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Tim McAleenan Jr.

 
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  • The Search For Safe 4% Dividend Yields [View article]
    bobbob, there are generally certain dividend stocks that catch the attention of these dividend-only investors. They are the ones that grow their dividends by 7-10% annually. With the exception of maybe Kraft, I can't think of any dividend firm that investors around here own that doesn't raise its dividend.

    Well, what happens when you spend most of your time finding and then owning stocks that grow dividends by 7-10% annually? Well, either the stock price stays the same or goes down, which makes it really valuable to reinvest dividends (so you can get even more dividends!) or the price goes up by a commensurate amount to get the capital appreciation that you talk about.

    And I strongly disagree with this "invested money must grow in BOTH to be a good dividend investment." The reason the Old Philip Morris was the *BEST* American stock to own from the 1920s to 2003 was because the earnings and dividends grew by 11% on average over that time but investors actually reaped 17% annually due to the low share price of reinvestment due to the threat of lawsuits/product obsolescence. Nothing is better for the long-term investor than growing earnings and dividends coupled with lower prices.
    Jun 14, 2012. 01:08 PM | 13 Likes Like |Link to Comment
  • Graham: The Pursuit Of Guaranteed Profits [View article]
    Let's say two investors have $100,000 to invest in General Electric. One buys GE at $6 per share, another buys GE at $20 per share.

    The first investor originally buys 16,667 shares.
    The second investor originally buys 5,000 shares.

    The first investor receives $11,334 in annual dividends.
    The second investor receives $3,400 in annual dividends.

    If both investors reinvest dividends throughout their lives, I believe that the first investor will end up in a much better place due to the margin of safety established in his initial purchase price.
    Jun 13, 2012. 05:14 PM | 3 Likes Like |Link to Comment
  • Warren Buffett Sure Knows How To Plant A Tree [View article]
    Before Warren was a superinvestor with connections, he had to...superinvest. He had to build a billion-dollar company before getting in a position to get those deals. In fact, Buffett's annual returns were higher when his asset base was smaller than it is now that's he's getting the special deals.
    Jun 12, 2012. 01:14 AM | 3 Likes Like |Link to Comment
  • What A Perma Bull Portfolio Looks Like [View article]
    Robert, I thought about doing something like that. But I realized that it's usually the commenters who are snarky and demanding that ask that question, and I have no desire to bend over backwards for them. If someone poses it as an honest question, I'll be happy to repeat my answer.

    But I have no desire to appease the "OH YEA IF U TINK JOHNSONS & JOHNSON IS SOO GR8T WHY DONT U OWN IT HUH HUH HUH?!" kind of people here.

    I'm more than content to ignore the churlish folks.
    Jun 11, 2012. 06:49 PM | 9 Likes Like |Link to Comment
  • My Fear As A Dividend Investor [View article]
    From David Fish: "Just to add a bit of clarification...the AT&T Corp. that cut its dividend in 2001 was the original "Ma Bell." The current AT&T Inc. is really the former SBC Communications, once Southwestern Bell, which eventually acquired its former parent company, along with several fellow "Baby Bells" and has never cut its dividend, having raised the payout every year since the 1984 break-up, making it a Dividend Champion."
    Jun 11, 2012. 01:37 PM | 1 Like Like |Link to Comment
  • The Best Thing Warren Buffett Has Said All Year [View article]
    So true. But you gotta have rules. That's called "parenting."
    Jun 10, 2012. 10:57 PM | 1 Like Like |Link to Comment
  • What I Like About How Zuckerberg Runs Facebook [View article]
    Robert, as usual, excellent point.

    Even if it's very thin, I do think there is some moat in the sense that it's colloquial to say something like "Go google it" when we mean look something up on a search engine. Seems a little similar to when we say "Hand me a Kleenex" instead of a tissue. If I were to design an exact replica of Facebook and Google, I doubt there would be many defectors until the alternative contained some element that made it superior.
    Jun 10, 2012. 08:09 PM | Likes Like |Link to Comment
  • What I Like About How Zuckerberg Runs Facebook [View article]
    Bluesmoke, I'll never own Facebook in my life. It will most likely be a terrible long-term investment. That's why I tried to avoid saying anything to endorse investing in Facebook. All I said in this article is that I appreciate the fact that Zuckerberg is pro-active in protecting his moat. In the internet world, that doesn't count for much. I was absolutely not touting this as an investment.
    Jun 10, 2012. 07:55 PM | 2 Likes Like |Link to Comment
  • What I Like About How Zuckerberg Runs Facebook [View article]
    Whoops. My bad. Thanks for letting me know.
    Jun 10, 2012. 02:18 PM | 1 Like Like |Link to Comment
  • Warren Buffett Sure Knows How To Plant A Tree [View article]
    Thanks DGI. I was hoping I made it clear in the first sentence "Those warrants to buy 700,000,000 shares..." that Buffett would have to actually buy the shares for the dividends to kick in.
    Jun 10, 2012. 02:05 PM | 4 Likes Like |Link to Comment
  • Dividend Stocks Give Rewards For Putting Up With This [View article]
    Perfect. I think Robert Allan Schwartz is going to get me a "Lawyers do it in the library" bumper sticker. I'm set.
    Jun 10, 2012. 12:35 AM | 3 Likes Like |Link to Comment
  • The Best Thing Warren Buffett Has Said All Year [View article]
    I did over 2,000 hours of community service, got a 34 ACT, and had a 3.9 GPA. I got full rides to SMU, Holy Cross, and Washington & Lee. I was torn between W&L, Vanderbilt, Dartmouth, and Notre Dame. But Washington & Lee blew me away with the speaking tradition (you have to say hi to everyone), classes with less than 20 people, and faculty members that you actually become friends with. And the school just has a good style about it.

    For law school, it was the same way. I did 900 hours of community service in college at a shelter for victims of domestic violence and scored in the 160s on my LSAT. Although my GPA came down a little bit from my 3.9 in high school.

    When I raise kids someday, there will be two non-negotiable rules in the McAleenan household: You have to do ten hours of community service every week, and you have to spend the entire summer before Junior/Senior year studying for the ACT/SAT exclusively. My best advice to anyone looking to get around paying tens of thousands of dollars for college would be to do hundreds of hours of community service and put yourself in a position to score 30 or above on the ACT. Scholarship money seems to really open up at that point.

    PS I gave you the short story that made it sound like it came easy to me. I wish I was that talented and put together. But I had a lot of help, and I screwed up a lot along the way. The reason I took the ACT instead of the SAT is because it allows you to pick the score you send to colleges. If you take the SAT, they get every record of every test you ever took. I had to take the ACT 5 times to get it up to a 34. I went: 29,32,31,33,34. You should have seen me the day after that third test when I thought I was getting worse! And even my community service wasn't perfect. I was a bit of a goofball when I started volunteering at a hospital--I filled latex gloves up with water, and started water balloon fights at very inopportune times. It seemed funny at the time, but doctors and nurses had much more important things to do than babysit Tim McAleenan. I'm still embarrassed by some of my antics there. Luckily, my favorite high school teacher started taking me to a soup kitchen in downtown St. Louis to do "real service", and that got me going in a good direction. If I didn't have the right parents, teachers, friends, etc., I couldn't have pulled it off.
    Jun 9, 2012. 06:04 AM | 7 Likes Like |Link to Comment
  • The Best Thing Warren Buffett Has Said All Year [View article]
    I don't even think I accept that "every person who buys and sells stocks thinks they are doing so rationally." What if I have to pay to send my kids to college and have to sell my prized Johnson & Johnson stock to pay the bills? I could be sitting there screaming "This is undervalued" but the fact is, I sold it, because I had to pay a bill.

    Or I have a family member who's about to lose his house, and I sell my stock to help him pay for it because I care about a sibling more than holding undervalued Colgate-Palmolive shares.

    It happens on the buy side as well. What if I'm one of those deceptive mutual fund managers that engage in "window dressing" by buying a hot stock at the end of the reporting period to trick a client into thinking that I owned it? That stock was purchased with no regard for its value, but rather, to deceive customers into thinking I was part of the past run up.

    Or picture this. A relative dies and gives me 100,000 shares of Emerson Electric in the will. I say 'Screw investing', sell it, and blow through the money.

    Each of those decisions were due to some desire, impulse, or emotion that had no regard for the company in question.
    Jun 9, 2012. 05:35 AM | 1 Like Like |Link to Comment
  • My Fear As A Dividend Investor [View article]
    Keela, it's the tone that I didn't like. Even if I was wrong and Bingo were right, I still wouldn't want to be talked to like this: "It is not true. Be sure of your facts before you publish."

    The condescension is particularly obnoxious in a case like this where I've got my facts right.
    Jun 8, 2012. 08:47 PM | 16 Likes Like |Link to Comment
  • The Best Thing Warren Buffett Has Said All Year [View article]
    I love Bruce Springsteen. Love the guy. Since he dominates my iPod, I doubt I go a day of my life without listening to him. Does the fact that he is politically to the Left make Born To Run any less of a masterpiece? Hell no.

    I listen to Springsteen when it comes to his trade: music. I don't listen to Springsteen when he's out of his circle of competence.

    I follow the same logic in regards to Buffett.
    Jun 8, 2012. 08:29 PM | 9 Likes Like |Link to Comment
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