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  • Are REITS Ready For Future Interest Rate Hikes ? [View article]
    It appears you have a significant error in your charts regarding Equity Residential (EQR). EQR's dividend for 2012 was $1.78 per share, resulting in a current yield of approximately 3.12% on a price of $57. The company states that it pays a fixed quarterly dividend of $0.3375 and adjusts the fourth quarter dividend based on earnings so that the total dividend approximates 65% payout. (Most analysts simply take the last quarterly dividend and multiply by 4 to obtain an annual number.)

    Yes, these companies are leveraged but a 50% or less ratio is normal for commercial REIT's and doesn't impose any greater risk.
    Most public REIT's are investment grade and access public debt markets for their financing versus "loans" as you state. Shorter term maturities theoretically put companies at some risk, but most are sophisticated enough to successfully manage this issue today. The most important issue for REIT's and private real estate companies is a rising capitalization rate that might affect their ability to exit certain properties in the future.
    Feb 19, 2013. 01:37 PM | Likes Like |Link to Comment
  • Cisco: Wait For A Pullback [View article]
    I agree with the author regarding valuation. I see Cisco as a good buy at $19 and under. I hope the stock rises to the high $20's, but the company has made numerous acquisitions over the years that have marginal value and done little to the stock price. As such, I need a greater margin of safety to own this stock. Long: CSCO, MSFT, AAPL, INTC
    Feb 19, 2013. 12:32 PM | 1 Like Like |Link to Comment
  • Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
    Actually understanding this article helps a great deal in understanding the financial markets and not following the herd mentality from brokers and CNBC. It is both a common and profound misunderstanding for most investors. Regards
    Feb 17, 2013. 07:48 PM | 2 Likes Like |Link to Comment
  • Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
    AgAu, you are wrong. If the market is "up" at the end of a given day, buyers simply exchanged cash or bonds (converted to cash) for stocks and the day's marginal price for any given stock. You are correct in that cash moved into the stock market, but this money moved out of a different cash or bond pocket. Regards
    Feb 17, 2013. 07:44 PM | Likes Like |Link to Comment
  • Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
    I assume your comment implies cash came out of the stock and bond market and went into CD's. So? People were afraid of a market meltdown and put their money where it was guaranteed, even at a low rate of interest. Over the next few years (2008-2010), I bought a lot of stocks at incredibly low prices, relative to today's prices. Sellers were willing to part with their shares at a much lower value than they had paid. I bought that lower value with my cash. No money went "to the sidelines" in the form of CD's. Sellers exchanged their stock for CD's; I exchanged my cash for their stocks. The cash stayed the same, the value of the stock changed. I simply received more stock for my cash. James is correct. Regards
    Feb 17, 2013. 07:20 PM | 1 Like Like |Link to Comment
  • Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
    James, it is very difficult to change cultural addictions for those who watch too much CNBC where the mantra is often repeated that "money is coming off the sidelines". The asset gathers make a living off these misguided perceptions. You exhibit infinite patience in your explanations, but we live in an age where the discourse and vitriol has people in their respective corners and don't want to told they don't understand.

    I got in the first time; the cash balance stays the same, the relative value of the asset changes based on the buyers and sellers perception of value (using whatever valuation methods, analyses, tools or what the talking heads told them!). I offer to purchase or sell at a given price. The buyer will execute at whatever price they perceive as value and the transaction is complete. The buyer's cash becomes the seller's cash. Regards
    Feb 17, 2013. 07:09 PM | 1 Like Like |Link to Comment
  • How To Remain Solvent Longer Than The Market Is Irrational [View article]
    I recall from previous articles by Chuck, that the orange line is merely one indicator and reference point. Most of us know that different industries have "average P/E ratios that vary from the orange 15 P/E benchmark. For example, oil and gas firms tend to be in the 8 to 10 range. Also, the "average" P/E will vary based on shorter time frames in the business cycle or times of extreme market stress. The Fast Graph is merely a tool, but, as DVK notes, a picture is worth a lot when it frames various pieces of financial data into a quick look instead of looking at reams of data. It's an efficient tool, both in it limits, its simplicity and its helpful focus.
    Feb 16, 2013. 12:32 PM | 2 Likes Like |Link to Comment
  • My Q4 Portfolio Review - 2012 Wrap Up [View article]
    I own SYY but the dividend increase is slowing as a slow economy pressures restaurants, etc. Great company, but may become a slow dividend grower. I would wait for a lower entry price.
    Feb 16, 2013. 11:58 AM | 1 Like Like |Link to Comment
  • Bondholder Alert: Fed Runs Out Of Gas And Wall Street Takes Over [View article]
    Sethmcs, perhaps you are correct. If so, the Fed will have effectively "monetized" all the excess junk and passed it on to the taxpayers in the form of future inflation. We're not quite there yet and fighting the Fed, at least in the short term, has proven to be a losing proposition over the last few years. The banks will stabilize and all will be well in the world of high finance. My solution: invest in the banks and ride the gravy train. Is this perhaps a little cynical? Of course, but I want to make money from this folly as we slowly enter a period of stagflation.
    Feb 15, 2013. 03:03 PM | Likes Like |Link to Comment
  • Revisiting Lorillard's Dividend Growth Potential [View article]
    I have owned Altria (MO) and Phillip Morris (PM) for many years and have a small position in Reynolds (RAI). Although Lorillard has a juicy dividend, the concentration risk with menthol has kept me away. The ultimate risk with these stocks is slowing dividend growth as the payout ratios get extremely high. MO is a more diversified company (smokeless tobacco, wines, etc.) and PM is working the emerging markets. I see these as decent holds for the next five years, but, at some point, smoking sales will start to plateau worldwide. Regards
    Feb 13, 2013. 12:25 PM | 1 Like Like |Link to Comment
  • 5 Reasons I Will Add An ETF To My Asset Allocation In 2013 [View article]
    SDS, I agree with you. As a DG investor, I currently own only one stock ETF, IDV, an international stock ETF, which I purchased five years ago and yields 3.5% on my cost basis. I also own two Vanguard bond ETFs to manage my bond holdings. I would rather analyze and purchase my own stocks in both taxable and tax deferred accounts. Unfortunately, many 401k's are set up to remit the 12-b fee to the mutual fund or ETF company and you can't make individual stock choices. I'm looking around to purchase an ETF for a friend who just opened a Roth IRA with $1,000. Many mutual funds have a higher minimum. One alternative is to purchase say 20 shares of a company for the $1,000, but provide no diversification to the money. Regards
    Feb 13, 2013. 12:18 PM | Likes Like |Link to Comment
  • Lloyds: Remarkable Upside Potential To Reach A Realistic Value [View article]
    Antonio, thanks for the evaluations. I bought LYG a few years ago at an average price of US $3.82. I always believed they could turn this bank around after the British government's takeover, but it would take at least five years. I hope to pass break-even this year and will hold for the upside of at least US $5.50. Regards
    Feb 12, 2013. 02:45 PM | 1 Like Like |Link to Comment
  • How To Properly Think About Stock Prices In Today's Volatile Markets [View article]
    I would be curious to know how you "yielded a 16% return for the last decade" with the S&P, NASDAQ and Bond mutual funds and ETF's averaging 10% or less. You mentioned a spread of index funds and ETF's, so I must have missed something here.
    Feb 11, 2013. 02:01 PM | 3 Likes Like |Link to Comment
  • Most Overbought And Worst Performing Dividend Champions [View article]
    I have been long INTC for many years and consider a price at or below $21 a reasonable entry point. The company is in transition with a new CEO coming in and a need to enter the chip mobile market. I believe they will figure this out and have a significant cash pile and excellent manufacturing capabilities. Regards
    Feb 10, 2013. 07:03 PM | Likes Like |Link to Comment
  • 12 Things To Dislike About Dividend Investing [View article]
    Elle, I must disagree with your comments based on my own experience. My MLP's have regular rising dividends, significant capital appreciation and are basically toll takers under long term contracts to transport oil and gas. Only one risky company, Breitburn Energy (BBEP), has cut its dividend, took the cash to pay down debt, and then restored the dividend. My portfolio yields 9.5% since I bought most of them a few years ago. I do not consider my MLP's a free lunch, but an industry segment to monitor on an ongoing basis. I consider most MLP's to be at or above fair market value today. I do not look to take on significant risk in my overall portfolio whether measured by beta, industry or individual company.
    Feb 7, 2013. 10:38 AM | 4 Likes Like |Link to Comment