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William Greenfield  

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  • Why I Will Start Social Security At Age 62 [View article]
    Robert,

    Thank you for this article.

    I would like to point out (as a CPA) that when you are discussing such a subject as this (when to take S.S.) you can't leave out taxes. I would even say that the tax implication of your choice is just as important as the actual choice. Warren Buffett once wrote in his partnership letters "...don't worry about the income, just the outcome".

    You should try to run scenarios in which you have your S.S. income with the dividends at the various rates and stages in life. Do this with a tax program that you know is good (there are so many variables that doing it by hand will guarantee it will be wrong).
    Aug 26, 2014. 02:38 PM | 17 Likes Like |Link to Comment
  • Retirees Please Don't Index, You Deserve Better Than Average [View article]
    Chuck,

    In your answer to Mister J you say there is no survivorship bias but you write an article showing how stocks would have done from 1996 to present there is an inherent bias. Many of the stocks you would consider today may not have even gotten on your radar in 1996. Some of them may have only been paying dividends for a short time. So to point to the select few that have paid for the last 20 years and say "if you had bought them in '96 you would have beaten the averages" is biased. You must instead look at which stocks would have been considered in '96 and then follow their performance. As we all know, some cut dividends in '03 and many cut dividends in '08-'09.

    We get your point. Buy stocks at low prices with good dividend history. But to prove your point you should show which stocks you would've chosen 20 years ago and then tell us how they would have done. And none of this "earnings were falling so I would sell". Most of the DGI's are consistently saying that they only sell when the dividend is cut, regardless of what earnings do.

    I am not saying that I disagree with your logic. In fact, I like buying dividend stocks at bargains. But we must realize that when trying to show the world that this is a good strategy you need to bring proof without using 20-20 hindsight.
    May 30, 2014. 10:41 AM | 17 Likes Like |Link to Comment
  • Is Apple's iPhone Losing The Smartphone War? [View article]
    Excellent article.
    Nov 22, 2013. 09:12 AM | 8 Likes Like |Link to Comment
  • Trying To Beat The Market Is A Fool's Errand [View article]
    Chuck,

    Nice article. The fact that investing is not necessarily to beat the market is something I have trouble explaining to some people. I think that having an absolute goal (e.g. a set income yield, or an absolute rate of return that one would be happy with) is a much better goal.

    With that said, I didn't quite understand how you chose the 20 stocks for you dividend portfolio. You mention taking stocks with a dividend yield over 3%.
    "The following Portfolio Review is comprised of 20 blue-chip dividend growth stocks that together provide an average current dividend yield of 3% per annum."

    By using current div. yield then that means that you are looking back through time with a little bit of 20/20 hindsight. It might be better to go back and find stocks in 1993 that were yielding 3% (or more) and have your graph track the performance of those stocks. Your way of picking stocks has a bit of "survivorship bias", in that it uses stocks that exist today to prove something is true for the last 20 years.

    If you can get that historical data I would love to see what the outcome would be. I also think your 20 stocks would be entirely different.

    Thanks,
    William
    Oct 17, 2013. 11:54 PM | 8 Likes Like |Link to Comment
  • How I Can Explain 96% Of Your Portfolio's Returns [View article]
    Kiran,

    Thanks for the article. Personally, I'm a Graham fan so I don't go for thinks like the Fama-French model which rely on EMH. However, I would like to thank you for explaining it in terms that are understandable to retail investors like myself.
    Dec 31, 2013. 02:58 PM | 7 Likes Like |Link to Comment
  • Retirees Please Don't Index, You Deserve Better Than Average [View article]
    Chuck,

    Nice article. Two comments.

    When you measured the dividend aristocrats did you the list as it was in 1996 or only looked at the list as it is today?

    There an ETF that tracks the Dividend Aristocrats. Perhaps investors should buy the ETF when they feel the underlying stocks (as a whole) are fairly valued or undervalued. Would you recommend such a plan?
    May 29, 2014. 03:34 PM | 6 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Chuck,

    I have been a long time critic of yours. I used to try to argue with you or your readers to show them why you are wrong, but after a while I gave up. There was no point. Lately when I click on your articles and my wife asks why I'm reading it if it will just make me upset.

    However, I now know why I kept clicking on your article. This article is one of the best you've written!!

    I'm not saying I will become a DGI suddenly.While I may disagree with you about certain point, I think I can say that this article shows your thinking in a clearer manner than any of your previous articles. This article is extremely well written and the case study you give is extremely informative. (I especially like that there aren't a bunch of FAST Graphs and other charts. It was a simple narrative with a few graphs, but not overkill.)

    Thank you.
    Sep 4, 2014. 05:53 PM | 4 Likes Like |Link to Comment
  • Retirees Please Don't Index, You Deserve Better Than Average [View article]
    This is precisely what I was trying to get at in my comment above.

    Furthermore, by buying the "Dividend Aristocrats" you are in essence buying an index, albeit a small one. These aristocrats in-and-of-themselves are an index. Just buy SDY when you believe it's fairly- or under-valued. So to say "don't index" is misleading.
    May 29, 2014. 06:28 PM | 4 Likes Like |Link to Comment
  • Sittin' On The Bid Side Of The Market [View instapost]
    Chris,

    A great way to track prices on Amazon is camelcamelcamel.com. I recently used it to track a book. I had forgotten all about the tracker and then one day an email lets me know the book I wanted was below my price point.

    Not only is it a price tracker, but it will show you the price history of the item, allowing you to see what times of the year may be the best time to buy. All in all it is a great tool.
    Dec 4, 2014. 03:06 PM | 2 Likes Like |Link to Comment
  • Sturm, Ruger And The Case Of Depreciation Deception [View article]
    Tadpoles_UK,

    Firstly, the IRS doesn’t allow 15 year depreciation for non-residential buildings. That was a rule back in 1981-1985 (known as ACRS) but was changed again in 1986. Before 1981 non-residential buildings were depreciated over 40 years. After 1986 the IRS rules were 31.5 years until 1993 when they changed the rate to 39 years. So, for a very short period of time the depreciation was 15 years, but that was over 30 years ago.

    Moving past IRS rules, you must remember that we are dealing with SEC reporting, which follows FASB. It’s very nice to want to use IRS depreciation (and nowadays I think the IRS depreciation rates are pretty in line with reality) but when writing financial reports according to GAAP you don’t use IRS rules for depreciation. Instead management must depreciate the assets “…in such a way as to allocate it as equitably as possible to the periods during which services are obtained from the use of the facility” (FASB ASC 360-10-35-4)

    Furthermore, it clearly states “If the number of years specified by the Accelerated Cost Recovery System [ACRS] of the Internal Revenue Service (NYSE:IRS) for recovery deductions for an asset does not fall within a reasonable range of asset’s useful life, the recovery deductions shall not be used as depreciation expense for financial reporting (FASB ASC 360-10-35-9).

    SEC filings must follow these FASB rules, so to say that they are possibly following IRS rules would mean they are heading for some deep trouble.

    As for everyone commenting that my use of the word “misleading” is wrong – I can concede that perhaps I should not have used the language “misleading” since it is said in their financials. But I would like to know how many readers knew what RGRs depreciation rate was before reading the article? What about your friends? What about the less savvy investor who isn’t reading SA?

    If management knows that no one ever questions depreciation (especially since many investors blindly use EBITDA) then using very high depreciation rates calls into question the honesty and ethics of Rugers management.
    Aug 18, 2014. 06:22 PM | 2 Likes Like |Link to Comment
  • A Value Investor Takes On Christmas Shopping [View instapost]
    Glad to see you already are making good use of camelcamelcamel.
    Dec 4, 2014. 05:01 PM | 1 Like Like |Link to Comment
  • Why Freeport-McMoRan Is A Great Buying Opportunity [View article]
    Thank you for writing this article. I only had time to skim through it but I will definitely come back to read more thoroughly after work today.

    However, I'm bothered that you used EBITDA as a metric for valuing FCX. As a mining company they have big capital expenses that must be taken into account. They must build rigs to get the oil out of the ground, they must constantly expand the mines and infrastructure within these mines if they wish to keep extracting copper and gold from their mines. EBITDA totally ignores all of this.

    What are the multiples if you had used free cash flow instead?
    Nov 4, 2014. 12:23 PM | 1 Like Like |Link to Comment
  • PSA-O Preferred Investors Risk Losses For Yield [View article]
    Smallstep,

    Thanks for reading.

    The difference between PSA and the PSA-Series is that PSA is a common stock. The Series' that we are discussing are preferred shares. It would take to long for me to explain what those are here, but you can learn more by going to Investopedia.

    The main points are - Preferred shares get a set dividend (like a bond gets set interest) but are not considered debt. This is an important distinction. Most investors who buy preferred shares are looking for income through dividends. Some preferred shares have a call feature which can cause a yield-to-call to exist. Investors need to pay attention to the terms for each preferred. These terms can change from series to series, increasing the risks that retail investors will make a mistake.

    REIT's (such as Public Storage) need to distribute 90% of their earnings. The dividends distributed to preferred shares count towards the 90%. Therefore, REIT's will usually have some preferred shares. This allows them to raise money without taking on more debt or diluting the earnings per share.

    The PSA shares you own are common shares. That means you are a owner in the actual business. If Public Storage does well your shares should increase in price since they can get more earnings and (possibly) more dividends, while the preferred shares won't since all they can get is the set dividend. However, if Public Storage does poorly your shares may go down in price and perhaps get a smaller dividend, while the preferred shares will still be owed the set dividend.

    I hope that was understandable. Like I said you can learn more about preferred shares on many other sites that will explain them better.

    Good luck!
    Sep 5, 2014. 12:24 PM | 1 Like Like |Link to Comment
  • California Chrome Arbitrage And $300 On The Sidewalk [View instapost]
    So Chris is this the new special situations that you referred to? Takes a lot of imagination to have spotted this on the go.

    How much money do you need to start an account?
    Jun 26, 2014. 01:02 PM | 1 Like Like |Link to Comment
  • Dividend Aristocrat Rejects [View article]
    Mike,

    I know that there are many DGIers that stress value. Regardless of whether you or Chuck or other DGIers buy only undervalued or fairly priced stocks, the fact that the Aristocrats are selling at high valuations is undeniable. This tells me that the masses are buying these high-quality stocks at high prices.

    Further, even if DGIers look at price when they buy, they don't look at price while holding. This can be just as bad.

    Perhaps you can explain to me why a DGIer holds on to an overvalued stock that is paying him 15%-20% on his cost but is only yielding 2% on current price. If he sells and picks up another undervalued stock with a 2% yield then he will have the same income.

    The above is a sincere question that I have. I just don't get the mentality, I guess. I would really appreciate it if you can explain it to me and the readers in a respectful fashion.

    Thank you.
    Jun 16, 2014. 09:56 AM | 1 Like Like |Link to Comment
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