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Kurtis Hemmerling

 
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  • High-Yielding Dividend Growth Strategy For Any Market [View article]
    I don't include taxes because they are different for everyone are vary wildly. I don't see too many articles that factor in taxes - its pretty much assumed you do that yourself.

    What else do you want to know? There are many discount brokers that offer $3 to $5 stock trades. 10 stocks every three months is $120 to $200 in fees max. Typically only 3 or 4 stocks are rebalance making this $36 to $80 per year. Slippage is minimal on these large-cap and very liquid stocks.

    What exactly do you want to for numbers that will have a serious impact on this specific model? I'd be happy to provide.
    May 22, 2012. 11:56 AM | 2 Likes Like |Link to Comment
  • A Successful Healthcare Basket-Trading Strategy [View article]
    Creating new investment models is a hobby but also my profession. I exclusively license my models to firms. I create other models which I allow other investors to examine who are non-members.

    My personal investments are inconsequential to your decision making process. I don't expect a sea captain to have designed the engine that powers the boat. Don't let what 'everyone else is doing' with their money influence your decisions. It creates herd mentality and poor returns.

    You are welcome not to invest in this model. This portfolio has doubled market returns over the past 3.5 months. Note that this scan picks up many small companies all with upgraded earnings. If analysts (those with so-called skin in the game) see a short-term upside, this will usually translate into stronger gains over a narrow trading window rather than betting against them over the well-known Medicare issue that has actually helped create value by keeping nervous investors away.
    Apr 5, 2012. 10:56 AM | 2 Likes Like |Link to Comment
  • Amazon Has No Room For Error At This Price [View article]
    Earnings can be misleading. Money spent in R&D or CAPEX may not yield immediate rewards. Amazons aggressive hardware price gouging is killing earnings short-term. The bigger picture for me is quarterly revenue growth (year over year) and between years. They can play the margin game later once they are well positioned.
    Mar 23, 2012. 10:19 AM | 2 Likes Like |Link to Comment
  • Amazon Has No Room For Error At This Price [View article]
    I think Amazons earnings are irrelevant at this point. They are saturating the market with product and will start to milk consumers through what you get on your Kindle Fire and other devices. Just wait for the 'fire sale' stage to be subsumed by online sales with wider profit margins in a couple years. They are making a higher risk move by offering the Fire basically at cost but I think the potential payoff is massive.
    Mar 23, 2012. 08:30 AM | 2 Likes Like |Link to Comment
  • My Defensive Dividend Strategy That Still Beats The Market [View article]
    Worth someone looking into. I don't smoke and thus do not promote tobacco companies. My own ethical investing belief system. They may very well have excellent returns for investors though.
    Mar 12, 2012. 01:31 PM | 2 Likes Like |Link to Comment
  • Little Known Dividend Stock That Could Double In 2012 [View article]
    Agreed. They just started a dividend and for reasons listed in article there should be some pretty big price growth over the next 6 - 12 months. Once earnings accelerate and price jumps to factor in growth things might calm down but much of the alpha will already be out. Make no mistake - a super tiny cap stock but a value play with huge upside nonetheless. Definitely not a stock for those liking larger cap slow moving income stocks.
    Mar 2, 2012. 06:40 PM | 2 Likes Like |Link to Comment
  • Proposed Dividend Tax Is As Uninformed As It Is Naive [View article]
    oops. Living in Canada and didn't realize your capital gains rate is so high. Ours is half of income tax rate.
    Mar 1, 2012. 01:05 PM | 2 Likes Like |Link to Comment
  • Proposed Dividend Tax Is As Uninformed As It Is Naive [View article]
    Share prices fall on ex-dividend date by the amount of the dividend paid. Sell the day before ex-dividend and buy it back the next morning. You'll have to pay capital gain tax of course but will gross just as much as those playing the dividend - you will just be getting it in the form of share price gains minus big tax.
    Mar 1, 2012. 12:16 PM | 2 Likes Like |Link to Comment
  • Are Dividends Irrelevant, Or Even Harmful? [View article]
    Agreed that historically bonds have delivered with income only investors. However, with low bond yields that are completely consumed (and then some) by inflation that is now around 3.5% - some are looking for higher yielding products. The FEDS commitment to long-term low interest rates will weigh heavy on bonds. Carefully picking sound dividend stocks is one way to create a value-based income product by knocking down the P/E ratio which gives more valuation stability and support than growth stocks - especially since lower P/E means more yield unless prices go up... either way its good.

    But when bond yields start to go up above inflation rates, it'll be time to re-look at which is best based on risk factors.
    Jan 16, 2012. 10:49 AM | 2 Likes Like |Link to Comment
  • Spain Must Address Low Labor Productivity To Resume Economic Growth [View article]
    I liked this article as all too often the 'run of the mill' treatment is to focus fiscal and not social issues. Whether everyone here agrees with you or not I generally prefer the honest viewpoint of someone living and working in the country than some financial advisor living in the US who reads reports and doesn't understand the cultural differences. Keep up the good work.
    Jan 3, 2012. 07:09 AM | 2 Likes Like |Link to Comment
  • Dividends And Stock Buybacks: Mutually Exclusive Or Interrelated? [View article]
    Buybacks can add a layer of coverup for excessive company options being handed out. Managers like buybacks since it keeps share prices propped up in the short-term. If a company chose to pay dividends this would negatively impact their company option premiums as they are negatively related to future dividends.

    I think buybacks CAN be okay provided no dilution is going on behind the scenes. But most often you have executives announcing a buyback, watching share prices jump, exercising options and selling into the hype - just to watch prices settle with a similar outstanding share pool a meager gain by long-term shareholders.

    In altrusitic theory it seems good. But I wonder how much extra earnings growth or excess net asset growth per share is really acheived in the real world over the long-term versus not doing it (factoring in the incentives of managers associated with executive options).
    Dec 16, 2011. 02:51 PM | 2 Likes Like |Link to Comment
  • Don't Get Trapped By Stocks Under $5 [View article]
    I always enjoy reading your work Rocco. Interestingly, the 2004 paper "Why Do Share Price Levels Matter? Investor Clientèles, Monitoring and Firm Performance" agrees with much of what you are saying. Why should price matter if we use market cap or EV? It does.

    *Retail investors are the biggest buyers of sub $5 stocks
    *Institutional investors generally prefer above $5 stocks
    *Higher quality companies will offer their IPOs, or will split to, higher dollar levels to target institutions who typically investigate deeper
    *Higher priced IPOs and stocks that split to higher price levels generally out-perform those that use lower levels.

    They use IPO and splitting prices as those are the two times that management has control over their share prices (but not market cap).

    That being said, I do think that a careful investor can target great value in the sub $5 stock minefield - but you better be real good at targeting strong candidates by looking for things such as high insider ownership where management cares about share prices, and other fundamentals while going the extra distance on due diligence.

    Good work Rocco. A good investor will often be unpopular as you lead the trend - which means you are in disagreement with the mass. Those that take the popular opinion and jump on trends after they are most obvious will suffer the most.
    Oct 5, 2011. 08:45 AM | 2 Likes Like |Link to Comment
  • The Income Investing Strategy That Boosted A Dividend By 500% [View article]
    I'll definitely do another piece soon that will consider your 3rd point. Valid points for 1 and 2 - noted. Thanks for commenting.
    Sep 7, 2011. 11:26 AM | 2 Likes Like |Link to Comment
  • Here's How To Get Sustainable 7% Dividend Yields When Markets Crash [View article]
    The idea is not to ignore capital gains and losses. When a good company that increases dividends every year has a temporary spike in yields due to a crashing market - this is often the best time to buy as you are most likely to gain from a long-term locked in dividend and long-term capital appreciation.

    When yields are high due to a broad market sell-off, this is a far better time to buy than an extended bull market where you lock-in with low yields and a much higher chance of long-term capital loss. It is actually the best of both worlds provided you have sturdy stocks with a solid earning track record.

    Overvalued blue chips = low dividend yields and higher risk of capital loss.

    Look back to the markets when solid stocks that paid 3-5% dividend yields suddenly had a spike to 6-7%+ due to falling share prices provided it was from mass market selling and not one stock dying in a bull market due to bad fundamentals. Chances are, in 1 to 2 years the capital gains were also significant as investors pushed prices back up to where yields settled in at long term averages of 3-5% again.

    It is a way of getting a great yield combined with a simple market timing model for long-term investors. Buffett does something similar using long-term P/E averages in falling markets. If you are playing swings from month to month - I suggest not doing so on income stocks.
    Aug 28, 2011. 10:55 PM | 2 Likes Like |Link to Comment
  • Here's How To Get Sustainable 7% Dividend Yields When Markets Crash [View article]
    Forgive me please as I am on vacation across the country visiting family. This is a down and dirty scan using only stocks in the S&P 500 which averaged yields over 5%, 2 years ago. The current yields are over 3% to prevent dividends being suspended.

    50 companies make the list. Granted, I used 5% "average" as 2009 had some massive highs as well that would dilute the yield. The price lows should have reached 7% dividend yields plus in many of the cases.

    The stocks on the list include MO, AEE, AEP, T, BMY, CNP, CTL, CINF, ED, D, DTE, DUK, DD, LLY, FTR, GE, HCP, HCN, HCBK, TEG, KIM, LEG, LO, MTB, MWV, MRK, MCHP, GAS, NI, NYX, OKE, POM, PFE, PM, PNW, PBI, PCL, PGN, PLD, RRD, RAI, SCG, SO, SE, TE, VTR, VZ, VNO, WIN, XEL.

    Some on the list may have fell a bit shy of 7% and others may not be suitable companies that fit into the 'good' category. I'd have to hand-check these first before saying for sure. Still, only filtering through 500 stocks gives you a lot of potential candidates where locking in at high yields would help you sleep at night with a somewhat secure annual payout - while others are taking nitroglycerin pills for their heart.
    Aug 24, 2011. 01:51 PM | 2 Likes Like |Link to Comment
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