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jstratt

jstratt
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  • Bogle's Views On Retirement Income [View article]
    Thanks for a great article! I routinely calculate future SS in the manner Bogle is suggesting using $350k which is the imputed value of SS.

    I would add that my plans are to not take SS until after my full retirement age. The key point is that SS increases by 8% annually for each year you delay taking it up to age 70. Further that is adjusted for inflation.

    So if your Full Retirement benefit amount is $1800 mo at age 66 and you are in good health you can raise that to $2037 mo by waiting until age 68, or $2275 at age 70. It is a simple investment question of would you prefer an investment with an 8% return and inflation protection guaranteed. Your broker wont suggest that because it doesnt increase his AUM.

    62 1800 x .75 = $1350 x 12 = $16200
    66 1800 $1800 x 12 = $21600
    68 1800 x 113.18 = $2037 x 12 = $24444
    70 1800 x 126.38 = $2275 x 12 = $27300

    Those of us who save and invest regularly can still be at risk if we live past 90 which many of us might. Make that $350k SS investment work for you.
    Jul 18, 2013. 03:23 PM | 4 Likes Like |Link to Comment
  • Merck Vs. Johnson & Johnson: Dividend Yield Vs. Dividend Growth [View article]
    I just have to add a couple of points.

    I love dividends but see way to many articles and comments on Seeking Alpha suggesting buying a stock for its dividend when the prospects for the company are poor, or the dividend already consumes most of the earnings.

    My point is that you have to look at total growth such as

    Comp Proj 5 yr Earn Growth + Dividend =

    JNJ 6.67% + 2.9% = 9.57%

    MRK 3.03% + 3.5% = 6.53%

    I am illustrating it in a overly simple manner above and could be more detailed but the best information available would suggest that an investor with $100k invested would earn $15,000 more over a 5 year period.

    If you are a dividend investor and are getting low returns you might consider more than just the dividend. It is not that the dividend isnt important it is just that shouldnt be 100% of the investment criteria.
    Jul 18, 2013. 02:36 PM | Likes Like |Link to Comment
  • Merck Vs. Johnson & Johnson: Dividend Yield Vs. Dividend Growth [View article]
    I own both and am much more heavily weighted toward JNJ where it used to be just the opposite.

    JNJ has such a great product mix and cash flow that it is hard to beat. I reinvested in JNJ upon hearing that they removed the most incompetent CEO in modern corporate history a year or so back. Just that removal has created a tailwind that still lasts today as products continue to come back online in full force.

    On top of that JNJ appears to have a good product pipeline and prospects. Consequently analysts project growth at more than double that of MRK.

    With MRK I see more minimal growth as evidenced by a 3% annual growth rate projected in the next 5 years. Further I see them paying out 87% of earnings in their dividend.

    My point is that to invest in MRK for a 0.60% higher dividend would be foolish in comparison with JNJ and a 206% higher 5 year growth rate projected by analysts. It wont take 4 years to declare a winner in this contest.
    Jul 18, 2013. 02:16 PM | Likes Like |Link to Comment
  • Intel: OK, Where Are The Apple 'A' Chips Really Going? [View article]
    Thanks for the article and many insightful comments on chips.

    I increasingly wonder about AAPL and if they are capable of producing a new product. It may be that a year form now AAPL is much less relevant in an INTC chip strategy.
    Jul 18, 2013. 01:24 PM | Likes Like |Link to Comment
  • Buy Bank Of America Now: 5 Simple Reasons [View article]
    I am holding BAC and think it a good investment. At this point I will wait to see what the judge decides in the AIG case. When that is over BAC should be worth much more than 0.8 times book value.

    The reason I am a little concerned about the AIG litigation is that people hate BAC (other than post crash investors). For systemic reasons bank litigation results have been one sided with banks paying maybe a .01c on the $1. We may now be past the systemic phase and BAC is going to announce a huge dividend after legal issues are contained which is what this case will do.

    Currently I think C is the best bank to invest in with BAC 2nd. Lots of money still to be made.
    Jul 18, 2013. 01:01 PM | Likes Like |Link to Comment
  • Intel's Q2 Results May Have Created A Buying Opportunity Investors Should Not Miss [View article]
    I tend to agree with the author but want to do some more research. What I like are some of the following:

    1) Strong cash and Free Cash Flow even in a difficult environment.
    2) Huge technology investment by a company with a long track record of successful innovation.
    3) As the PC market fractured into pieces INTC has been impacted but seem to be responding well.

    Where did this question of the PC going away come from? I only see increases in the number of devices performing the function of the PC with INTC poised to capitalize.

    Lets be clear the INTC/MSFT duopoly is over and never to return. I do have a fundamental faith in INTC to compete strongly in the future however.

    So I will let the stock price settle and see no need to rush. Check to see what I can about their products and implementation status. If my gut checks out INTC could merit a 15 PE and 33% upside or if their products are really good an 18 PE and 59% upside.
    Jul 18, 2013. 12:42 PM | 4 Likes Like |Link to Comment
  • AT&T: High Dividend Yield With Limited Growth Opportunity [View article]
    I loaded up on T at $22-$24 but have been selling off 50% of holdings over the past year.

    T keeps increasing its debt, decreasing its earnings and paying a dividend that is 135% of earnings.

    As such I think it will fall back one day when these issues get more widely recognized. It wont go bankrupt but it could cut its dividend one day and share price drop into $27 range.
    Jul 17, 2013. 10:28 PM | 1 Like Like |Link to Comment
  • Landmark Bank: A Regional Banking Gem With A Great Dividend [View article]
    Thanks for the excellent article on LARK.

    I think it is a great time to buy banks but LARK is a little too small and thinly traded. It also seems to have a problem growing earnings.
    Jul 17, 2013. 10:19 PM | Likes Like |Link to Comment
  • Coca-Cola: A Long-Term Growth Story [View article]
    As an investor KO has always been a special company. At the same time it has been difficult to buy as it generally commands a higher PE. So when a rare buying opportunity arises I jump on it.

    I believe KO will be able to grow share value near a 10% annual rate. Free cash flow is a key metric for me as it allows KO to grow earnings in an environment where revenue growth is difficult.

    My assessment of long term growth is 3% dividend, 2.5% share buyback and 3.5% growth in earnings thru increased revenue
    and cost cutting. If you buy right you can get a 10% return.

    The split last year was nice as were KOs 2012 gains. This year it has been an under performer with the stock up only 5%+. By year end I suspect an 8%-10% return.
    Jul 17, 2013. 10:08 PM | 2 Likes Like |Link to Comment
  • Citigroup And Goldman Do Well: Questions Exist About Sustainability [View article]
    I just wanted to comment on the question of sustainability as I think you are getting to close to see the big picture.

    As a perspective I am not sure their has been a better time to be an investor in banks.

    1) It starts with historic low cost of capital
    2) Banks are never safer than after a cleansing recession and reestablishment of capital levels which is where we are now
    3) The yield curve is steepening
    4) Banks like BAC are trading at 80% of book value others higher but still historically low
    5) The cost cutting from technology going forward is huge for profitability. Think about depositing checks with a cell phone and the need for branches

    Anything can happen but sustainability isnt one of my concerns. Thats just my perspective.
    Jul 17, 2013. 01:28 PM | 1 Like Like |Link to Comment
  • The Fed And America's Debt [View article]
    Thanks for an interesting article!

    I enjoy seeing the Fed activity and US debt from a different angle.
    Jul 16, 2013. 08:20 AM | Likes Like |Link to Comment
  • America's Median Wealth Is Surprisingly Low [View article]
    Great article!

    The crux of the matter as I see it is that 40% of capital is in the hands of the top 1% and that amount appears to be growing by 1% per year.

    Many would immediately want to tax the top 1%. However they may find that capital flows away from the US would make median wealth much lower.

    Dare I suggest financial education and the thought that if you save nothing perhaps wont have anything. After all there is no shortage of 2nd homes, Boats, Cars, RVs, Airplanes, Motorcycles, Timeshares and increasingly Tattoos.
    Jul 13, 2013. 08:12 PM | 1 Like Like |Link to Comment
  • High Frequency Insider Trading - And It's Completely Legal [View article]
    Excellent Article!

    It appears that the free and fair markets are under siege from all angles. The corruption is becoming the norm and many will suffer from the effects.

    Even finding an article such as this that supports a legitimate market economy is becoming less common.
    Jul 12, 2013. 09:16 PM | 1 Like Like |Link to Comment
  • It's Time To Play Ball And Finally Do Dividend Growth Investing Right [View article]
    I would encourage Mike to not let cash build up in significant amounts. In other words stay an investor and not a trader. If you sell a stock replace it immediately!

    If I did have a lot of cash at this point I would invest it over the next 6 months. Since the market is up 12 of the last 13 months, it should develop some rational fear at some point.

    Overall however an investor should stay fully invested. If not you become one of the many who write articles suggesting it is time to sell as it kills you to watch the market rise while you are in cash.
    Jul 11, 2013. 09:32 PM | 2 Likes Like |Link to Comment
  • The Optics Of Selling Financial Information [View article]
    I object to the process in its entirety. Our markets have been based throughout history on free and fair access to information.

    As we descend more into manipulated markets with special access given to special people for special reasons we as a country and a society lose.

    When the US was higher rated on an anti corruption scale these things didnt happen. By the way we arent even in the top 25 countries for honesty and integrity anymore.

    I dont trade anymore just invest. Based on the corruption I would just lose. Only in the US could it be legal for a high frequency trader to look at a persons trade in a retirement account and enact trades ahead of it.
    Jul 11, 2013. 03:15 PM | Likes Like |Link to Comment
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