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Buyandhold 2012

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  • Philip Morris Is A Buy For The Long Term [View article]
    Adam,

    I am a creature of habit. When I started investing back in 1970, I was not aware that dividends could be automatically reinvested. So I would stick the dividend checks in the bank and then wait until the stock market appeared to be quite low before I bought more shares of stock.

    That's what I still do today.
    Apr 1, 2015. 08:22 PM | 1 Like Like |Link to Comment
  • Philip Morris Is A Buy For The Long Term [View article]
    Adam, I agree with you that Philip Morris is a buy and hold forever stock. I have been a PM shareholder for 45 years and will continue to own the stock until I am sent to my underground condominium.

    Anyone who buys PM whenever it is relatively cheap and then never sells it will take a big step forward in his goal of achieving financial independence.
    Apr 1, 2015. 04:25 PM | 11 Likes Like |Link to Comment
  • How Much Money Will You Need To Retire? [View article]
    Alex_P,

    I have always felt that the stock market was a better investment than real estate. I have 36 stocks. Almost all of these stocks mail me a dividend check 4 times a year. Walt Disney just mails me one check a year, but that's okay.

    My rental properties, on the other hand, are a pain in the neck compared to my stocks. It is true that I receive rental checks every month, however there is considerable expense involved with rental properties even if the properties are owned free and clear.

    1) Property taxes
    2) Insurance
    3) Maintenance

    It is true that these expenses are tax deductible, but there is no expense to sticking stock certificates in a safe deposit box at the bank except for the yearly rental of the box.

    And, on top of that, many of my stocks such as Philip Morris, Exxon Mobil and Abbott Labs have gone up in value vastly more than my rental property.

    I also have to pay property taxes, insurance and maintenance on my personal residences in Connecticut and Florida.

    It is true, Alex-P, even after taking into account my income from rent, Social Security, and interest, I will still need a minimum of $100,000 in yearly income from dividends when I retire.
    Apr 1, 2015. 04:15 PM | 2 Likes Like |Link to Comment
  • Warning: The Greatest Market Crash Of Your Lifetime Is Coming [View article]
    Wow! The greatest market crash in my lifetime is coming!

    I was not around to see the stock market crash in 1929, but I did manage to buy more shares of stock when the market crashed in 1974 and 2002 and 2008.

    It's a good thing that 20% of my total net worth is in cash so that I will have the funds available to buy more shares of Exxon Mobil, Philip Morris, Abbott Labs, Abbvie, Disney, Altria and At&T when these excellent companies are thrown into the bargain bin at the next 50% off sale.

    Harry, why is it that I get the feeling that you are trying to alarm investors with headlines such as: The Greatest Market Crash of Your Lifetime is Coming?

    Market crashes don't alarm me at all, Harry. I like nothing more than a good old-fashioned sale in the stock market. I love the opportunity to add to my positions in high quality dividend growth stocks at bargain basement prices.
    Apr 1, 2015. 10:29 AM | 6 Likes Like |Link to Comment
  • Amazon Dash Could Be Big For Brands [View article]
    "Press the button when you are about to run out of a product, and your WIFI will take that signal to a shopping cart, from which the order can be quickly fulfilled."

    That's all I need. A drone swooping over my house to drop off an order of Cheez Whiz.

    I hate to sound like that mean gym teacher in high school, but here goes.

    Get up off your lazy butt and walk to the store to pick up your Cheez Whiz and Fritos. We have a huge obesity problem in the United States. Pressing a button to order Cheez Whiz is not going to help.
    Apr 1, 2015. 10:10 AM | 7 Likes Like |Link to Comment
  • How Much Money Will You Need To Retire? [View article]
    20/20,

    None of my stocks are in a retirement account. So I will never have to sell any of my stocks to satisfy that retirement account rule when I reach age 70 and a half.

    It is a mistake to assume that a person who has no debt does not have significant expenses. I have a lot of expenses. Every month when I pay my bills, I realize how high the cost of living has become.
    Apr 1, 2015. 09:48 AM | 5 Likes Like |Link to Comment
  • Philip Morris: A Dividend Cut Is Possible [View article]
    HiLo,

    "You're killing me here."

    I may be killing you here, but PM is killing me here. PM is so attractively priced at this time that I can hardly resist it.

    Buying PM in 1970 and never selling it was one of the best decisions I ever made as an investor. Not buying Berkshire Hathaway in 1970 and then never selling it was the worst mistake I ever made as an investor.

    You may be right, HiLo. Rules are made to be broken. I may throw in the towel and buy more shares of PM. I'll think about it tomorrow.
    Apr 1, 2015. 08:47 AM | 9 Likes Like |Link to Comment
  • Philip Morris: A Dividend Cut Is Possible [View article]
    Bill, I have a rule against buying any stocks unless the S&P 500 is at least 20% lower than its last all time high.

    If any stock could make me break that rule, it would be Philip Morris.

    Philip Morris is so attractively priced right now that I can hardly resist it. During the past 52 weeks, the price of PM has ranged from 75.24 to 91.63. It is now 75.24.

    The PE ratio is 15.83. The yield is 5.2%.

    To be frank, the possibility of a dividend cut does not concern me at all. Quite a few stocks have cut their dividends and then gone on to deliver superior returns. And I also think that a dividend cut is unlikely.

    For those investors who do not try to time the market and are interested in a stock that is a good buy at its current price, PM appears to be quite attractive at this time.
    Apr 1, 2015. 07:28 AM | 28 Likes Like |Link to Comment
  • How Much Money Will You Need To Retire? [View article]
    20/20,

    I have no debt. But I still have significant expenses. Property taxes, insurance, property maintenance, food, clothing, medical bills, etc.

    Whoever keeps saying that we have little inflation must be living on another planet. In 1955, the year that I was born, one million dollars was a lot of money. Now, due to inflation, ten million dollars is the equivalent of one million dollars back in 1955.
    Mar 31, 2015. 08:46 PM | 6 Likes Like |Link to Comment
  • AmerisourceBergen: A Great Growth Story [View article]
    Bill, I have been following AmerisourceBergen for several years. ABC has been a terrific investment.

    During the past 52 weeks, the price of ABC has ranged from 62.55 to 114.73. It just closed at 113.70.

    Two things prevent me from investing in ABC at this time. The PE ratio is higher than 20. The stock market is close to an all time high.

    I will continue to follow ABC and wait for the right opportunity to buy.
    Mar 31, 2015. 06:34 PM | 1 Like Like |Link to Comment
  • How Much Money Will You Need To Retire? [View article]
    Dividends4Life,

    I liked your list of stocks. I like all of the Dividend Aristocrats.

    How much money will you need to retire? That is an interesting question. I have a feeling that many people underestimate how much money they will need to retire.

    When I retire, I will be receiving income from rental properties, Social Security, dividends and interest. At this time, an investor is lucky to receive even 1% in interest from money parked in the bank. I receive approximately 2.5% in dividends on the total value of my common stock portfolio.

    To figure out how much money I will need to retire, I calculate what I will most likely be receiving in rent, Social Security and interest. That total amount falls short of the total income I will need each year to retire. I will need a minimum of $100,000 in dividends each year, which means that the total value of my common stock portfolio must be at least $4,000,000.

    Four million may sound like a lot of money to some people, but with the way that inflation has been on a tear for the last 50 years, four million is not as much money as it seems.
    Mar 31, 2015. 04:48 PM | 10 Likes Like |Link to Comment
  • Behind A Very Low Dividend Yield, Disney Shows Very Strong Growth [View article]
    "I would buy more DIS if I had 10K in hand."

    Dividend Guy, I have been a Disney shareholder for decades. I would never sell any shares of Disney. I think Disney is one of the best stocks on the NYSE.

    However, I would not buy any shares of Disney at this time. Disney is very expensive at this time, close to an all time high. The stock market is close to an all time high.

    Cash is not a hot potato that needs to be constantly invested at all times. The best thing to do with cash when the stock market is overpriced is to park the cash in the bank and wait for the right opportunity to add to your shares of high quality dividend growth stocks.

    Unfortunately, the ridiculously low interest rates maintained by the Federal Reserve have conditioned investors to treat cash like a hot potato that needs to be invested at all times. This is extremely dangerous for investors. Investors should not react to the craziness at the Federal Reserve and pile indiscriminately into the stock market like little lambs being marched to the slaughter.

    The best strategy is to buy high quality dividend growth stocks such as Disney whenever they are relatively cheap and then to never sell them.
    Mar 31, 2015. 02:50 PM | 4 Likes Like |Link to Comment
  • Warren Buffett Increases Berkshire Hathaway's Stake In IBM - Let's Analyze It [View article]
    Really interesting article.

    "Therefore, I am able to conclude that the US markets are overvalued at the moment."

    That is certainly true, Mycroft, thanks to those folks at the Fed who seem to be determined to keep the stock market artificially levitated come hell or high water.

    It is interesting that Warren Buffett focuses on return on equity rather than earnings.

    An old ad on TV used to say: When EF Hutton talks, people listen.

    When Warren Buffett talks, I definitely listen since I consider him to be the smartest investor on the planet.

    The PE ratio of IBM is 13.67, which is not bad in this frothy stock market.

    The Beta is .92, which is good.

    Over the past 52 weeks, the price of IBM has ranged from 149.52 to 199.21. It just closed at 162.25. The yield is 2.7%.

    If I had to buy a stock this week, IBM, Exxon Mobil, Chevron, and Philip Morris would not be bad choices. Although I am extremely reluctant to buy any stocks when the stock market is so close to an all time high.
    Mar 31, 2015. 07:42 AM | 7 Likes Like |Link to Comment
  • The Center Of Gravity For Retirees [View article]
    "The correlated ideal asset allocation for beginning a discussion on asset allocation with a pre-retiree or retiree is 30% stocks and 70% bonds."

    Rick, whoever came up with that "ideal" asset allocation has a lot of explaining to do.

    Why is it necessary to put pre-retirees and retirees out to pasture in the land of bonds?

    I am 59 and 70% of my total net worth is in the stock market. 20% cash. 10% real estate.

    I am never selling any shares of stock to lower my asset allocation in the stock market. In fact, if the stock market ever fell significantly, I would use some of my cash to buy more shares of stock.

    A 60-year-old is not dead yet. He or she could potentially live another 30 or 40 years. Why shouldn't senior citizens benefit from the historical outperformance of the stock market compared to other investments? Senior citizens remaining invested in the stock market have a better chance of beating inflation over the long term.
    Mar 30, 2015. 05:33 PM | 12 Likes Like |Link to Comment
  • From Growth To Dividend, Why Warren Buffett's Primary Reason For Investing In Coke Is Slowly Fading [View article]
    Gold Finder,

    Whenever Coca-Cola stock is overpriced, it is a HOLD.

    Whenever Coca-Cola stock is attractively priced, it is a BUY.

    Coca-Cola is never a SELL.
    Mar 30, 2015. 05:15 PM | 15 Likes Like |Link to Comment
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