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  • This Bear ETF Will Hedge Your Portfolio [View article]
    Thanks, but a nearly 3% annualized fee would seem to make this fund VERY expensive, even for short-term use, when compared to the alternatives.
    Sep 3, 2015. 03:33 PM | Likes Like |Link to Comment
  • ConocoPhillips: At What Price Is That Dividend In Danger? [View article]
    Casey -- Clearly COP's dividend is being stressed, and many will appreciate your article.

    Hopefully, you might consider doing the same with BP, CVX, RSD, and XOM.
    Sep 3, 2015. 07:41 AM | 2 Likes Like |Link to Comment
  • Procter & Gamble: Fairly Valued, Even Assuming A Bad Upcoming Decade [View article]
    Ian -- I took all the data from Morningstar's Key Ratio's tab (and of course, M* is not above a mistake).

    As you question the quoted EPS of $2.44, I went to PG's 2015 Annual Report, which reads on page 2...
    "Diluted Net Earnings per Common Share 2.44"
    Sep 2, 2015. 06:47 PM | Likes Like |Link to Comment
  • Waiting For The Stock Market Correction? Good Luck With That [View article]
    Dale -- I have serious problems with your calling me a fool, and your views on cash.

    But rather than detailing my objections, I'll simply point-out I'm disappointed you submitted an (admittedly) stale article--we deserve better.
    Sep 2, 2015. 06:31 PM | 6 Likes Like |Link to Comment
  • Procter & Gamble: Fairly Valued, Even Assuming A Bad Upcoming Decade [View article]
    Ian -- "Little growth lately"!...IMO, there is much room to consider PG's growth to be far less than you believe it to be.

    Here are a few metrics demonstrating years of STRONG negative growth--including poor performance compared to their category competitors.

    According to M*, these are PG's growth rates:
    . . . . . . . . . Yr over Yr . . . 3 years . . . 5 years . . . 10 years
    Revenues . . . -8.2% . . . . -3.0% . . . . -0.7% . . . . 3.0%

    Opr. Inc. . . . -22.8% . . . . -3.9% . . . . -6.0% . . . . 0.8%

    Net Inc. . . . . -39.6% . . . -13.2% . . . -11.2% . . . -0.3%

    EPS . . . . . . . -39.2% . . . -12.6% . . . -9.9% . . . . -0.9%

    If PG were keeping up with its competitors in the Household Products Category, I may have a different opinion; however, that's not the's Category performance, and PG +/- competitors for the multi-year periods:
    . . . . . . . . . . . . YTD . . . . 1 Year . . . 3 Years . . . 5 Years . . . 10 Years
    Category . . . . -8.4% . . . -14.0% . . . 7.4% . . . . 10.3% . . . . 7.5%
    PG +/- Cat. . -14.43% . . . -8.70% . . -3.17% . . . -4.39% . . . -2.97%

    Here's PG +/- the S&P500:
    . . . . . . . . . .-17.59% . . -12.75% . . -9.08% . . . -9.00% . . . -2.29%

    Those lousy growth rates speak to myself; but you should also consider these PG metrics:

    Revs: Peaked in 2013 @$84.2 billion; now only $76.3 billion (-9.4%)!

    Opr. Inc.: Peaked in 2008 @$17.1 billion; now only $11.8 billion (-31%)!

    Net Inc.: Peaked in 2009 @$13.4 billion; now only $7.0 billion (-48%)!

    EPS: Peaked in 2009 @$4.26; now only $2.44 (-43% and -6.9% shrs)!
    Sep 2, 2015. 01:59 PM | Likes Like |Link to Comment
  • Procter & Gamble: Fairly Valued, Even Assuming A Bad Upcoming Decade [View article]
    >>Great returns aren't likely based off current prices, but shares now promise modest long-run gains, even assuming the company's issues can't be resolved.<<

    Partially agree, and only to the extent PG's very negative growth rates (revenues, gross margins, operating income, net income, & EPS) improve enough to produce the modest returns you anticipate.

    PG's share price is depressed to the extent new purchasers now pay a whopping $22.50 for each $1 of TTM earnings, and $15.50 for next 12 months earnings ONLY if only PG is able to improve their EPS by the anticipated 11.6% (not likely IMO, given their higher prices in the slow-growth US and world economy, their on-going reorganization, and forex headwinds).

    I'm using any price strength to trim my position about 18%, and allocating the proceeds to another stock in which I have greater confidence.

    I expect PG will someday (again) introduce new product categories favorably received by consumers, and right their ship...but other than hopium, there is no indication when that might happen. Meanwhile, they are cutting costs, which is necessary, but not the long-term answer.

    Sep 2, 2015. 09:10 AM | 2 Likes Like |Link to Comment
  • A Follow-Up To Berkshire For Retirement Income [View article]
    Nothing controversial here.

    For at least the last couple hundred years, SDIs have been buying stocks with attractive growth of total returns, and either selling shares to produce 100% of their required income, or selling those shares necessary to fill the gap between their dividend income and their needs.

    BRK has long been an outstanding stock for those selling shares for income (I am not long BRK).
    Sep 1, 2015. 09:56 AM | Likes Like |Link to Comment
  • My 4% Dividend Yield Portfolio: Exchanging Baxter International For Johnson & Johnson [View article]
    Ron -- Thanks for sharing your experience in this article.

    I know little about you, or your goals. If I did, I wouldn't say you were right or wrong in trading BAX for JNJ--though I agree JNJ is the safer holding, and likely the better long-term performer, and there is much to be said for holding JNJ in this declining market.

    FWIW, I too am selling off my position in BAX. For myself, it's less about maximizing dividends, and more about improving total return. Most likely, I'll apply about 50% of the proceeds to BXLT because I expect strong returns from their biotechnology.

    As for holding a cash reserve, I too maintain a cash reserve, and I enlarged it considerably in the spring because (as I wrote then) I expected bargains to be offered in the summer following a string of new all-time highs and numerous overvaluations.

    I normally hold a cash reserve because like equities and bonds, cash is an asset class (it's strange many don't realize that). Therefore like bonds (but less so) cash dampens both the market's upside and downside, resulting in a smoother ride (which is the purpose of diversification).

    Furthermore as I hold no bonds, it is especially important I hold cash.

    I'm also fine with others not believing in the advantages of a cash reserve. I assume they are willing to go balls-out in equities because they have a wider comfort zone compared to mine; they are likely in wealth accumulation; and/or they have a far longer time horizon compared to my own. Assuming they were also ball-out in equities through the Great Recession, and made no change in their investing style and had no concerns--I'm sure they will not regret it this time, and I congratulate them.

    Sep 1, 2015. 09:41 AM | 1 Like Like |Link to Comment
  • Remember That Ham Sandwich Quote? [View article]
    Yiannis -- Agreed PG has a great past (and may have a great future.)

    However, IMO not so easy to understand and dismiss:
    USD strength was for many years a tailwind for US multinationals, and didn't begin to became a headwind until only a few quarters ago (late 2014), and PG's decline clearly pre-dates dollar strength by a bunch of years.

    Same dates apply to Venezuela.
    Sep 1, 2015. 06:42 AM | Likes Like |Link to Comment
  • Remember That Ham Sandwich Quote? [View article]
    Mike -- Among investing characteristics I cherish, we are all responsible for our own decisions, and entitled to 100% of the credit for our successes and all the blame for our mistakes.

    I found the article lacking critical information and merely discussed a portion of how I look at PG today, and added my action plan. However, Tim, yourself, and I can all be long PG, and having taken a fresh (and unemotional) look at it look today, we could arrive at 3 quite different conclusions. I'm not pounding the table saying anyone else's view is wrong.

    I expect to occasionally have a horse or two requiring medication, rest, and patience, while it recovers before it can resume pulling my wagon. IMO, the world exited the Great Recession years ago, and while competitors have posted impressive results, PG is stuck in the ditch (take UL for example: I'd be embarrassed to post their growth rates alongside PG's).

    So, should I give PG another 5 years on top of what they've already had?...
    No way, if I can't change horses under these circumstances, I might as well buy indexes.

    But I'll keep an eye on it; maybe I'll it back to PG in a few years.
    Aug 31, 2015. 08:31 PM | 3 Likes Like |Link to Comment
  • Remember That Ham Sandwich Quote? [View article]
    Tim -- You generally make a strong case.

    Unfortunately, IMO, you made little or no case today (and I am a PG long!).

    Traditionally, PG's R&D produced high quality new products in entirely new categories that filled a need consumers (and competitors) hadn't yet realized were needed. Consequently, being first with an important new product category produced huge profit margins that supported an above market multiple (5 yr average of 19.6, but today is over 23).

    I suspect P&G has not introduced a highly profitable new product category since the Swifter in 1999 (followed by 5 or 6 derivative products), and Crest Whitestrips in 2001 (also followed by improved versions)...and likely little new of consequence since.

    Insofar as we know, presently, P&G is doing little more than shifting chairs (and butts occupying them) while the ship is stalled, 'in irons', and leaking.

    As 'stagnation' is your best case scenario, and you also forecast investors require "5+ years of patience"--readers deserve a paragraph or two describing the basis for your assumption the new management team will "right the ship". Absent that, your conclusion might be described as "hopium".

    Let's add a few relevant metrics...According to M*, these are PG's growth rates:

    . . . . . . . . . Yr over Yr . . . 3 years . . . 5 years . . . 10 years
    Revenues . . . -8.2% . . . . -3.0% . . . . -0.7% . . . . 3.0%

    Opr. Inc. . . . -22.8% . . . . -3.9% . . . . -6.0% . . . . 0.8%

    Net Inc. . . . . -39.6% . . . -13.2% . . . -11.2% . . . -0.3%

    EPS . . . . . . . -39.2% . . . -12.6% . . . -9.9% . . . . -0.9%

    PG +/- Household & Personal Products Competitors:
    . . . . YTD . . . . 1 Year . . . 3 Years . . . 5 Years . . . 10 Years

    . -14.43% . . . -8.70% . . . -3.17% . . . -4.39% . . . -2.97%

    PG +/- S&P500:
    . -17.59% . . . -12.75% . . . -9.08% . . . . -9.00% . . . -2.29%

    Clearly, "stagnation" is an overstatement, and the trend offers little suggesting improvement:
    Revenues peaked in 2013 @$84.2 billion; now only $76.3 billion.
    Operating Income peaked in 2008 @$17.1 billion; now only $11.8 billion.
    Net Income peaked in 2009 @$13.4 billion; now only $7.0 billion.
    EPS peaked in 2009 @$4.26; now only $2.44.

    PG is undoubtedly doing some things right, such as cost-cutting and brand trimming. However, it has also lost the CEO who drove the make-over. PG is faced with strong headwinds from U.S consumers substituting cheaper import products costing less than PG's brands in a slow-growth world economy, combined with the reduced profits from overseas sales due to forex and the strong dollar.

    Another year or two of trending PG performance, and a couple more -11.1% haircuts to PG total returns, and it will become an 'accidental high-yielder' (4+%), and the BoD will likely have difficulty justifying even a 2% dividend increase.

    My portfolio management practices do not permit waiting another 5 years for PG to right whatever might be left of the ship. My patience has worn quite thin; I'm trimming on strength so as to salvage my gains. I also expect PG's FV to be adjusted downward (resulting in a still lower share price).

    Aug 31, 2015. 05:35 PM | 8 Likes Like |Link to Comment
  • Remember That Ham Sandwich Quote? [View article]
    IMO, advertising is a critical marketing tool to support increased sales and production. A significant ad budget is required to generate interest in a new product, and a modest ad budget is required to maintain market share for an established brand.

    Soap operas?'s women work! They are not home for daytime TV, nor are they interested in keeping up with their serial plots.

    Traditional advertising is in TV has given-up share to cable, and both have suffered by ad-skipping DVRs. Newspaper and magazine circulation are both going the way of soap operas. Coupons worked well for decades, but there are indications many women are too busy to hunt them down (electronic delivery may be helpful).

    Thus all the traditional largest advertisers are searching for more effective means to reach the primary purchasers of their products.
    Aug 31, 2015. 01:54 PM | 2 Likes Like |Link to Comment
  • Understanding Fair Valuation: A Common Sense Approach To Long-Term Investing Success [View article]
    GA -- It is widely acknowledged there is great value to investors in determining the value of a future earnings stream.

    IMO, you are at least a tad off base. Essentially, you would make the good and fair estimate the enemy of the perfect.

    If you have a better mousetrap for determining the share price you are willing to pay, and using a non-mathematical concept that is transportable from company to company, I'd like very much for you to demonstrate it for us. For easy comparison, please consider using MA (or use any other symbol of your choice).

    As you suggest, one might attempt to identify, evaluate, and weigh (without bias) numerous factors that might in 20 years affect a company's earnings stream--but it is UNNECESSARY in 2015 to make a buy/hold/sell decision based upon a 2035 share value--there will be many opportunities long before 2035 to recalculate FV as more data become available.

    You are correct that TIME is a key consideration...investor confidence in the earnings estimates for the next 1 to 3 years is almost certainly greater compared to estimates for more distant periods, such as 10 to 20 years. As you indicated, new and both positive and negative influences will arise, and some are likely to be more important than are others.

    I acknowledge greater confidence in the FV calculation for a well established largecap or midcap having a 10 to 20 year history in its present industry, compared to another established company attempting to change its product line or industry, or compared to a new tech or biotech company having little or no earnings history.

    OTOH, I smile when I see FV displayed to the penny ($102.82). A range of is quite acceptable ($98 to $108) to myself, and FAR superior compared to pulling a number from one's [ear].

    I look forward to your explanation of your valuation methodology.
    Aug 30, 2015. 03:42 PM | 4 Likes Like |Link to Comment
  • Understanding Fair Valuation: A Common Sense Approach To Long-Term Investing Success [View article]
    >>This category of fast grower, Peter Lynch referred to as "superstocks" that he contended deserve the most attention from investors. The reason he believed they deserved the most attention, is because these are the stocks that will generate the highest total returns over the long run. Assuming of course you invest in them at fair value.<<

    Thanks Chuck -- Above is my take-away.

    I am not abandoning the 'traditional' dividend favorites, but as I've been saying since early spring...IMO the addition of a few (established) dividend-paying growth stocks will both diversify my horses and improve my total returns by providing greater earnings-driven appreciation.

    MA is one of my additions.

    Rich-unck:12 hrs
    Aug 30, 2015. 09:38 AM | 2 Likes Like |Link to Comment
  • Learning From The Masters: Market Meltdown Edition [View article]
    That's OK Ted, no need to be sorry.

    I thought it was fair and balanced.

    However, based upon years of experience here, I was certain some would react quite negatively to the article. (Incidentally, I assume you continued to the conclusion in which he recommend the Vanguard's VDIGX.)

    Live long and prosper!
    Aug 30, 2015. 08:19 AM | 1 Like Like |Link to Comment