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  • How To Be Sure You Won't End Up Eating Cat Food In Your Retirement [View article]
    Good article PTI. Establishing goals is of primary importance if you want to accomplish anything (beyond retirement income). Reviewing progress is also key as it allows you to modify the plan as circumstances change. Without it you might wind up at the end of the time interval without the anticipated income and not having any idea why.

    Young folks out there reading this article would be wise to take heed and pick up a pencil to start figuring for their own retirement needs.

    Bravo also to ScottU for asking the probing question that kicked off your effort.
    Jun 29, 2015. 08:15 PM | 4 Likes Like |Link to Comment
  • Looking Beyond The Obvious: Critical Thinking And Investment Decisions (Part 1) [View article]
    "Yes, I figured that out he was trading option spreads (most likely via ETFs based on the VIX) a long time ago, back when he was here under a different user name." - giorgiolb

    I'm late to his game, but establishing option spreads where the worst case outcome is to lose ~40% of your account balance on one trade seems somewhat riskier than DGI. Given the small account value, he won't have much hope if he gets a surprise move in the underlying. Delta neutral positions would seem like better bets for 'extreme' VIX plays, but that takes more money unless his ETF is priced around $10 or so, which would make the options side a challenge.

    He's either going to win big, or lose big. Time will tell.
    Jun 28, 2015. 11:33 PM | 1 Like Like |Link to Comment
  • Looking Beyond The Obvious: Critical Thinking And Investment Decisions (Part 1) [View article]
    "C'mon giorgio, give the man credit. He has $2.62 in a mutual fund. The rest of his portfolio is in a money market fund, total $5,380.19 before he lost $13.69 and then shut the site down so we can't see how he's doing." - Chowder

    I got a quick look at his website when he first started it. He wasn't using mutual funds, he was trading option spreads. The upper right hand portion of his website shows the gain/loss vs. price chart that is often used to depict option trade results. From the looks of the graph on his website it appeared he had established a spread of some sort using call options.

    In addition his statement showed all the 'greeks' for his position (also indicative of an option position). What wasn't showing were the symbols for the options he used,the duration of the spread, or the prices of each leg.

    Apparently he did some 'prep' work to cover up that kind of information in his statement(s). Why, we can only guess. Maybe he can provide further detail if someone asks.

    One thing he is not doing is 'investing' by establishing long term positions. He's establishing short term option positions to either sell premium or to play short term stock swings.
    Jun 28, 2015. 09:36 PM | 4 Likes Like |Link to Comment
  • Looking Beyond The Obvious: Critical Thinking And Investment Decisions (Part 1) [View article]
    “Five percent of the people think;
    ten percent of the people think they think;
    and the other eighty-five percent would rather die than think.”

    ― Thomas A. Edison

    Edison died in 1931, so the general principle that most folks avoid critical thinking has been around a while.

    The blog example discussed in this article makes me wonder if Edison held KO in his portfolio when he died though. :-)
    Jun 27, 2015. 11:50 AM | 8 Likes Like |Link to Comment
  • Looking Beyond The Obvious: Critical Thinking And Investment Decisions (Part 1) [View article]
    "I retired from Callahan and have moved on the bigger and better things. Like being retired! And a grandpa." - Dave Crosetti

    I can't help but put one last Tommy Boy reference in:

    Critical thinking is sort of like when Tommy Boy saw 'guaranteed' stamped on the box. It makes you feel all warm and fuzzy, but you still have to figure out what's being guaranteed before spending your hard earned money.

    And that's when we blow it.
    Jun 27, 2015. 11:42 AM | 2 Likes Like |Link to Comment
  • Happy Birthday! My Dividend Growth Portfolio's 7th Birthday Report [View article]
    "How is that possible? Why didn't the dividend cut holes in the pockets of the Magic Pants?" - Mike Nadel

    Obviously, the shares would be worth ~2/3% more than they are now ... but ... if you are DRIP'ing the dividends, you now have ~2/3% more shares than you used to have.

    So doesn't the total value come out the same in both cases?

    Why, YES, it does!

    Amazingly the Distributive Property of mathematics holds when you are wearing Magic Pants.
    Jun 26, 2015. 12:08 PM | 2 Likes Like |Link to Comment
  • 8% Raise For The Dividend Growth 50 [View article]
    "I do wrap vegetables in foil when I put them on the grill, especially corn on the cob and onions." - chowder

    Foil is great for cooking while camping too. Wrap cut up potatos, carrots, some cut up ham and/or raw shrimp, and add seasoning. Put it in some heavy duty foil, add a cup of water, then fold the foil to seal the package. Drop it in the campfire. Wait 10 minutes and remove from fire (carefully). Open the foil package and eat hearty. YUM!

    As long as your package doesn't run out of water, nothing will burn. The water boils and steams everything up really nice. When done eating, crumple up the foil and toss in the fire for disposal (dump the water out first).
    Jun 23, 2015. 05:26 PM | 3 Likes Like |Link to Comment
  • 8% Raise For The Dividend Growth 50 [View article]
    "Taxpayers would be unable to fix anything. Consider them victims of the mess. Anyone who believes the Fed has back-up dollars/gold for every single CD is (and I truly don't mean this as a put-down), naive to say the least." - misscbd

    That is why lawmakers are changing the way things work so that bank failures of the future will be made whole via the use of bail-ins instead of bail-outs.

    Those with significant account balances will be the ones who take a haircut so that their bank can stay in business.

    "The United States ... plan(s) to use funds from systemically important bank ... creditors to protect taxpayers from losses. These creditors, principally the unsecured bondholders, are to be bailed in at failing banking groups to absorb losses and recapitalize failing banks to allow their continued operation." - Federal Reserve Bank of Atlanta - August 2014

    Brought to you by the Dodd-Frank Act.

    And ... thanks for playing. Investors would be wise to keep minimum balances at their banks going forward. See Cyprus as the example.
    Jun 22, 2015. 08:56 PM | Likes Like |Link to Comment
  • The Numbers Say Gold Resource Is One Of The Best Stocks In The Gold Mining Sector [View article]
    "The problem with this company is that the life of the mine of its operating one is only 3 years" - tajer

    That's based on official reserves and doesn't include any possible reserves in their other 5 properties on which they are currently drilling.

    Check out some of the preliminary drill results on slide 23 in their most recent presentation:

    > 1 meter intercept at 132 g/t (that's almost 4.25 oz per tonne) Au
    > 2.85 meters at 27 g/t Au and 2600 g/t Ag
    > 19.34 meters at 2.56 g/t Au and 129 g/t Ag

    As a rule of thumb, Au can be economically mined at 1 g/t using heap leaching and at lower concentrations using a mill (which GORO recently completed building).

    Given zero debt, $21 million in cash, and currently profitable operations of at least 3 years, it is only a matter of time before they drill enough to be able to claim much higher reserves in the ground.

    The author is correct. GORO has some pretty good numbers. The biggest concern is that it will take some time to finish drilling and post additional reserves to extend the official life of the mine. It's a reasonably good bet that they will have no problem doing so.

    Disclosure: I am quite long GORO and have been DRIP'ing steadily since January of 2014.
    Jun 21, 2015. 02:01 PM | 3 Likes Like |Link to Comment
  • 8% Raise For The Dividend Growth 50 [View article]
    "By this time next year, I'll be able to do real year-over-year comparisons of a real portfolio in real time." - Mike Nadel

    One format to consider is showing your DG the way Chowder follows it. Present the dividend totals for each quarter, then compare Q1 vs. Q1, etc., from year to year. That way you get four comparisons per calendar year.

    Given the quarterly income data, anyone can generate a YoY comparison starting in any quarter by simply adding up the individual numbers for the quarters of interest.

    Just a thought ...

    Thanks for the update. I love it when someone else does work and keeps me informed without any effort on my part. Oh, and you write pretty good too. You should continue doing so. ;-)
    Jun 18, 2015. 07:39 PM | 4 Likes Like |Link to Comment
  • Lessons Learned From The Grand Canyon [View article]
    "He tried to save us from ourselves, he realized we weren't buying what he was selling, and he has returned to a situation where he is more comfortable and where he probably can do some good for those who agree with his investing theories." - Mike Nadel

    "Mike, that's a generous viewpoint on Mr. Swedroe. I recall several times his telling commenters that they were too dumb to do math if they didn't agree with him." - Big Thunder

    You are both being far too generous, IMHO. Based on past 'debates' between Larry and myself (search through my comment stream if you care to see the lurid details) I am of the opinion that Mr. Swedroe comes closer to being a menace than an aid in things financial. Logic and causality do not appear to be his strong suits.

    I wouldn't let him touch my money with a ten foot pole, but that's just me. Maybe what he offers is just the ticket for those who don't want to be bothered with the risks they are taking by following his advice.
    Jun 17, 2015. 09:05 AM | 8 Likes Like |Link to Comment
  • Why I'm Calling The Federal Reserve's Bluff [View article]
    "I believe many bonds are selling at a discount right now because of all the feds claims." - Adam Harrington

    The 30 Year Treasury bond is selling at ~150. When it matures you get paid 100. The all-time high is only around 170. Where's the 'discount'? It's trading within 12% of its highest price in the last decade.

    The last time 30 years were priced anywhere near par was 2006.

    If 30 year rates (~3.0% now) rise to ~4.5% the price of a 30 year bond will drop to near 100, leaving today's buyer with a ~33% loss.

    If you're looking for income you might want to consider a nice boring utility instead. At least you'll get paid more for taking on an interest rate risk. As an example, SO pays over 5% and it's quoted within 5% of its lowest price in the past 4 years. IMHO, the risk / reward is much better with SO than the long bond, and the income is 60% higher.
    Jun 17, 2015. 06:51 AM | Likes Like |Link to Comment
  • Why I'm Calling The Federal Reserve's Bluff [View article]
    "Based on this simple analysis I truly believe that ... the Federal Reserve does not have the ability to raise interest rates of any significant value without crippling the economy." - Adam Harrington

    What if market participants as a whole raise interest rates instead? If enough bond holders decide that the risk of not getting paid outweighs the paltry amounts of interest involved and decide to sell an avalanche of bonds into the illiquid market, rates will rise DESPITE the FED.

    There are currently more than $13 Trillion worth of US debt held by the public. If only a third of them try to sell in a hurry, the FED would need to double its balance sheet in order to buy them all and keep interest rates 'low'. (That means the FED would have to print over $4 Trillion in cash to fund the purchase.)

    If that should come to pass, we would see significant inflation soon after, far in excess of what the FED hopes to see.

    I'll give you that the FED is unlikely to raise rates voluntarily any time soon, but that doesn't mean rates can't go up anyway. At some point holders of US bonds will realize they face a risk of not getting repaid and rates will become a secondary concern. See Greek bonds for an example: 10 Year Greek notes yield 12+%, and not because the Greek central bank raised rates.
    Jun 16, 2015. 06:41 AM | 2 Likes Like |Link to Comment
  • Lessons Learned From The Grand Canyon [View article]
    "I'd say contributions of $56,000 made to look like gains and a huge bull market is the secret behind project 3 million." - DividendsUberAlles

    I did some calculations of my own and came up with a CAGR for Chowder's Project $3 Million of 10.26%, assuming all investments were made at year end.

    The Project $3 Million goal is:

    "To contribute $500 per month to the portfolio, plus 5% of income (no match) to the Thrift Savings Plan (TSP), look to earn 8.25% annually, compounded over 40 years, to age 65."

    Given the long term goal of earning 8.25% CAGR while generating income, I'd say Chowder's results are quite good. Sure, someone might have "done better", but so what? How much more risk would that entail?

    Chowder set realizable goals to meet a retiree's needs 35 years from now and is well ahead of the planned performance needed to get there.

    Most retirees don't even HAVE a goal, and so they don't really know if they have "enough" or not. Why take on additional risk if it's not necessary to achieve your goal? Just so you can say you "did the best"? That's some retirement plan there... Do THE BEST. Good thinkin'.
    Jun 13, 2015. 11:30 PM | 5 Likes Like |Link to Comment
  • Lessons Learned From The Grand Canyon [View article]
    "The song "Time" probably means more to people who have lived 2/3rds ''or more of their life. Although maybe younger people should take note of the words and may their own personal assessment." - as10675

    Some do. I first heard 'Time' in college 35 years ago. It made quite an impression on me, opened my eyes so to speak. While I have still managed to squeeze in a good bit of frittering here and there, I have tried to allocate time on a regular basis for some form of self improvement, whether through learning, working, or doing something that I feel will make my life better in the future.

    While that made complete sense to me way back then at a young age, I have come to realize that is not the case for most of humanity. It's amazing what can be accomplished over a lifetime by simply 'spending' one hour a day working at it. Over 35 years that totals nearly 13,000 hours, more than enough to become expert at some field of endeavor, or quite handy at several.

    Having those kind of options can be very useful when the unexpected happens, like being laid off, or losing possessions in a natural disaster. Seeking Alpha is one of the areas where I try to spend time learning from those who have an expertise to share. It has made a significant difference in my investment results.

    One thing I learned over the years of added 'work' was to take every shortcut I could find to the knowledge I needed. Learning from helpful experts saves Time I can spend on other areas. Many thanks to those here who spend their time educating the newbies. I certainly appreciate it a great deal.

    Young folks out there reading this would be wise to think about what it all means and how putting Time to work can help you too. Make a promise to yourself, and get at it. Start learning. Use Time for something better than pure frittering. In 20 years you will be glad you did.

    Don't just sit there, get going! Time's a wastin'.
    Jun 11, 2015. 08:50 PM | 6 Likes Like |Link to Comment