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  • A Look at Utilities: Con Edison vs. Aqua America [View article]
    Corrected version below:

    Greetings Jarco,

    Generally I try to avoid using fundamental analysis. My hope is that if someone can be made aware of a quality company at the right time then the fundamental analysis can be done by the individual. Additionally, my view on the fundamental analysis is going to be much different than someone else so I try to take an unconventional look at the different characteristics of a particular company.

    Another issue that is of concern to me is seeking the best alternatives. I did not issue a research recommendation on consolidated Edison at the March low because the alternatives were too alluring. On March 10 (dividendinc.blogspot.c...), I issued a research recommendation on Helmerich & Payne (HP). HP has increased its dividend for over 20 years in a row as a high quality oil drilling company. The upside potential presented on March 10 indicated that HP was a better alternative than Consolidated Edison. Additionally, on March 26 (dividendinc.blogspot.c...) , I issued a research recommendation on Meridian Biosciences (VIVO). VIVO has raised the dividend for 16 years in a row and has increased in price by 60% since the March recommendation. Naturally both stocks are Dividend Achievers and have performed well in the past, which is the basis for following them currently.

    Again, I try to avoid expounding on fundamental analysis since everybody has their own take on the matter. However, I try to give a different view that might not be part of the consideration of "generally high quality companies." Finally, I am stuck on making my investment decisions based on what the alternatives are. Once I have determined what the best alternatives are, I then apply fundamental analysis and try to take action.

    I hope this gives perspective on my investment approach.

    On Nov 30 07:15 PM jarco wrote:

    > The comment bashing the author is unfortunate and clearly "out of
    > line'. Having said that, however, much of the article, and a few
    > comments as well, are not based upon fundamentals rather stock price
    > lows, behaviors, etc.
    > ED presents a unique niche; namely, little or nor exposure to Cap
    > and Trade or any other pollution/environmental issue. Pretty cut
    > and dried; buy competitively (pseudo) generated power and sell the
    > distribution at a guaranteed return rate. Safety and secure with
    > a very nice dividend. Houston based CNP is similar but weaker financial
    > metrics.
    > Natural Gas utilities such as EGN carry risks associated with alternative
    > (albeit primary) energy sources. Competition; variable demands further
    > brought by weather, etc. Investors interested in safety should consider
    > reliable cash flows driven by necessity. Its like a mandatory drug
    > from a single source supplier.
    Dec 1, 2009. 10:36 AM | 1 Like Like |Link to Comment
  • Monsanto: Within Striking Distance [View article]
    Dow Theory is based on the writings of Charles H. Dow (founder WSJ and Dow Industrial and Dow Transport Index) as interpreted by S.A. Nelson, William Peter Hamilton (editor WSJ), Robert Rhea, E. George Schaefer, and Richard Russell.

    The Dow Theory observes that stocks will retrace 1/3, 2/3, or 3/3 of a increase or decline of a previous movement. However, unlike the manner in which you mentioned that you use Fibonacci numbers, Dow Theorists wait until the turn takes place before calculating the upside and downside targets. Obviously, both methods are more art than science and therefore are only worth what you get out of them.

    I suspect that those who apply upside target to a falling stock or index aren't appreciating the value of the current declining trend. When a stock is falling, I calculate the downside targets. When a stock is rising, to be cautious, I calculate the downside targets. The upside always takes care of itself.

    There is a lot more on the topic of Dow's Theory on my blog at dividendinc.blogspot.c.... I think that you'll appreciate the fact that while Fibonacci numbers reflect nature, Dow Theory reflects the nature of markets specifically. I think that the most effective use of Fibonacciss is when they are applied to the Wave Principle.

    On Nov 04 10:36 AM manuel wrote:

    > Relative Strenght Index is also around 20, a verY Good entrY point,
    > sorrY can you explain me how you came up with the 4 levels mentioned
    > above, is it some kind of fibonacci? But fibonacci retraces highs
    > with actual lows, not past lows with past highs......
    Nov 4, 2009. 12:15 PM | 1 Like Like |Link to Comment
  • 10 Dividend Stocks to Buy Now [View article]
    Greetings Jrham,

    I'm going on the data provided to me by Mergent's Dividend Achievers Summer edition 2009.


    On Oct 10 12:39 PM jrham wrote:

    > I noticed you indicated that WMT has paid a dividend for 33 years.
    > When did Sam Walton take Walmart public? I see to recall it was 1972.
    Oct 10, 2009. 01:20 PM | 1 Like Like |Link to Comment
  • It's Time to Sell Equities and Look to These 3 Areas [View article]
    Greetings Mr. Harrison,

    Gold only rose during the "great" depression because governments had gold propped at a fixed rate. If governments didn't have the gold standard then the price would have fallen like all other commodities.

    This also explains why gold fell from $1000 to $850 in 2008 and gold stocks fell, as reflected in the XAU index, from the level of 200 to 63 in 2008.

    Although this fact may seem like blasphemy to gold bugs the reality should be acknowledge. I say this despite that fact that I have owned gold and silver bullion since 1996.

    On Sep 18 08:56 AM Edward Harrison wrote:

    > One other thing. There has been no correlation between inflation
    > and gold over the past twenty-five years.
    > While inflation is generally thought to be an inflationary hedge,
    > it is also a safe haven when there is currency revulsion. During
    > the Depression, gold rose while deflation was everywhere.
    Sep 22, 2009. 01:10 PM | 1 Like Like |Link to Comment
  • Fannie and Freddie: Sticking it to the Taxpayers [View article]
    Greetings Pecede,

    I appreciate your thoughts and hope that I didn't imply that the consumer was maliciously trying to get as much out of the bank as possible. Just that, if given the opportunity, consumers would take as much as possible and try to manage it as much as best he or she can until things improve.

    What I wanted to do was to point out that the terms conditions and consequences of contracts were not fully understood by the consumers. If the terms and consequences were fully understood then I think the consumer would would pause before entering into a contract. The beauty is that the consumer would pause. That is enough to get some to shop around or rethink if they're capable of handling taking on such a transaction as buying a home or anything else for that matter.

    Again, I don't think honesty, or the lack thereof, is the problem. The real problems appears to be that most Americans (not all) who enter into contracts aren't aware of the ramifications once signed. Since it is a large part of our democracy (starting with the declaration of independence), if the importance and consequences of contracts were taught in school then I think that we'd be making some progress.

    Thanks again,


    On Sep 06 05:28 PM pecede wrote:

    > Dividend,
    > Your reply states two things which concern me, 1, When going to a
    > bank "All consumers will ask for the max $ " and 2, "Banks should
    > be held to higher standards." I agree Banks have failed us miserably
    > with lack of due diligence, greed based decision making and flagrant
    > disrespect for the taxpayer and consumer alike.
    > However "All consumers" do not approach banks with larceny in their
    > hearts and are not out to squeeze every last penny they can and damn
    > the torpedoes! The gold "Standard" we need to remember is 'honesty
    > for all and by all.' More than likely there are still a few honest
    > people walking around this country, or am I being naive? If someone
    > came up to me and offered a mortgage of 8 times my annual earnings
    > I would be tempted but instinctively know that I would end up paying
    > the piper at some point in the future as would my family and all
    > the people I love and care for. I agree there are many consumers
    > who were misled by the banks and the Government and essentially are
    > in trouble now because of it and I am truly sorry for them, but there
    > are many, who walked into their bank with untrue and blatantly false
    > claims of net worth, earnings etc. and are now receiving my money
    > to adjust or basically bale them out of their folly.
    > To repeat, in this dangerous world it is incumbent for us to be meticulously
    > honest as consumers and also do the due diligence on both sides of
    > the equation. Caveat emptor has been the consumers rule for hundreds
    > of years now, why should it change?
    > Once again thanks for your article.
    > BTW, I wonder if honesty could be taught in our schools sometime
    > in the future?
    Sep 6, 2009. 06:56 PM | 1 Like Like |Link to Comment
  • 5 Dividend Stocks for Those that Missed the Rally [View article]
    Greetings DD,

    I think that your insights on GD's method are solid and strike to the core of why dividend investing isn't about giving up growth and capital appreciation. GD's approach sounds similar to Geraldine Weiss' Dividends Don't Lie book. Thanks.

    On Aug 21 05:06 PM Dividend Disciple wrote:

    > In response, I quote another dividend enthusiast. Greg Donaldson
    > writes at risingdividendinvestin... in a March 16th post titled,
    > In the long run, Price Follows Dividends--Part II:
    > "If a company is giving its shareholders their fair cut of the profits,
    > it should show up in the stock price. The stock market is a pricing
    > machine. The more transparent a company is with their dividend policy,
    > the more accurately the market will price their stock."
    > and later..."Dividends not only contribute directly to investment
    > returns because they are real money, but they also have predictive
    > powers for stock price appreciation, as well." See also the Table
    > with Greg's article.
    > So if I understand Greg correctly, if you're doing adequate research
    > and investing in only the best of breed dividend stocks, price appreciation
    > should follow.
    > Thus, if you follow a sound dividend growth're already
    > keeping your eye on price appreciation. They are interwined, not
    > separate philosophies. In theory, if I buy a great dividend stock,
    > the price appreciation should be trending higher, and if it dips,
    > then I should buy more.
    > YoYoMa--I think your point is one in the same with David's. In order
    > to be "satisfied with the yield," as David says, then you have to
    > have done your homework on the current and future expectations of
    > the price. No one can call bottoms, so if the price is trending
    > down, but the fundamentals are there, maybe you are initiating a
    > position, will add on dips, and can expect, as Greg says, long term
    > price appreciation to follow expected dividend growth.
    > Enjoy reading each of you and would love to hear thoughts.
    > -DD
    > On Aug 21 08:43 AM YoYoMama wrote:
    Aug 23, 2009. 02:48 AM | 1 Like Like |Link to Comment
  • Choose Phillip Morris, Not Altria [View article]

    I guess I have debated the merits of these two companies for a very long time. My only conclusion seems to be that it isn't which company but at what price. MO was/is the low hanging fruit for government revenue generation.

    When other nations jump on the same bandwagon, using tobacco taxes to make up for reckless spending in other areas, the primary target will be the largest and most "foreign" company that can be found. Obviously, PM will be the primary target. After all, who would have thought that Paris would ban smoking in certain areas.

    MO has been given the guarantee of monopoly power with backing state attorney general enforcement and Federal government health regulators. Future lawsuits will not be allowed to impinge on MO's ability to continue making the MSA payments. Although not a sure thing, MO offers fewer unknowns.

    I see no need to point out the redeeming attributes of PM since you already covered that area. However, I would like to point out that a depreciating currency only affects trade across borders not domestically. Also, since most items are traded in dollars the decline in the dollar will result in even greater declines in other currencies until world trade gets off the dollar system. The means the PM is most affected by disparities in the rise and fall of local currencies.

    Again, the primary issues is, at what price are we to buy either company? Your comparision of MO and PM was good since both are of the highest quality with comensurate high governmental risk.
    Jul 9, 2009. 12:12 PM | 1 Like Like |Link to Comment
  • How Does $9000 Gold Sound? [View article]
    $9000 gold sounds good but if that were to occur then silver would go to $562 by my calculations. I would prefer the larger percentage change.
    Apr 28, 2009. 07:28 PM | 1 Like Like |Link to Comment
  • Dow Jones' Decline Largely Impacted by Index Changes [View article]
    Greetings Jay,

    Thank you for your comment on my article.

    The fact that Dow-Jones has demonstrated a lack of judgment in the timing of the selection of their companies is only one issue. Another problem is that index managers exhibit herd mentality.

    Because the S&P 500 was created in 1957 and backward calculated, there is no way to see how the S&P managed their index back in 1929. However, you can seen exactly the same decisions that Dow-Jones made by the teams at S&P. S&P added and dropped companies in a similar fashion that Dow Jones did.

    Regarding the Russell 2000, that index was created, from what I can tell, in 1984. Russell indices also seem to exhibit bias towards changing their index when S&P and Dow-Jones make changes by switching out companies that have hit bottom with companies that are still in the position to fall further.

    Again, my article wasn't an effort to demonstrate that companies will go up or down based on being in an index or that earnings aren't important. Instead, I was trying to demonstrate that the creators of the indices are prone to chacteristics of novice traders.

    Regarding your question of the similarity of market movements, there is surprising evidence that although similar, the indices movements isn't the same. I have addressed this issue in a prior Seeking Alpha article at:

    Thanks again Jay.

    On Apr 22 10:00 AM jay fredrickson wrote:

    > Good article but it doesn't really go anywhere. So the DJIA is wrong
    > to move stocks in and out? What would explain similar moves to the
    > S & P 500 and the Russell 2000? Seems like on face value you
    > are correct, but the potential for companies to earn money in the
    > future is still the main reason for stock price movement, up or down.
    > jay
    Apr 22, 2009. 10:48 AM | 1 Like Like |Link to Comment
  • Production Index on Brink of Collapse [View article]
    As a sidebar, if the Fed was in so much control of the financial situation then the very first assurance from the Fed that the economy is fine would have solved our problems way back in 2006.

    The fact that they (The Fed) has continously reiterated the economy is fine as we've watched it slide into oblivion shows that the Fed doesn't have the control that you seem to believe.
    Mar 17, 2009. 10:46 PM | 1 Like Like |Link to Comment
  • Production Index on Brink of Collapse [View article]
    Hi Ricard,

    I have to admit that I had to jazz up the title otherwise the SA team would give it a title that would be worse. It's better to control your content rather than someone else. Although I can understand the confusion you may have had with the content and the title. On my blog the title is more aptly stated as "Industrial Production Index Fence Sitting."

    If you followed my blog then you'd see that I like to use Charles Dow's theory for technical analysis (TA.) This outdated TA approach is the basis for almost all modern TA in the United States. I'm not claiming that this theory is the basis of all TA in the world, just that, in the US, the majority of TA is derived from this source.

    To your question of why I'm using TA for an economic indicator and not trying to divine all the data that exists. The answer is in the fact that, as Dow's Theory states, all the knowledge that exists is compiled in the Dow Transports, Industrials and the Barron's Business Index. Since the Barron's Business index was discontinued in 1938 my research indicates that the Industrial Production Index has a high correlation with Barron's Business Index. Again, the point of Dow's Theory is that it imputs all the known variables and synthesizes this information through the three aforementioned indices.

    Regarding your comment about Treasuries, I don't have a fear of the impact of treasuries. I am only restating a common concern whether real or not. However, I'm fine with the fact that you have no doubt about the Fed's ability to assuage any concerns on the issuance of treasuries along with the government's impeccable balance sheet.

    I am anxious to see your blog or website that has compiled your detailed take on the economy in a format that doesn't accuse others of "...spread[ing] unfounded rumors..." However, your thoughtful critiques of my work are certainly appreciated. After all, I have everything to gain and nothing to lose from the experience.

    Thank you for your time and consideration of my material.
    Mar 17, 2009. 10:38 PM | 1 Like Like |Link to Comment
  • Helmerich & Payne: Great Bet If We Hit Massive Levels of Inflation [View article]
    Greetings Tankmanbob,

    You make some great points that as an investor should not be ignored. I completely agree with you. As this is a speculation on a "quality" stock I am only hoping that we're in the rally phase of this bear market. So far things are working in my favor from a Dow Theory standpoint but you're on the market with your assessment of the situation.

    Thanks for your thoughts and I gave your comment a thumbs up.

    Mar 11, 2009. 05:39 PM | 1 Like Like |Link to Comment
  • Where Is the Dow Going Now? [View article]
    Greetings Teutonic Knight,

    You are absolutely right about the Dow target numbers not being sacred. That is why I don't worry about hitting the nail on the head when it comes to estimating the extent of the market increase or decline. By using Dow's theory the only goal is the primary trend of the market. I happen to be lucky by calling the direction and the extent. Notice that I have "hedged" every downside call with a potential upside call. Clearly I'm no genius, especially since I'm using a theory that has been relegated to the refuse heap of market voodoo.

    Despite the market hocus pocus, you brought up a point that all Dow theorists are expected to understand and that is, The Dow (transports and industrials) knows more than everyone else and has discounted all the current concerns. It doesn't matter the arbitrary nature of the selection of the companies that actually go into the indices, it only requires that when someone says, "what'd the market do today?" the answer will likely include what the Dow Industrials have done. Prior to the Dow it was the Cowles index which was as random as the S&P 500 in terms of its market weighting bias.

    I can appreciate your skepticism on this matter which is why I cannot fully ignore other factors at play in the market and economy. However, (thus far) Dow's theory has helped me avoid putting personal hopes ahead of market realities.

    Thanks for you comments Teutonic Knight.

    Feb 26, 2009. 06:15 PM | 1 Like Like |Link to Comment
  • When Bank of Hawaii Falls Below 52-Week Low, It's Time to Buy [View article]
    Greetings All,

    Your points are well taken which explains the reason why I expect BOH to be worth looking into at around $20 or lower. The title itself is unrelated to the title that I submit to SeekingAlpha (see www.dividendinc.blogsp....)

    Again, I only see this as a perfect time to do your homework and come to your own conclusions about the numbers. Since the facts, as mentioned by "District Banker" and "MichaelSchmichael," are widely available I would be wasting my time to point out the obvious.

    As my blog points out "...Only postings with 'Research Rec.:' before the stock name are those that are considered by Dividend Inc. as worthy of being researched then put on a watchlist and bought at the lowest possible price after the Research recommendation."

    I debated actually using the $70 high for the purpose applying Dow's theory. However, the use of the $70 high reflects the emotion of the markets and is therefore a relevant part of determining sentiment.

    Yeah, I know, I'm idealistic and unrealistic at the same time however I have no illusions about BOH being a buy at this time as indicated by the SeekingAlpha staff who continually put a spin in the titles that I submit which are often juxtapose to the ones on my blog.

    However, thank for taking the time to critically contribute to the information that is out there. I certainly respect and appreciate your input.

    Jan 14, 2009. 01:05 PM | 1 Like Like |Link to Comment
  • When to Sell Dividend Stocks [View article]
    Greetings Dividend Growth Investor,

    The question of dividend cuts is fascinating since it is actually a potential buy signal rather than a sell signal. All dividend cuts take place after the stock has taken the largest portion of the declines that are likely to occur (in the short and medium term.)

    A dividend cut reflects the company management's realization that action needs to be taken in order to shore up the company's finance. Once the cut takes place, an investor can then fairly assess the potential for a healthier balance sheet.

    Another method for avoiding the decline in dividend paying stocks is to sell when the stock is selling at a historically low yield and buying at a historically high yield. This keeps the perspective on the company in relative terms rather than trying figure out when management is going to make the tough decision to cut the dividend long after the decline has taken place.

    Some good sources for understanding this and other key dividend investing concepts without having to do the work yourself is found in the Investment Quality Trend newsletter ( In their newsletter, IQTrends gives you the historical high and low yields for over 300 high quality dividend paying stocks. Another good source is the book Relative Dividend Yield by Anthony Spare and Nancy Tengler. Finally, my all time favorite is Mergent's Dividend Achievers ( as recommended by Peter Lynch in the book Beating the Street.

    Because of these sources of information, I had a great 2008 and I think that they will benefit anyone who takes careful consideration of the ideas contained within. Enjoy.

    Dividend Inc.
    Jan 5, 2009. 01:29 PM | 1 Like Like |Link to Comment