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  • Why Peter Lynch Would Like eBay [View article]

    The key to ebays future is paypal. However, one thing that is not Lynch like is the fact that ebay has a market cap of 40billion+. Lynch loves small fast growing companies. Now if ebay decides to spin off paypal, that would be a different story.
    Jan 26, 2011. 12:55 PM | 1 Like Like |Link to Comment
  • Top 14 Dividend Champions: Sweet Spot for Total Return (Part 1) [View article]

    I take that back. I meant mini-Buffett, not Buffett junior.
    Jan 26, 2011. 12:29 PM | 4 Likes Like |Link to Comment
  • Top 14 Dividend Champions: Sweet Spot for Total Return (Part 1) [View article]

    The intrinsic value of ABT has increased based on todays earnings. But the price is going down. Sounds like a bargain to me.
    To help better understand this Alaw, if you look at ABTs cash flow 10 years ago. It was about 2-3 billion a year. Its cash flow for the past year was around 8 billion. So you have a business that has increased its cash flow/profits by 3-4X in 10 years yet its price is the same 10 years ago. If you owned a private business that could put out these numbers, would you be happy owning it. I sure would. The only difference between ABT and a private business is that it gets traded on the stock market. This is good for you because when the market is foolish, you can take advantage of this. If you can understand this concept, you will be on your way to being a Buffett junior.
    Jan 26, 2011. 12:05 PM | 12 Likes Like |Link to Comment
  • Top 14 Dividend Champions: Sweet Spot for Total Return (Part 1) [View article]
    Isnt it funny how the same companies come up on everyones tip list of dividend paying stocks. Could it be that they are actually companies worth owning.
    The best time to buy dividend paying stocks is when the market is tankning. Thats why 10 or so years ago was a bad time to buy even large caps bc of the massive pe expansion in the market. Many say well jnj ko abt pep did nothing for 10 years and fail to realize this simple factor. They then get impatient with thecompany and bail when they should be buying.
    Thanks for the article. I think it will help investors visualize stock valuation better.
    Jan 26, 2011. 11:19 AM | 9 Likes Like |Link to Comment
  • Here's How to Take 20 Years to Build a Retirement Fund That Lasts Forever [View article]
    To achieve 14% return LONG term with large companies, you need to be in a protracted bear market. Why?
    Because this will allow companies to have
    1) low PEs. The last thing you want is the price of companies to go up and the PE to expand when you are buying more shares.
    2)high dividend yields.
    Bear markets provide the fuel that will set up good future returns.

    Now for small caps, thats a different story.

    Regarding WB, Rich you are right. He is not a useful benchmark. He is an anomaly. People think that he made money by buying wonderful businesses. This is true. But people also forget that he did alot of abritrage investing. He also had the benefit of burrowing money essentially for free through his insurance companies.
    Jan 25, 2011. 08:31 PM | 2 Likes Like |Link to Comment
  • Are J&J Recalls Turning Off Consumers? [View article]
    As a follow up to my last comment, although i think JNJ could/will go lower, I would be comfortable nibbling at these prices.
    Jan 25, 2011. 03:32 PM | Likes Like |Link to Comment
  • Are J&J Recalls Turning Off Consumers? [View article]

    I'm waiting for a better price on JNJ.
    I love buy outs and spin offs even more. I think if JNJ or ABT spun off some of their divisions, you would get a higher return. Look at what happened with MCD spinning of CMG. Look at ABT spiniing off HSP. Look at SLE spinning off COH. Bristol Myers spinnning off MJN. CBY spinning off DPS. PEP spinning off yum. Check out the stock charts on CMG, HSP, COH and MJN, DPS and'll make your mouth water
    I love buyouts too. BUD getting bought out by inbev. Wriglyey getting bought out by Mars. CBY getting bought out by KFT
    In my opinion, after Buffett is gone, BRK will get deconstructed, which would unlock more value.
    Jan 25, 2011. 03:25 PM | 1 Like Like |Link to Comment
  • Are J&J Recalls Turning Off Consumers? [View article]

    Good luck to you. May you do well in 2011 and beyond. Don't worry. I don't get offended if others have different views than mine. Its always interesting to see other people's perspective though.
    Jan 25, 2011. 02:15 PM | Likes Like |Link to Comment
  • Are J&J Recalls Turning Off Consumers? [View article]
    Good morning wyo

    I guess the question is this. Do you think JNJ will earn more 10-15 years from now? Do you think they will earn substantially more 10-15 years from now? I'm not talking about 2-3 years. Granted, 10-15 years is a long time from now, but if there is a high degree of certainty of that happening, then, its intrinic value in 10-15 years will be higher then it is now. There are only a few companies that you can predict with high degree of certainty of increasing its intrinsic value....the ones with very wide economic moats. As long as the company can maintain and increase its dividends along the way, price will naturally follow.
    There is no better example of bad news being good for long term investors than MO. 15 or so years ago with the threat of litigation and generics coming on, it appeared very gloomy for MO. Certaintly, the stock price tanked. But people who held on and reinvested dividends had a roughly 18-19% annualized return.
    I am not implying you should have faith in all companies to do this. Certaintly if a company has no moat, you have to consider selling. But a company like JNJ will withstand the test of time.
    Jan 25, 2011. 12:18 PM | Likes Like |Link to Comment
  • Are J&J Recalls Turning Off Consumers? [View article]
    Good morning rich
    I guess the million dollar question is this. Is the damage to jnj so severe that they cannot maintain their dividend. If you think the answer is yes, you should get out especially if your goal is capital preservation. If you think they will eventually recover and you have no need to sell, I would be adding more. In fact, I want the decline to be deeper and more protracted. Only a very few companies have the power to withstand a hurricane and jnj is one of them. They might of gotten a d on a quiz, but their final grade for the semester will be an A.
    Jan 25, 2011. 09:43 AM | Likes Like |Link to Comment
  • 4 Stocks That Buffett Could Buy Now [View article]
    Ctl and xerox. Are you sure buffett would buy these? Ctl is in a very capital intensive industry. Does xerox have a moat?
    Jan 23, 2011. 11:52 PM | 3 Likes Like |Link to Comment
  • Dividend Matchup: McDonald's vs. Yum Brands [View article]
    Both are outstanding companies. Theres enough room for both in China and india.
    Jan 21, 2011. 05:19 PM | 2 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    One way to not panic during corrections is to focus on intrinsic value, not the stock price. For the dividend paying companies in my portfolio I generally only pay attention to price when im buying meaningful amount of more shares. Otherwise, I might not even look at it for 6 to 12 months.
    Jan 21, 2011. 10:40 AM | 2 Likes Like |Link to Comment
  • A Basic Retirement Plan, And 9 Dividend Income Stocks to Help Get You There [View article]
    I think IBD can be a good place to get investment ideas. However, it is widely followed. That means any stock that is about to "break out" will be closely followed by many. Too many people know about it.
    I really like value line because it lays out in a clear fashion information about companies for the past 10 plus years. Its a good starting point to find good ideas.
    Jan 21, 2011. 02:28 AM | 2 Likes Like |Link to Comment
  • The Little Book of Sideways Markets: A Profitable Read [View article]
    Rich, as David alluded to, its called trend following or momentum investing. Basically, once a stock clears its 52 week high( in some cases, its all time high), all the weak hands have been shaken off and you have no more resistance. Some of the biggest advances in history were achieved AFTER stocks broke through their highs. Bill O Neil's CANSLIM method is based on this. Many stocks form a base (they are consolidating). Then they form a "handle" then there is usually a slight pull back to shake off weak hands. Then the stock advances to new highs. A very important rule is to always limit your losses by putting a stop loss, typically about 8%. Let your winners run and cut your losers. Does it work Y?es it does because there are plenty of people who've made great amounts of money doing this. But it takes discipline. There are other technical ways to trade including looking at chart patterns, using moving averages, etc.So why am i not doing it? Because I have more satisfaction being a long term "owner" of a business. I don't like "timing" the market. I like timing value. One has to do what one feels comfortable with.
    Jan 21, 2011. 12:41 AM | 2 Likes Like |Link to Comment