wolfdog's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/202311/comments http://seekingalpha.com/article/122069-could-the-dow-reach-4000?source=feed#comment-399885 399885 Mon, 23 Feb 2009 10:24:07 -0500 http://seekingalpha.com/article/115624-trading-the-dow-what-history-tells-us?source=feed#comment-362103 362103
Based on my estimate, DOW div will decline about 6%. And I calculate the current yield at 3.6%, which is somewhat less than the near-4 mentioned in this article.

But the more important issue is that it looks like the trend of the DOW div yield is inexorably up, since bottoming in 2000. If we are lucky, the yield will stay range bound as the author suggests, between 3 and 4% as was the case 1960 - 73. More ominously, and the case I favor slightly at this time, the yield will march higher toward 5 or even 6% over the next several years.

What could cause this? Investor repugnance toward equities after this brutal bear market. It takes a long time to reprice assets at inflection points, and now we have the reality that competition from non-Treasury instruments provides very attractive, albeit somewhat risky, yields. Moreover, notwithstanding the Fed's quantitative easing manipulation of the long end of the T-curve, how are we going to finance these massive deficits over time unless interest rates are eventually allowed to float much higher? That is, foreign investors who finance the U. S. could decide to go on strike, especially if the dollar weakens over time. Just as our goal should be higher self sufficiency in energy, we should also devise policies to enable the Federal deficit to be financed in a greater proportion from domestic saving. Only two avenues seem viable to accomplish this: tax incentives or higher interest rates.

Thus, the combination of investor demand for higher income and/or less exposure to volatile equties plus the carrot of higher competitive yields from bonds (and I need to mention how does all the TARP money attract private capital to get re-fied 3 years down the road?) seems likely to create pressure on stock valuations leading to higher yields. At some point this will put a floor on stock prices and create a historic secular bear market low.........but investors need to be thinking about the notion that we are not there yet. ]]> Wed, 21 Jan 2009 13:28:10 -0500
Based on my estimate, DOW div will decline about 6%. And I calculate the current yield at 3.6%, which is somewhat less than the near-4 mentioned in this article.

But the more important issue is that it looks like the trend of the DOW div yield is inexorably up, since bottoming in 2000. If we are lucky, the yield will stay range bound as the author suggests, between 3 and 4% as was the case 1960 - 73. More ominously, and the case I favor slightly at this time, the yield will march higher toward 5 or even 6% over the next several years.

What could cause this? Investor repugnance toward equities after this brutal bear market. It takes a long time to reprice assets at inflection points, and now we have the reality that competition from non-Treasury instruments provides very attractive, albeit somewhat risky, yields. Moreover, notwithstanding the Fed's quantitative easing manipulation of the long end of the T-curve, how are we going to finance these massive deficits over time unless interest rates are eventually allowed to float much higher? That is, foreign investors who finance the U. S. could decide to go on strike, especially if the dollar weakens over time. Just as our goal should be higher self sufficiency in energy, we should also devise policies to enable the Federal deficit to be financed in a greater proportion from domestic saving. Only two avenues seem viable to accomplish this: tax incentives or higher interest rates.

Thus, the combination of investor demand for higher income and/or less exposure to volatile equties plus the carrot of higher competitive yields from bonds (and I need to mention how does all the TARP money attract private capital to get re-fied 3 years down the road?) seems likely to create pressure on stock valuations leading to higher yields. At some point this will put a floor on stock prices and create a historic secular bear market low.........but investors need to be thinking about the notion that we are not there yet. ]]> http://seekingalpha.com/article/110684-investing-in-companies-with-high-roes-be-careful?source=feed#comment-332283 332283 ROA) and also Pretax Return on Total Capital (PTROC). These ratios can weed out companies which have used leverage to inflate ROE ]]> Wed, 17 Dec 2008 14:06:13 -0500 ROA) and also Pretax Return on Total Capital (PTROC). These ratios can weed out companies which have used leverage to inflate ROE ]]> http://seekingalpha.com/article/96425-if-you-think-the-dow-did-well-today-you-re-wrong?source=feed#comment-259943 259943 Sat, 20 Sep 2008 10:48:28 -0400 http://seekingalpha.com/article/91329-the-bedrock-case-for-the-return-of-the-gold-bull?source=feed#comment-233504 233504 Mon, 18 Aug 2008 19:00:50 -0400 http://seekingalpha.com/article/91144-skechers-ignoring-obvious-value?source=feed#comment-232731 232731 KKD) where advocates got caught up in the notion of everyone in the country eating a dozen donuts every morning..........all I know about CROX is the earnings expectations have imploded and sales growth is negative so there must be some issue with the sustainability of demand for the product? That said, it is a very statistically cheap stock in here so maybe the bulls are right and international will be the company's salvation. But products like Crocs have very little intellectual property and low barriers to competition, and that plus the fickleness of consumer tastes is what causes me to put the company in the "fad" category. ]]> Sun, 17 Aug 2008 21:49:54 -0400 KKD) where advocates got caught up in the notion of everyone in the country eating a dozen donuts every morning..........all I know about CROX is the earnings expectations have imploded and sales growth is negative so there must be some issue with the sustainability of demand for the product? That said, it is a very statistically cheap stock in here so maybe the bulls are right and international will be the company's salvation. But products like Crocs have very little intellectual property and low barriers to competition, and that plus the fickleness of consumer tastes is what causes me to put the company in the "fad" category. ]]> http://seekingalpha.com/article/84988-well-capitalized-regional-banks-the-bottom-is-in?source=feed#comment-205889 205889
I noticed there was a lot of insider buying in CNB, at higher prices. And I did not think that had any signaling power either, b/c if the management is dumb enough to go overboard on real estate lending w/out proper credit standards, they are sure not smart enough to figure out when to buy the stock.

All that said, we are in fact getting close to or at some compelling valuation levels in banks, based on tangible book values. The key is where are we in the credit loss cycle. I believe we are in the 3rd or 4th inning, but by the end of this year could be nearing the 7th inning "stretch". So it is a good time to be doing lots of homework. ]]> Tue, 15 Jul 2008 09:44:11 -0400
I noticed there was a lot of insider buying in CNB, at higher prices. And I did not think that had any signaling power either, b/c if the management is dumb enough to go overboard on real estate lending w/out proper credit standards, they are sure not smart enough to figure out when to buy the stock.

All that said, we are in fact getting close to or at some compelling valuation levels in banks, based on tangible book values. The key is where are we in the credit loss cycle. I believe we are in the 3rd or 4th inning, but by the end of this year could be nearing the 7th inning "stretch". So it is a good time to be doing lots of homework. ]]> http://seekingalpha.com/article/82799-american-greetings-mea-culpa?source=feed#comment-194435 194435 Fri, 27 Jun 2008 15:38:56 -0400 http://seekingalpha.com/article/81485-4-reasons-why-orion-energy-is-a-good-short-candidate?source=feed#comment-187995 187995 Wed, 18 Jun 2008 17:35:05 -0400 http://seekingalpha.com/article/80894-steelcase-s-high-yield-makes-it-worth-the-gamble?source=feed#comment-183634 183634 Wed, 11 Jun 2008 16:25:31 -0400