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richjoy403

richjoy403
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  • Omega Healthcare Investors: A Perfect Retirement Stock [View article]
    I could show a little ankle.
    Apr 1 04:22 PM | 1 Like Like |Link to Comment
  • Omega Healthcare Investors: A Perfect Retirement Stock [View article]
    Thanks guys...I may return to limited posting in July.
    Apr 1 02:09 PM | Likes Like |Link to Comment
  • Omega Healthcare Investors: A Perfect Retirement Stock [View article]
    Thanks Mike -- That was an exception.
    Apr 1 11:03 AM | 1 Like Like |Link to Comment
  • Omega Healthcare Investors: A Perfect Retirement Stock [View article]
    [lonestar -- I've been on a 3-month posting sabbatical for almost a month, but since you addressed a conversation I entered last month, I'd like to respond.]

    Let me make it abundantly clear -- I support DGI -- it is an excellent strategy. I also agree there is a difference between noise and news; but if you aren't paying attention, you can't know the difference.

    First, your comment assumes (a) REITs are ONLY bought by DGIs; and (b) you assume all DGIs buy ONLY for dividends, and have zero interest in other metrics, including capital appreciation. Both those assumptions would be incorrect.

    As for DGIs, true, their goal attainment relies upon the thin layer of icing (the dividend) which they expect the company will multiply many times over an extended period of 25 or 35 years. Also, DGIs do not rely upon the cake (price appreciation) to meet their income goal.

    As a growth & income investor, I invest for BOTH the cake and the icing (i.e., total return). Furthermore, I invest in healthcare REITs such as OHI because (a) healthcare is a mega trend; and (b) real estate is a separate asset class (a source of diversification I presently prefer over bonds).

    IMO, those (hopefully few) DGIs who focus ONLY on dividends are focusing on the intended 'effect', and missing the 'cause' of their success. Potentially, that is critical error, because no BoD can assist DGIs in meeting their income goals unless the corporation first generates and subsequently maintains its own reliable and growing stream of income (obviously easier said than done).

    By increasing its income, the corporation increases its intrinsic value to investors, which results in the price appreciation critical to maintaining its p/e ratio. Dividends follow earnings, and cannot be increased at rates greater than earnings are increased (to do so threatens the payout ratio). Instead of thinking only of dividends--a solo--consider a symphony wherein many instruments must play in support of each other.

    Put another way...to assume one can enter into a multi-decade relationship with the goose, yet focus only on the eggs without equal attention to the feeding and continued good health of the goose is hoping--not investing.

    You would be well served to monitor what goes into the front end of the goose (the corporate balance sheet), rather than to concentrate ONLY what might eventually come out the back end.

    Rich
    Apr 1 12:50 AM | 3 Likes Like |Link to Comment
  • Reduce Risk Of Buying A Lower Quality Company For A Higher Yield And Return [View article]
    "DLR never hit $80 at any time in its history."
    _________________

    'Just a minor factual correction', Q:

    July 17, 2012
    Open $79.02
    >>> High $80.59 <<<
    Low $79.02
    >>> Close $80.31 <<<
    Volume 1,199,200
    Adjusted Close $74.37

    Regards,
    Rich

    p.s. I recently awarded myself a few months sabbatical from posting as I concentrate on more productive pursuits (an exception is warranted). I take data seriously, and always strive for accuracy, yet I acknowledge an occasional mistake.

    I also acknowledge DLR was trading in the high $70s shortly before the Ira Sohn Conference.
    Mar 8 12:11 PM | 1 Like Like |Link to Comment
  • Why Dividends Actually Might Be Relevant [View article]
    Jon -- If there remains any doubt that price compounds, consider this:

    "And they’ve certainly done it – earning a compounded annual gain of 19.7% a year for 49 years vs just 9.8% for the S&P, with dividends included. This equates to a return over the last half-century of some 693,518% vs the not-too-shabby 9,841% of the broad index. But they are realistic about their inability to keep pace with a raging bull market during any given period, the deficit owing to an unwillingness to be fully-invested in stocks or to pay high valuations for the leading companies."

    The reference is to Warren Buffet/Charlie Munger's performance at BRK, which as you know does not itself pay a dividend, thus its total return stands only on the one leg of price change.

    http://bit.ly/1mTBAGc
    Mar 4 06:45 PM | Likes Like |Link to Comment
  • Why Dividends Actually Might Be Relevant [View article]
    Art -- I'm taking a posting sabbatical. I've announced today is my last day posting until July 5th.

    As we agree 'magical' is hyperbole, there is little to discuss.

    You may not know I am on record at least 99 times as stating DGI works, so your efforts to convince me are unnecessary (other strategies also work, including my own growth & income).
    Mar 4 06:14 PM | Likes Like |Link to Comment
  • Why Bank Of America's Projected Dividend Increase Is Only The Beginning [View article]
    Crate -- I understand your going with the regionals, and do not dispute your view of BAC's dividend, your strategy, or your comfort zone.

    But total return is another story...

    In my own case, I seek growth & income. I am constrained only by my rule any holding must pay a dividend (I have no rule they must have increased their dividend 5, 10, or more years). In years past, I had no such rule, now I'm more conservative and find this rule keeps me grounded.

    I bought BAC when many DGIs were posting "I'll never own another bank again". I've since trimmed gains 3 times, by sale of a few hundred shares (putting the proceeds to work in 'higher quality' companies), yet each time my BAC position value has grown back to a full position. I presently have a 4th limit-sell in place for execution @$18.94.

    Over the remainder of this business cycle, it is very likely I will have harvested 2 full positions from my BAC investment.

    OTOH, I also own WFC and BNS, but have yet to harvest gains.
    Mar 4 05:00 PM | 2 Likes Like |Link to Comment
  • Why Bank Of America's Projected Dividend Increase Is Only The Beginning [View article]
    Tony -- Everything is relative. A 4 cent dividend is 4% yield on a $1 stock, thus very significant. BAC is now at $16.50, and 4 cents is a 0.25% yield, thus insignificant.
    Mar 4 10:23 AM | Likes Like |Link to Comment
  • Why Dividends Matter: A Review Of Recent Research [View article]
    Thanks MBN -- I tend to agree with Chuck...for these studies, the devil is in the details, and few have the time or technical skills to dig deeply into the research supporting the conclusions of these studies.

    For example, I recall back in the 70s a theory of psychology became popular among corporate human resources departments (can't now recall which), and was quietly dumped when some years later another researcher discover the theory was based upon research targeting mental patients.
    _____________

    BTW, today's comments will be my last for a while. I need to get away from commenting and to instead devote more time to endeavors more productive...including a deep dive into a new book to evaluate the use of options to increase portfolio income. See you July 5th.

    [I'll continue to read articles and respond to those 4 or 5 who occasionally PM me for discussion and questions]
    Mar 4 10:13 AM | 4 Likes Like |Link to Comment
  • Why Dividends Matter: A Review Of Recent Research [View article]
    I own only dividend-payers. I read the on-going articles touting dividend stocks are best, and/or growth stocks are best (and by extension, either is a one-size-fits-all strategy for all market conditions, and thus everyone having common sense should adopt that investment strategy).

    IMO, only a tiny sliver of 1% of SDIs of any strategy are qualified to go toe-to-toe with Larry or Geoff, or the papers of Ken French/Eugene Fama, or those of Larry and others. Frankly, I've yet to spot such an SDI among commenters on SA. I also wouldn't be surprised if Larry or another posts a counter-article to this one.

    Very few SDIs are so pliable as to change their strategies on the basis of technical theories and arguments they only comprehend on a Cliffs Notes level, but instead will continue in the direction they believe best fits their present circumstances and goals.

    Rather, we tend to accept and adopt what we intuitively relate to...regardless of competing theories and studies. SDIs finding their comfort zone in short- or long-term price change (like former myself in wealth accumulation), and focus on growth-stocks, momentum, etc. will continue to do so. Those (like myself in retirement) more comfortable in long-term total return from both its legs--distributions plus price change--will continue to do so. Those whose primary interest is dividends, and pay little attention to earnings and price change (i.e., DGIs), will continue to do so.

    SDIs are capable of changing strategies as our circumstances, experience, and comfort zones change.
    Mar 4 09:03 AM | 3 Likes Like |Link to Comment
  • Why Bank Of America's Projected Dividend Increase Is Only The Beginning [View article]
    magi -- BAC pays 4 cents...perhaps you meant to say 'increases the dividend'?
    Mar 3 06:01 PM | Likes Like |Link to Comment
  • Why Dividends Actually Might Be Relevant [View article]
    "Sometimes it (price growth) is and sometimes it is not....so not really. I tend to like to take Mr. Market out of the equation as much as possible."
    ___________
    Jon -- Yours is a DGI strategy, to get the benefits of dividend compounding, you MUST be invested in dividend-payers for many years (the very long-term).

    Thus your stocks absolutely MUST produce a EGR (earnings growth rate) to support its DGR...else you don't reach your goal.

    Therefore your DGI goal is DEPENDENT upon EGR (which is essential to you because DGR must stall without it), and it is earnings produces price growth (which is essential to p/e ratios, and a host of other valuation statistics). Thus in the long-term, Mr. Market is essential to yourself also, noise is filtered-out, and price reflects valuation. I suspect you know you ignore Mr. Market at your peril, you just refuse to admit it.

    BTW, you did not address my question: Bonds are available in 'strips'. If dividend-stocks were available in strips which allowed you to gain only growth in dividends, and NOT from price growth--would you want to buy the strip?
    Mar 3 05:15 PM | Likes Like |Link to Comment
  • Why Dividends Actually Might Be Relevant [View article]
    Jon -- Wrong again. Stock prices (referred to as 'performance' below) do compound. CAGR is absolutely not limited to dividends, as demonstrated below.

    Compound annual growth rate (or rate of change) is simply a mathematical formula applied to a series of numbers.

    Consider these among other sources:

    (a) From Investopedia:
    "The year-over-year growth rate of an INVESTMENT over a specified period of time.
    http://bit.ly/N8jetC

    The compound annual growth rate is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered. CAGR isn't the actual return in reality. It's an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as a way to smooth out the returns.

    (b) From Wikipedia:
    "Compounded Annual Growth Rate (OTCPK:CAGR) is a business and investing specific term for the geometric progression ratio that provides a constant rate of return over the time period. CAGR is not an accounting term, but it is often used to describe some element of the business, for example REVENUE, UNITS DELIVERED, REGISTERED USERS, ETC., CAGR dampens the effect of volatility of periodic returns that can render arithmetic means irrelevant. It is particularly useful to compare growth rates from different data sets such as revenue growth of companies in the same industry. Examples:

    . Calculating and communicating the average returns of investment funds
    . Demonstrating and comparing the performance of investment advisors
    . Comparing the historical returns of stocks with bonds or with a savings account
    . Forecasting future values based on the CAGR of a data series (you find future values by multiplying the last datum of the series by (1 + CAGR) as many times as years required). As every forecasting method, this method has a calculation error associated.
    . Analyzing and communicating the behavior, over a series of years, of different business measures such as sales, market share, costs, customer satisfaction, and performance."
    http://bit.ly/15wNtnG

    In fact a CAGR can be calculated for virtually any series of numbers; such as the change in average height of 21 year old men between 1900 and 2000; the average reported incidence of nora virus among cruise ship passengers from 1950 to 2000; and average innings pitched by professional starting pitchers from 1920 to 2000.
    Mar 3 04:48 PM | Likes Like |Link to Comment
  • Why Dividends Actually Might Be Relevant [View article]
    <<< I can plan around the dividend, it will compound unlike the stock price. >>>

    Jon -- So you are on-record...stock prices do not compound!

    I assume you have not read Warren Buffett's weekend shareholder letter. Worse yet, you also make reference to Amazon!...neither pay dividends, yet both have outstanding compound returns.

    I'm not against dividends, as they are an important to my strategy; but I do like balance in both my portfolio and the comment stream. Accuracy is always important, and in addition there are impressionable newbies here.

    It appears your DGR reference is anecdotal at best--as you represent it to be greater than the historical growth of earnings, in which case the payout ratio would be >100%. Do you have a link to a study demonstrating a long-term DGR of 7-11% per year. (see below)

    As price compounding also takes place over many years, I fail to understand your repeated reference to "predictability". After all, is not price change also predictable over many years?

    As you know, BKB pays no dividend, but its would be almost impossible to find another stock whose growth is 11,000% over so many years.

    As for your reference to Amazon, it would seem to many you have inadvertently made their case for growth stocks--it has grown from <$2 in 1997 to >$362 in about 16 years...that's a CAGR of about 37%, an outstanding total return.

    You may find this link interesting reading, note Hussmann says the dividends have grown by 4 to 5% in the long-term:

    http://bit.ly/1hBmYql
    Mar 3 09:41 AM | 1 Like Like |Link to Comment
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