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  • 40 Dividend Champions Vs. The S&P 500: 30-Year Backtest [View article]
    Retailinvestor is right. This study is of little value. It must be conducted by constructing the list from 1982 and going forward.

    Then it would probably include companies like GE, AIG, Citi, BofA, Lehman Bros., Enron, and Eastman Kodak. Assuming they met the criteria and at least some of them did, adding companies like this might have a significant impact on the actual returns.
    Jun 5, 2012. 04:32 PM | 2 Likes Like |Link to Comment
  • 40 Dividend Champions Vs. The S&P 500: 30-Year Backtest [View article]
    The major separation looks to occur in 2003.

    This is also the year when the Jobs and Growth Tax Relief Reconciliation Act of 2003 (2nd of the "Bush Tax Cuts") was passed, and this is the one that lowered the tax rates on dividends. Could this have something to do with it? If so, that would have ominous implications for the expiration of that tax cut.
    Jun 5, 2012. 09:56 AM | Likes Like |Link to Comment
  • Take A Pass On Leveraged ETFs [View article]
    Yes, yes. The ETFs you mention reset daily. There are a few that reset monthly that would be more appropriate for a longer holding period. UBS has several ETNs (ETNs carry the credit risk of the issuer) that reset monthly, for MLPs (MLPL), Business Dev Companies (BDCL), and that track dividend paying indices (DVYL), (SDYL). The last two are particularly interesting since they track the same index as popular no-leverage ETFs (DVY), (SDY).
    Jun 5, 2012. 09:42 AM | 1 Like Like |Link to Comment
  • The strong correlation between Treasury yields and European stock prices tells Scott Grannis the 1.5% 10-year rate is more a function of foreign demand for safe paper than an indicator of imminent U.S. recession. Every post-war recession has been preceded by a sharp rise in the real Fed Funds rate and a flat or inverted yield curve, neither of which is occurring now.  [View news story]
    Right. But I don't have the exact dates for that operation so I wonder exactly what condition caused its implementation and how it impacted the stock market?

    I understand it lowered long term bond rates by 0-15 bps and that it has commonly been considered a failure.

    But back to my point, it seems that such constrictive activity would spoil the use of the yield curve as a predictor of recession.
    Jun 5, 2012. 12:21 AM | Likes Like |Link to Comment
  • The strong correlation between Treasury yields and European stock prices tells Scott Grannis the 1.5% 10-year rate is more a function of foreign demand for safe paper than an indicator of imminent U.S. recession. Every post-war recession has been preceded by a sharp rise in the real Fed Funds rate and a flat or inverted yield curve, neither of which is occurring now.  [View news story]
    Obviously you can't use the current yield curve to predict an oncoming recession since it is completely manipulated from one end to the other. Has this situation been present in any other post-war recession?
    Jun 4, 2012. 10:36 PM | 7 Likes Like |Link to Comment
  • "If it comes to worst, before the eurozone collapses, everything will be done to bail (it) out," says former Deutsche Bank CEO Josef Ackermann, adding he has "no doubt" the German people would support it. "Destruction is much more expensive than further construction."  [View news story]
    ..."Destruction is much more expensive than further construction."

    Right, now "construction" is what the banker calls throwing good money after bad, at least when you're rescuing HIS money.

    If borrowed money ever had a constructive purpose in Greece, we wouldn't be talking bailouts and defaults.
    Jun 4, 2012. 10:27 PM | 3 Likes Like |Link to Comment
  • May Nonfarm Payrolls: +69K vs. consensus of +150K, prior 79K (revised). Unemployment 8.2% vs 8.1% expected, 8.1% previous.  [View news story]
    Construction lost 28,000 jobs. Most probably not related to housing but this indicates the housing recovery is a phantom.
    Jun 1, 2012. 08:47 AM | 2 Likes Like |Link to Comment
  • Concrete Example Of Potential Compromise In Europe [View article]
    I think it comes down to political leverage just as here in the US. Both sides want to use this as political leverage to gain something else, just as here in the US.

    But the problem is there's never enough leverage to gain (or pass) the something else until somebody has a "gun to the head".

    This is why the expiring tax cuts, debt ceiling, and everything else will go down to the wire, because the political systems in use today are broken.
    May 31, 2012. 11:37 PM | 1 Like Like |Link to Comment
  • What's going on with high-yield? HYG is diving on heavy volume even as stocks and the high yield index mosey along, leaving the ETF trading well below intrinsic value. (via)  [View news story]
    It makes sense that if you wanted to unload some HY funds, today would likely be the peak price day to do it. After the monthly payment comes out, odds are higher the price will be lower for a few days.
    May 31, 2012. 04:33 PM | Likes Like |Link to Comment
  • What's going on with high-yield? HYG is diving on heavy volume even as stocks and the high yield index mosey along, leaving the ETF trading well below intrinsic value. (via)  [View news story]
    Right. It's trading 3x normal volume and down much more than the payout.
    May 31, 2012. 03:59 PM | Likes Like |Link to Comment
  • All Signs Are Pointing Down [View article]
    Excellent work, Bret. I appreciate both your bullish and bearish articles, some balance is good.
    May 30, 2012. 09:55 PM | 2 Likes Like |Link to Comment
  • June could be the turning point for the markets and the economy, according to economist Mark Zandi. "We’re going to get a lot of clarity on a lot of big issues. June jobs data I think will provide insight into whether the slow down is simply weather pay back or whether there's a fundamental downshift in the economy."  [View news story]
    Yeah, thanks Mark. We'll let you know how it turns out when we get there.
    May 29, 2012. 08:35 PM | 3 Likes Like |Link to Comment
  • Redemption And Reality In High-Yield ETFs [View article]
    Yes, I do.

    Understanding how the market for the securities involved has been affected is very difficult, I suspect only bond traders really have much of a feel for the action that transpired. The details will not be fully available from JPM. Given that, it is pretty difficult to either "quantify" or "qualify" the risk with any accuracy. You have to judge for yourself how important this unknown might be.

    At this point, I haven't sold out of my HY funds but I am trying to make sure I stay more up the quality ladder.

    When the market panics, HY funds have a tendency to be among the first over the cliff as investors try to dump their riskiest holdings. You should be aware of that and a bit more sensitive to anomalies if you invest in them.
    May 29, 2012. 08:33 PM | Likes Like |Link to Comment
  • Going Defensive With Dividend Funds [View article]
    I think the best ETF for "defensive dividends" is First Trust Value LineĀ® Dividend Index Fund (FVD).

    This ETF has a prime focus on safe dividend stocks and is rebalanced monthly.

    I might nominate the Guggenheim Defensive Equity ETF (DEF), but it doesn't have the liquidity to get in and out of on demand.

    I am long FVD.
    May 29, 2012. 06:00 PM | Likes Like |Link to Comment
  • Iceland has indicted or jailed 200 of the bankers that were involved in its financial collapse. Given that the U.S. population is 981 times as big, that's the equivalent of over 196K American bankers. [View news story]
    On the 2011 Corruptions Perception Index (and we all like numbers), the US is 24th out of 182 countries. Iceland is 13th.

    http://bit.ly/K8lYLH
    May 29, 2012. 10:10 AM | 1 Like Like |Link to Comment
COMMENTS STATS
156 Comments
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