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  • Why It's A Mistake To Be Raising Cash In This Market  [View article]
    "I believe it is always a mistake for true investors to hold cash based on an expectation of what the stock market might do in the near-term future."

    Chuck -- As you know, I have great appreciation for the work of Mr. Valuation.

    However, when it comes to portfolio and cash management tactics...not (quite) so much.

    My views remain as stated in the comments to your Dec 26, 2013 article.

    Feb 11, 2016. 08:23 PM | Likes Like |Link to Comment
  • No Recession Is Signaled By iM's Business Cycle Index: Update February 11, 2016  [View article]
    Thanks Georg -- I assume your data will give warning of creeping stats that result in a recession. I also assume we could be pushed into an immediate recession (or worse) by an unexpected, but very significant event.

    Feb 11, 2016. 06:51 PM | Likes Like |Link to Comment
  • Is HCP's Dividend Aristocrat Record At Risk?  [View article]
    Thanks Brad -- It happens I chose VTR after having determined risk was elevated in HCP. I also have more confidence in VTR's CEO.

    Was I mistaken? Will those who chose HCP be more richly rewarded compared to VTR? They might; time will tell.

    However, that I own VTR does not mean I do or should wish ill on HCP. In fact, when a company is having fundamental problems, its competitors often decline in sympathy (and visa versa).

    Feb 11, 2016. 02:22 PM | 3 Likes Like |Link to Comment
  • Dividend Investors: Time To Rethink Verizon And AT&T  [View article]
    Reuben -- I'm long both T & VZ.

    Thank you. I'd much rather read an article suggesting I review my positions in these symbols, as compared to reading another 3 articles cheerleading them and confirming my bias.

    You're correct--T is not the Ma Bell of decades ago when its monopoly was broken-up by the Justice Department. Today's T may not qualify for some risk-averse widows & orphans portfolios (though I suspect many professional portfolio managers rightly recommend both to widow & orphan portfolios as an appropriate equity holding alongside bonds).

    I'll take your caution as a suggestion SDIs should monitor their positions, and limit their position size in these names.

    Feb 11, 2016. 10:39 AM | 14 Likes Like |Link to Comment
  • Who's Really Getting Crushed By Lower Oil?  [View article]
    Mitch -- Yes, the oil patch is hurting, and many marginal producers are in or approaching a death spiral--just as any economist would expect of them.

    As you know, the cure for low prices is low prices (same for high prices).

    Having devoted multiple paragraphs to production and employment problem in the oil patch, you might have also briefly mentioned the other impact of lower oil prices--the many $ billions made available to consumers for savings or discretionary spending. Gasoline may break below $1/gal. in some places. Already low gas prices are supporting lower production costs for companies using fuel and petrochemicals, so that's good for them and for jobs. As consumers are 70% of our economy, low gasoline costs translate to increased sale of cars and SUVs, and meals in restaurants, vacations, homes, and even increased savings--all of which increases jobs!

    Thus were I to have written your "Bottom Line--it's difficult to overlook the possibility of big gains if oil bounces back". I would have added a V-shaped recovery is the most positive view. At least equally likely is a saucer-shapped recovery wherein after oil finally bottoms (twenties or teens?), the price recovery stalls in the $20s or $30s for considerable period. Unfortunately, the problem is most producers need prices in the 50s and higher to survive, and oil in the $20s and $30s only prolongs their pain.

    Feb 11, 2016. 08:21 AM | Likes Like |Link to Comment
  • More on PepsiCo's Q4  [View news story]
    I expect PEP to also announce a dividend increase this month.
    Feb 11, 2016. 07:25 AM | Likes Like |Link to Comment
  • Royal Dutch Shell In 2016  [View article]
    Casey -- Agreed, Shell might be worth a shot by the brave.

    Shell is very likely the highest risk in my portfolio.

    Shell represents the classic 'accidental high-yielder' because it's historic high yield is wholly due to its share price decline (when Shell declared an increase to 94 cents on April 30, 2014, shares closed at $84.65, and have declined 50% to yesterday's close at $42.33).

    Reaching for Shell's high-yield means accepting greatly elevated risk with uncertain reward. In the event the dividend were cut, the concurrent haircut to its share prices would almost certainly exceed many quarter's 94 cent dividends.

    Best-guesses for higher oil prices are continually revised, and now centered around 'lower for longer'. Nor can anyone say if oil will have a V-shaped recovery, or saucer-shaped. Protecting the dividend may require the V. Shell's share price can go much lower, especially if it cuts its dividend. Thus it is not for the faint of heart, and not a suitable risk for widows and orphans. Controlling position-size may be critical to a good night's sleep.

    As for BG, the smooth integration of a major acquisition always represents a new opportunity for unintended consequences.

    Feb 11, 2016. 06:12 AM | 1 Like Like |Link to Comment
  • CSX: The Dividend Is In Danger  [View article]
    Bern -- Thank you for the support and kind words.

    Feb 10, 2016. 06:03 PM | 1 Like Like |Link to Comment
  • Why You Should Not Attempt To Double Your Dividend Aristocrat Yield  [View article]
    "Double Your (Dividend Aristocrat) Yield!"

    First, my pet peeve...I have seen similar covered call titles, text, and/or comments, that twist the definition of "yield" in an attempt to (over)sell covered calls on dividend-paying stocks. Unfortunately, IMO they are as much a misnomer as were similar headlines, text, and/or comments, recommending MLPs as being "bond substitutes"!

    Four questions:
    (a) Is it not true covered calls produce INCOME--and income is neither a dividend, nor an interest payment--therefore, does it not follow there can be no "doubling of yield"?
    (b) Is it not true investors are entitled to their dividends if they don't write covered calls?
    (c) Thus (unlike dividends), is it not true covered calls come with an additional risk related to the possibility they may be forced to sell the goose which regularly lays golden eggs if the share price meets the strike price?
    (d) Is it not also true at least 90% of professional and academic discussion of covered calls includes the recommendation investors not sell covered calls if they would not otherwise desire to sell their shares at the strike price?

    Years ago, I successfully wrote covered calls on growth stocks. However, unlike more volatile growth stocks, each time I've considered covered calls on my Consumer Staples, Utes, and Healthcare dividend-payers, I've concluded covered calls come with an unfortunate paradox--because most Dividend Aristocrats (and the like) have far lower price volatility compared to the typical growth stock, the premiums offered on the dividend-payers are relative paltry--I've yet to see them offer premium rewards sufficient to tip the risk/reward scale in favor of the risk inherent in selling covered calls.

    Feb 10, 2016. 02:42 PM | 3 Likes Like |Link to Comment
  • CSX: The Dividend Is In Danger  [View article]
    I'm long CSX. Over the past several quarters, the railroad (as well a its competitors) is suffering declining revenues and profits. Trucking is suffering from declining cargo volume, and the rails principally suffer from defining coal volumes (which may be affected by yesterday's related Supreme Court decision).

    IMO, CSX is nowhere near the point at which its ability to continue its dividend is in danger (and thus it is likely, though I'd never say never, you've rung the bell much too soon).

    Nonetheless, CSX normally announces its annual dividend increase in April (as it has for about the past 11 consecutive years,-including thru the Great Recession). Thus we will not have long to wait for an indication of the dividend going forward. I believe the CSX BoD is committed to the dividend.

    I also agree with Oraida--should it becomes necessary (such as were the US to enter a recession), it is at least as likely the aggressive share buyback program would be delayed, reduced, or ceased, before the dividend were cut.

    Feb 10, 2016. 12:02 PM | 9 Likes Like |Link to Comment
  • It's Time To Double Down On Omega Healthcare  [View article]
    II -- Agreed. Given OHI's continuing decline to a fresh 52-wk low on almost 250% of average volume by 1:30p, it has become progressively more difficult for myself to assume today's -9.5% decline is a mis-pricing due to HCP (-16+%) having a good quarter, but issuing poor guidance.

    A sympathy decline is common, but OHI's decline seems to assume a high-probability OHI will also issue poor guidance.

    [When does the falling knife strike a solid bottom? I'm not adding to my OHI position until after it reports earnings report, and maybe also the conference call.]
    Feb 9, 2016. 01:51 PM | 4 Likes Like |Link to Comment
  • Mystery ship helped keep California gas prices high, consumer advocate says  [View news story]
    I'm not naive--For over 40 years I've been monitoring my investments, the economy, and markets. It's a fact, companies large and small sometimes act badly. It's also a fact, Greenpeace, consumer advocates, and other special interests also act badly.

    I'm long XOM, but being a shareholder does not shift my moral compass. Unlike many here, I do not respond emotionally in defense of the companies I own.

    OTOH, this 'news item' is reporting on speculation, and that speculation amounts to "guilt by innuendo". It is particularly interesting/disturbing the above news item does not include the challenge to the 'mystery ship' thesis made by the chairman of the California Petroleum Market Advisory Board--"That piece of the story doesn't make much economic sense."

    I'll defer judgment to a presentation of the evidence...if any.

    Feb 9, 2016. 12:38 PM | 7 Likes Like |Link to Comment
  • New-Look Periodic Table Of Dividend Champions - Dividend Safety Edition  [View article]
    Dave -- I certainly understand time constraints. Also, that all articles are the result of a LOT of work. It's one thing to make a factual error in a comment, and another in an article--that's just the way it is. It's money, we expect a minimum level of professionalism of authors. Thus it's up to yourself to find a middle-ground that avoids the 'literary masterpiece' syndrome.

    Obviously, I'm bold enough to offer a couple suggestions...
    Each article needn't present more than highlight paragraphs on each potential DiD. As you know, member opinions will often be divided, and the comments will also flesh-out any new information. Members won't be shy in discussing their own weighing of the DiD probabilities. Others can weigh the relative merits in relation to their own comfort zones.

    Also, knowing members can't resist adding their own suggestions for new DiD candidates (that's a good thing), you could take advantage of crowdsourcing in constructing your following article containing any updates to the prior article, plus any additions (crowdsourced and/or others of your own discovery).
    Feb 9, 2016. 11:36 AM | 9 Likes Like |Link to Comment
  • It's Time To Double Down On Omega Healthcare  [View article]
    p.s. I has a similar low-ball limit-buy on VTR, and it just executed after also opening gap lower.

    In both cases, their 50 day SMA crossed their 200 day nearly a year ago. OHI is about 20% below its 50 day, and VTR about 9% below.
    Feb 9, 2016. 10:57 AM | 4 Likes Like |Link to Comment
  • It's Time To Double Down On Omega Healthcare  [View article]
    Brad, Mike & 55 -- The double-down comment is an issue, but a secondary issue. The main issue is the valuation of OHI.

    I checked GEN, and found no new news that would account for OHI's continuing decline on high volume, nor would I expect GEN's problems to be reflected in OHI's past quarter.

    I could be very wrong, but having a limit-buy in place to snag another hundred shares at a 2013 price, I allowed it to be executed this morning @$28.52. OHI announces earnings tomorrow.

    IMO someone(s) expect a very negative report, as OHI opened gap lower today.
    Feb 9, 2016. 10:45 AM | 4 Likes Like |Link to Comment