Roger Nusbaum Positions for 2011: Sector Picking Less Important Than Country / Theme Selection [View article]
Strange comments from Roger. He dislikes European companies and likes emerging markets. He bought and sold Diageo which is based in the UK, but DEO has its growth in the US and emerging markets. He sold Equity Residential (EQR) after Zell sold Equity Office. After multi family hit bottom a year ago, public multifamily companies are up close to 100%. Muni's are being sold on fear and represent a good opportunity right now. I would like to know what returns his picks have had over the last two years. Note: Long DEO, EQR, FLTMX
Chesapeake a Prime Hostile Takeover Target? [View article]
Agree CHK should not be a public company. Aubrey played that old CEO game of telling everyone he was heavily invested in the company while borrowing heavily against his shares so the public didn't see him as selling. A number of CEO's did this over the last five years and got burned on margin calls. (Spare me the story that it was "tax planning!)". The SEC should institute a rule that limits an executive's amount of leverage against the company's common stock or disclose the leverage the same way sales are disclosed via a Form 4.
The real crime here was the board simply giving Aubrey new shares to replace the ones called away. Everyday is Christmas at CHK for the CEO. Some things never change.
The 'New Normal' and Its Implications for States, Municipalities and Pensions [View article]
I wonder just what the "Regime" is in the preceding comment. Unfortunately, there is a third option favored by the majority of the middle class. We would like to see a government and economy that has a realistic "pay-as-you-go" system at the federal, state and local level. Now we have a system that is structured at the extremes where the wealthy class (and, yes, its OK to be wealthy!) can buy the politicians to enact rules via favorable tax laws and corporate welfare that and the other end of the spectrum with every left leaning group has a "feel good" social program.
We can have any social safety net we want if we are willing to pay for it. It is always easy to call for "freedom " and "constitutional, libertarian" ideas without making the hard choices. The great middle class will have to make some of the following choices in the next few years:
1. Social Security - raise the retirement age and taxes for individuals who are now under 40 years old.
2. Medicare/Medicaid - limit services to a basic menu. Now you can get anything because it is "free". Hip and knee replacements will become a paid service in the future or only available through private insurance or funds.
3. Eliminate corporate welfare for oil and ag companies. Sugar subsidies? Restricting the import of ethanol?
4. Public pensions - all new employees must have lower benefits and 401k plans. Pay teachers, police and fire market wages and get rid of the unions. We will need to go through a number of strikes to accomplish this.
The author is correct. Earnings are deteriorating and fundamentals remain weak. Banking sector is essential to a recovery and banks are crippled; facing more real estate writeoffs and consumer deleveraging. Stock market has "corrected" to the upside and will now give it back over the next three months. -Investors can find monthly cash flow in MLP's around 7-10%(KMP, EPD, TPP, LINE) and Ginnie Mae bond funds (4.5-5%).
-Also consider intermediate investment grade corporate bond funds due to wide credit spreads that will come in over time(5%).
-Stocks with strong balance sheets will be buys again after the market corrects.
Backwards Looking Leads to Bottom Blindness [View article]
Chris, you make a number of good points. However, I would add that we are in a deleveraging environment that is very different than the 1980's. Many consumers have too much debt, either on thier house or on credit cards, or both. Lower rates help but the principal balance is still too high. A number of corporations have too much leverage. The stronger credits are not looking to borrow and the banks don't want to lend to the weaker ones. The government can restore liquidity through various facilities but the deleveraging process by consumers and corporations will take a few years. Wevwill face rising unemployment, rising crime and social unrest both here and abroad over the next year as various forms of overt and less overt protectionist policies take hold. Yes, ther is a lot of cash on the sidelines but also a lot of stock value has vanished from 401k's. If you lose 50%, it takes a 100% rise in values to get back to breakeven. It will be a long, slow road to healing.
On Mar 25 10:32 AM Chris B wrote:
> Agreed. I could come up with several reasons to be bullish: > > 1) Barak Obama seems to be fueling the pessimism of investors, most > of whom are conservative, dislike his policies, and are increasingly > predicting disasterous outcomes. If these investors are reacting > to political distaste rather than economic reality (a judgement call > you have to make) their fleeing the market could be distorting prices > to the downside. We can evaluate the rationality of their pessimism > by noting that, for whatever reason, the stock market has historically > done better the more Democrats are in office. > > 2) Trillions of dollars sidelined into money market accounts, gold, > and treasuries will flee these assets at the first whiff of recovery, > especially trying to get out of gold and treasuries before their > values fall. > > 3) We had twice as many problems in the early 80's - double-digit > unemployment, inflation, the cold war, rising crime, fuel price spikes, > strikes, etc. Turns out if you bought stocks at that highly pessimistic > point, you could look forward to two decades of parabolic gains. > It's just not rational to expect all the world's problems to resolve > before you are willing to invest. > > 4) As bad as the housing market is said to be, the foreclosure rate > is still less than 10%, which means those so-called "TOXIC!" securities > can still be expected to return more than 0.75 on the dollar, long-term. > By that standard, the S&P 500 is even more toxic! Why do you > think banks are refusing to sell these assets, marking them to market > on their balance sheets instead? Yes, money was lost. Supposedly > safe investments failed to yield positive returns. Yet, are "toxic" > assets really worthless? Might accounting rules have more to do with > bank losses than actual revenue flows? > > 5) Those "buy American" tariff provisions were watered down to the > point of being an extra form to file. > > 6) Lower fuel prices mean more money (tens of billions more) in consumers' > pockets. > > 7) The rise in consumer savings is directly reducing consumer debt, > which is a healthy correction. It was the days of 0% savings rates > and massive consumer leverage when we should have been worried.<br/> > > 8) Lower home prices and rock-bottom interest rates mean lower payments > for millions of consumers for their biggest expense - housing. <br/> > > 9) Reduced geopolitical concerns about Iraq, Iran, and North Korea > should keep commodity and energy prices low, inflation contained, > and reduce investment risk premiums. > > 10) Consumer-targeted tax cuts are going into effect.
3 Reasons Why Darden Is A Better Buy Than McDonald's [View article]
Well run companies will adjust to Obamacare or any other government program or regulation. This isn't about the politics, it's how businesses manage through issues. The economy might slow, but we are on a slow, but steady upward trend and both of these companies will successfully manage. Long: MCD, DRI
Can You Retire With A $1,000,000 Portfolio? An Urgent Follow Up [View article]
RS, you are spot on. I have studied this issue and women, on average, continue to lag men in "comparably employed " positions. Those are the facts. Keep up the good writing.
Dividend Growth Investing: Reflections On What I've Learned, Part 2 [View article]
Bob, thanks for your article. I love the saying about "a portfolio is like a bar of soap. The more it's handled, the smaller it gets". I thought I was one of the smartest guys around with great business experience as an executive with a finance background. I could pick stocks to grow, traded lots of options and I was doing fine. I retired before the crash of 2008-10 and held a number of bank stocks. I realized the market is basically rigged by all the high frequency traders, dark pools, etc. so that a small guy had little chance other than to build and monitor my own portfolio. I finally figured out that I had to live on my investments and slowly shifted towards a dividend growth strategy. I have built a steady cash flow stream of dividend paying and dividend growth stocks that allow me to pay the bills and sleep at night.
I'm 50% in bond funds (Ginnie Mae's, intermediate tax exempts and two broad bond funds) plus my stock portfolio. I'm slowly shifting more to the stock side as I am finding decent buys on market dips. I appreciate all the great contributors here on SA such as David Van Knapp, David Fish, Robert Schwartz, Todd Johnson and a handful of others. I appreciate your frankness and look forward to your next article.
Major Downtrends: 8 Stocks With a Death Cross Formation [View article]
JNJ has manufacturing problems that can be solved. It's a definite buy at $58-60. MRK is a bit more speculative, but also a buy at this level. Long: JNJ, MRK
Fiscally Irresponsible Friday: Trading for Magic Beans [View article]
Your comments are correct, but incomplete. I too pay the higher rates but also know that the Bush tax cuts, two wars and a senior drug benefit were done with borrowed money. Repaying this debt (if ever) is spread over the entire population. Therefore, I receive a disproportionate benefit. I haven't seen any real deficit reduction ideas from either the Dems or Republicans. At least I know where the Democrats stand (spend more, tax more). The Republicans are two faced. They talk a tough game but won't pay the bill! (I'm an independent.)
10 Dividend Stocks for a Healthy and Wealthy Retirement [View article]
Roger Nusbaum Positions for 2011: Sector Picking Less Important Than Country / Theme Selection [View article]
Chesapeake a Prime Hostile Takeover Target? [View article]
The real crime here was the board simply giving Aubrey new shares to replace the ones called away. Everyday is Christmas at CHK for the CEO. Some things never change.
45 Dividend Champions With Yields Higher Than Long-Term Treasuries [View article]
The 'New Normal' and Its Implications for States, Municipalities and Pensions [View article]
We can have any social safety net we want if we are willing to pay for it. It is always easy to call for "freedom " and "constitutional, libertarian" ideas without making the hard choices. The great middle class will have to make some of the following choices in the next few years:
1. Social Security - raise the retirement age and taxes for individuals who are now under 40 years old.
2. Medicare/Medicaid - limit services to a basic menu. Now you can get anything because it is "free". Hip and knee replacements will become a paid service in the future or only available through private insurance or funds.
3. Eliminate corporate welfare for oil and ag companies. Sugar subsidies? Restricting the import of ethanol?
4. Public pensions - all new employees must have lower benefits and 401k plans. Pay teachers, police and fire market wages and get rid of the unions. We will need to go through a number of strikes to accomplish this.
Why This Rally Is Unsustainable [View article]
-Investors can find monthly cash flow in MLP's around 7-10%(KMP, EPD, TPP, LINE) and Ginnie Mae bond funds (4.5-5%).
-Also consider intermediate investment grade corporate bond funds due to wide credit spreads that will come in over time(5%).
-Stocks with strong balance sheets will be buys again after the market corrects.
-A strong short is the TBT (20 year T bond).
-Cash can be held in SHY (1-3 year T's; 2%)
Note: Long all of the above.
Backwards Looking Leads to Bottom Blindness [View article]
On Mar 25 10:32 AM Chris B wrote:
> Agreed. I could come up with several reasons to be bullish:
>
> 1) Barak Obama seems to be fueling the pessimism of investors, most
> of whom are conservative, dislike his policies, and are increasingly
> predicting disasterous outcomes. If these investors are reacting
> to political distaste rather than economic reality (a judgement call
> you have to make) their fleeing the market could be distorting prices
> to the downside. We can evaluate the rationality of their pessimism
> by noting that, for whatever reason, the stock market has historically
> done better the more Democrats are in office.
>
> 2) Trillions of dollars sidelined into money market accounts, gold,
> and treasuries will flee these assets at the first whiff of recovery,
> especially trying to get out of gold and treasuries before their
> values fall.
>
> 3) We had twice as many problems in the early 80's - double-digit
> unemployment, inflation, the cold war, rising crime, fuel price spikes,
> strikes, etc. Turns out if you bought stocks at that highly pessimistic
> point, you could look forward to two decades of parabolic gains.
> It's just not rational to expect all the world's problems to resolve
> before you are willing to invest.
>
> 4) As bad as the housing market is said to be, the foreclosure rate
> is still less than 10%, which means those so-called "TOXIC!" securities
> can still be expected to return more than 0.75 on the dollar, long-term.
> By that standard, the S&P 500 is even more toxic! Why do you
> think banks are refusing to sell these assets, marking them to market
> on their balance sheets instead? Yes, money was lost. Supposedly
> safe investments failed to yield positive returns. Yet, are "toxic"
> assets really worthless? Might accounting rules have more to do with
> bank losses than actual revenue flows?
>
> 5) Those "buy American" tariff provisions were watered down to the
> point of being an extra form to file.
>
> 6) Lower fuel prices mean more money (tens of billions more) in consumers'
> pockets.
>
> 7) The rise in consumer savings is directly reducing consumer debt,
> which is a healthy correction. It was the days of 0% savings rates
> and massive consumer leverage when we should have been worried.<br/>
>
> 8) Lower home prices and rock-bottom interest rates mean lower payments
> for millions of consumers for their biggest expense - housing. <br/>
>
> 9) Reduced geopolitical concerns about Iraq, Iran, and North Korea
> should keep commodity and energy prices low, inflation contained,
> and reduce investment risk premiums.
>
> 10) Consumer-targeted tax cuts are going into effect.
Why Not to Buy Bond ETFs [View article]
3 Reasons Why Darden Is A Better Buy Than McDonald's [View article]
Can You Retire With A $1,000,000 Portfolio? An Urgent Follow Up [View article]
Dividend Growth Investing: Reflections On What I've Learned, Part 2 [View article]
I'm 50% in bond funds (Ginnie Mae's, intermediate tax exempts and two broad bond funds) plus my stock portfolio. I'm slowly shifting more to the stock side as I am finding decent buys on market dips. I appreciate all the great contributors here on SA such as David Van Knapp, David Fish, Robert Schwartz, Todd Johnson and a handful of others. I appreciate your frankness and look forward to your next article.
2 Undervalued, High Dividend Yielding Financial Stocks [View article]
Major Downtrends: 8 Stocks With a Death Cross Formation [View article]
10 Companies Expected to Increase Dividends in April [View article]
Fiscally Irresponsible Friday: Trading for Magic Beans [View article]