You [View article]
    As long as I can get more in the free market then... uh... no. :-)

    But if that offer still stands should the price hit $812, you know how to reach me!
    Apr 17 12:03 PM | 27 Likes Like |Link to Comment
  • The Only 20 Companies That Matter [View article]
    Thanks wigit5 and above commentors. Glad to hear you guys enjoyed the article. Sometimes we make this stuff too complicated.

    Though I confess there's a certain degree of irony in taking 3,000 words to make the point...
    Mar 27 08:17 AM | 14 Likes Like |Link to Comment
  • Reload Your Dividend Portfolio for a Yield-Boosting Strategy [View article]
    Thanks for the comment.

    I'll admit, Kraft is about as boring as they coming. I included it for exactly that reason -- buying it strictly for its dividend. People buy Treasuries for their dividends and I wanted to draw the explicit comparison to that.

    Would I rather own Kraft and its 3.8% yield than a 10-year and its 3.6% yield for the next decade? I'd kinda rather own Kraft. In a lot of ways I feel like it's lower risk. A company like that is better suited for an inflationary outcome than something like Treasury notes.
    Feb 14 05:24 PM | 12 Likes Like |Link to Comment
  • The Only 20 Companies That Matter [View article]
    After spending two hours writing the darn thing, I guess I wasn't willing to spend a couple more editing it down. :-)

    Maybe in version 3.0 of this article, which I'm sure we'll revisit around this time next year.
    Mar 27 03:56 PM | 9 Likes Like |Link to Comment
  • Reload Your Dividend Portfolio for a Yield-Boosting Strategy [View article]
    Hey, kudos for finding something that works for you and sticking to it.

    That's the real secret to investing success. It differs from investor to investor and personality to personality.
    Feb 14 05:25 PM | 9 Likes Like |Link to Comment
  • How Far The Gold Sell-Off Could Go, And Strategies That'll Save You [View article]
    I'd put the probably that gold touches $812 at maybe 20% within the next 24 months. It's low. Maybe even 10%, or like the guy in another comment said, it might never touch $800.

    I give gold a 50/50 chance at touching $1000 over the next 24 months.

    And, to think about that fair value of $812 another way, this model is suggesting a coming 10yr rate of return of around -1.7%/year for gold.

    I'd say there's a 95% probability that the actual rate of return for gold over the next 10 years winds up as -1.7% +/- 3%.

    Does that help?
    Apr 18 08:35 AM | 8 Likes Like |Link to Comment
  • The Only 20 Companies That Matter [View article]
    Also: Actual tax rates couldn't possibly matter less. Who cares if U.S. corporate taxes are the highest in the world.

    Effective tax rates are the thing that have economic impact. And right now, they're as favorable as they've been in a long, long time. (Maybe ever?)
    Mar 27 09:01 AM | 8 Likes Like |Link to Comment
  • The Only 20 Companies That Matter [View article]
    I'm not totally sure why profits are so high. I think low rates have something to do with it. Maybe Dollar strength too. Favorable regulatory policy? Perhaps. Low tax rates.

    Life is really awesome for big companies right now. It hasn't always been that way.
    Nov 10 06:33 PM | 8 Likes Like |Link to Comment
  • Maybe I'm Wrong - Justifying $2,000+ Gold [View article]
    I'm a huge fan of GDX.

    http://bit.ly/McwC74

    In fact, being long GDX over GLD might be one of my favorite trades right now.

    This is my game:

    1) I want to stimulate discussion and honestly see if there are some robust, rational counter-arguments to this type of model. SA is a good place for this, especially relative to the rest of the internet.
    2) I'm writing a book on gold and want to vet this thesis as best as a chump like me can.
    3) I want to drive traffic to my website and get people to sign up for my newsletter, and hopefully by discussing interesting topics in interesting ways I'll be able to do that.
    4) I get paid (peanuts) per click on this article. So the more traffic the better! Hopefully this one will pay for a nice dinner for me and my wife. :-)
    Jun 2 11:00 PM | 7 Likes Like |Link to Comment
  • Maybe I'm Wrong - Justifying $2,000+ Gold [View article]
    Very much! I think they're still trading at a discount to where they ought to be given the price of gold. I really like the idea of getting long the miners over gold. Over the long run, gold miners are much, MUCH better investments than gold.
    Jun 2 07:59 PM | 7 Likes Like |Link to Comment
  • Places To Hide When It All Goes Down [View article]
    This is a really interesting perspective. I've never really thought about investing this way. Once I've made an investment, it no longer matters to me what I paid for it; I stop caring about the past. What matters is whether it's the best position going forward.

    Every day each investment in the portfolio has to pass the test. It's sort of like "buying" the position anew every morning. If there's something better, a position with a better mix of future risk/return, I make the change. I guess you might call it a Darwinian approach to portfolio management.

    (Obviously, taxes can play a small role here too)
    May 14 08:02 AM | 7 Likes Like |Link to Comment
  • How Far The Gold Sell-Off Could Go, And Strategies That'll Save You [View article]
    If you're concerned about inflation or the Dollars in which gold is denominated, why not TIPS or real estate for such a hedge?
    Apr 17 12:14 PM | 7 Likes Like |Link to Comment
  • Places To Hide When It All Goes Down [View article]
    Yield on cost is fine, but what matters is yield on opportunity cost.

    Here's another way to look at it that increases your income and STILL preserves your unique perspective of "yield on cost":

    You had $35,000 in Nike. Now it's $100,000. The amount of dividend income you're currently receiving is much higher relative to yesterday's prices (obviously). NKE's yield of 1.3% -- $1,300/yr -- is a more impressive 3.7% when you link it to your original investment cost.

    But you could exchange that $100k of Nike for $100k of, I dunno, AT&T, and instead of getting $1,300/year you'd be getting $5,000 per year. Much more income!

    Keep in mind that your original "cost" -- $35k of Nike -- HASN'T CHANGED. You've simply changed positions. Your "yield on cost" after switching to AT&T is now a staggering 14.2%, isn't it?

    Obviously, one must consider taxes and transaction costs. But the unrealized gains on your NKE stock represent an unrealized tax liability. If you realize that liability by selling and switching to AT&T, it goes away. You'll pay taxes on that now or you'll pay taxes on it later. Or you'll die with Nike stock and somebody else will figure it out.

    Hopefully you were doing this in your IRA :-)
    May 14 12:49 PM | 6 Likes Like |Link to Comment
  • How Far The Gold Sell-Off Could Go, And Strategies That'll Save You [View article]
    The reason why ShadowStats gets laughed at by professionals is because it's not statistically rigorous. All they do is take CPI and add a constant to make it higher.

    ShadowStats Guy also doesn't publish any kind of "better" global inflation rate. But I suppose I could do that myself by taking the OECD's G20 CPI and then add my own arbitrary constant to reflect a higher rate.

    CRB/CCI are interesting indicators, but man, those things can really DEflate, too. Systemic inflation is in reality a much less volatile thing than that.

    I'm not so sure CPI is a terrible calculation. Yes, it's low, and we all think it's bunk because it didn't seem to reflect the huge increase in gas prices we saw between 2002 and 2008. Home prices, too. We all saw and felt those very visceral trends and then saw the 2-4% CPI and said "nuh uh." Over the long term, though, it's pretty good. Plus, there are a lot of goods & services in the economy that are deflationary. Lots of technology, for example.

    Another basis for inflation would be to look at median wages or median hourly wages. Those are the things that support systemic prices, anyway. (Long term wage inflation is pretty close to CPI too, though, I believe.)
    Apr 17 01:57 PM | 6 Likes Like |Link to Comment
  • The Only 20 Companies That Matter [View article]
    Good comment. I think that negative real rates have contributed a bit to profitability but not a ton. Yes, large companies can borrow money on the (record) cheap right. But there's a problem endemic with the market right now: there aren't enough good places to deploy capital. The demand side is still constrained.

    Do you think low borrowing costs are really helping Apple out right now? Google?

    It's difficult or impossible to quantify, but I think the interest rate environment right now is doing more to affect PSYCHOLOGY than operations. Investors don't have a choice, folks.

    Cash is a guarantee to lose value. Stocks aren't.
    Mar 27 08:22 AM | 6 Likes Like |Link to Comment
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