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WallStreetDebunker

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  • Dividend Growth Investors - Mind Your Own Business [View article]
    In spite of all the lip service given to Buffett, it's ironic that so few writers own Berkshire Hathaway, especially when the shares offer better value and better long term total return potential than a basket of popular DGI stocks. Even with Berkshire hitting an all time high today.
    Aug 9 12:27 AM | 4 Likes Like |Link to Comment
  • Why D.R. Horton's Q3 2014 Earnings Are Cause For Concern [View article]
    4bagger and Money Investor:

    The biggest builders are currently among the smallest mid-caps. Still, smaller mid-caps are historically expensive just like small caps

    There's as much downside potential as upside. A significant correction becomes more likely with each passing month. When it occurs, DHI will likely get to book value--depending on the catalyst for the correction.

    People have focused on the wrong real estate recovery beneficiaries--like the stock AIV.
    Aug 8 03:50 PM | Likes Like |Link to Comment
  • Tesla's Order Backlog And Why It Is Worth More Than Porsche [View article]
    Is that humming sound like a 1974 Mazda RX-4 (rotary engine)? Personally, I like the sound of rotary engines better than the turbo golf cart sound of a Tesla. Here's a photo of a '74 RX-4 that has far more individualistic style than any of the cookie cutter Teslas I've seen so far:

    http://bit.ly/1lFENUy
    Aug 7 10:09 PM | 3 Likes Like |Link to Comment
  • Why D.R. Horton's Q3 2014 Earnings Are Cause For Concern [View article]
    4-bagger:

    I'll let you figure out how many times DHI has traded near or below book value in the least 20 years (sometimes as low as 40% of book value).

    Small caps are historically expensive, and builders are part that wave of strong sentiment.
    Aug 7 09:46 PM | Likes Like |Link to Comment
  • How Dividends Don't Matter In Retirement; A Few Examples [View article]
    "And once again, this is not an attack on dividends."

    In the future, Congress will enact laws to prevent hate speech towards dividends.
    Aug 7 12:12 PM | 4 Likes Like |Link to Comment
  • Stock Market Bubble? [View article]
    It takes a long time to work off extreme valuations. During the Japanese stock bubble ending in 1990, valuations were more than double those of the US in 2000. Japan's stock market is still mired in the swamp 24 years later. It takes a long time to work off a bubble, even with government intervention. Note that Japan invented QE (in the early 2000s) with no success in the long run

    Don't be too sure that the US has worked off its excess valuation, especially when the median S&P 500 price/sales ratio is currently just under its all-time high.
    Aug 6 01:19 PM | Likes Like |Link to Comment
  • Why D.R. Horton's Q3 2014 Earnings Are Cause For Concern [View article]
    Growth stocks expensive? Check
    Small caps expensive? Check
    Homebuilder stocks expensive? Check

    But wait...They're not obscenely expensive based on pro-forma forward earnings estimates! Never mind that DR Horton, the "largest homebuilder in the US", just missed their estimates by 35%. Never mind that inventory is rising.


    Let's all hold hands and sing the Housing Recovery song.
    Aug 5 01:12 PM | Likes Like |Link to Comment
  • Show Me The Money: The Perils Of REIT ETF Investing [View article]
    "I believe those willing to do some homework would be wise to do what Warren does rather than what he says!"

    Buffett has a near-photographic memory, a genius intellect, a Master's Degree from Columbia, studied at the New York Institute of Finance, and worked for Ben Graham. He spends more time reading financial reports than the average frat boy spends viewing porn. He has instant access to massive insurance float that gives him free leverage for his investments.

    The Dividend Dudes on Seeking Alpha cannot compete with Buffett and Berkshire Hathaway. That is the most absurd fantasies that regularly appears on this website (thanks to the dozens of $99/year newsletter writers here).
    Aug 4 11:02 PM | 5 Likes Like |Link to Comment
  • No Alternative Other Than Stocks [View article]
    David, Thanks for the detailed response, worthy of an article by itself. Although interest rates were historically modest and stable in the early 1960s (with stock market valuations on the high side), stock market returns for about 10-20 years thereafter lagged or barely kept up with inflation. High stock valuations seem hard to sustain regardless of interest rates. We'll have to wait to see how it all plays out.
    Aug 4 10:32 PM | Likes Like |Link to Comment
  • Show Me The Money: The Perils Of REIT ETF Investing [View article]
    Does a 7-month period of outperformance mean anything?

    A recent study tracked historical 3-year returns of Morningstar-rated actively managed funds. The average 5-star fund (top-rated) underperformed its style benchmark more than the average 1-star fund. Today's heroes are tomorrow's zeroes, more often than not.

    Peter Lynch did not coin the term "diworsification" for investment funds. He coined it for corporations that wasted cash on businesses far outside their historical focus. For example, when a bookstore company starts manufacturing electronic tablets (***cough*** Barnes & Noble).

    Lynch's fund held up to 1400 securities, which is 10 times the number of stock holdings in the Vanguard REIT ETF. Obviously Lynch believed in owning a widely diversified portfolio.

    Finally, is Warren Buffett diworsifying by owning so many businesses and stocks? (At least 70 by my last count).
    Aug 4 01:50 PM | 3 Likes Like |Link to Comment
  • Who Will Be Swimming Naked When The Tide Goes Out? [View article]
    Berkshire is probably one of the few diversified equity funds that is still fairly priced. (OK, it's really a pseudo-fund.) The stock price seems to be kept in line because of the "mega-conglomerate run by old genius soon-to-need diapers" discount.
    Aug 3 10:35 PM | 3 Likes Like |Link to Comment
  • Zillow Housing Data Portends A Housing Downturn [View article]
    "housing is now responding to more conventional forces."

    WTF???

    --All-cash deals accounted for an all-time high of 43 percent of total homes sales in the first quarter (according to RealtyTrac).

    --Amateur home flips have have increased substantially in the last year in many cities.

    --Wall Street firms are currently securitizing rental income from the first ever large-scale attempt at single family landlording.

    --First-time home buyers accounted for 27% of sales nationally in December, the lowest since the National Association of REALTORS® began tracking them in 2008.
    Aug 3 10:29 PM | 2 Likes Like |Link to Comment
  • 5 Reasons I Love A Melty Equity Market [View article]
    "You mean you haven't been reading the headlines plastered all over the financial press for the last year and a half that a 10 to 20% correction is coming to the market and coming soon?"

    No. We've been too busy falling asleep in front of the TV as asset-gatherers on CNBC predict a stock market melt-up. How could the market not rise knowing that there's a pile of cash on the sidelines, the market climbs a wall of worry, there is no alternative to stocks, and the market is cheap based on next year's pro-forma estimated earnings?

    It's always a good time to buy stocks--well, at least when it's other people's money.
    Aug 3 09:39 PM | 1 Like Like |Link to Comment
  • Now Is The Time To Buy Stocks, Not Sell Them [View article]
    Since 1980, the correlation of the Fed Model with S&P 500 total returns in the following 1-10 years has been from 20-47%. There are many models with 90% or greater correlation with long-term returns.

    In 1937, the 10-year Treasury rate was similar to today's value--and stayed similarly low for two more decades. Yet someone who bought stocks in 1937--after a powerful 5-year bull market--experienced 15 years of poor stock market returns.

    For estimated future returns, valuation matters. Current interest rates don't.
    Aug 3 04:27 PM | 2 Likes Like |Link to Comment
  • No Alternative Other Than Stocks [View article]
    Why is the shrinking number of listed companies important? The total market cap is at an all-time high, and the ratio of total market cap to GDP is near an all time high. Perhaps the declining number of listed companies indicates that many small and awful companies exited the listed market as a result of failure or ill-conceived acquisitions in times of excess money printing.

    Pundits keep rationalizing investing in an expensive US stock market because of low current interest rates. Is there any rigorous study that shows that currently low interest rates have a strong correlation with *future* stock market returns?
    Aug 3 03:44 PM | 2 Likes Like |Link to Comment
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