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  • Dividends Matter, But Not For The Reason You Think [View article]
    Nice take on an often unsung benefit of dividends. You are completely right about risk management and diversification... And it does seem that the majority of dividend debate gravitates towards personal preferences, which can still be interesting, but yup, not exactly hard-nosed analysis. Over the years I have read a good deal of the research on the topic, but have had a couple of investing experiences that clearly weigh in favor of dividends as risk management tools, which are not touched on in the research I've read:

    The most significant, was when an international company I was an investor in was bought-out. Simply put, the process of the shareholder payouts was fraught with delay, incompetence, SEC involvement, etc. and thus profoundly impacted my rate of return - whereas if the company had a regular dividend much of this 'shareholder value lag' (or whatever you'd care to call it) would have been mitigated.

    This was particularly annoying as I was denied other investing opportunities at the time. It was one of those experiences where you realize just how much trust in the system is misplaced, and how much theoretical research misses the facts on the ground.

    Aug 15, 2014. 10:01 PM | 2 Likes Like |Link to Comment
  • The Day I Sold Everything [View article]
    If you want some unsettling news compare the PE ratios of US companies with the their EU counterparts... (In general) US large cap companies are topped out using historic valuation models, while equivalent EU large cap companies have roughly 50% upside. Like the author, I'm also down to tacit equity holdings, but definitely interested in good foreign buys.
    Jul 25, 2014. 03:12 PM | 2 Likes Like |Link to Comment
  • J.C. Penney: Whoa, Just $5 Per Share But I Will Buy More [View article]

    A few years ago I sometimes read the message boards on yahoo financial to see the panic as novice (and other) investors came to the realization that their alleged rock star Biotech company was going under, and nothing was going to save it...

    The most tragic-funny comment was made by someone who wondered "what is going to happen when they run out of money?" Sounds like some schadenfreude on my part, but there are fundamental lessons to be learned in viewing the self-deception of investors, and yup, reminding yourself that stocks go to zero!
    Feb 5, 2014. 10:54 AM | Likes Like |Link to Comment
  • J.C. Penney: Whoa, Just $5 Per Share But I Will Buy More [View article]
    Six months ago, I might have been tempted by a $5 price... for about 30 seconds. Then I'd start to remember all of the management subterfuge.

    Take two examples out of hundreds: The huge upside of "stores within stores" (Remember that inane hype? They don't even mention that supposed core strategy anymore... hmmm.), and of course the outright lies to investors about JCP not needing to raise more capital (and then doing the exact opposite within days).... Seriously, if there are not a dozen shareholder lawsuits, SEC complaints, restated financials, etc brought to the surface in the next 6 months I'll eat my hat.
    Feb 5, 2014. 10:42 AM | Likes Like |Link to Comment
  • J.C.Penney: A Case Study In Poor IR, Time For Ullman To Step Down [View article]
    Companies rot from the top down, and its far past the time to examine JCP's Board of Directors...

    For starters, they have an ex-RadioShack CEO(!) and the President of Southern Methodist University... And then of course two JCP insiders... that's 40% of your board already. Seeing a trend starting to develop?
    Feb 3, 2014. 02:29 PM | Likes Like |Link to Comment
  • Yahoo Beats Expectations But Falls Anyway [View article]
    Maybe investors are reacting to the new yahoo email design? (That's only partly a joke)
    Oct 17, 2013. 09:56 PM | Likes Like |Link to Comment
  • J.C. Penney Still Has Further To Fall - $7 Per Share Should Be A Ceiling, Not A Floor [View article]
    Thank you... I get that seekingalpha types (like me) enjoy the horse race elements of JCP, but yes, step back for a moment and take a look at the market's assessment. I can't think of another company in retail that has such low credibility - in all meanings of the term.
    Oct 9, 2013. 10:29 AM | Likes Like |Link to Comment
  • J.C. Penney Dilutes By 30%, Avoid At All Costs [View article]
    Are you aware that shorting a stock - even if you are 99% sure of its future movement - is still a decision only to made in context with a much larger investment strategy - and there is simply no way an outsider such as yourself could ever be privy to such a strategy unless the investor invited you into their portfolio?

    In other words, comments like yours - 'risk your own money or don't write' - are easy to ignore...
    Sep 27, 2013. 03:12 PM | 4 Likes Like |Link to Comment
  • J.C. Penney Is Dead Money, Get Out While You Can [View article]
    Thanks for posting that link. I don't know what is more pathetic, the fact that JCP is engaging in this borderline illegal practice, or the company's official response.

    In fact, there is no 'confusion' in price, JCP... the evidence is in, and you have been caught.
    Sep 26, 2013. 03:38 PM | Likes Like |Link to Comment
  • J.C. Penney Is Dead Money, Get Out While You Can [View article]
    For what its worth, I agree... JCP's management is likely to make some sort of 'good news' announcement after this titanic drop (if they don't, the company is even more guileless than I thought possible), which will probably temporarily bolster the price.

    If you didn't see this, some funds are apparently already viewing $10 as a Buy (albeit with some big reservations).
    Sep 26, 2013. 10:08 AM | Likes Like |Link to Comment
  • J.C. Penney Is Dead Money, Get Out While You Can [View article]
    I had understood that JCP had already levered their RE via collateral to loans made by Goldman... am I wrong? Ergo, there is no real estate play of any significance to be made.
    Sep 24, 2013. 03:37 PM | Likes Like |Link to Comment
  • Outerwall: Investors Throwing Shares Out After Poor Price Initiatives [View article]
    I see your point, but I find that dividend stocks (especially small or med cap) located in a low or medium-growth industry outperform those that engage in buybacks, or just hoard cash.

    My observations are that we are now in a permanently reduced liquidity environment for these types of companies and the 'confidence' (for lack of a better term) a regular dividend instills in the investor is rewarded in higher share price - plus the dividend!

    (I do see that buybacks can add some liquidity, but not near enough to offset a secular change in the equity market, which is now hyper- focused on the big boys of the S&P500 to the detriment of others)

    I realize that theoretically share buybacks can be just as beneficial, however: They have a history of being used to cover mass insider selling and other company sins... and more importantly, there is a tacit admission from the company that they 'know' a fair value of their shares, and are buying smart... I find this preposterous.

    If OUTR has (lets say) an internal rate of return requirement for capital expenditures of 15%, the only way they can justify using cash for buybacks is if they are going to see a similar rate of return in share value... and they can't possibly make an assumption that bold for about a thousand different reasons. One of which is that the equity market is even less under their control than their much smaller and better understood industry market.

    Finally, there is simply no resting on theoretical valuations of companies any more... I have lost count of how many times a company I have invested in has sat stagnant, even while engaging in share buybacks, growing cash, etc. - and I'm talking stagnant for years, despite generous increases in book value...

    Thus, if you can't rely on the rationality of the market to reward profitable businesses with a higher share price (or buyout, etc), the only way to return earnings to an investor is a dividend... This is even more significant when market sentiment is negative for an industry, as it is in OUTR's situation...

    (This ends my small thesis!)
    Sep 19, 2013. 02:10 PM | Likes Like |Link to Comment
  • Outerwall: Investors Throwing Shares Out After Poor Price Initiatives [View article]
    I have noticed that OUTR tends to take a big dive after negative news - much bigger than I think is typically warranted after the impact on earnings, etc is understood. Then - when some rationally returns - the stock ticks a bit up... its just classic volatility. A bit of noise, in my opinion, mingling with a lot of worry.

    Also, there are a huge number of shorts (obviously), which ads to the drama, and then the overly optimistic guidance... it makes it a bit of a thrill ride.

    So yes, buying on the dips seems to be particularly fruitful if you have faith in the underlying business. Personally, I would just much prefer management used cash for a dividend, instead of buybacks.
    Sep 18, 2013. 08:45 PM | 1 Like Like |Link to Comment
  • But How Near Is The Fall? [View article]
    Indeed... Perhaps a bigger dove will continue to keep the home mortgage markets subsidized - and then give away a new car with every purchase? How could that possibly have any negative effects?!?!
    Sep 18, 2013. 10:20 AM | Likes Like |Link to Comment
  • Deal Of The Decade - For Verizon? [View article]
    Interesting article... About 2 months ago I sold 50% of my VZ and have been looking for another reason to sell the remaining lot. I find it surprising that the markets are so tepid on the Vodafone deal, as I was expecting to see a small bump, particularly after all the hype-articles, opinions, etc. Nope. I should have been more skeptical of the usual fluff.

    In fact VZ is down roughly 10% on the high earlier in the summer.

    To put it mildly, M&As of this size have a checkered history, and although the VZ managers might be smiling (as you put it) the market (the critical piece of the puzzle) is not so amused.
    Sep 12, 2013. 11:06 AM | Likes Like |Link to Comment