Bob Johnson's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/549160/comments http://seekingalpha.com/instablog/725729-sds-seductive-dividend-stocks/987431-us-stocks-dividend-growth-rate-magic-number?source=feed#comment-19238061 19238061 Sat, 25 May 2013 09:22:59 -0400 http://seekingalpha.com/article/1447081/comments?source=feed#comment-19062031 19062031
Thank you for the very good technical article.

Working at Digital Equipment Corporation in the 1980's I learned that the best engineering does not always win the day. So, I am skeptical about how much weight to put on any argument of corporate success which is based on engineering superiority.

If one invested $10,000 in INTC 10 years ago, they would have $9,000 today.

Best regards,
Bob J]]> Tue, 21 May 2013 06:08:07 -0400
Thank you for the very good technical article.

Working at Digital Equipment Corporation in the 1980's I learned that the best engineering does not always win the day. So, I am skeptical about how much weight to put on any argument of corporate success which is based on engineering superiority.

If one invested $10,000 in INTC 10 years ago, they would have $9,000 today.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18999041 18999041 Sun, 19 May 2013 13:05:39 -0400 http://seekingalpha.com/article/1441391/comments?source=feed#comment-18976821 18976821 As expected, another top quality article.
Best,
Bob J]]> Sat, 18 May 2013 09:09:54 -0400 As expected, another top quality article.
Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18949471 18949471
I understand exactly what you mean about understanding the products you are investing in. Can you imagine a group of bankers sitting around on the floor with their crayons in hand drawing pictures of CDO's? How about synthetic CDOs?

Any of us who does not understand simplicity and the value of keeping things simple, is setting themselves up for a great fall.

Best,
Bob J]]> Fri, 17 May 2013 12:31:38 -0400
I understand exactly what you mean about understanding the products you are investing in. Can you imagine a group of bankers sitting around on the floor with their crayons in hand drawing pictures of CDO's? How about synthetic CDOs?

Any of us who does not understand simplicity and the value of keeping things simple, is setting themselves up for a great fall.

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18948901 18948901
Risk is the anything that increases the possibility of not having enough money when you need it.

So, it therefore follows that if I'm concerned about next month's rent, car repairs and the grocery bill, the higher current yield is just what I need. Ha That's not guts, that's simply survival! The long term risk is something we may have to deal with if we keep paying the rent, eating and breathing. I hope I have the opportunity.

AGNC, DX, TCAP, PNNT add quite a boost to my income, and none of them has a P/E over 12; their average yield is 11.5%. For $10,000 invested I get the same amount of income that $37,000 worth of JNJ would give me.

Best,
Bob J]]> Fri, 17 May 2013 12:22:39 -0400
Risk is the anything that increases the possibility of not having enough money when you need it.

So, it therefore follows that if I'm concerned about next month's rent, car repairs and the grocery bill, the higher current yield is just what I need. Ha That's not guts, that's simply survival! The long term risk is something we may have to deal with if we keep paying the rent, eating and breathing. I hope I have the opportunity.

AGNC, DX, TCAP, PNNT add quite a boost to my income, and none of them has a P/E over 12; their average yield is 11.5%. For $10,000 invested I get the same amount of income that $37,000 worth of JNJ would give me.

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18947561 18947561 Fri, 17 May 2013 12:01:44 -0400 http://seekingalpha.com/article/1434512/comments?source=feed#comment-18912351 18912351
It's often the great comments that provide the best learning experiences. There's a pretty savvy group of investors contributing their knowledge and experiences here.

Best regards,
Bob J]]> Thu, 16 May 2013 15:26:56 -0400
It's often the great comments that provide the best learning experiences. There's a pretty savvy group of investors contributing their knowledge and experiences here.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18912071 18912071
It is very important, for me at least, to read the annual report and read the CEO tell the story of the firm, explain the game plan and the stakeholders who will win. When you visit a retail store, for example, you can appraise the company from a different perspective... is this the same firm lauded in the Annual Report?

I mention this because of your comment, but also because a "disconnect" between what a firm says it is about and what it is really doing, signals a big caution in my mind. I sold a big MLP pipeline firm a year or so ago, because they really changed the nature of their business, I had no confidence the evolving model would work.

Not, perhaps a reason to sell, but any big change is a reason to evaluate.

Best regards,
Bob J]]> Thu, 16 May 2013 15:22:27 -0400
It is very important, for me at least, to read the annual report and read the CEO tell the story of the firm, explain the game plan and the stakeholders who will win. When you visit a retail store, for example, you can appraise the company from a different perspective... is this the same firm lauded in the Annual Report?

I mention this because of your comment, but also because a "disconnect" between what a firm says it is about and what it is really doing, signals a big caution in my mind. I sold a big MLP pipeline firm a year or so ago, because they really changed the nature of their business, I had no confidence the evolving model would work.

Not, perhaps a reason to sell, but any big change is a reason to evaluate.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18911091 18911091
Thanks for your comment. One of the things that distinguishes SA is the quality of the readers' comments. It's a pretty savvy group of investors here, and we all learn a lot from the comments.

Best regards,
Bob J]]> Thu, 16 May 2013 15:07:14 -0400
Thanks for your comment. One of the things that distinguishes SA is the quality of the readers' comments. It's a pretty savvy group of investors here, and we all learn a lot from the comments.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18887761 18887761 I appreciate your kind words.
Best,
Bob J]]> Thu, 16 May 2013 07:11:34 -0400 I appreciate your kind words.
Best,
Bob J]]> http://seekingalpha.com/article/1432841/comments?source=feed#comment-18879381 18879381
I appreciate the fact filled analytical article. However, the US Banking system is not a whole lot sounder than when WFC had to cut its dividend. We won't have a 1st Class banking system until the bankers and the politicians want one. Bank failures, unknown in some countries, have always happened here. Nothing has changed very much.
There are many banks that one can buy which did not cut their dividends during the financial crisis. Why invest in one which is part of a very unhealthy system?
The World Economic Forum, compiler and publisher of the World Competitiveness Report ranks the US Soundness of Banks as 80th, out of 144 countries. Numbers 77, 78 and 79 are Kenya, Mozambique and Gabon.
http://bit.ly/Yg6usz
Better to invest in the banks of Canada, New Zealand, South Africa, Australia, Finland, Hong Kong or Singapore and 6 dozen other countries rather
than the US.
Unfortunately, until things change drastically in this country, investing in any US banks is a very high risk gamble.
Best regards and good luck,Bob J]]> Wed, 15 May 2013 22:18:38 -0400
I appreciate the fact filled analytical article. However, the US Banking system is not a whole lot sounder than when WFC had to cut its dividend. We won't have a 1st Class banking system until the bankers and the politicians want one. Bank failures, unknown in some countries, have always happened here. Nothing has changed very much.
There are many banks that one can buy which did not cut their dividends during the financial crisis. Why invest in one which is part of a very unhealthy system?
The World Economic Forum, compiler and publisher of the World Competitiveness Report ranks the US Soundness of Banks as 80th, out of 144 countries. Numbers 77, 78 and 79 are Kenya, Mozambique and Gabon.
http://bit.ly/Yg6usz
Better to invest in the banks of Canada, New Zealand, South Africa, Australia, Finland, Hong Kong or Singapore and 6 dozen other countries rather
than the US.
Unfortunately, until things change drastically in this country, investing in any US banks is a very high risk gamble.
Best regards and good luck,Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18873581 18873581 Thanks for the information. I try not to make too many trades, but it sounds like it's worth checking out.
Best,
Bob J]]> Wed, 15 May 2013 19:17:44 -0400 Thanks for the information. I try not to make too many trades, but it sounds like it's worth checking out.
Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18873521 18873521 Thanks for the insight. Have a long and restful sleep.

Improving fundamentals certainly justifies higher prices. Historical data sometimes doesn't catch up with the momentum of the market or the forces behind it. A lot of decisions are made on ttm numbers.

Increasing forward projections bode well for the market.

Best regards,
Bob J]]> Wed, 15 May 2013 19:15:35 -0400 Thanks for the insight. Have a long and restful sleep.

Improving fundamentals certainly justifies higher prices. Historical data sometimes doesn't catch up with the momentum of the market or the forces behind it. A lot of decisions are made on ttm numbers.

Increasing forward projections bode well for the market.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18873251 18873251
David Fish's CCC list is a good place to start for opportunities in any sector.

Best,
Bob J]]> Wed, 15 May 2013 19:08:50 -0400
David Fish's CCC list is a good place to start for opportunities in any sector.

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18873081 18873081 Good to hear. Thanks.
Best,
Bob J]]> Wed, 15 May 2013 19:05:10 -0400 Good to hear. Thanks.
Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18873011 18873011
I would think that the selling of the "worst dross" would make perfect sense for the seller. I would embrace such a move. Mistakes are made, they need to be corrected.

Perhaps I am missing something here.

Best,
Bob J]]> Wed, 15 May 2013 19:03:26 -0400
I would think that the selling of the "worst dross" would make perfect sense for the seller. I would embrace such a move. Mistakes are made, they need to be corrected.

Perhaps I am missing something here.

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18872881 18872881
I think we're talking about two different things at the same time. 1.) True re-balancing and 2.) trimming your position in an overvalued stock.

If I sold INTC in March of 2000, when it was at about 65, would I be selling a winner? I think not. I think I would be lowering risk by cashing in on the market overvaluation, a prudent move toward safety. I would not call this re-balancing.

If I had 60% of my assets in the mining sector, due to huge run-up in basic materials, I would sell some of those holdings to re-balance. I would lower the risk caused by my lack of diversification. This would be a re-balancing by sector which I see as different from eliminating the risk of overvaluation.

Re-balancing is rarely that extreme, and is best done regularly. I believe the term came into common many years ago, initially often referring to the balance (percentage) of stocks and bonds in an individual investors holdings, and a once a year re-balance.

Valuation of an individual holding, and adding to an undervalued stock and trimming an overvalued stock is simply the logical outcome of value investing. You buy what is undervalued. These are not necessarily losers, they are mistakes by Mr. Market. A stock overvalued by Mr. Market, will revert to its intrinsic value eventually. Better to sell some of it first.

That's my best shot at this linguistically challenging discussion!

Best,
Bob J]]> Wed, 15 May 2013 18:58:49 -0400
I think we're talking about two different things at the same time. 1.) True re-balancing and 2.) trimming your position in an overvalued stock.

If I sold INTC in March of 2000, when it was at about 65, would I be selling a winner? I think not. I think I would be lowering risk by cashing in on the market overvaluation, a prudent move toward safety. I would not call this re-balancing.

If I had 60% of my assets in the mining sector, due to huge run-up in basic materials, I would sell some of those holdings to re-balance. I would lower the risk caused by my lack of diversification. This would be a re-balancing by sector which I see as different from eliminating the risk of overvaluation.

Re-balancing is rarely that extreme, and is best done regularly. I believe the term came into common many years ago, initially often referring to the balance (percentage) of stocks and bonds in an individual investors holdings, and a once a year re-balance.

Valuation of an individual holding, and adding to an undervalued stock and trimming an overvalued stock is simply the logical outcome of value investing. You buy what is undervalued. These are not necessarily losers, they are mistakes by Mr. Market. A stock overvalued by Mr. Market, will revert to its intrinsic value eventually. Better to sell some of it first.

That's my best shot at this linguistically challenging discussion!

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18871901 18871901
That sounds logical, but I know that people in divested companies are not always happy campers, and sometimes performance lags. Interesting topic. Thanks for your point of view.

Best,
Bob J]]> Wed, 15 May 2013 18:31:16 -0400
That sounds logical, but I know that people in divested companies are not always happy campers, and sometimes performance lags. Interesting topic. Thanks for your point of view.

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18871681 18871681
Thanks for a comment that hits home, for me.

I sold out of COP and ABT before they split because I was following the guideline on that checklist. While I am hesitant to make any global statements, I can say in those cases I probably would have been better off if I held onto them.

I'd love to see some hard data on the subject, taken from both up markets and down.

Best, Bob J]]> Wed, 15 May 2013 18:23:26 -0400
Thanks for a comment that hits home, for me.

I sold out of COP and ABT before they split because I was following the guideline on that checklist. While I am hesitant to make any global statements, I can say in those cases I probably would have been better off if I held onto them.

I'd love to see some hard data on the subject, taken from both up markets and down.

Best, Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18871421 18871421
On the other hand, for someone like me, who would like to squeeze a little more income out of his portfolio for current living expenses, I think it makes sense to trim a little JNJ, and find double the yield in a lesser name.

Different strokes...

Best,
Bob J]]> Wed, 15 May 2013 18:17:56 -0400
On the other hand, for someone like me, who would like to squeeze a little more income out of his portfolio for current living expenses, I think it makes sense to trim a little JNJ, and find double the yield in a lesser name.

Different strokes...

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18871031 18871031
Buying the buyers sounds like a viable strategy. Aside from the purchases of the Chinese and the Koreans, would you care to share any names?

Best,
Bob J]]> Wed, 15 May 2013 18:08:02 -0400
Buying the buyers sounds like a viable strategy. Aside from the purchases of the Chinese and the Koreans, would you care to share any names?

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18870281 18870281 Thanks for your comment. TCAP has a good record.
Best,
Bob J]]> Wed, 15 May 2013 17:49:06 -0400 Thanks for your comment. TCAP has a good record.
Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18858341 18858341
We're on the same page here.

Best,
Bob J]]> Wed, 15 May 2013 13:45:12 -0400
We're on the same page here.

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18858281 18858281
For most of us, diversification is a way to prevent that type of loss.

Best,
Bob J]]> Wed, 15 May 2013 13:43:41 -0400
For most of us, diversification is a way to prevent that type of loss.

Best,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18858131 18858131
Thanks for reading and for your comment.

Peter Lynch said "we should not diworsify". However, his mutual fund capitalized on opportunities of many different kinds. It did not just add stocks, though, for the sake of adding stocks.

Warren Buffett said, “Wide diversification is only required when investors do not understand what they are doing.” He certainly knows what he is doing and has holdings in Consumer Staples, Insurance, Healthcare, Railroads and Banks. It follows that he would not consider his focused portfolio wide diversification, the kind that one would attain by buying a Total Stock Market fund.

However, he certainly does not tie his fate to one industry. That, by any investment standards I know, could be a very high risk mistake. Entire industries can have generation long depressions, of fail completely as times change.

Warren Buffett has gotten quite rich by diversification into a number of industries.

I think I know a fair amount about the mining industry. However, my current portfolio holds just one mining stock. I spread my investments across all sectors. I think that is the best way to prosper. I may not get 'rich' but I believe I will meet my investing goals and hold poverty at bay.

I would invite you to enter your profile so we might better understand your perspective.

Best regards,
Bob J]]> Wed, 15 May 2013 13:39:32 -0400
Thanks for reading and for your comment.

Peter Lynch said "we should not diworsify". However, his mutual fund capitalized on opportunities of many different kinds. It did not just add stocks, though, for the sake of adding stocks.

Warren Buffett said, “Wide diversification is only required when investors do not understand what they are doing.” He certainly knows what he is doing and has holdings in Consumer Staples, Insurance, Healthcare, Railroads and Banks. It follows that he would not consider his focused portfolio wide diversification, the kind that one would attain by buying a Total Stock Market fund.

However, he certainly does not tie his fate to one industry. That, by any investment standards I know, could be a very high risk mistake. Entire industries can have generation long depressions, of fail completely as times change.

Warren Buffett has gotten quite rich by diversification into a number of industries.

I think I know a fair amount about the mining industry. However, my current portfolio holds just one mining stock. I spread my investments across all sectors. I think that is the best way to prosper. I may not get 'rich' but I believe I will meet my investing goals and hold poverty at bay.

I would invite you to enter your profile so we might better understand your perspective.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18856771 18856771
Yes, you have nailed down the ultimate alternatives, "go all in" or "sell out". If you go all in you could be buying high, if you sell out you could be selling low. Or, just possibly, the other way around.

Then again, maybe you can figure out it the market is going to go up or down. You think? I suspect the method used by Cramer, the heads of the great investment banks, the financial press and most certainly the Fed, is to consult a Magic 8-Ball. Is the market going up? In the spirit of the analyst community and all happy politicians, let's just look at the positive outcomes.

● It is certain● It is decidedly so● Without a doubt● Yes definitely● You may rely on it● As I see it yes● Most likely● Outlook good● Yes● Signs point to yes●

Perhaps the most viable option, all kidding aside, is to hold. Just keep doing what you're doing. As John Bogle would say, "Stay the Course."

As you say, "Each of us most do what helps us sleep well at night".
The choice you make is probably the best choice for you.

Best regards,
Bob J]]> Wed, 15 May 2013 13:17:48 -0400
Yes, you have nailed down the ultimate alternatives, "go all in" or "sell out". If you go all in you could be buying high, if you sell out you could be selling low. Or, just possibly, the other way around.

Then again, maybe you can figure out it the market is going to go up or down. You think? I suspect the method used by Cramer, the heads of the great investment banks, the financial press and most certainly the Fed, is to consult a Magic 8-Ball. Is the market going up? In the spirit of the analyst community and all happy politicians, let's just look at the positive outcomes.

● It is certain● It is decidedly so● Without a doubt● Yes definitely● You may rely on it● As I see it yes● Most likely● Outlook good● Yes● Signs point to yes●

Perhaps the most viable option, all kidding aside, is to hold. Just keep doing what you're doing. As John Bogle would say, "Stay the Course."

As you say, "Each of us most do what helps us sleep well at night".
The choice you make is probably the best choice for you.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18849371 18849371
The variety of ideas serves to validate our own. There is no one right way to invest. There is no one rule as to when to sell. We are all evolving.

Best regards,
Bob J]]> Wed, 15 May 2013 10:49:49 -0400
The variety of ideas serves to validate our own. There is no one right way to invest. There is no one rule as to when to sell. We are all evolving.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18848881 18848881
What to do with Intel. If you had invested $10,000 in Intel in 1998, you'd have $8,300 today. If you waited until 2003, you'd have $9,400, still a loss. So much on getting in on the ground floor of high tech. The last five years have been tremendous, with an ROR over 18%, allowing you to double that same investment in five years. What will the next five years bring?

I too dumped Excelon some time ago as when changed their business model. That's really a red flag concerning any firm, and a time to reevaluate and often sell. You picked a good time to unload yours, Casey.

I always appreciate your thoughts.

Best regards,
Bob J]]> Wed, 15 May 2013 10:41:42 -0400
What to do with Intel. If you had invested $10,000 in Intel in 1998, you'd have $8,300 today. If you waited until 2003, you'd have $9,400, still a loss. So much on getting in on the ground floor of high tech. The last five years have been tremendous, with an ROR over 18%, allowing you to double that same investment in five years. What will the next five years bring?

I too dumped Excelon some time ago as when changed their business model. That's really a red flag concerning any firm, and a time to reevaluate and often sell. You picked a good time to unload yours, Casey.

I always appreciate your thoughts.

Best regards,
Bob J]]> http://seekingalpha.com/article/1434512/comments?source=feed#comment-18847611 18847611
My opinion of Barron's has dropped a little since their attack on LINE. LINN Energy has an excellent track record and seem to me to be very well managed and unusually savvy in their hedges. They have a clear mission statement and fulfill it. "Acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets."

I've been thinking of 1995. By mid May, that market and this one were both up 14% without a correction. In 1995, the market gained 34% by year end. The increases continued right through 1999, which was also similar to this market.

Best regards,
Bob J]]> Wed, 15 May 2013 10:20:32 -0400
My opinion of Barron's has dropped a little since their attack on LINE. LINN Energy has an excellent track record and seem to me to be very well managed and unusually savvy in their hedges. They have a clear mission statement and fulfill it. "Acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets."

I've been thinking of 1995. By mid May, that market and this one were both up 14% without a correction. In 1995, the market gained 34% by year end. The increases continued right through 1999, which was also similar to this market.

Best regards,
Bob J]]>