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WallStreetDebunker

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  • Looking for an oil bounceback? Don't buy energy stocks [View news story]
    The recent low point would be the highest post-crash bottom price in history, adjusted for inflation. But it's great that the analyst's crystal ball is certain that the bottom is in for oil. (There's a lot of broken glass where crystal balls once sat in Wall Street firms that called other commodity bottoms in recent years.)
    May 17, 2015. 02:04 PM | 1 Like Like |Link to Comment
  • Why Dividend Growth Will Slow Down [View article]
    "As far keeping going with DGI - there was no suggestion in the article to abandon DGI."

    It's sad that people feel pressured to walk on egg shells around the DGI apostles. There's nothing special about DGI. It's an indirect value + quality strategy. The results have been historically fine, but I haven't see such hype aimed at retail investors since the late 1990s when the Motley Fool was promoting "Rule Makers" portfolios (which ironically fared poorly in the next several years).

    One can get similar results from a vanilla value index fund with very low fees and none of the labor. But DGI is a labor of love, like knitting and nose picking.

    Someone had to say it...
    May 16, 2015. 10:54 PM | 4 Likes Like |Link to Comment
  • What's An Investor To Do With McDonald's? [View article]
    "Enjoyed a bacon n cheese Angus burger today."

    A bacon, cheese, and Anus burger? I've had tacos made with cow eyeballs before (Taco de Ojos), but never an Anus burger. Does that come with Preparation H on it? Oh wait, you wrote Angus burger. That's cool that they named a burger after the guitarist of AC/DC, but it won't help them with the very important youth demographic that likes other fast-casual restaurants.

    "A decade ago, there were 9,000 fast-casual restaurants in the U.S., versus nearly 14,000 McDonald's. Now, fast-casual restaurants number more than 21,000, according to Technomic, while McDonald's U.S. restaurant count has risen only slightly.

    "The percentage of people age 19 to 21 in the U.S. who visited McDonald's monthly has fallen by 12.9 percentage points since the beginning of 2011, according to Technomic, while the percentage of customers age 22 to 37 visiting monthly during that period has been flat."

    -WSJ

    I can't believe activists went after McD's. They must see some potential for financial engineering. The brand will be the Denny's of American fast food restaurants in a couple of decades.
    May 16, 2015. 10:28 PM | Likes Like |Link to Comment
  • All-Time Highs Prove Investors Must Be Stoned [View article]
    "I always think it's really sleazy to make these flimsy excuses to comment on other author's posts in order to put links to your own posts so I never do it but I'm curious - does it work?"

    Yeah it works for him, but obviously not as well as what you're doing. How did you get so many followers? (This is a genuine question.)

    Retail investors generally weigh a recent track record above all else, in spite of the evidence that it has no predictive value (or even negative predictive value). The best fund rating company in the world, Morningstar, cannot predict which funds will outperform in the future, in spite of trying to do so for decades.
    May 16, 2015. 08:52 PM | 2 Likes Like |Link to Comment
  • I Concede Defeat In Amazon.com [View article]
    Freeman: Since this article, Amazon has been whipped by the Nasdaq 100 index by about 15%. But thanks for providing evidence that the market is in the phase where every novice speculator is an arrogant genius (and bound to learn the mistakes of the past).
    May 16, 2015. 07:01 PM | 4 Likes Like |Link to Comment
  • Why Dividend Growth Will Slow Down [View article]
    Robert: You might consider writing the article anyway. It's one of the few ways a retail investor has a genuine edge over institutions. A paragraph in a recent Larry Swedroe article inspired my research into the topic. He still is cranking out good articles regularly over at the ETF website.
    May 16, 2015. 06:37 PM | Likes Like |Link to Comment
  • What's An Investor To Do With McDonald's? [View article]
    The best thing McD's has going for it in the near term is that some pretty good activist hedge funds are on their backs now. That usually is beneficial to the stock price.

    In the long term, McD's is sitting squarely in front of a tsunami of changing consumer tastes and a spate of new and superior fast-casual restaurants that are in the early to mid rollout cycle. This means the competition will be greater than ever in N. America in the future.

    This is similar to what has been going on in the traditional grocery store sector, with the onslaught of Whole Foods, Trader Joes, Fresh Market, and others.

    Will McDonald's thrive like Kroger? Or will it flail and suffer like Supervalu? Nobody knows. If it weren't for emerging countries, McD's would be a risky wager--especially because the stock isn't cheap like Kroger stock was (until recently). It might be worth considering dumping MCD stock after the activists juice the shares.

    The menu at McD's is like the complex cockpit of a jumbo jet, and I've been told that many of the newer items taste like vending machine food warmed in a microwave. That tells you all you need to know about the current management.
    May 16, 2015. 03:46 PM | Likes Like |Link to Comment
  • Why Dividend Growth Will Slow Down [View article]
    Here's a trick you can use to park some money until stocks offer better value: Get a 5 Year CD from Barclays yielding 2.25%. (The rate is comparable to a much longer duration 10-year Treasury.)

    The early withdrawal penalty is 6-months of interest. As long as you withdraw after one year, you've done better than short term Treasury bonds and bank accounts, even bearing the expense of early withdrawal.

    Example: Suppose there's another bear market that brings the stock market down down 40% in the next 2 years. In two years, you can do an early withdrawal of your CD, lose a half year of interest accrued, yet you still will have accrued about 3.125% interest in 2 years (with zero risk to your principle). So you don't lose much to inflation while you're waiting for the inevitable correction. Unlike Treasury bonds, you have zero exposure to the loss of principle if rates rise suddenly--and you are getting a better yield compared to short-term Treasuries.
    May 16, 2015. 03:23 PM | 3 Likes Like |Link to Comment
  • What's An Investor To Do With McDonald's? [View article]
    It hasn't hurt him, but he'll never own Chipotle or any other brand that churns out returns like Sees Candy did for him when he was young and had an eye for brands of the future.
    May 15, 2015. 10:07 PM | 1 Like Like |Link to Comment
  • What's An Investor To Do With McDonald's? [View article]
    McD's will muddle along here and focus on the emerging markets--where cleanliness, speed, cheapness, and formica tables are still a novelty. I'm surprised Buffett doesn't own McD's. It's right up his alley. He loves the dinosaur brands of his youth--mediocre, unhealthy products with little consumer enthusiasm in the wealthy nations but still interesting to the unsophisticated middle class of emerging countries.

    Buffet loves Heinz, Budweiser, Kraft Velveeta Chese, or any junky brand name food stock popular in 1960s suburbia. Why not McDonald's? Maybe they offended his palate when they starting offering healthy (but limp) salads many years ago.
    May 15, 2015. 09:56 PM | 4 Likes Like |Link to Comment
  • What's An Investor To Do With McDonald's? [View article]
    "The patty however lacked that "angus" taste."

    Next time you're in McD's, ask the manager if there's a typo in the menu. They might be serving Anus Beef rather than Angus Beef.

    McD's is now a Third World enterprise, whether overseas or in the inner city.

    I don't eat that type of food often, but when I go to the Habit or In and Out, people look satisfied. At McD's people seem to exude the resignation that one sees at the DMV.
    May 15, 2015. 08:43 PM | 3 Likes Like |Link to Comment
  • Why Dividend Growth Will Slow Down [View article]
    Good and timely article. Many Dividend Growthers have been making assumptions about future dividend growth based on recent years. Nobody knows when the end will come to the low interest rates and the Gilded Age of Financial Engineering, but when it does, it will likely prove quite a shock to US stock holders, especially the dividend domatists.
    May 15, 2015. 08:01 PM | 11 Likes Like |Link to Comment
  • Realty Income Corp.: Collecting Monthly Dividends [View article]
    "The Monthly Dividend Company" slogan should be changed to "The Daily Stock Blogger Company".

    I hope the bloggers are getting a holiday fruit cake for their efforts.
    May 15, 2015. 07:43 PM | 11 Likes Like |Link to Comment
  • Why Income Investors Should Buy These 4 Dividend Stocks Instead Of Dividend ETFs [View article]
    Schwartz: Read the article. It's not all about income.

    "Dividends are all the rage these days. Of course, there's very good reason for this, since dividends have been historically proven to meaningfully boost investor returns over time."

    I doubt whether many people are happy to underperform the market just because dividends are hitting their account statements.

    I don't read about too many income investors excited by their ownership of mREITs in recent years as the stock prices have plummeted. Apparently dividends don't really make people feel so warm and fuzzy when the income is more than erased by declining share prices.
    May 15, 2015. 02:30 PM | Likes Like |Link to Comment
  • Dividends At A Reasonable Price - Part 2 [View article]
    giorgio: I thought that you have been around long enough to understand that the past does not predict the future. VEA is not 10 years old, but it tracks an index that has been around since 1969. It offers better value than any blue chip US portfolio, whether DGI or whatever.

    It's unlikely that you'll keep up with it going forward 5 -10 years.
    May 15, 2015. 02:09 PM | Likes Like |Link to Comment
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