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  • Sears finally forms REIT [View news story]
    Please correct me if I am wrong, but isn't this the strategy that Mervyn's effectively used a few years ago to commit suicide? Sales drop a bit so you can't make the lease payments and then it's game over.
    Apr 1, 2015. 10:32 PM | 4 Likes Like |Link to Comment
  • Home Depot's Buyback Has Created Billions In Value [View article]
    Unless you are cheating on your taxes, your tax liability is what the government says it is. Your choice is not in setting the tax rates but in choosing your investments. If you don't like how HD is running the show, you can easily enough own something else. HD has not made a secret about how they want to reward shareholders. It says right in the annual report that they want to pay a strong dividend and they are doing so. Because the company's job is to maximize shareholder value, they must be concerned about the tax liabilities of the company's owners. I have no idea what the tax rates are for every individual owner, but I suspect that many shareholders are paying significant taxes. Those who are scraping by from paycheck to paycheck seem to be more concerned about buying groceries than buying stocks. Personally, I prefer capital gains over dividends (I like to defer my tax liability until I sell, can't do that with dividends) but I like to see companies paying strong dividends anyway because it reflects a profitable business. It is easy enough to get your rewards as virtually pure dividends if that is what you want, all you have to do is buy a real estate investment trust like PSA or a REIT index like VNQ, and I do that too, the universe is not made up of only one good investment.
    Mar 31, 2015. 02:00 PM | Likes Like |Link to Comment
  • Why Is Home Depot Accelerating The Buyback Program? [View article]
    Management continues to do an excellent job rewarding shareholders in a tax-efficient manner. I mean, there are a lot of other things you could do with the hefty cash flow that would be a lot worse than share buybacks. If there is a better way to return value to shareholders, I would like to hear it. You could make an argument for even higher dividends or special dividends, but I would not be in favor due to the higher tax rates. You could also make an argument for doing acquisitions, and that could make sense, but a lot of acquisitions don't turn out as well as anticipated. Maybe they could try selling in China again, they only lost $100 million or so last time they tried.
    Mar 31, 2015. 09:39 AM | 2 Likes Like |Link to Comment
  • Home Depot's Buyback Has Created Billions In Value [View article]
    As the business throws off a lot of cash, something has to be done with the money. Buybacks make a lot of sense, they are tax-efficient for the shareholder. It doesn't matter to me what the price is at the time of the buyback. It doesn't seem to matter anyway, because HD is buying back constantly. Credit management with not doing crazy things with the money, which is a temptation for many companies generating lots of cash. They figured out a while back that they don't need to keep opening new stores. Wall Street loves lots of expansion, new store openings, but growth in store count for the sake of growth in the case of HD would only hurt as diminishing returns would be experienced.
    Mar 30, 2015. 08:53 AM | 1 Like Like |Link to Comment
  • Home Depot: Great Company, But Stock Too Expensive [View article]
    What was that line from the 1987 movie Wall Street? "This stock is goin' to Pluto, man!"
    Mar 19, 2015. 11:48 PM | 2 Likes Like |Link to Comment
  • My Home Depot Fourth-Quarter Earnings Prediction [View article]
    I suspect a lot of investors are expecting the announcement of a substantial dividend increase.
    Feb 23, 2015. 01:24 AM | 1 Like Like |Link to Comment
  • Retirement Strategy: Is It Time To Panic Based Upon The Most Widely Used Valuation Metric? [View article]
    You have obviously not been talking to the guys pitching gold for your IRA.
    Feb 16, 2015. 03:33 PM | Likes Like |Link to Comment
  • Ditching The 401(k) [View article]
    Not for everyone, that isn't what I want. Of course, if you have enough money, you may very well be able to do what you want, which is a great reason to be an investor.
    Jan 10, 2015. 10:31 AM | Likes Like |Link to Comment
  • Brunswick: From Bowling Balls To Boats [View article]
    What a sad day for the bowling industry. The reality is that the risk of owning Brunswick shares has increased due to the absence of reliable (although non-growing) cash flows from the bowling business. The next time the economy tanks, watch out. While league bowlers will be showing up for their weekly fun, the boat buyers will be nowhere to be found. Brunswick came so close to death you could have bought your shares for less than $2.00 each in 2008. The next time things go bad we may actually make it to zero.
    Jan 1, 2015. 10:46 AM | Likes Like |Link to Comment
  • Ditching The 401(k) [View article]
    I don't ever want to retire because I like to work. If you don't like your work, why not do yourself a favor and quit and find something you love to do?
    Dec 30, 2014. 01:57 PM | 1 Like Like |Link to Comment
  • Ditching The 401(k) [View article]
    Yes, but since income limitations were removed for those who wish to convert from Traditional IRA to Roth IRA is has become possible for more people to have a Roth regardless of income. My plan is to make a deposit on January 2nd to a Traditional IRA for 2015 and then, a few days later, convert the traditional to a Roth. It is the "backdoor Roth."
    Dec 30, 2014. 01:51 PM | 1 Like Like |Link to Comment
  • Ditching The 401(k) [View article]
    No, I don't think the government will look at my Roth, not in my lifetime anyway. But that is just my read on the situation. Additionally, I want to move as much money to the Roth because I don't want there to be a strong disincentive for me or my wife to work when we are older. Call me crazy, but I want to work for the rest of my life. I like to work, I like the social interaction, I like to earn a paycheck. And when my wife and I are old and going out to work I don't want so much of our paychecks going to pay taxes, so if I can reduce future taxation with the Roth it makes sense for us. Federal income tax, state income tax, state disability tax, social security tax, if our investments are in a Roth it gives us a greater incentive to get out of the bed every morning. But please don't tell my wife I told you this.
    Dec 30, 2014. 01:24 PM | 1 Like Like |Link to Comment
  • Ditching The 401(k) [View article]
    I agree completely. Yet, I still like to max the 401k because the money then becomes "qualified plan money" and gives me more to eventually convert to a Roth IRA (although you have to wait to do that until you get canned or the plan gets terminated due to a buyout or something like that to work the conversion.) I have this fascination with getting tax-free investment earnings and not worrying about hefty required minimum distributions. And in the Roth IRA, you have lots of investment options through your broker. Besides, I think it is just a matter of time before we see means-testing to obtain Social Security benefits, and I want to get as much of my money off the radar as possible.
    Dec 29, 2014. 11:46 AM | 2 Likes Like |Link to Comment
  • This J.C. Penney Turnaround Simply Isn't Working [View article]
    Thanks for writing the article. I love to read opinions, pro and con, regarding JCP and other companies . . . then I make up my own mind. It is easy enough to get sales by discounting . . . In my view, JCP can't afford to be in the mall unless margins make it up to the low 40s, I have my doubts, there is no shortage of investment alternatives that appear vastly more attractive than JCP . . . the shorts may have fun with it, but that is not my game . . .
    Dec 9, 2014. 04:57 PM | Likes Like |Link to Comment
  • Unraveling Home Depot's Increasing Return On Equity [View article]
    It would be easy enough for HD to reduce its leverage, they could just decrease their stock repurchases which, this year, has been something like $7 Billion. Given that long-term debt has been refinanced at rates of 2 3/4% and a little over 4% and, as was mentioned in the article, that debt is tax deductible, there would seem to be little reason to reduce leverage currently.
    Dec 7, 2014. 01:09 PM | Likes Like |Link to Comment