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Little Dude

Little Dude
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  • From Growth To Dividend, Why Warren Buffett's Primary Reason For Investing In Coke Is Slowly Fading [View article]
    I think they have seen the changes and have reacted by investing in Keurig and Monster, and launching Fairlife.

    I think the argument that the fortunes of the Coca-Cola company are tied too strongly to soft drinks is disingenuous. Non-sparkling beverages make up such a small percent of current sales because so many people are still drinking soda. If soda sales drop to nothing then, unless there is a wholesale shift to tap water, Coke will be in the best position to market and distribute the substitutes, whether it be coffee, tea, juice, water, or milk.
    Mar 30, 2015. 03:31 PM | Likes Like |Link to Comment
  • Johnson & Johnson: A Dividend Growth Powerhouse In The Making? [View article]
    That's what I said in 1996 - still waiting, but I'm confident that any day now the S & P will break below 550 and I can finally start investing for my retirement!
    Mar 27, 2015. 09:21 AM | 11 Likes Like |Link to Comment
  • Cisco Spends $1.97 To Retire $1 Worth Of Stock [View article]
    Although the effects of higher salaries are more difficult to hide
    Mar 27, 2015. 08:12 AM | 4 Likes Like |Link to Comment
  • Starbucks to split 2-for-1 [View news story]
    Agreed - in the past, with round lots and high commissions (and more retail investors as a % of total market) splits actually had the effect of making shares more "affordable" and therefore more in demand.

    Now, splits are still perhaps a sign of management confidence and a confirmation of growth in stock price (they wouldn't be splittin' if we were still at $50 / share). And I still can't help that illogical feeling that "I got more"
    Mar 18, 2015. 02:21 PM | 3 Likes Like |Link to Comment
  • Beware: The Western Union Short Float [View article]
    I think it will be tough for any of those companies to meet the compliance hurdles, and to enact the necessary security.
    Mar 18, 2015. 08:34 AM | 3 Likes Like |Link to Comment
  • Despite Head-Scratching Upgrade, Union Pacific Climbs Higher [View article]
    Understood, but what if a bigger earnings miss is already priced in? What if this is like the early 90's and even though the market looks pretty high, it still has a long way to run, and we'll never see these low prices again?

    To me, the stock market is like a roulette wheel where the ball lands on green 70% of the time. It might land on green 20 times in a row, it might have a streak of 27 reds in 30 spins, but overall it always averages out to 7 greens in 10 spinsat the end of each day. In such a situation, I wouldn't try to time the spins, or move my chips to red after 13 straight greens thinking that a red was "due" - what I would do is bet on green every spin, starting with the first spin of the day, knowing that at the end of the day I'd come out ahead.

    Same thing with the stock market (or quality stocks) - keep the chips on green. Stay invested in quality stocks and add as much as you can as soon as you can - you'll come out ahead.

    Best of luck!
    Mar 18, 2015. 08:31 AM | Likes Like |Link to Comment
  • Despite Head-Scratching Upgrade, Union Pacific Climbs Higher [View article]
    Advice such as this is usually given on SA - "if you want to buy a stock, break up your purchases over time". However, this is an inferior strategy compared to making your intended purchase all at once for a few reasons:

    1) You pay extra commissions (not a large expense, granted, but can add up especially over smaller share counts)
    2) Possibly miss out on dividend payments which at present will probably be larger than any interest you'd receive on your funds in a bank or brokerage acct.
    3) The biggest reason is that over time, the prices of stocks tend to go up. So, on average, if you buy 50 shares of a stock today and 50 shares of a stock 6 months from now, your second purchase will be at a higher price.

    To me, if you think the price of a stock will increase, then buy all you intend to as soon as you can. If it doesn't look like it will increase, then don't buy any. If you're really not sure what the price will do but are convinced that the business will do well over the long term, buy all you intend to (and can afford to) now and on average you will do better at least 7 out of 10 times compared to a fractional approach.

    The prevailing wisdom seems to be that breaking up one's purchases over time is less risky, the thinking being that if the price of the stock does increase you don't have to buy more, but at least have profited from the fractional purchase. However, you have forfeited the additional profits you would have made if you had established a full position, and this is a real loss.
    Mar 17, 2015. 02:35 PM | Likes Like |Link to Comment
  • Nobody Wants To Be Seen In A McDonald's: Problem Or Opportunity? [View article]
    I guess it depends on where you look. I see plenty of CMGs with no lines at meal time, and plenty of MCDs where you can't get through the door. Maybe that's MCD's problem - the places are so crowded no one goes there anymore!
    Mar 17, 2015. 11:11 AM | 1 Like Like |Link to Comment
  • ModernGraham Annual Valuation Of Coca-Cola [View article]
    Two more criticisms of Graham analysis -

    1) Inflates the importance of physical assets.

    2) Treats all companies and industries the same.

    I've seen too many Graham valuations of companies where the fair value is either much higher or lower than the current price (or any price reached during the succeeding 10 years) to believe that this is a relevant valuation method anymore.

    Sometimes Graham gets it right, but sometimes the monkey with the dart does also.
    Mar 4, 2015. 10:09 AM | Likes Like |Link to Comment
  • Johnson & Johnson: The Benefit Of A Stagnant Share Price [View article]
    I always feel good about lower share prices at dividend reinvestment time, but the other parts of the year I admit I want the price to increase because a) a higher price gives me more options should I want / need to sell and b) if the share price isn't moving higher it might be a sign that something is wrong with the business.

    Since most of my companies pay their dividends in mid Mar / Jun / Sep / Dec, I wonder if the fed could cooperate by making an announement during the first week of those months implying huge rate increases are on the horizon?
    Feb 27, 2015. 10:14 AM | Likes Like |Link to Comment
  • Young Investor Dividend Growth Portfolio [View article]
    If I were a young investor, I'd also look at the next wave of dividend aristocrats, high growth companies with high dividend growth rates, although not necessarily high yields yet, such as SBUX, AAPL, DIS, WBA, and CSCO, as well as stocks from the excellent list in the article.
    Feb 26, 2015. 12:15 PM | 2 Likes Like |Link to Comment
  • Why Kellogg Is Obsolete [View article]
    Cereal grains have been a staple of human diets for millenia. When I read that people are opting for healthier or more convenient breakfast alternatives, I wonder what could be more convenient than pouring cereal and milk into a bowl, and what could be more healthy than wheat, rice, or oats? Is it more convenient to wait at least 10 minutes in a drive-through line, only to get a fat, sodium, and calorie laden breakfast sandwich?

    There's nothing hurting cereal sales that a little innovation, and consumer education (ie advertising) can't fix. Maybe even some new market creation - how about some hot cereal-based products aimed at lunch / dinner? K also has Morningstar Farms which I'm sure they have the muscle to leverage.
    Feb 24, 2015. 02:12 PM | 2 Likes Like |Link to Comment
  • McCormick Finally Seeks Acquisition, Still Overvalued [View article]
    Hope MKC is at least kicking the tires on Tajin.
    Feb 23, 2015. 11:09 AM | Likes Like |Link to Comment
  • One Simple Reason Not To Buy Whole Foods Market [View article]
    "ridiculous trend", "hardcore organic nuts" - these phrase make clear how seriously we readers should take this post.
    Feb 13, 2015. 11:07 PM | 1 Like Like |Link to Comment
  • Coca-Cola's Earnings Prove The Business Is Still Shrinking [View article]
    People seem to think that since Coca-Cola company is primarily dependent on soft drinks for most of their volume, that if people switch from soft drinks then the company is in trouble.

    But if people switch away from sparkling, the company can respond. Coke makes up so much of the comapny's volume right now because so many people continue to drink it. But if people stop drinking Coke, they still have to drink something. Now, you might say that if you take away sparkling that levels the playing field for Coke at best, and perhaps puts them at a disadvantage. But the reason Coke is the number one soft drink is due to marketing and distribution. The company has so many non-sparkling brands that they can put their muscle behind, and the only reason they're not doing so now is because sparkling is still the cash cow. In other words, if sales of Coke really start going down then instead of Coke commercials and billboards you'll start seeing more commercials and ads for Farilife, Honest Tea, Fuze, Vitamin Water, Monster etc.

    Bottomline, no one company addresses people's need for food the way Coke addresses peoples need for fluid intake. And unless something happens that curtails human need for fluid intake, Coke is gonna be the way to play it, no matter what form that fluid intake takes.
    Feb 13, 2015. 12:00 PM | 4 Likes Like |Link to Comment