Seeking Alpha
View as an RSS Feed

Tim McAleenan Jr.  

View Tim McAleenan Jr.'s Comments BY TICKER:
Latest  |  Highest rated
  • General Electric: What A 15% Higher Price Means For Returns [View article]
    Great post, Eli. I'm in full agreement.
    Apr 15, 2015. 11:35 AM | Likes Like |Link to Comment
  • Kraft, Heinz announce merger [View news story]
    Definitely a terrible day for some Kraft employees. Some of the layoffs and cuts that affect quality of life will be substantial. It's going to be a much harder world for day-to-day employees so that shareholders can get an extra nickel in dividends. The investment side of the equation, however, looks much more attractive than the humanitarian side. I imagine Kraft Heinz will make much more money for shareholders over the coming years than a standalone Kraft would have.
    Mar 25, 2015. 11:35 PM | 2 Likes Like |Link to Comment
  • The Advantages Of Finding Dividend Growth Early [View article]
    Funfun, I think we all know the party don't start until you arrive.
    Mar 22, 2015. 01:10 PM | 17 Likes Like |Link to Comment
  • The Dividend Growth 50... Plus 113 More [View article]
    Some early Wednesday afternoon thoughts:

    1. A commenter noted that some non-dividend growth investors own a stock or two that does not pay a dividend. He saw this as a sign of a bubble. That is not my interpretation. In my case, I saw certain REITs and utilities trading at high P/E ratios or high P/FFO ratios and I found it wise to avoid them given my belief in: (1) eventual P/E reversion to the mean, and (2) they have low growth rates which make the experience of paying an overvalued price more problematic because you don't have the salve of 8%, 10%, 12% profit growth to boost fair value in the short term.

    2. Those who criticize dividend growth investors for bringing a six-pack to the Gilead Sciences party have a point. During every year from 1987 through 2011, Gilead could be purchased for under $20 per share (and most of those years, much lower than even that). At a minimum, those investors have seen their shares quintuple. The ability to rack up those kinds of gains quickly is gone...earnings have grown at 41.5% annually for the past ten years--I'd own the Brooklyn Bridge by now if I thought it would do that going forward.

    But still, those of us investing in Gilead now have an advantage that those who have come before didn't have: Certainty. And yes, we have paid a much higher price to get that certainty. But now we can see that Gilead is making more than $11 billion per year in net profit, has $6.3 billion in cash, spends $3.1 billion doing research and development for future growth, and offers intrigue through Sovaldi for those that want to enjoy the patent duration ride. Even though Gilead's future growth will be slower than its past, it still offers more wealth for a long-term buy and holder than buying an overvalued REIT, utility, or material company.

    (3) These lists permit me the opportunity to spot my own errors (perhaps an unexpected benefit of contributing to this!)... I'm not sure what I was thinking excluding Disney and Nike, for instance. They own their niche, and have growth rates above 10%.

    (4) This list is a very helpful starting place for someone wanting to wrestle control of their own life and take their long-term financial security into their own hands. Imagine a 0% turnover portfolio that consisted of these stocks bought and held over the coming decades. Even with a few flameouts, can you imagine anyone experiencing financial ruin with these recommendations? I can't because these products are essential to our daily life, and as long as humanity prevails, we will use electricity, drink water, eat food, bathe, engage in commerce, and so on. These stocks strike at the gut of civilization, and provide value for their owners year after year (even if their prices offer no such short-term predictability).

    (5) On a personal level, I am thankful to Mike for including me in this list among people I deeply respect, though I have never met. On a broader level, I am thankful that Mike floats this information onto the internet so that someone new to investing or seeking refinement can have an intelligent reference point that provides them the knowledge to mix with actions so that they can realize their goals.

    Paul Meyer once said: "Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort." By living below one's means and deliberately acquiring shares of oil refineries, soda giants, cleaning solutions, snack and meat companies, water utilities, health and medical companies, industrial conglomerates, and the occasional niche company, someone can find themselves leading a highly productive life, both through their chosen profession and their passive holdings. A loud thank you to Mike for providing the roadmap.
    Feb 11, 2015. 12:21 PM | 31 Likes Like |Link to Comment
  • Mama Said There Would Be Days Like These [View article]
    +1 on the Van Morrison reference.

    -1 if you had The Shirelles in mind.
    Feb 5, 2015. 10:33 AM | 5 Likes Like |Link to Comment
  • Selling Guidelines For Self Directed Investors [View article]
    Chowder, I find your item #6 to be the most important. When a company fundamentally changes, that is obviously a time for review ("When the facts change, I change my mind; what do you do, sir?").

    I wonder how many investors apply the horns and halo effect to their stock selections, choosing to see no bad things in companies they own and recognize no good things in companies that formerly burned them or got passed up?

    I think you are absolutely correct to note that successful investing involves eliminating emotions, or at least harnessing them, and in that respect, Seeking Alpha is lucky to have you around as you teach others how to become more thorough and disciplined investors.

    Thank you.
    Jan 7, 2015. 06:46 AM | 10 Likes Like |Link to Comment
  • A Demonstration Of How Dividend Growth Investing Outperforms [View article]
    And then ask them about those millions of dollars in Eastman Chemical shares that got spun off in 1994 that gets neglected by practically everyone trying to make the "dividend investors have 100% of their portfolio in Kodak stock" argument.
    Dec 29, 2014. 08:39 PM | 17 Likes Like |Link to Comment
  • Recent Buy: The Walt Disney Co. [View article]
    I have a strong emotional and logical reaction to Seeking Alpha commenters that criticize someone for the amount of money that they are investing at a particular time.

    In the 23rd Chapter of "To Kill A Mockingbird", Atticus Finch says: ""As you grow older, you'll see white men cheat black men every day of your life, but let me tell you something and don't you forget it—whenever a white man does that to a black man, no matter who he is, how rich he is, or how fine a family he comes from, that white man is trash." I would update that quote to this context by saying that any affluent man that criticizes another for being of lesser means is also, in that moment, acting like trash.

    I have a great respect for anyone that is trying to improve his lot in life, and chooses to combine grit and intelligence to execute that plan. Jason's posts provide us with a regular peek into that quest for higher ground, and I have the highest respect for the arc of someone's life that went from having nothing to having something.

    And now, for the logical part of my response: People write on Seeking Alpha to discuss ideas and strategies for improving one's wealth. The same successful idea that increases wealth five-fold over twenty years will just as readily turn $10 million into $50 million as it will turn $5,000 into $25,000. The amount of capital does not reflect the percentage gain returns offered by a particular investment, and I hope that you possess the wisdom to evaluate the legitimacy of individual arguments without getting distracted by the context that is irrelevant.

    Oh, and Jason, nice article.
    Dec 5, 2014. 11:33 PM | 84 Likes Like |Link to Comment
  • Some heavy hitters eye Coca-Cola [View news story]
    The gutting out of American business will continue as long as shareholders continue their hyper-active focus on the next quarterly result and think nothing of selling out an ownership position for 30% to 50% premiums, the long-term employment effects of the home country be damned.

    The $70 per share buyout of Anheuser-Busch in 2008 was merely Act I.
    Nov 20, 2014. 11:38 AM | 15 Likes Like |Link to Comment
  • Why You Shouldn't Buy Automatic Data Processing Now [View article]
    You, sir, are a powerhouse.
    Nov 14, 2014. 10:05 PM | 6 Likes Like |Link to Comment
  • Safety Insurance: A 4.5% Dividend Yield Growing At 12% Annually [View article]
    It seems we are looking at different numbers. Over the past twelve months, they've made $4.08 per share in profits. If it were trading at a P/E ratio of 70, that would be a stock price of $285 per share.

    I likewise don't see the multi-year decline you're talking about. I'm reading the company's statements and see: $3.80 per share in earnings in 2012, $3.98 per share in earnings in 2013, and 2014 numbers should be above $4.08.
    Nov 3, 2014. 03:11 PM | 1 Like Like |Link to Comment
  • The New Nifty Fifty, Part 3: Dividend Growth Ideas And Valuations [View article]
    Mike, I find your identification of Lockheed as a superior permanent investment to be exceptionally wise. It doesn't get a lot of mention, but its breadth is staggering. On the same level as Johnson & Johnson, Nestle, Exxon, and Coca-Cola, IMHO.

    Thank you for this series, and thank you for including me.

    If others found it half as useful as I did, you have performed a great service.
    Oct 30, 2014. 07:16 PM | 11 Likes Like |Link to Comment
  • Becton, Dickinson And Co. Continues To Print Money Like It's Going Out Of Style [View article]
    Keith, that's probably my least favorite thing about investing in businesses--there's a dirtiness to it that you cannot escape. I absolutely despite the quarterly earnings culture, in which people that want to do things right get shoved aside in favor of the people who find a way to increase profits a nickel per share (even if it creates long-run drains on non-quantifiable things like employee morale).

    The race to the bottom--layoffs, cut benefits, lower input costs--helps the short-term investor often at the expense of the long-term investor and American society as a whole.

    I have no knowledge of Becton Dickinson's employment practices or culture during the 1980s. However, based on what you said, it reaffirms the special fondness I have for privately run family businesses. If you own something generating millions of dollars, well above your spending requirements, the absence of other shareholders demanding growth permits a more genteel, humanitarian approach to business management if your heart finds that attractive.

    Also, I just realized I misread your comment a bit, but I have a class in three minutes-- I hope you will find what I said useful regardless.

    P.S. Good stock choices ;)
    Oct 29, 2014. 02:07 PM | 2 Likes Like |Link to Comment
  • Becton, Dickinson And Co. Continues To Print Money Like It's Going Out Of Style [View article]
    Doug, that's my thought exactly. If you establish sizable positions in companies with high internal rates of compounding--I have in mind Visa, Franklin Resources, Disney, and Becton Dickinson--you can put yourself in that favored Charlie Munger position where all have to do is sit on your rear as the money compounds on its own once you hit that buy order.

    The time involved identifying such companies can be extensive, but the workload involved after making the initial investment is minimal. That's why I enjoy the search for getting it right. The rewards of excellent research are simply tremendous. It grants a freedom the likes of which only 0.001% of the world will ever know.
    Oct 29, 2014. 12:55 PM | 3 Likes Like |Link to Comment
  • Coca-Cola, How A Giant Company Starts Losing Relevance [View article]
    Ha! Larry, if you gave me your e-mail address, I'd forward you a message I got from a reader wishing me an early death after I wrote a pro-Philip Morris International article. The internet is not as fun of a playground for me as you imply.

    To address Adam's point in the article, it seems that the word of Coca-Cola's death (or more precisely, loss of relevance) is greatly exaggerated. Coca-Cola volumes in North America have been a concern throughout the past decade--the figures hem and haw 2% up, 2% down in many years.

    Yet, earnings per share have grown 8.5% annually over the past ten years. Why? International soda volume growth, volume growth in non-soda beverages both here and abroad, stock buybacks, and increases in soda prices (at a rate greater than the volume lost) have all acted as countervailing forces that matter more than Coca-Cola sales in North America.

    Coca-Cola (the beverage) is slowly losing its centrality to the growth of Coca-Cola (the business). Look at what Coca-Cola is doing in the non-soda, coffee, tea, energy drink, and water markets. Within a few years, 5% of all liquid consumed in the world will be at the trough of The Coca-Cola Company. It has become so much more than soda, and coloring water remains immensely profitable (as seen by the sustained 20% profit margins companywide).

    Buffett and Munger aren't fools. Sarofim and Yacktman aren't fools. Why have they bought, and why do they continue to hold, so much Coca-Cola? Lord knows Buffett isn't afraid to discard blue-chips--look at what he has done with Procter & Gamble this past decade. Perhaps it's because they know it's not just soda--it's vast beverage distributorships, trademarks, and low-cost syrup reserves that consist of an ever-growing collection of well-branded names. Heck, even Dr. Pepper hawks its wares through Coca-Cola's pipelines.

    This company's story ain't over yet, and many more millionaires will be minted in the meantime.
    Oct 29, 2014. 01:43 AM | 15 Likes Like |Link to Comment
COMMENTS STATS
2,075 Comments
7,231 Likes