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  • Retirement Plumbing: The Cistern System [View article]
    While DVK can probably explain more clearly, Mr.Market is Benjamin Graham's analogy to the stock market.

    Imagine you own a business and your partner is a bipolar dude named Mr. Market. Every day he comes pounding on your door, and whether you like it or not, he tells you what he thinks your stake in the partnership is. Graham explains that it is most important to ignore him, generally, because his spewing is meaningless nonsense- as a business owner, you don't care what the going value is nearly as much as just want the business to continue humming right along.

    However, you can take advantage of this crazy dude. If he comes one morning and tells you your stake is worth 5x what you think it's worth, it may be appropriate to take advantage and sell, because it's such an overpriced valuation. On the other hand, if he tells you that it's only worth .25x of what you think it is, you might want to take the day's price to buy out some of Mr. Market's share.

    It's a very good analogy, in a lot of people's opinion. It can be found in The Intelligent Investor, by Graham, and in all sorts of "investing/anti-trading" materials since.
    Feb 20 11:25 PM | 6 Likes Like |Link to Comment
  • Conoco-Phillips Spin-Off: Buy One Dividend, Get One Free [View article]
    Eyetri2-

    I hope you don't mind, I went snooping through your comments and found the link you're referring to- http://bit.ly/oT8rI4 - Also, according to your comment and the powerpoint, the split will be 2 for 1 (or 1 for 2, meaning 1 new company share for each 2 COP shares).

    Tim- good article again, thanks for sharing your thoughts.
    Oct 25 02:18 PM | 5 Likes Like |Link to Comment
  • The Truth About The Impact Of Dividend Reinvesting [View article]
    pfifla-

    People will definitely continue to need those consumable goods you mentioned, but it's at least questionable from where they will purchase 10, 20 and 30 years from now.

    For example, all the big store chains, be it retail, warehouse, pharmacy or grocery are all producing generic products which compete with the likes of DG champions (I'm excluding companies like wmt, because I don't really consider them a stalwart dividend payor because of Sam's Choice water). It may not be fatal to these companies, but I think it makes it a little more difficult to predict long term.

    Furthermore, rising dividends is by-product of rising earnings which is a byproduct of rising revenues (and/or cost reduction). But, as AAPL (even if not a DG yet) saw in its February earnings report, growth is limited by the size of the planet (for now). Eventually, dividends might necessarily stop rising specifically because of a company's outstanding success.

    Finally, this is something I've been wondering for a little while and I would appreciate information about it. A lot of people throw around historical numbers, like "if you would've bought PG or KO, etc, 30 years ago, you'd be rich!." (I have no problem with throwing around historical facts to support theories.) My point is, 30 years ago, these companies were only maintaining streaks of 20+ years. What companies historically paid out rising dividends for 70, 80, or 90 years? In 1970, what companies were paying dividends for 50 years at that point and maintained them for *another* 20 or 30 years? I briefly checked the CCC list and the largest current streak is 60 years DBD. How much higher have streaks gone, and how commonly?

    Perhaps the best we can do is try to find companies likely to continue growing revenues, earnings and dividends, and pay attention for when they're about to top out?

    (I feel like SA has become more hostile as of late, so allow me to clarify - I am genuinely curious, not snide and pessimistic.)
    Apr 12 12:31 PM | 3 Likes Like |Link to Comment
  • This New Budget Proposal May Limit Your Annual Retirement Income [View article]
    It seems like a lot of people have a problem with the plan using the term "reasonable." If Obama left this out, would it be better? I assume there will still be a lot of complaints about the amount, but at some point, the concept makes sense, as some commentors have pointed out. Isn't it essentially just another limit on what people can extract? And what happens to everything above the upper limit (whatever that may end up being)? You just have to save it in a regular, taxable account?

    With that being said, I agree with those who are concerned with where a step in this direction may lead. This guy's crazy and I think he's going to try to do as much damage as he can over the next 3.5 years. I heard Canada's still a free country...
    Apr 8 11:41 PM | 3 Likes Like |Link to Comment
  • Retirement Plumbing: The Cistern System [View article]
    Definitely get a hand on The Intelligent Investor. I read the one with Jason Zweig's commentary; it's a nice addition because he shows how timeless Graham's principles are. What follows is link to dealoz.com for the book, if you were so inclined to purchase it right now.
    http://bit.ly/11YGbNk
    Feb 21 10:09 PM | 3 Likes Like |Link to Comment
  • 12 Things To Dislike About Dividend Investing [View article]
    wenzela, and everyone else-

    Approximately how large are new positions that you open? When I get started, my dividend stream will be so small that it could take years before they accumulate to a worthwhile sum to invest separately (not taking into consideration any new funds I may be able to add). My thought process as of now is to let DRiP works its magic until the positions throw off enough income that within a few quarters, there will be enough there to take somewhere else.
    Feb 5 11:12 PM | 3 Likes Like |Link to Comment
  • Retire In Half The Time With Dividend Growth Investing [View article]
    I don't know if people consider this, but I thought I'd point it out. Compounding on stocks will generally happen quarterly, so that you will reach your goal a little bit faster. Or more likely, when you get to your goal, you'll get there a little higher. For example, instead of hitting 506K after 18 years, you'll have 511K. because technically the 2nd quarter dividend will be compounding on the first quarter, the 3rd will compound on the previous two, and the 4th will be on the previous three.

    Of course, I understand your charts were kept simple for convenience reasons. But in case there are readers out there who may not be aware of this, hopefully they will be going forward.

    Kudos on the article, another enjoyable read.
    Nov 18 03:09 PM | 3 Likes Like |Link to Comment
  • Dividend Stocks Vs. Growth Stocks: Myth And Math [View article]
    CP-

    I enjoyed your theorizing. As has been pointed out ad nauseam, in a real world situation in which there are market dips, GS probably get hit harder. However, in my unsolicited opinion, the only really good rebuttal to your article is that 10 years is likely too long a horizon for many GS.

    With that said, you were very explicit in your intention and your assumptions; your article was thought-out and clearly thought-provoking. Thanks.
    Nov 8 01:16 PM | 3 Likes Like |Link to Comment
  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    I'm not recommending any of the following stocks, but from my understanding they are all pretty standard for long term portfolios and can give you an idea of where to look. If you go to each company's page on google finance, it has similar companies and the sector and industry links to find more similar companies.

    capital/durable goods- such as MMM and CAT;
    healthcare- JNJ and ABT
    more consumer, household- PG and KMB
    energy- XOM and COP

    Also, check out the U.S.Dividend Champions spreadsheet put together by David Fish http://bit.ly/aA8y3H .

    That should be enough to get you started. Again, I don't recommend you purchase any of the aforementioned stocks until you do your own analyses and determine they are each what you're looking for at the price you're looking for. Good luck!
    Nov 4 10:25 AM | 3 Likes Like |Link to Comment
  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    Does anyone feel comfortable giving a general rule? I have actually been thinking about this exact point the last few weeks (my investing career has only be a few months), and as I watch my holdings go up and down I wonder if it pays to sell out and wait for it to come back down. I feel confidant that I'm purchasing quality shares for the long term, but if some good news unreasonably runs up the market price- should I jump off the bandwagon? So, it would seem from this article that the consensus is, J-U-M-P! But the XOM example was more than 25% increase. What if it's a more modest increase, such as 15%, or 8% in a couple of months? What are all of your feelings' towards smaller capital gain opportunities?

    Thanks.
    Nov 3 06:57 PM | 3 Likes Like |Link to Comment
  • Preferred Stock Investing: A Simple Guide To 7% Yield - Part 2 [View article]
    A few things-

    1) My impression from yesterday's article was that CDx3 and preferredstockinvesting is your newsletter and notification service. If that's true, calling it your "preferred" newsletter and service is misleading to readers.

    2) QuantumOnline doesn't rely on an honor system; it relies on generous donors who have money to spare and are moved by the cause. Calling it an honor system should make a person feel as if they are stealing if they do not contribute. If it's just a call for generosity, it won't.

    I do understand that you're trying to sell you book/service, but it feels like dishonesty to me.

    3) What is your response to the lack of trading volume on preferreds? I only checked a few (using google finance, for what it's worth) but they all (between 5-10 issues) had only a few thousand shares trading daily. If this is representative, that's quite a large drawback.
    Oct 25 09:57 AM | 3 Likes Like |Link to Comment
  • 10 Commandments For Dividend Growth Investors [View article]
    Great post, David, thanks.

    Quick question for anyone out there- why is CL's p/b ratio so high? Unless there's a good reason, I would think that despite it's favorable yield, it's got a significant snag in its fundamentals.

    Thanks
    Sep 20 10:02 AM | 3 Likes Like |Link to Comment
  • Monitoring A Large Portfolio [View instapost]
    "Wall Street has done a wonderful job of conditioning our minds to always be cognizant of share price."

    Sometimes people are in a position where they can realistically need the money in a few years, but they do not need it now. Then, price does matter now, in that such an investor ("speculator") will not want to lose on his principal. Would you recommend to just park the money in an FDIC-insured account and let inflation eat away?

    "That "margin of safety" simply isn't true if you are buying companies as opposed to buying stocks."

    I feel like margin of safety can apply to DG, as well. You like KO because it has a certain reputation, which builds your expectation. In addition, it has financial strength, product moat, global reach, etc etc etc. If KO with the *same exact* metrics was priced at $1,000.00 per share, you likely would not buy it, you would not reinvest the dividends into such a position, and you might even think about lightening the position. Thus, your margin of safety has been lost. I think of it as you just have a different guide for defining safe. (Perhaps 6 of 1?)

    RAS- I have never come across anything. If and when I do, and I remember this comment stream, I'll post it ;)
    Apr 18 04:49 PM | 2 Likes Like |Link to Comment
  • This New Budget Proposal May Limit Your Annual Retirement Income [View article]
    It's just a matter of perspective. I think saving is "right;" nobody can stop you from doing as you please with your money. Saving in a tax-sheltered account is not a "right" per se. You may view it as an "entitlement," in that since the government extended your ability to exercise your right, you feel that the government is now encroaching on your abilities.

    If the initial legislation had a maximum cap on distributions or account value, would this have been such a big talking point?

    If anyone chooses to disagree, please, explain your points or disprove my points (preferably both) as clearly as you can; I would like to understand your position.
    Apr 12 10:16 AM | 2 Likes Like |Link to Comment
  • This New Budget Proposal May Limit Your Annual Retirement Income [View article]
    TVP- I agree, and I'm very concerned with where the more liberal folks are driving this country. And I understand that this is (likely) a step in that direction.

    Justaminute- I don't agree with you. I apologize if I'm factually mistaken, but nobody is taking away people's "excess" money; my understanding is that it will just be left out of retirement shelters, to accumulate at a slower rate, all the while helping this (formerly great) country make a disappointing attempt at balancing a budget when there spending policy is whacked out, to say the least.

    Tim- "Whether the gazillion dollars is in a retirement account or taxable account is not important." I think this is an important statement. As above, and please correct me if I'm wrong so I may change my opinion, you are free to have as much money as you want, and you then have to do you part of being a citizen/resident (even if half the country doesn't do theirs). If the IRA legislation was originally passed with some sort of cap on distributions or value, can people honestly say they're pissed off? I would think people's reactions would've been similar to what they probably were back then- we get to shield money from the government? AWESOME! If they're reaction was, "we get to shield $3mil from the government," I assume it would be followed the same enthusiastic "awesome."

    And it's entirely understandable that now that we have something, it's rough to take it away. But I think the legislative intent has been overrun. And Bama's New Deal theoretically gets retirement savings back to its origins.

    I'm not in favor of it; I just don't the possibly proposed legislation (standing alone) to be as bad as many others here do.

    "This is why some people do not want to tax the most affluent." This implies that many SAers in this thread are ticked off because their wealth is being taxed at all. That's a whole other discussion, and I am only referring to tax deferred retirement savings.

    Disclosure- I paid the IRS money for my 2012 return, we work hard for our money, and we do not get government handouts unlike many of our neighbors (excluding things such as roadways, police, fire, etc.).
    Apr 10 01:35 AM | 2 Likes Like |Link to Comment
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