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Wealthcompound

 
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  • Drill, Drill, Drill = Jobs, Jobs, Jobs [View article]
    You need to re-think the sources you are using. The "study" you reference may have some bias, don't you think?

    Second, I am politically neutral and respect arguments on both sides but only when those arguments reference facts. Your last paragraph unfortunately doesn't include them. First, to reference the Keystone pipeline as a reason the Obama administration is "unfriendly" to the energy industry is just a Republican talking point and doesn't delve into the nuance around the opposition of one particular section of said pipeline. Second, the reason for advances in "fracking" is due primarily to, guess what, government subsidies that helped fund the research (not to mention other energy related research). Subsidies that you deride in reference to "green" energy and technology.

    Please, if you are going to post articles, make sure they are only rooted in facts. We have enough of the left-right political non-sense elsewhere.
    Jun 2, 2012. 02:58 PM | 5 Likes Like |Link to Comment
  • Dividends Vs. Buybacks: Putting The Debate To Bed [View article]
    I stopped reading this article after this paragraph

    "In the long term, stock buybacks are no different than dollar cost averaging for investors. If the company paid a dividend every three months that is automatically re-invested by shareholders, chances are, some of those re-investments will be at unfavorable long term prices. That is the nature of automatic investing. The case for stock buybacks being badly timed is a case against dollar cost averaging."

    Every sentence in this paragraph bothers me. First, the fact that stock buybacks are no different than dollar cost averaging or reinvesting dividends is ridiculous. I could care less what a fellow shareholder does with their profits. If they choose to reinvest at unfavorable prices, so be it. However, I care very much if management decides to use shareholders money to buyback even one share of stock at an unfavorable price. I can do that myself if I wanted to. Buybacks can be a good way to enhance shareholder returns but only when done properly which means purchasing undervalued shares and retiring them. This is rarely the case though.

    And don't even get me started on "automatic" investing, dollar cost averaging and the related fallacy of buy and hold.
    Dec 16, 2011. 05:37 PM | 4 Likes Like |Link to Comment
  • Dividends Vs. Buybacks: Putting The Debate To Bed [View article]
    You are welcome. However, maybe you shouldn't have gotten bored at "I stopped reading." Since you are an RIA, I am sure you are able to see the difference between dollar cost averaging and share buybacks. At least I hope you can (especially for your client's sake).

    Have a good weekend as well.
    Dec 17, 2011. 03:48 AM | 3 Likes Like |Link to Comment
  • Individual Investors Deserve To Be Burned By Facebook [View article]
    "The amount of hype was too much for the small investor to ignore."- Are you serious with this idiotic statement. The whole purpose of my rant is to make it clear that individual investors SHOULD ALWAYS ignore the hype, especially when it comes from Wall Street and the media (who can in some respects be considered one and the same.) And what is M.Z.?
    May 25, 2012. 08:35 PM | 2 Likes Like |Link to Comment
  • Wells Fargo: A Plagued Stock With Serious Risks For Investors [View article]
    I have to agree with most of the commenter's here that this article presents no real evidence as to why WFC is a plagued stock. Are they working through problems? Sure. That is what happens in a recession. Are they being hounded by regulators in an uncertain regulatory environment? Of course. When the regulators should have been doing there job, they weren't. Now they decide to over-regulate to compensate. However, most of the commenter's also state that it is a good company because Buffett owns it. I am sure he will be glad to know you all agree with him. WFC is the best of the large "too big to fails" because it A) has a relatively simpler business model, B) generally has an ROA above 1% annually and well above average returns on equity and C) has an annual net interest margin that usually exceeds 4%. There are other reasons as well, but I don't want to write an article here.

    One more thing. The integration of Wachovia has actually been quite well executed which is a testament to the quality management considering how problematic it could have been.
    Dec 27, 2011. 09:55 AM | 2 Likes Like |Link to Comment
  • The Truth About Warren Buffett And 'Forever Investing' [View article]
    It is not disingenuous at all when he talks about paying less than his secretary. Buffett has tremendous wealth outside of Berkshire (estimated at $500+ million) which generates the bulk of his income through dividends and capital gains, which are taxed at the lower rates. This is what he is referring to when he discusses his taxes relative to his secretary.
    Dec 26, 2011. 10:49 PM | 2 Likes Like |Link to Comment
  • The Truth About Warren Buffett And 'Forever Investing' [View article]
    That is not because he has a buy and hold mentality, it is because he has an investing mentality. Buy and hold is a simplistic description of investing like "set it and forget it." Of course he doesn't sell just because earnings fell 10%. Would you sell a great piece of real estate just because you have a vacancy and have less cash flow as a result? Would you sell a pizzeria just because this month wasn't as good as the previous month? As far as not selling when the stock doubles, that is true. Only a fool would sell just because something doubled. However, he has stated that he made a mistake and should have sold some of the larger positions back in the late '90's. That doesn't mean that those companies don't have a "durable, competitive advantage"; it just means that he should have sold when the market valuation far exceeded the business value.
    Dec 26, 2011. 09:35 AM | 2 Likes Like |Link to Comment
  • Volcker Says U.S. Mired In Recession And Inflation Is Coming [View article]
    I have great respect for Mr. Volcker but how could he make connections between what is going on in the E.U. and the U.S.? Two very different situations. The U.S. has been mired in a recession caused by reckless speculation (with many different parties at fault) while the E.U. has had a recession partly caused by and fully exasperated by overly indebted countries and the inflexibility of a monetary union with members that differed drastically in their economic policies.
    Dec 8, 2011. 02:41 AM | 2 Likes Like |Link to Comment
  • Drill, Drill, Drill = Jobs, Jobs, Jobs [View article]
    I am arrogant? Thank You
    Jun 3, 2012. 11:34 AM | 1 Like Like |Link to Comment
  • Individual Investors Deserve To Be Burned By Facebook [View article]
    Brokers are always telling people to buy, buy, buy. That is how they make money. That is how Wall Street makes money. Wall Street is at the end of the day a sales industry. Yes, I probably could be considered an insider or professional considering I am in the investment field. However, my purpose is to tell individual investors NOT TO LISTEN to Wall Street, their brokers, the financial media, etc. Do your own objective analysis, have patience, learn as much as you can and understand that the only one who will care about your money is you.
    May 25, 2012. 08:49 PM | 1 Like Like |Link to Comment
  • Individual Investors Deserve To Be Burned By Facebook [View article]
    Yes, if individual investors over the age of 10 do not have a serious distrust of Wall Street by now (and the mainstream media, especially on the financial side) then they deserve to lose their money. There are thousands of other public companies to invest in that an investor can know and understand like the inside of their pocket and which Wall Street doesn't care about (or they are so large and established that the company is not being hyped). This is where the individual who wants to invest in equities should be looking.
    May 25, 2012. 08:43 PM | 1 Like Like |Link to Comment
  • Individual Investors Deserve To Be Burned By Facebook [View article]
    I can do fundamental research just not on an overpriced tech stock like FB. The rest of what you wrote is nonsense as well.
    May 25, 2012. 08:37 PM | 1 Like Like |Link to Comment
  • Pepsi's Management Shuffle, Packaging Redesigns Are Distractions [View article]
    I understand the nature of Pepsico and its business very well. It is NOT a health food business. It is a beverage and snack food business. It is perfectly reasonable to invest in healthier products to an extent but the main focus should be investing in the core brands (possibly finding ways to make them healthier) and not just accumulating brands for the portfolio. Also, as an RIA, CFA, CFP, blah, blah; for you to say that the company can afford the bumps along the way is really amazing. So management needlessly wasting shareholders money is ok with you? In my view, when management needlessly wastes even a dollar, it is one dollar too many. Lastly, I understand marketing quite well. If you were to ask someone in marketing (who is not full of B.S. and actually knew something), they would tell you do not, under any circumstances, fool around with iconic brands. There is no reason to do so. What smart marketers will do is build upon that brands "iconic-ness" (especially by incorporating links from the brands history e.g. Coca-Cola changing the design of the 2-liter bottle to the "iconic" shape, which also allowed them to cut costs). By your logic, McDonalds should get rid of the golden arches or big mac because they have healthier products on the menu.
    Mar 16, 2012. 09:38 AM | 1 Like Like |Link to Comment
  • No, Best Buy Is Not Going Out Of Business [View article]
    Actually, I don't think I missed the point of the article. The article states that BBY is going out of business gradually and references quantitative figures and a qualitative analysis (the customer service). First, you state that BBY is failing at attracting and retaining customers yet present no evidence of this. Second, you mention that you would be hard pressed to find a shopper who enjoys going to BBY. Have you polled all the customers? I am certain I can find customers who hate shopping at ANY retailer. I know people who hate shopping on AMZN. Also, you mention that the money-making services will begin to deteriorate as consumers become more sophisticated and want to shop at "experience" locations such as the Apple store. That is a massive assumption to make that consumers will become more sophisticated and in what way will they become more sophisticated? Believe it or not, I am sure there are consumers who hate the Apple store ( I am one of them). Next, you ask the question "what is BBY competitive advantage?" The main rival, Circuit City, is gone. That makes BBY really the only big-box electronic retailer. Do they have competition from other sources? Sure. I never said otherwise. However, the idea that everyone is going to be purchasing all of their electronics on-line from AMZN is crazy. And the other brick and mortar stores you mention? They are struggling as well. It is not as if all of BBY competition is doing great and BBY is struggling. If that was the case, it would be a totally different ballgame. You also mention Wal-Mart's competent management team compared to BBY. Didn't Wal-Mart's management team have some very public missteps the past several years? Lastly, I do always look at the actual business but I do not let personal bias get in the way. I think you should read the article again. I actually agree with Mr. Downes about the customer service and have a whole paragraph dedicated to it.
    Jan 7, 2012. 11:33 AM | 1 Like Like |Link to Comment
  • No, Best Buy Is Not Going Out Of Business [View article]
    I am sure I could find stories of poor customer service at any and every retailer, not just BBY. Also, when AMZN has to start charging sales tax (which they inevitably will have to imo), that may alter things a bit.
    Jan 7, 2012. 11:02 AM | 1 Like Like |Link to Comment
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