General Electric And Caterpillar Shares Could Be Indicating That A Market Correction Is Coming [View article]
I tend to disagree on GE.
My suspicion is that GE will outperform this quarter. With huge cash flow to valuation they will buy back shares if needed to beat the earnings target.
GE is actually undervalued and with a 3.3% dividend yield it offers great investor potential.
The more interesting question with CSCO is its fundamental business. It trades at a low PE 11.93 with the Forward PE at 9.83.
If you believe they will grow sales by 5%+ as projected and continue to cut costs it should be worth much more. Apparently the market believes some risk to their business model exists as software solutions may replace hardware in the future.
Regarding the dividend CSCO is one of the safest dividends around. With 46B in cash, FCF (Free Cash Flow) of 10B and a dividend of 1.5B, not too many people have been asking the question about CSCO ability to pay a dividend.
The question is how much they will raise it?
Regarding their business, management is confident and I am growing more comfortable with the idea of further investments in CSCO. If Sales, Cash Flow or Margins get impacted I can review that decision.
With the kind of money CSCO is generating they could potentially buy back 50% of their stock.
Three Reasons Why You Can Beat The Professional Investors [View article]
It should be added that most individual investors do not want to take the risk of a 100% investment in the SP500.
If more investors wanted to take that level of risk many would beat the market. For instance in Spring 2009 after a classic blowout bottom it became easy to invest aggressively and beat the market averages.
Now after a solid 3 year performance period it is time to remain fully invested but to have a lower beta in the portfolio. Especially since stocks dont seem like screaming bargains anymore.
The only way to compare returns is adjusted for risk. The dividend investors know they are getting a more stable return but perhaps will find S&P hard to beat.
If I was only trying to maximize return and beat the S&P I could have easily invested everything in financials or junk bonds.
Stock Buybacks: The Good, The Bad And The Ugly [View article]
The author makes a couple of valid points. However I would mostly disagree with the simplistic approach.
I have been happy with IBMs approach especially since shares have tripled in value over the past decade. They have a plan to deliver value and have executed it well at least under Palmisano.
There is very little that HPQ does that I approve of but if they drove the price of their shares down to 25% of their value before the Hurd exit, then bought back shares, that was a smart thing to do.
The Bullish Case For Chesapeake Energy [View article]
Interesting article!
CHK is cheap and it does have assets that should be of interest to many major companies. Further without a CEO to buy out or find a place for a sale would be viable.
One minor difference I would not call Natural Gas near multi year lows but I think Nat Gas is a fair price.
Amazing how everyone gets excited about energy when the price is thru the roof. Then get squeemish when prices fall back.
If nothing else CHK is a great Private Equity alternative. It is also not too difficult to value as CHK has sold off pieces of most of their major assets.
Avoiding Tunnel Vision In Your Dividend Growth Investing [View article]
Interesting article!
I am less sure of the authors conclusions. Rather than chance it I just invest in another company in which their major products are not being overtaken.
The important point is Microsoft is a risk that doesnt need to be taken without an appropriate additional return as compensation.
Equity Investing For The Very Long Term Will Yield Spectacular Returns [View article]
Great article!
As a believer in always being invested I endorse and live your theory. However a few things are missed which alter the magnitude of the rise and the future rise.
1) The million from 1934 after taxes and costs paid each year would be much lower.
2) The composite averages remove the bankruptcies and collapses. Further investing in a market wasnt an option as it is today.
My guess is 8% would be a better comparison but the authors case remains intact.
Looking forward it might be a little optimistic to forecast another industrial revolution. Further it would be impossible for the population to increase exponentially from here.
I like APA and I am holding. For those who arent easily spooked APA is well managed and has great assets.
I am aware of but not spooked by the Egyptian assets or the gas leak in the Gulf of Mexico.
The play with APA in my opinion is to buy at current prices and sell when things look good and shares trade around $120.Then move the funds into XOM if you have an Oil portfolio.
APA great company and well managed but it is more volatile than others. It is more like an old style Exploration and Production model.
General Electric And Caterpillar Shares Could Be Indicating That A Market Correction Is Coming [View article]
My suspicion is that GE will outperform this quarter. With huge cash flow to valuation they will buy back shares if needed to beat the earnings target.
GE is actually undervalued and with a 3.3% dividend yield it offers great investor potential.
Bank Of America Is Going To $25 [View article]
A few extraneous thoughts
BAC stated last year come March with government release they were prepared to address the dividend... What happened?
BAC is at a point where they would like to clean the deck of litigation and move forward. We may get to see the full extent of Countrywide assets.
Great article! I am bullish on BAC but one has to acknowledge there could be some bumps in the road.
It Is Not Can Intel Dominate Tablets, But When [View article]
How Safe Is Cisco's Dividend? [View article]
If you believe they will grow sales by 5%+ as projected and continue to cut costs it should be worth much more. Apparently the market believes some risk to their business model exists as software solutions may replace hardware in the future.
Regarding the dividend CSCO is one of the safest dividends around. With 46B in cash, FCF (Free Cash Flow) of 10B and a dividend of 1.5B, not too many people have been asking the question about CSCO ability to pay a dividend.
The question is how much they will raise it?
Regarding their business, management is confident and I am growing more comfortable with the idea of further investments in CSCO.
If Sales, Cash Flow or Margins get impacted I can review that decision.
With the kind of money CSCO is generating they could potentially buy back 50% of their stock.
Three Reasons Why You Can Beat The Professional Investors [View article]
If more investors wanted to take that level of risk many would beat the market. For instance in Spring 2009 after a classic blowout bottom it became easy to invest aggressively and beat the market averages.
Now after a solid 3 year performance period it is time to remain fully invested but to have a lower beta in the portfolio. Especially since stocks dont seem like screaming bargains anymore.
The only way to compare returns is adjusted for risk. The dividend investors know they are getting a more stable return but perhaps will find S&P hard to beat.
If I was only trying to maximize return and beat the S&P I could have easily invested everything in financials or junk bonds.
Cyclical P/E 10 Ratios At S&P 500 Peaks Prior To Bear Markets [View article]
Also that we didnt have a recession the entire decade of the 1990s by the data presented although I thought we had one in 1991.
Still both recessions in the past 20 years much more severe than average losing more than 50% of value. Perhaps less frequent than usual.
World Gold Council's Artigas: How To Use Gold As A Portfolio Hedge [View article]
I will look for more analysis by Juan Carlos Artigas in the future.
Stratton
What Everyone Must Know About The U.S. Dollar: Sea Change Coming? [View article]
I will let it ferment for a time in the future.
Stock Buybacks: The Good, The Bad And The Ugly [View article]
I have been happy with IBMs approach especially since shares have tripled in value over the past decade. They have a plan to deliver value and have executed it well at least under Palmisano.
There is very little that HPQ does that I approve of but if they drove the price of their shares down to 25% of their value before the Hurd exit, then bought back shares, that was a smart thing to do.
HP Is Still Struggling But Its Recovery Is Gaining Traction [View article]
Still I am not ready to invest in HPQ again. Apparently some people are happy that it is now worth 40% of its value when they fired Hurd.
Also the report today that the HPQ board continues investigating Autonomy is precious.
Red Robin: Attractive Company At Too High A Price [View article]
1) The burger is good but more expensive than other alternatives.
2) Consumer purchasing power is stagnant at best and more likely declining this year
3) RRGB is not in the healthier segment of the restaurant market which shows better prospects
So at a time when restaurants are not a primary focus area for investment RRGB seems to be in the bad area of a bad town.
The Bullish Case For Chesapeake Energy [View article]
CHK is cheap and it does have assets that should be of interest to many major companies. Further without a CEO to buy out or find a place for a sale would be viable.
One minor difference I would not call Natural Gas near multi year lows but I think Nat Gas is a fair price.
Amazing how everyone gets excited about energy when the price is thru the roof. Then get squeemish when prices fall back.
If nothing else CHK is a great Private Equity alternative. It is also not too difficult to value as CHK has sold off pieces of most of their major assets.
Avoiding Tunnel Vision In Your Dividend Growth Investing [View article]
I am less sure of the authors conclusions. Rather than chance it I just invest in another company in which their major products are not being overtaken.
The important point is Microsoft is a risk that doesnt need to be taken without an appropriate additional return as compensation.
Equity Investing For The Very Long Term Will Yield Spectacular Returns [View article]
As a believer in always being invested I endorse and live your theory. However a few things are missed which alter the magnitude of the rise and the future rise.
1) The million from 1934 after taxes and costs paid each year would be much lower.
2) The composite averages remove the bankruptcies and collapses. Further investing in a market wasnt an option as it is today.
My guess is 8% would be a better comparison but the authors case remains intact.
Looking forward it might be a little optimistic to forecast another industrial revolution. Further it would be impossible for the population to increase exponentially from here.
The Value In Apache Corporation [View article]
I am aware of but not spooked by the Egyptian assets or the gas leak in the Gulf of Mexico.
The play with APA in my opinion is to buy at current prices and sell when things look good and shares trade around $120.Then move the funds into XOM if you have an Oil portfolio.
APA great company and well managed but it is more volatile than others. It is more like an old style Exploration and Production model.