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  • I Love My 'Magic Pants' And My Partners Wear Them Proudly [View article]
    You just don't get it, do you.

    The Nifty Fifty fell because of absurd valuations, not because they are blue chips. If dividend stocks fall in similar fashion, it will because they are vastly overvalued. Throughout the fall, DGIs will continue buying and receiving dividends and companies will continue raising dividends.

    Why do you think Buffett loves market corrections?

    Rising interest rates will slaughter bond funds much more than dividend stocks. The bond funds that in which the likes of Swedroe believe deserve a 10-40% allocation because infallible studies tell them so.
    Mar 20, 2014. 07:47 AM | 11 Likes Like |Link to Comment
  • I Love My 'Magic Pants' And My Partners Wear Them Proudly [View article]

    "However, I am fascinated by the aspect of human behavior that leads people to immediately attack him when he writes something that does not comfort them."

    You say that the comments are attacks. I say that people are calling out Swedroe on his bull. Seriously, can you fathom the mental jujitsu required to simultaneously support efficient market hypothesis and follow the greatest exploiter of market inefficiencies? I wish I could be right all of the time, too.

    One group that Swedroe definitely does not comfort is his clients. How can one look a client in the eye, tell the client that minimizing expenses is a pillar of his investment philosophy, and then turn around and charge him a fee to invest him in funds that themselves charge fees?
    Mar 19, 2014. 09:15 PM | 11 Likes Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    I accept that my dividends are anecdotal, but my other comments are not.

    It is a simple fact that one can construct a fully diversified portfolio using only dividend-paying stocks. To dismiss that as anecdotal is lazy.

    It is a simple fact that borrowing when rates are low is wise. In what universe is that statement anecdotal?

    You never addressed your incessant reliance of Buffett and Berkshire to support points. Berkshire is a once in a lifetime phenomenon that defies explanation by simplistic portfolio theories. Your using Berkshire as an example of an excellent non dividend payer is like suggesting that baseball players should drink, smoke, and eat to excess because Babe Ruth hit 714 home runs doing so. Please find examples of other cash generating machines that 1) do not pay dividends AND 2) do not regularly set fire to their piles of cash through ill-timed share buybacks and or ill-advised acquisitions. By the way, Buffett would be as dismissive of your ideas about dividends as you are about dividends themselves. I suspect he will enjoy loading his elephant gun with the ~$560 million and the $488 million that Wells Fargo and Coca-Cola will pay Berkshire this year in dividends, respectively.

    Ultimately, the problem with your article is that your statements are not correct. They are merely your beliefs of how numbers should work in a controlled vacuum shaped by your biases rather than how things work in the real world. As an academic in finance, you probably know that even the flimsiest financial theory can be supported by seemingly bulletproof evidence if the theorist selects the correct parameters and correct data. I appreciate some aspects of what you espouse, such as minimizing expenses and diversification, but when it comes to dividends, you cannot see the forest for the trees.
    Mar 18, 2014. 10:34 PM | 3 Likes Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    "It's amazing what beliefs people will hold onto simply because they are long held and they have much vested in the belief. They find it hard to accept even the obvious because somehow it goes against their accepted beliefs."

    The same can be said about your beliefs. You remind me of the Laputans in Gulliver's Travels--your reliance on seemingly irrefutable logic and reason result in ideas that are ridiculous when applied to the real world. We do not live in a fantasy world in which humans are robots and every investment decision is governed solely by arithmetic. Emotions frequently cloud our judgment. Dividends operate as a buffer to soften the blows during the down times and to reinforce discipline during the good times. They help investors and companies perform better.

    Until your fantasy world becomes a reality, I will stick with Carnevale's view of dividends over yours.

    "Do dividend fans believe it is wise for the company to take on more debt in order to fund new projects and also maintain its dividend?"

    When interest rates are as low as they are right now, yes--as long as the company does not become overleveraged.

    "And since done properly diversification is the only free lunch, you might was well eat as much of it as you can."

    One can easily develop a 20-25 stock portfolio of quality dividend-paying stocks diversified among industries and currencies--one in which adding even the best non-dividend-paying company would not meaningfully impact the portfolio's performance.

    "[Dividends] are not as tax efficient as home made dividends."

    Not mine. Given continued contributions, continued dividend growth, and continued dividend reinvestments, my wife and I are looking at over $100K a year of tax-free dividends in our Roths when we retire.

    "And while some companies spend cash unwisely, many others, like Berkshire Hathaway for example, have never paid a dividend - and I don't think anyone would argue that investors would have been better off if BRK.B had paid dividends."

    Thanks to Buffett's acumen, Berkshire is the exception rather than the rule. Berkshire is a lazy fallback for people who claim dividends don't matter. Use examples of the "many others" you cite if you want your point to be taken seriously.
    Mar 18, 2014. 11:05 AM | 9 Likes Like |Link to Comment
  • Debunking The 'Dividends Don't Add Shareholder Value' Myth [View article]
    Chuck is not saying that companies that do not pay dividends are bad or that dividend paying companies are better than those that do not pay dividends. He is merely saying that dividends are good, and that statement is neither silly nor pointless. It is a simple fact.
    Mar 13, 2014. 04:43 PM | 15 Likes Like |Link to Comment
  • Retail bear emerges on Starbucks earnings call [View news story]
    Just wait until Bezos starts Amazon Cafe, which will deliver your caramel macchiato by drone.
    Jan 24, 2014. 12:56 PM | 7 Likes Like |Link to Comment
  • AMEX to allow reward points for payment [View news story]
    VISA and MasterCard have nothing to do with rewards points. The points are given by the issuing bank (Chase, Bank of America, Citi, etc.).
    Oct 21, 2013. 09:09 AM | Likes Like |Link to Comment
  • Visa And MasterCard Remain Ridiculously Expensive With Unjustified Growth Premiums [View article]
    I've read quite a few of your articles. I can safely say that analysis is your Achilles heel.
    Oct 8, 2013. 11:05 AM | 1 Like Like |Link to Comment
  • Cramer's Kid-Friendly Portfolio Is Very Unfriendly For Your Kids [View article]
    Here are stocks I have in my kids' portfolios:

    AAPL, DIS, JNJ, KO, MCD, PEP, PG, and XOM. Dividends are reinvested.
    Jun 16, 2013. 10:15 PM | Likes Like |Link to Comment
  • Volkswagen (VLKAY.PK) says it will boost its global workforce to 600K to 550K as it keeps a firm foot on the gas in a race to produce more cars than any other automaker. Naturally, the focus will be on adding jobs in China - not Europe where demand is sluggish. [View news story]
    Volkswagen sure manufactures a lot of vehicles with -50K employees.
    Apr 1, 2013. 08:36 AM | 1 Like Like |Link to Comment
  • Why Accomplished Dividend Growth Investors Can Ignore Price Volatility [View article]
    You will always win some and lose some in the market. If you focus on dividend growth stocks, you will likely win a bit more and lose a bit less. I'd take that deal.
    Mar 21, 2013. 04:34 PM | 14 Likes Like |Link to Comment
  • Google's 'Project Glass': An Over-Hyped Hobby [View article]
    Google is the master of the "good enough" product. Google products are usually inferior to their competitors, but Google grabs market share anyway because it gives many of them away for free. Is Google clearly the best at anything it does? iOS is far better than Android. Office is far better than Google Docs. Netflix is far better than YouTube. Facebook is far better than Google+. Amazon keeps far better information than Google (knowing how someone is willing to part with money is more valuable than knowing what he is searching for). Firefox is better than Chrome. Fine, Google Fiber is far better than Comcast or AT&T, but a piece of turd is better than Comcast or AT&T.

    Google has hit an embarrassing new low with Google Glass. It appears Google is leaving inferior behind and heading straight for useless. With Google Glass' endless potential to 1) put its user in danger from accidents and health problems, and 2) invade everyone else's privacy, Google should finally give up once and for all any pretense that it does no evil.

    I would not be surprised if Google Search is dethroned soon. I prefer Bing, but I'm obviously in the minority. I'm waiting for IBM to use Watson as some kind of consumer search engine that will provide 3-5 answers rather than 100,000,000 links--most of which are useless. When that day comes, Google will collapse faster than Nokia or Blackberry. Until then, Google will continue be the world's other vampire squid.
    Mar 11, 2013. 05:50 PM | 1 Like Like |Link to Comment
  • Dell (DELL) enters into agreement to be acquired by Michael Dell and Silver Lake for $13.65/share, or $24.4B, a 25% premium over the Jan. 11 price before rumors began. (PR[View news story]
    $13.65 is quite a premium to its low of $8.69.

    DELL shareholders are lucky they're getting $13.65. What they should be angry about is DELL spending so much on buybacks. Based on today's sale price, Dell probably could have bought itself once or twice already.
    Feb 5, 2013. 11:25 AM | Likes Like |Link to Comment
  • The House will vote on the unamended Senate bill at 9 PM ET, reports CNN's Dana Bash. Any attempt to alter the bill by adding spending cuts has reportedly been abandoned for now. Update at 9:10: The vote has been pushed back to 11 PM ET. [View news story]

    Note that I said "conservative," not "Democratic" or "Republican." Clinton and Rubin did their part in redistributing wealth from the middle class to the rich. They weren't nearly as good as Reagan or Bush 43, though.
    Jan 1, 2013. 09:43 PM | 1 Like Like |Link to Comment
  • The House will vote on the unamended Senate bill at 9 PM ET, reports CNN's Dana Bash. Any attempt to alter the bill by adding spending cuts has reportedly been abandoned for now. Update at 9:10: The vote has been pushed back to 11 PM ET. [View news story]
    The conservative redistributionists have bent over the American middle class for the last thirty years--taking their money and giving it to the rich in the U.S. and the poor in China.
    Jan 1, 2013. 08:51 PM | 4 Likes Like |Link to Comment