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rhoughton

rhoughton
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  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    And when a position starts to move against you and one is stuck in a "buy & hold" mantra as you watch the investment lose 25%, 50%, 75%, 90% and then the horrible 100%, your "buy & hold" just turned into a trap.
    Oct 4 09:55 AM | Likes Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    Mike, first, $100,000 yearly income is not a lot of money. After federal, state, property and other taxes, 30% or more is gone. Secondly, a great many people do have health problem, or provide help for adult children,or help with grandchildren,or have expenses that eat up cash, or pay monthly/annual long term care/ insurance premiums, and many other things.

    Yes, there are a great many expenses that disappear at retirement, but it's funny how other ones pop up. Then, at age 70.5 RMD kicks in and starts to erode 401k assets to pay income taxes.
    In 30 years of working with clients, I have never seen a couple that wants to retire on much less income as they were living on for the 10-15 years prior to retirement. I have some clients that start to travel and need money for that. Then, the knee and hip replacements pop up, and other unplanned for expenses.

    You and your wife are to be commended. But Mike, you are rare. I am sure you have seen the media articles that speak to a HUGE percent of the U.S. population that have little to no savings. I will ask you, who do you think will have to pay for them as they grow older? My bet is that your tax bite on whatever income you plan on having in retirement will shock you some day.
    Good luck, it sounds like you and your wife are following a solid plan.
    Oct 3 12:22 AM | 1 Like Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    Wow conkjc, a fair question without ad hominem attacks. Thank you, sincerely.
    The simple answer is that the landscape is loaded with so many stocks that should have been sold because they will never come back, won't come back in one's time frame, or they go bankrupt at some point. A perfect example from a number of years ago is EK, once a member of the DOW, but today is a mere shell of the past. A recent case is OSG, the only oil tanker company at the time in the DOW JONES Transportation index. I saw an insider buy over $25 million worth of stock literally less than a year before it started to slide, and eventually had to be liquidated last year. It was a big company with a lot of shareholders. A lot of nice people lost a lot of money.
    Having a sell discipline, or using tactical asset management is not "hopping in or out of stock - but more a strategy to manage risk. I think Ben Graham said it is better to lose opportunity than to lose money.
    Yes, investors do make many mistakes, and do hop in and out, and do engage in short term timing. Having a discipline is of value. A number of really smart and successful investors I know use a 20% rule, or something like it. If a position goes against you, it is better selling at 15% - 20% down than to watch it go to 70% or 80%. True, one may miss some opportunities, but one also has to sleep at night.
    Again, a fair question - and a very valid one for a blog that speaks to searching for "alpha."
    Oct 2 11:54 PM | 4 Likes Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    AgAuMoney- I must admit that I see a real pattern with some of the comments and replies on this thread. Many of them are as lame as yours. MY POINT Ag is you HAVE to BUILD the asset base to the $2 million level BEFORE you can live on the dividends/yield/income... money at the annual income of $100,000. NOT everyone can do that, and NOT everyone WILL be able to do that by age 55/60/65/70, or whatever.

    My comment was a response to a semi lame reply by Robert that was schooling me that one can live in retirement on DIVIDENDS only, and not touch the corpus. DUH - yes that is true - but how the heck do you get there??? That comment was in response to a semi lame reply by someone who asked the question: "Why would anyone want to see price appreciation in their stocks?"
    So please, irrelevancy is thine if you can't see what is obvious - if you can't get to $2 million, then @ 5% you are NOT going to retire on $100,000 per year. Pretty straight forward Ag!!!
    Oct 2 11:26 PM | Likes Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    Robert, you are right, dividends are one way to pay bills in retirement. Great if you can do it, but not everyone can. Take the husband & wife who have lived the past 10 years on an income of $100,000 per year. At a 5% yield they would need about $2,000,000 to generate a $100,000 yearly income in retirement. Sorry, but not everyone can accumulate $2 million by age 65.

    Industry standards and financial planning recommendations preach not to expect to draw more than 5% from the asset base in retirement. Seeking higher yields will raise the risk level of a portfolio.

    Please don't tell me they will have to live a lifestyle on significantly less income than they are accustomed - it just doesn't happen.

    For most of the people I work with we use a combination of tactical growth(which means selling stocks at opportune times), dividends and fixed income assets. Spread the risk and not keep all the eggs in one basket.
    Oct 2 10:49 PM | Likes Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    giorgiolb - I too am more interested in how to prosper in the future - but the central focus of the article was the 43 year history, and Buffet's ability to hold the stock long term. I would say holding a stock 43+ years through all kinds off volatile markets is a "blind buy and hold."

    No hard and fast rules that I know of either - but most of the smart investors I know follow a basic discipline. To each his own as to what that discipline is, but buy and hold is not a sound discipline to follow.
    As for Varan, I have no experience with past comments. That which he wrote was a valid point in the context of the overall article - "one man's treasure is another man's junk"
    Personally I can't agree with the forever hold. I prefer tactical asset management and following a discipline that I am comfortable with for my investments.
    As for the future, you might want to look at a couple of the Brazilian ETF's. EWZ has gotten a little ahead of itself, but over the next couple 3 years it has solid prospects. Brazilian GDP is coming back to life. ( I am sure I will get slammed on this, but that's cool.)
    Oct 2 10:26 PM | Likes Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    No inconsistency on my part. I did not disagree with the KO performance over those 43 years. I disagree with the author "cherry picking" a perfect time period for KO when not many investors can or will hold an investment that long. In fact you make my point when you point out that XOM has long periods of under performance, as does KO, IBM, MRK, AAPL, or most every stock. I strongly disagree with the use of unrealistic holding periods to demonstrate an investment's value. I think it is misleading since very few people hold a stock that long. The mutual fund industry is guilty of this practice. In their sales literature are mountain charts that depict a $10,000 investment in 1951 (their fund inception year) and if you held it through 2012 it would be worth some incredible amount. The problem is that "life happens" and the investor suddenly needs the funds 1 month after a market crash - his proceeds are decimated. Thus, I endorse and practice tactical asset management instead of a blind "buy and hold" strategy. Just that simple.

    I applauded VARAN simply because he/she pointed out a different stock with far better results over the same time period. I am NOT endorsing the 43 year hold for XOM, KO, or any other stock.
    Oct 2 06:11 PM | Likes Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    varan - you are man/woman after my own heart. I have been beat up by a bunch of KO sycophants above - but you are 1000% right. XOM has been an awesome investment over the 43 years. Both have the same yield today, but KO has to keep re-inventing a new sugar/water drink where XOM just has to dig another hole, or better yet, buy up a competitor. You have made my point in a lot less words than I had to use. I should have said: "there are better investments than KO," and be done with it.

    Right you are varan!!
    Oct 2 03:35 PM | 1 Like Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    mjs_28s - you covered a lot of ground so I will try to respond to some of your points. My point about length of time in the article is that I see this all the time and it is a fallacy and very misleading. You may be the exception and hold for 43 years, but the VAST majority of investors don't. Stocks are not to get married to, and holding a stock for that long is like getting married. Very few investments should be held that long. They just don't work that way, and you can not guarantee that at that specific point in time, your retirement, that the investment will be at maximum value. The employee of KO that retired in 1998 with $2 million worth of stock, planning on a great retirement lost $1,168,000 in market value by March 2003 - less than 5 years into retirement. Had only $832,000 left to live the rest of their life - that sure changed his/her plans - don't you think????

    I don't know what planet you come from, but having billions of dollars to invest with is a lot different than 99% of investors. Mr. Buffett is a lengendary investor who can do things neither you or I can do. He should not be held up as an example because 99% of us can't do what he can. It ain't only in the research - to believe that is naive. Just look at what he did with Goldman these last 5 years. He gives them $5 billion in '08 for a hybrid security that NONE of us in the real world could have purchased. It was a special security for only Buffet. You don't think that it was his money that did it, or was it the "brilliant" research he did at the library about Goldman Sachs that got him the deal???

    You cover to many "what ifs." Silly to try to answer them. Taxes are a very important part of the investmeny experience. No, I didn't forget about tax free acccount since that was not discussed in the article. Qualified accounts and plans do change many investment decicions, but getting "married" to an investment is very dangerous to investment success.

    Yes, I did "cherry pick" a specific time period. But so did the author "cherry pick" a time period. KO went public in 1919 - by my calulator that was 94 years ago. But, the author chose to only use 43 of those 94. I would call that a "cherry pick." My point, which you didn't get, or I didn't fully explain because of limited space is that most, if not all investments have good periods and poor periods. Investment succes is all about which period you own that investment. As I told another commentator, I turned a $90,000 investment in KO in 1985 to a market value of over $2.2 million by 1998. I took advantage of ALL the splits and dividends over that 13 year period. KO peaked in July 1998 and has been a POOR investment for the past 15 years (unless you bought some at the bottoms in 3/03, 10/04, 1/06 and 3/09). So, for that man/woman who bought some in June 1998 or maby August 1998, the past 15 years have been a waste of time and money, other than the dividends, which in a TAXABLE account you gave some of it up to the IRS.

    I know you still won't get my point, but know this - I do know KO as an investment - and I took profits in 1998, and paid some taxes, and bought back into KO March 2009 - but you could have bought anything on 3/3/2009 when the S&P 500 hit 666.79, down from 1576 in October 2007. I trust you did the same?
    Oct 2 03:20 PM | 1 Like Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    gfmn2000 - you are making the same mistake so many ivestors make. You are confusing a great company with a great stock - please NEVER confuse the two. KO is a GREAT company. Has been for a very long time. I am not a fan of p/e ratios - can be very misleading when used by amatures. There are a lot of metrics that go into evaluating a company - as well as a lot of non metrics - like the development of New Coke in the 1980's, death of Roberto Goizueta in 1997. Interesting isn't it that KO hit a historic price peak as a STOCK in 1998, less than a year after his death - and it has taken 15 years to get back to that same price. You say " value KO on the fundamentals" - well I guess the stock market wasn't listening to you these past 15 years.
    Oct 2 02:23 PM | 1 Like Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    I answered your reply - look above. You have no Idea how WELL I know Coca Cola as an investment!!!!
    Oct 2 02:11 PM | Likes Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    I am and was fully aware of the spolits and dividend increases . I turned $90,000 invested in KO into $2.2 million from 1985 to 1998 as a result of all the splits wise guy. Dividends ARE traxed, so their value is muted depending on your tax bracket. KO has had no splits up to the most recent one - roughly a 15 year drought. Get your head out of the sand and look at a 20 year chart - KO has done nothing in the growth area since 1998.
    Oct 2 02:08 PM | 1 Like Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    Because some people need to sell stock to live their life and pay bills. That IS the whole concept of investing for retirement. I don't think you want to buy stack at $60.00 when you are 45 and sell it at 25 when you are 65 just to satisfy some other investor that wants to buy low and sell high. Just common sense.
    Oct 1 02:33 PM | 1 Like Like |Link to Comment
  • Coca-Cola: An Updated View On A Lifetime Investment [View article]
    Sorry, but I can't agree with some of what you discuss in this article. Very, very few investors can and will hold an investment for 43 years, or anything close to that. I think it is a huge mistake when investments are extrapolated out over very long time frames. Just not realistic. Secondly, it is a gross mistake to hold Mr. Buffet up as an example. He has billions to invest, can absorb huge mistakes, and can sit on a losing/poor position for a very long time. The average investor just can't do that. As for KO, it has been a poor investment for the past 15 years, which is closer to what the average investor considers long term. KO hit a high in July 1998 of $44.47. As of today it has yet to hit that high. So, the investor who bought stock in June 1998 @ 42.75 has made a .68 cents capital gain at best, and captured some dividends that he has had to pay taxes on each April. Not a very good investment. Great company, not a great stock. NEVER confuse the two.
    Oct 1 02:28 PM | 2 Likes Like |Link to Comment
  • Freeport-McMoRan: Likely Struggles Will Continue After The Government Takes Control Of Indonesian Operations [View article]
    I am sorry, but I may be missing something. The S&P 500 ended 2011 @ 1257 on the close. The high in April was a little over 1419 on the close. That is an increase of 162 points, or about 12.9%. Could you please show me where it rallied about 30% as in your article. The same for the SPY as well.
    Jul 26 03:11 PM | 1 Like Like |Link to Comment
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