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dancing diva

dancing diva
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  • Warren Buffett's Berkshire Hathaway At ½ Price [View article]
    Chris - I have no problems selling long dated puts as long as the implied volatility makes it worth my while. The Jan 2017 BRKB put is at roughly at a 19% implied volatility. IMO that's too low given what could happen during the course of the next 19 months. If there's a recession brkb book value would fall and there's no guarantee Buffett would buy his own stock back, perhaps preferring to use his cash to make another purchase instead.

    Personally I'd rather go short the JNJ Jan 2017 80 puts - roughly the same discount as brkb is at $115. The implied vol is roughly the same but I'd potentially be getting long JNJ above a 4% div yield. BRKB has no yield support.

    BTW, I am long BRKB, but every time I look at at its puts, I find the vol unattractive. I'm not yet short JNJ 2017 puts, but will consider selling those on further weakness in the stock as long as vol doesn't decline.
    Jun 23, 2015. 04:58 PM | 1 Like Like |Link to Comment
  • Johnson & Johnson: Quiz Of The Day [View article]
    dunnhaupt - don't be so shortsighted. JNJ made a tremendous move between mid 2012 and mid/late 2014. It's resting now. I can point to numerous examples of stocks that go up, move sideways for a year or two before moving up again. You've just caught it in a period of basing.
    May 31, 2015. 11:27 AM | Likes Like |Link to Comment
  • Analysis Which Is Not Market Friendly [View article]
    "Currently, the market is either ignoring the economy, or believing the economic situation is transitory, as it has been many times previously."

    Steve - there is a third explanation. That while the economy looks on the weak side and may stay that way, it doesn't look recessionary. And given the lack of alternatives to stocks participants see no reason to relinquish ownership that is paying more than cash or bonds.
    May 30, 2015. 03:45 PM | 5 Likes Like |Link to Comment
  • Why Is The U.S. Economy Still Depressed? [View article]
    Robert - that chart is misleading. Personal disposable income includes things like rental income and dividends - both rising faster than wages. Guess who the bulk of that accrues to - the top 10%.

    Look at debt relative to median household income and you get a very different picture.
    May 30, 2015. 01:12 PM | 2 Likes Like |Link to Comment
  • Lessons Learned From The Grand Canyon [View article]
    The div yield is higher for each of the Jackson 5 than for either KXI or XLP. When investing for the long haul and and using the dividends to buy more shares, the starting point of the div yield is important.
    May 24, 2015. 12:48 PM | 1 Like Like |Link to Comment
  • Johnson & Johnson: The 'Tragedy' Of Paying 17 Times Earnings [View article]
    I agree RAS as long as you have a long holding period.
    May 17, 2015. 02:57 PM | 1 Like Like |Link to Comment
  • Johnson & Johnson: The 'Tragedy' Of Paying 17 Times Earnings [View article]
    TF17 - I'd qualify that and say whenever you have excess cash and the 10 year bond is less than or equal to 4% (or you can lock in a 10 year CD at 4% or more). I conservatively estimate the 10 year return on JNJ (price appreciation and dividends) to be at least 5% per year, so at/above a 10 year of 4% I might consider a bond or CD depending what the p/e of JNJ is at that time.
    May 17, 2015. 02:56 PM | Likes Like |Link to Comment
  • Johnson & Johnson: The 'Tragedy' Of Paying 17 Times Earnings [View article]
    Mike - shame on me too. I started buying JNJ at the lofty price of $62 back in May 2012; it's now my largest position and I'd love to add more if it ever drops (last purchase in Feb @ $99).

    Here's the way I view it. What are my alternatives to cash? Taking a 10 year time frame and making very conservative assumptions that eps and dividends grow by 5%/year and that in 10 years the p/e is 14, I arrive my 100/share investment in JNJ is worth around $170 in 10 years time. Where else am I almost guaranteed that kind of safe return?

    Sure there are stocks with better growth characteristics NOW and better yields NOW, but can I count on them? JNJ is 11% of my holdings and at the right levels will continue to add. I would love to see a decline but given that it's trading better lately, it may not happen.
    May 17, 2015. 12:18 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Will The Interest Rate Spike Pressure Stock Prices? [View article]
    Jeff - FYI - Almost all the weakness in gasoline prices in California have been erased largely due to refinery problems; they are back up near last summers level - the highest in the nation (and that includes Hawaii and Alaska). While only one state, California has a disproportionate number of drivers - almost 12% of all registered drivers in the US. I was shocked to pay $3.96/gal last week for regular unleaded.

    I'm also surprised there was no mention of European bonds are the reason for US bonds falling since they have been more or less trading in tandem for the past year to 18 months. US rates fell for most of last year despite better US economic data due to falling European rates, now it looks like they are rising for the same reason. German 10 year bunds got down to the ridiculous level of about 0.07% in mid April - around the time Bill Gross said it was the greatest short ever - and bounced to over 0.7% last week.
    May 17, 2015. 11:54 AM | 1 Like Like |Link to Comment
  • What Does The Anadarko Project Mean For Chicago Bridge & Iron? [View article]
    It does not. The company anticipates they will be buying back a significant amount of stock when cash flow improves later this year and next, but were not buying back stock recently (see Q4 2014 & Q1 2015 transcripts).
    May 16, 2015. 03:38 PM | 2 Likes Like |Link to Comment
  • Johnson & Johnson: The 'Tragedy' Of Paying 17 Times Earnings [View article]
    KO is more expensive than JNJ. If you specifically want safety and yield over 3% and long term dividend growth, I'd go with Pfizer - pfe.
    May 16, 2015. 09:13 AM | Likes Like |Link to Comment
  • Johnson & Johnson: The 'Tragedy' Of Paying 17 Times Earnings [View article]
    'If we have a major correction in the S&P 500 in the next year or two, a correction in the range of 15% to 30%, the price of Johnson & Johnson will fall substantially.

    I am not buying JNJ at this time. "

    BuyandHold 2012

    Then I assume you are not buying anything, because that logic can be used for the entire market. It is not specific to JNJ.
    May 16, 2015. 08:58 AM | 10 Likes Like |Link to Comment
  • Is Chicago Bridge & Iron Still Undervalued? [View article]
    6228371 -I don't care for commodities since I don't think the world is in that great a shape. I was a buyer of BHP at the beginning of the year (sold out half at $52) and own AA, but I would have expected by now better global growth stats than we've seen given the large drops in interest rates (and Central Bank accomodation) and the reduction in oil prices. I think most of the commodity gains have already been seen.

    And I realize gild and san aren't commodity related - that's why I wrote "for the most part". BTW - I like gild; have no opinion on san.
    May 13, 2015. 02:05 PM | Likes Like |Link to Comment
  • Stress Test For Dividend Growth Investors [View article]
    "Suppose the value of your dividend growth stock portfolio was $1,000,000 on January 1, 2015. You are reliant on the income being generated from this portfolio in order to fund your retirement, but you also cannot afford to lose the principal value of your investment. "

    Eric - this is a pretty silly premise since anyone involved in the stock market (dgi or another type) must realize that from time to time the market experiences severe weakness. If you can't afford to lose any of your principle you don't belong in the stock market.
    May 10, 2015. 01:04 PM | 16 Likes Like |Link to Comment
  • Apple Stock: Affirming My $140 Target By The End Of May [View article]
    "Apple will also likely be buying shares heavily prior to ex-dividend date, thus avoiding paying out $.52 per share. "

    Huh? The payment of a dividend can never be avoided unless perhaps if a company magically goes bankrupt between the declaration date and the payment date.
    May 10, 2015. 11:18 AM | 1 Like Like |Link to Comment