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Paul Wagner  

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  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Chowder...sometimes, if you've lost your mojo, it's a good idea to take a time out. While you're getting your head right, it's perfectly fine in my opinion to let someone else, like a fund manager or a computer that runs an index fund, keep your money in the game even if you're not.

    Sometimes, goals change. While I had to outperform to stay away from w**king for a living, I no longer have that concern and so my goal now is to reposition our assets so that when I can no longer contribute to the process my family will have a portfolio that doesn't need a lot of babysitting. It's been a challenge for me to make the transistion; old habits die hard.
    Apr 27, 2015. 09:26 PM | 1 Like Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Chowder...you're one of the best. I admire all contributors and commenters who post their portfolios. Last year I was inspired to post as I made them all of my trades as stock talks at my profile. I, too, made mistakes during the year and they are there for all to see. I got lazy this year while we were in Arizona and haven't posted all of them. I would take the time and post them now at this late date, but the cynics would accuse me of making them up if they were profitable ones.

    I spent 25 years making decisions the results of which were readily apparent to my managers and credit committees. One of the people who reviewed my work is now a regional Fed president and another is now CEO of HCP. I developed two things: confidence and a thick skin. It mattered then what people thought and said about my performance. Now, here on SA, not so much.
    Apr 27, 2015. 07:55 PM | 5 Likes Like |Link to Comment
  • Preparing For The Next Market Collapse [View article]
    turmantl...as I read down the comments, I began to think about people who have no savings or investments, no real property. Then came your comment. Kris Kristofferson pointed out that "freedom's just another word for nothin' left to lose. Nothin' ain't worth nothin' but it's free.". Take comfort in that, I guess.
    Apr 27, 2015. 07:26 PM | 1 Like Like |Link to Comment
  • Preparing For The Next Market Collapse [View article]
    Archman"The type of bear market where you will not be safe owning anything other than cash in a mattress.". I have seen a couple of news articles about the Guvmint boldly teeing up the concept of placing limits on currency. Also saw something today I believe where JP Morgan Chase is having safe deposit customers sign agreements not to store cash in their boxes.

    I'm an oldish guy and remember predictions saying the fit was going to hit the shan in 1972. Not saying it can't happen. Only that it hasn't. If it does, then my timing has been terrible: I moved from 10 acres in the country last fall to a suburb. Now I'm totally grid-dependent.
    Apr 27, 2015. 07:11 PM | 2 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Whatsup! We all have our own approach to how we do things. There is an assumption that Wall Streeters have insurmountable advantages and it's true that you can't win playing their game. It's not that they are necessarily smarter, but they play with so much money that they can gobble up yours in short order. But, that advantage diminishes when you get past the short term.

    I remember during the dotcom bubble that the late Joe Battapaglia was right on target day after day as the market climbed. On the other side was Gail Dudack, day after day making the wrong call by warning that the market was way overvalued. Over some period of time, anyone heeding Gail was missing out and anyone heeding Joe was getting rich. Both were Wall Streeters, but for awhile one was so wrong and one was so right-- depending on your definition of right and wrong. Then the roles reversed and Gail was proven right at long last.

    I made some investments at that time that put me somewhere in between the two gurus. I invested in Amazon for about 2 months where I doubled my money and in EMC. When I had made more gains on those than I had any right to expect, I sold my shares, temporarily settling for decent money market returns. The net result was that I had less gains than if I had invested with Joe the whole time, but I lost nothing because I also listened to Gail. And I handily beat the S&P.

    An index investor can't do that. For an index investor to try to do it requires timing "the market". What I did required me to time only two stocks. Later, I did the only real frequent trading I have ever done: I was "lucky" to see that NVDA had frequent 10-20% price swings and I started trading within that range. A couple of times NVDA surprised and ran up to 20 without me on board. After it settled back to ~$13 I bought again and waited till it went up to ~$20 before selling. That happened a couple of times. Once I bought at ~$13 and it went to ~$8. That's when I got out and have stayed out since. It's run back up to the 20's over a long period of time, but I haven't played with it. Again, that has not been my normal behavior, but I saw an opportunity that Wall Street gave me and took advantage of it.

    I made money in distressed AIG and CIT bonds during the crisis, but I've never owned a bond fund. Those bond buys were based on the sense that the negative net worths of those companies couldn't have been as large as the bond prices were suggesting. If I buy a bond at 40 cents and I figure worst case it's worth 20c and best case it's worth 100 cents, as long as I don't bet the ranch, those are favorable risk:reward ratios. Turns out I got returns of over 60% on both in a matter of months.

    Wall Streeters gave me those opportunities. Somebody sold to me. If I was "right", they must have been "wrong".

    I do have confidence in myself, but I'm not so arrogant as to think that a majority of people who focus on it can't make money just as well or better than I can. Those who can't will realize it in short order and that's where Wall Street offers them an index to keep them from underperforming.

    One thing I know for sure: if a person sits in the stands their whole life, they will become above average spectators. Nothing wrong with that.
    Apr 26, 2015. 05:41 PM | 7 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Petrarch...just FYI, I get $1.50 from each book sale and it all goes to charity. I've written 4 articles for SA and did not ask for payment for any of them.

    You're probably a nice person and someone who if I got to know I would want to be BFFs with. But what you write sometimes seems to suggest that the words are coming from a cynical, defeated old soul who can't abide the suggestion that someone might actually have the best of motives and might actually try to live a life guided by right principles and respect for others.
    Apr 26, 2015. 03:36 PM | 12 Likes Like |Link to Comment
  • The Last Two Oil Crashes Show Peak Oil Is Real [View article]
    Paul Hughes...yes, I'm pretty sure I was aware that there was a difference in the "gestation" period of chickens and hydrocarbons. But, of course, cropland is in finite supply and oceans can support a finite amount of seafood. Add to that political concerns about the use of herbicides and pesticides and genetic modification of seeds. Could it be that these techniques to make existing cropland more efficient are analogous to fracking and horizontal drilling which have made the oil fields more productive? I haven't mentioned the effect of a warmer planet on pests and rain falling in the wrong places at the wrong time.

    Yes, all of us living things are renewable -- all of us. Which is why demand has the potential of outstripping supply -- of everything.
    And, why, like oil, there may be a floor on pricing.
    Apr 26, 2015. 12:15 PM | Likes Like |Link to Comment
  • The Last Two Oil Crashes Show Peak Oil Is Real [View article]
    I'm not an oil expert, but I did appreciate the author's thought process and his writing skills.

    Without wanting to seem silly and using the author's massaging of "peak" to mean "price floor", have we also reached "peak beef" or "peak chicken" or "peak salmon", all products that seem unlikely to ever reach 1986 prices? And, if so, how are the dynamics different?
    Apr 25, 2015. 11:06 AM | 1 Like Like |Link to Comment
  • Holy Smoke - My Favorite Idea That Everyone Knows But Doesn't Understand [View article]
    Rochelle..not to disparage your conclusion about MO, which you present in a cogent and thorough fashion, but your understanding of where dividends come from could be better:

    "Dividends are paid out either from earnings or from debt."

    That is partly true. Actually, dividends are paid out from the company's checking account. Cash flow, not earnings, puts money into the checking account. Earnings can be much less or much greater than cash flow. (As illustrated by the following line from your article: "Altria did complete a cash tender offer to extinguish notes due in 2018. While the offer reduced debt, it also resulted in early extinguishment charges." Early extinguishment reduces earnings without reducing cash flow.). In addition to borrowing, sales of assets can put cash into the checking account. Finally, cash balances existing prior to the earnings period can be reduced in order to pay the dividend.

    "One of the first warning flags waved concerning a dividend's stability occurs when a company borrows to pay the dividend."

    In the same way that cash is fungible, debt is fungible. When a company's operating cash flow is insufficient to fund capex and acquisitions and share buybacks and dividends, it is common to say that the company was forced to borrow in order to pay dividends. In reality, the company may have borrowed money to fund the aggregate of all of its post-operating cash flow expenditures.

    "Based on that principle, for dividends to grow, earnings must grow. Earnings, typically, grow one of three ways - revenue growth, cost cutting, or stock repurchases."

    As above, in order for dividends to grow, cash flow must grow. Stock repurchases do not grow earnings, they only reduce the number of slices of the earnings pie. Actually, stock repurchases detract from the supply of cash available to pay dividends.

    I've never owned shares of a tobacco company because I don't want it to be part of my life story that I benefitted from the sale of cigarettes. I think you did a fine job of laying out solid reasons for believing that the shares are over valued in an environment where there are similar opportunities elsewhere.
    Apr 24, 2015. 09:39 PM | 4 Likes Like |Link to Comment
  • Retirement Strategy: Dividends Vs. Capital Gains [View article]
    as10675..I had mine out in 1996 and was grateful that the problem didn't arise until laproscopic surgery had become the surgical state of the art. I took a week off work and watched the Olympics, but could have been back at work the next day.
    Apr 24, 2015. 06:13 PM | Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    "That work took me a whole 5 minutes at the most."

    And a real piece of work it was.
    Apr 24, 2015. 03:03 PM | Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Nice work? Did the magnetic poles just reverse?
    Apr 24, 2015. 01:45 PM | Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Dividend D...GIGO never fails.

    Don't you think your assumptions should reflect reality before you come to a conclusion about reality?
    Apr 24, 2015. 01:44 PM | Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Whatsup! "There isn't one way to reliably make money.". Absolutely correct. But individual investors have many advantages that funds don't have and less disadvantages than most people think.
    Apr 24, 2015. 01:16 PM | 3 Likes Like |Link to Comment
  • Why Yield On Cost Is An Important Metric In My Portfolio [View article]
    S.Gambler..at least you got the idea of total dividend income in there. That explains why I run across investors who don't include as cost any dividends from Company A that have been reinvested in Company A, but would include those Company A dividends as cost in Company B if they chose to invest them in Company B.

    Over a period of time, if you deduct all the dividends you have ever received from a portfolio, you would probably find that your dividends have exceeded your original investment. At that point, following the netting logic, you would no longer have anything at risk. That is when I would like you to write and ask me for my address so you could turn your portfolio over to me to manage for you. Don't worry, you have nothing to risk.

    :=)>
    Apr 24, 2015. 12:30 PM | Likes Like |Link to Comment
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