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purpleboarder

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  • (Un)Happiness At McDonald's? Outlook Not So Tasty In 2014 [View article]
    ....."with millennials leaning towards fresher foods—another bad sign for MCD. "

    Well, if millennials want 'fresh', they'll have to cough up the CASH. And last time I checked, millennials are in some deep jelly trying to pay off loans (car, student, etc)... When they get out of Momma's house, they'll come back to MCD. They always do.

    As for the other 'trends' (wage increases, etc). You think MCD is the only fast food company that has to endure these trends? BK, Wendy's etal, are in tougher financial shape. The way I see it; the more headwinds for the fastfood industry, the better for MCD. Simply because it is better run than its competitors.....
    Sep 5 12:03 PM | 5 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Rico,

    Great, respectful response to a great article. You state the following...

    ...."The only honest way to describe the yield on any portfolio is current yield. Indeed, what else could it be? The YOC conceit is based on the appreciation in the price of a portfolio's securities. Isn't it enough that an investor's portfolio has increased in value? "......

    I agree that 'increase in value' of the portfolio is important. However, to the Dividend Growth Investor (DGI), yield is paramount. Whether or not you are a TRI or DGI, you can't argue that the dividend yield of a blue chip company is WAY more stable than the price of the blue-chip company.

    If you are TRI or a DGI, and come to wind up owning the same blue-chip companies, I guess it really doesn't matter. However, having the DGI focus on the importance of a growing dividend, it forces the investor to reprogram oneself, into not making stupid, rash decisions when confronted w/ a market correction or crash. Chuck's story proves this. When a TRI doesn't believe in the importance of yield (and YOC for that matter), I'm guessing they'd be more inclined to sell off the blue-chip company at the worst possible moment during a market correction.

    It also reinforces the idea that you not only hold onto the blue-chip during a correction, but also gives you the courage to even ADD to the position, to increase yield, and YOC.

    I disagree that ....."The only honest way to describe the yield on any portfolio is current yield."....... I don't accept the premise that YOC is 'dishonest'. To me, it doesn't replace the metric of Yield, but is a useful 'accessory metric', to demonstrate the power of a DG blue chip company, when in a buy/hold scenario.

    The YOC metric isn't lying, and "it is what it is". You are getting X amount in dividends against the cost of those shares that are generating those dividends. It's not the 'yield snapshot polaroid' that you mention, but YOC is a long movie w/ the happy ending (growing dividend income) that you remember when you are tempted in selling these money-making blue-chips in a down market.
    Sep 4 12:53 PM | 9 Likes Like |Link to Comment
  • Philip Morris: Looking Forward To A Likely Dividend Hike [View article]
    Continuing that logic, you can eliminate gun makers, big oil, chemical companies, pool manufactures, etc... As a long-term investor (not trader), where do YOU draw the line? It's a personal question....

    But I'm willing to bet that those w/ a 'holier than thou' attitude towards the "PM Investors of the world", have no clue that their 401K mutual fund or ETF have gobs of $$ invested in PM, DEO, XOM, etc...
    Sep 2 09:58 AM | 8 Likes Like |Link to Comment
  • Think Like An Owner [View article]
    TRI, I'm guessing that you are a much more experienced investor than myself. I've been investing for 10 years, and got burned a little for the first 5. After reading and researching, I found Dividend growth investing as the way to go for me and my retirement goals. The last 5 years have been very gratifying, in knowing that I now have a plan that works. The quote that I listed just emphasizes how confident I now feel about the stocks within my retirement accounts, and how I will react positively during the next downturn/correction.

    I think the quote is great, or has much weight for those who are new in the 'self directed' acct management, or the noob 'retail investor'. I think the quote means more to a less experienced investor like myself, and less to more experienced investor (like you?)... I don't think it has to do with TRI vs DGI, but how well you can evaluate a company's value, and having the confidence of not selling, but buying on the dips/crashes....
    Aug 29 01:28 PM | Likes Like |Link to Comment
  • How Will Coca-Cola's Mexico Launch Impact The Stock? [View article]
    Does the 'Life' beverage fall under Mexico's new 'sugary beverage tax'? I'm assuming it does, but wondering what the 'trigger' or limit of sugar in a beverage that would get penalized under this new law...

    What's next? A new 'buttery' law? A new 'salty' law? A slippery slope, I say....
    Aug 29 09:28 AM | 4 Likes Like |Link to Comment
  • How NOT To Report On Demographics: Millennials Blamed For Taking Down McDonald's [View article]
    First, I question your price difference of 1 dollar between a meal at MCD and Chipotle. I'm guessing it's more along the lines of a $3-4 difference.

    I get a chuckle when the buzzword du jour, INNOVATE, is used to describe a company's temporary problem. Talk about a non sequitur....

    My guess is your complaint about MCD's inability to innovate, is more along the lines of 'giving the people what they want', for lack of a more technical term. MCD isn't perfect, but usually spot on. A downturn like this tells me they are a little slow to getting 'the pulse of the consumer'.

    This happened to them back in '03. Would you have predicted back then that "they will stay with their same tired model and watch revenues drop for years and years."? (your words).... If you had, you (and those that followed your advice), would have missed out on a great opportunity w/ MCD... Good Luck...
    Aug 28 11:33 AM | Likes Like |Link to Comment
  • Think Like An Owner [View article]
    ...."However, it’s difficult to be excited about a stock’s depreciation when you don’t really know what you own. After all, how can you get excited about buying more of something when it’s cheaper when you’re unsure as to what you’re buying?...."

    That's a great quote. Thanks for the article, DM.
    Aug 28 06:39 AM | 1 Like Like |Link to Comment
  • Save Your Stomachs And Your Wallets - Stay Away From McDonald's [View article]
    The average American family doesn't have $40-50 to waste on a fast food lunch at 5 guys, on a Saturday. It's that simple.
    Aug 24 08:42 AM | 1 Like Like |Link to Comment
  • Save Your Stomachs And Your Wallets - Stay Away From McDonald's [View article]
    ...."McDonald's is also facing competition from private burger establishments like Five Guys, on the East Coast, and In-N-Out Burger on the West Coast. Both establishments have been praised by consumers for the quality of their burgers, while the latter has managed to do so at McDonald's level prices.".....

    When I read this paragraph, the article, nor the author has any credibility. You can't get out of 5 Guys or In-Out w/o spending 8-9 bucks, but you can get the same meal at MCD for 5.. I'm a big fan of In-Out, and MCD for different times/reasons. I'll never take any of my kids to 5 guys or in-out, because they can't be found when needed.

    You seem to discount that the entire fast food industry is in a slump, yet MCD is faring the best.
    Aug 24 08:32 AM | 1 Like Like |Link to Comment
  • The Truly Battle-Tested Bank With 8%-9% Growth [View article]
    Noob question.... Is there a tax penalty (% of divvy withheld) for Canadian companies? I assume so, but would like to confirm.... Tim, great article as usual....
    Aug 18 07:53 PM | Likes Like |Link to Comment
  • Coke chooses caution, sees too much risk in swallowing all of Monster [View news story]
    ...."KO has been one dog of a blue chip coming out of the recession, and even since the turn of the century."....

    Huh? Were you talking about the 2-fer stock split a couple of years ago? KO, like many other money-minting blue chips, had insane P/E ratios after the "dot-bomb" run up to 2000. So with a P/E ratio in the 30-50s range, of course stock price didn't grow, as earnings were "growing into" the stock price over the last 10+ years. What a disingenuous statement.

    But of course you seem to forget that the dividend doubled, then doubled again since 2000, giving you a yield between 10-12%. I'll take that dog of a stock every day of the week, and twice on Sunday. For the record, big fan of V and DIS as well.....
    Aug 18 07:45 PM | 1 Like Like |Link to Comment
  • Coke chooses caution, sees too much risk in swallowing all of Monster [View news story]
    ..."All the infrastructure in the world won't help a secular decline in interest in your core products." (in the US market)...

    Wait till KO takes off in places like India, Brazil, BRICs, etc. The party is just getting started. Did you take this into consideration? Further diversification from the caffeinated 'core' products, increasing the distribution infrastructure, increasing exposure to fast-growth countries whose middle-class is starting to explode. Yeah, let's write off KO.. PFFT.
    Aug 17 07:38 PM | 1 Like Like |Link to Comment
  • Coke chooses caution, sees too much risk in swallowing all of Monster [View news story]
    That's the beauty of KO. If they aren't the first to market w/ a 'disruptor' or market-growing beverage, they'll imitate it, or buy it outright. So KO aren't innovators. Who the hell cares? As long as they react and adapt, and keep that 8-10% dividend growth going for another 40 years, I couldn't care less if they don't 'innovate'....

    Many people forget that KO has been diversifying away from caffeinated beverages for the past 20-30 years. If they were stagnant, they wouldn't have 150+ beverages that include juices (MinuteMaid), water, energy drinks, health-water, etc....

    Q: Who's going to challenge KO's worldwide distribution infrastructure?
    A: N-O-B-O-D-Y

    I like those odds going into the future, being the 'stagnant' company that it is.
    Aug 17 10:55 AM | 1 Like Like |Link to Comment
  • Coca-Cola Is Probably Overvalued, But So What? [View article]
    Martin,

    ....."The reality though is that those who purchased 20 years ago have not quite matched the S&P 500."... If you are talking about the late 90's runup in rediculous P/E ratios of KO (30-50x, IIRC), and wish to use that convenient time period for KO's evaluation for your argument, I'll concede. But today's P/E ratio is historically in line.

    ......"The truth is that the company is out of growth possibilites and the world is gradually turning to other beverages ".... You do know that KO is just getting started overseas in India, China, Russia, Brazil, etc? One has to dig deeper to understand that KO is more about DISTRIBUTION, along w/ Product. Do you think InBev bought Anheiser Busch just for it's decreasing market share of BUD in the US? No, it's about distribution..... Also, you do know that over the past 30 years, KO has been diversifying away from carbonated beverages (sport drinks, water, juices, etc), right?


    ........"I sold recently after a nine year holding period.".... I'm curious, what was the average P/E ratio during your purchases of KO during that 9 year period?

    Good luck w/ the proceeds of your sale of KO. I'm going to follow Buffet on this one...
    Aug 6 11:42 AM | 1 Like Like |Link to Comment
  • Coca-Cola Is Probably Overvalued, But So What? [View article]
    JNPFL,

    You are sorry that you are long KO, and that it's 'dead money'? Are you sorry about getting a dividend check that grows by 10% every year for the last 40 years? (ie, your dividend doubling every 7 years?)

    As for Buffett, he won't be selling ANY KO while he's alive. That you can count on....
    Aug 4 12:19 PM | 2 Likes Like |Link to Comment
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