Dividend Stocks: Lose-Lose-Lose Proposition In Intermediate Term [View article]
James -
Good to see you writing again. This article, as with many, is controversial. Furthermore, there are many scenarios you omitted (you can't write a book on here after all). One such scenario is: part-time investor with full-time occupation who doesn't have the time or inclination to be constantly trading and re-allocating. For this scenario, dividend stocks - more appropriately, the RIGHT dividend stocks - are always better. When things go up, maybe pare back or get the dividends paid in cash -- when things go down, add more and/or have dividends reinvested. Simple strategy, less fuss, less commission money handed out.
I guess my point is to be wary when labeling all dividend-paying stocks as overvalued, which is the impression one gets when reading this article. REIT's were probably due for a shellacking, but many other dividend-paying companies out there are likely undervalued or in a more stable position. In any further downturn, I would add to - not sell - these stocks. Personal favorites (and holdings) include: WU, FCX, BK.
Wow, one guy has a bad opinion about AAPL and the lemmings come out to bash him. Gee whiz folks, someone thinks differently than you? And that's bad? Isn't the purpose of SA to get sensible, different investing opinions? For smack-talk, go to Yahoo or other message boards.
Personally I see AAPL as about fairly valued right now. Interesting choice to focus on ROIC instead of the usual P/E or cash-per-share analyses. Time will tell ... surely the loss of Jobs will continue to have ramifications for years though.
i think bears and bulls both have decent arguments. usually neither side listens to each other: they just keep on ranting in whatever mode they're fixated on.
having the courage of your convictions makes or breaks you in the financial world (i.e. John Paulson - we'll see what happens in 2-5 years). being "right" is great ... but once again isn't worth much. i personally wonder if there will be an "upwards crash" or something of the sort for gold once short-covering takes place en masse, but am not quitting my day job.
best of luck in trying to understand these zany markets.
First off, have to respect you for posting articles on SA: takes effort and at times a thick skin.
That being said; you (and others - yours truly included) were obviously wrong on gold. You can't go and bash the bears for "every bear theory" and call them "wrong" unless you call losing money "right." Every bull theory has been tossed about over the past few years as well - each side has its looney-tunes characters.
Personally I picked up some CEF recently in the selloff, but with the full realization that it's a gamble play, not an "investment." The only constant I've seen these past few years is that the market rewards those who follow it, not those who try to be "right" all the time.
Ultimately, I couldn't agree with you more in theory regarding what "should" be happening ... but theory isn't going to make anyone any money. We'll see if this thing can consolidate over the next few months: if so, great - if not, plans will change according to reality.
Intel Valued As Though New Technologies Will Bust, But I Disagree [View article]
Tim -
Nice article. Appreciate the level-headed writing. I whole-heartedly agree with your line: " ... we are clearly in a phase of increasing connectivity in all aspects of our lives, and these devices require chips, and no company is better suited to meet the design and manufacturing needs for these chips as Intel is." Well put.
Will appreciate any periodic updates, particularly in regards to earnings surprises. In the meantime I've got a few shares and enjoy earning 4.2% on them. I'll continue to buy in the low $20's unless the chip industry is made obsolete overnight. Looking forward to future articles.
Apple: Major Concerns Overstated And More Than Priced In [View article]
Actually, that's not so far fetched of an idea. Or Pacific Ocean properties (i.e. islands / atolls with fishing rights and navy ports potential). If the U.S. doesn't get federal spending under control within the next decade, look for the debtholders (i.e. Chinese) to start forcing our hands. Sad but true.
This is exactly the kind of thing I thought might happen back when the crisis was in full-press mode back in 2009. We can only expect to see more of the same, with not only Russia, but other countries exchanging cash for land/asset rights. Other top contenders: China, China, China, South Korea, Iran, Japan (ever so quietly), Turkey, and yes - China again. Wouldn't be surprised either if some of these nations start getting, ahem, "concerned" with continued U.S. budgetary imbalances, and bargain to buy a Pacific reef/island/atoll or two. Alaskan territory would be on the short-list too if things don't improve over next 10 years or so.
Investing-wise, I like dancing diva's advice, though at the moment I am heavily cash biased (~60-70%). Think this next decade will be marked by anemic growth, low rates, and building inflation - not quite sure how to handle all of this other than to buy some dividend-paying stocks, and buy some real estate within the next 3 years (while rates are guaranteed to be low).
Cam - love the articles - you always pick a good topic and have a unique perspective on it. One of my must-read authors on SA.
Always enjoy your punchy, no-nonsense daily assessments. Just wanting to clarify: I see Cyprus as EU's test-case for Spain. Now they've learned what to do and what not to do (biggest lesson: set a 100k euro threshold below which not to levy a "haircut"). I see Spain following suit and doing something similar in May or June. Do you think that to be a possibility? Something similar (i.e. blanket real estate tax)? Do they have any overseas territories or assets (i.e. ports) that could be used as bailout bargaining chips with rich MidEast / Asian nations?
Might be getting a little off the rocker here - just not seeing how Spain can escape the deflationary vortex without some sort of dramatic move, a-la Cyprus.
i just don't see the edginess to Apple anymore. the new phones people want to try out are the Galaxy and the Lumia. perhaps that is more in the "trendy" camp versus the "cool" camp, but it makes a very real difference in margins, i.e. Apple can't continue to price things where they traditionally have.
companies of Apple's size take years, even decades, to consolidate and transform into a more staid & steady business model. nice that they have (finally) instituted a dividend, but i see the consolidation taking prices down to the $250-$300 range over the coming 3-5 years: might get a pop to $500+ by late summer, but then it will reverse and continue downwards. personally i'd rather deal with companies that have already experienced years of beatdown, have proven they can survive, and have a dividend. that means MSFT, INTC, BCO, for example. just my 2 cents.
In Defense Of Apple: Battling The Mounting Hysteria [View article]
Don't let the numbers interfere with common sense. Here are some highlights over the past year or so for AAPL:
- Steve Jobs dies - Lawsuit bonanza with Samsung and others. As usual, the only clear winner is the lawyers - More Apple stores --> more overhead & rents to pay - More employee benefits and better pay --> more expenses - Dividend --> less cash for bottom line. Also indicates slowing growth and recognition by execs to slow/moderate growth, hence dividend established to attract & maintain shareholders - Android platform continues market share dominance, led first by HTC - now by Samsung - Apple maps snafu --> indicates Apple arrogance at thinking they can "do it all" and take on GOOG, which has spent the past decade-plus building their Google Maps and Google Earth products - iPad mini - while a good product - obviously cannibalizing regular iPad sales - AAPL becomes largest company on Earth (how much growth can you realistically expect from $500bn+ market cap?) - no one wants iPhone 5 -- amongst my circle of friends & acquaintances, i have seen only 2 iPhone 5's. not what you expect out of prime-earning 30's and 40's crowd
i own Apple products and love them, but their poor treatment of shareholders (measly dividend started WAY too late), their fading product line (Jobs' death), and their bully tactics and ridiculous lawsuits ("App Store" lawsuit? rounded corners? really?) are all indicative of poor prospects for the shareholder. i've said it elsewhere but will say it again: a company's products are separate and distinct from its stock.
the stock market is a completely ruthless beast. ignore the numbers - which are undergoing rapid changes while sales slacken and margins compress - and take out a chart. strong support for AAPL doesn't occur until $350-$400 range. wait for it to drop until those levels before getting in.
Love your articles. Very talented at distilling the chaos into sensible advice. Your last two sentences are classic:
"Apple closed at $500.00 exactly, rendering all 400,000 of those contracts worthless. It's a wonderful world."
Agree with your fade sentiments - the trickier part will be knowing when to get back in the game. I can't imagine that with QE-fueled everything markets will sink that much, but they certainly do look ripe for a pullback now.
In Defense Of Apple: Battling The Mounting Hysteria [View article]
sorry AAPL longs, party days are over. MSFT has handily increased sales over the past 10+ years. so has CSCO. so has INTC. so have many others. whatever you think the price "should" be doesn't matter once sales slow and your products quickly become commoditized. why else do you think AAPL is trying to shut down Samsung? because Samsung's phones are kicking the iPhone where it hurts, and AAPL is over-reliant on the iPhone for growth.
best thing AAPL execs could do now would be to either split company up into parts, institute a massive special dividend, double the regular dividend, or all of the above. barring that, my guidepost is simple: open up a chart of AAPL and see where the first respectable levels of support are: looks to be roughly the low $300's to $400. so, likely the stock will continue biting into people's stop orders on the way back down to at least those levels. regardless of the company's prowess or impressive numbers, i wouldn't even think about touching this until at least $400, and likely <$350.
surprised your comment stream hasn't been filled with AAPL lovers defending the stock to its death. as i type this comment on a MacBook, it's worthwhile to remember that the company (and its products) are separate from its stock.
always liked this clip from the Onion, by the way (a little humor): http://bit.ly/10BhAYu
Outlook 2013: Americans Are Going Broke [View article]
Colin-
I appreciate you looking at a factor that few others out there have addressed. That being said, the charts you showed, I believe, merit closer scrutiny.
The St. Louis Fed chart, for example, indicates that hourly earnings are now bottoming. Once they peak, you look for a recession within a year or so. The inflation-adjusted earnings chart seems to indicate too that infl-adj earnings are bottoming. So I would argue that now is the time to invest in the consumer sector, particularly with rates so low. Once hourly earnings and infl-adj earnings are seen peaking, then it's time to go into cash or short.
Betting On Apple's Operations Team And Gross Margins [View article]
it has to be kept in mind that Jobs built one of the greatest companies of all time. we'll see if Cook can improve it: so far he has not. this is not easily identifiable as a number, but lawsuits - failed apps - top exec firings - are all symptomatic of struggles at the top.
big test showing up now: whether or not it can maintain >$500. if not then there is really no support until ~ $400. who knows: maybe i'll buy some AAPL if it can make a convincing move above $550, or preferably $600. for now though - however ridiculous it may seem to analysts - the trend is clearly rotating out of AAPL into names with more room for growth.
Dividend Stocks: Lose-Lose-Lose Proposition In Intermediate Term [View article]
Good to see you writing again. This article, as with many, is controversial. Furthermore, there are many scenarios you omitted (you can't write a book on here after all). One such scenario is: part-time investor with full-time occupation who doesn't have the time or inclination to be constantly trading and re-allocating. For this scenario, dividend stocks - more appropriately, the RIGHT dividend stocks - are always better. When things go up, maybe pare back or get the dividends paid in cash -- when things go down, add more and/or have dividends reinvested. Simple strategy, less fuss, less commission money handed out.
I guess my point is to be wary when labeling all dividend-paying stocks as overvalued, which is the impression one gets when reading this article. REIT's were probably due for a shellacking, but many other dividend-paying companies out there are likely undervalued or in a more stable position. In any further downturn, I would add to - not sell - these stocks. Personal favorites (and holdings) include: WU, FCX, BK.
Danger Zone For This Week: Apple [View article]
Personally I see AAPL as about fairly valued right now. Interesting choice to focus on ROIC instead of the usual P/E or cash-per-share analyses. Time will tell ... surely the loss of Jobs will continue to have ramifications for years though.
Gold: Where Are We Now? [View article]
having the courage of your convictions makes or breaks you in the financial world (i.e. John Paulson - we'll see what happens in 2-5 years). being "right" is great ... but once again isn't worth much. i personally wonder if there will be an "upwards crash" or something of the sort for gold once short-covering takes place en masse, but am not quitting my day job.
best of luck in trying to understand these zany markets.
Gold: Where Are We Now? [View article]
First off, have to respect you for posting articles on SA: takes effort and at times a thick skin.
That being said; you (and others - yours truly included) were obviously wrong on gold. You can't go and bash the bears for "every bear theory" and call them "wrong" unless you call losing money "right." Every bull theory has been tossed about over the past few years as well - each side has its looney-tunes characters.
Personally I picked up some CEF recently in the selloff, but with the full realization that it's a gamble play, not an "investment." The only constant I've seen these past few years is that the market rewards those who follow it, not those who try to be "right" all the time.
Ultimately, I couldn't agree with you more in theory regarding what "should" be happening ... but theory isn't going to make anyone any money. We'll see if this thing can consolidate over the next few months: if so, great - if not, plans will change according to reality.
Intel Valued As Though New Technologies Will Bust, But I Disagree [View article]
Nice article. Appreciate the level-headed writing. I whole-heartedly agree with your line: " ... we are clearly in a phase of increasing connectivity in all aspects of our lives, and these devices require chips, and no company is better suited to meet the design and manufacturing needs for these chips as Intel is." Well put.
Will appreciate any periodic updates, particularly in regards to earnings surprises. In the meantime I've got a few shares and enjoy earning 4.2% on them. I'll continue to buy in the low $20's unless the chip industry is made obsolete overnight. Looking forward to future articles.
Apple: Major Concerns Overstated And More Than Priced In [View article]
More Of The Usual Eurocrisis Drama [View article]
Investing-wise, I like dancing diva's advice, though at the moment I am heavily cash biased (~60-70%). Think this next decade will be marked by anemic growth, low rates, and building inflation - not quite sure how to handle all of this other than to buy some dividend-paying stocks, and buy some real estate within the next 3 years (while rates are guaranteed to be low).
Cam - love the articles - you always pick a good topic and have a unique perspective on it. One of my must-read authors on SA.
Dollar Firm, Axniety Still High [View article]
Always enjoy your punchy, no-nonsense daily assessments. Just wanting to clarify: I see Cyprus as EU's test-case for Spain. Now they've learned what to do and what not to do (biggest lesson: set a 100k euro threshold below which not to levy a "haircut"). I see Spain following suit and doing something similar in May or June. Do you think that to be a possibility? Something similar (i.e. blanket real estate tax)? Do they have any overseas territories or assets (i.e. ports) that could be used as bailout bargaining chips with rich MidEast / Asian nations?
Might be getting a little off the rocker here - just not seeing how Spain can escape the deflationary vortex without some sort of dramatic move, a-la Cyprus.
Apple Is Still Cool [View article]
i just don't see the edginess to Apple anymore. the new phones people want to try out are the Galaxy and the Lumia. perhaps that is more in the "trendy" camp versus the "cool" camp, but it makes a very real difference in margins, i.e. Apple can't continue to price things where they traditionally have.
companies of Apple's size take years, even decades, to consolidate and transform into a more staid & steady business model. nice that they have (finally) instituted a dividend, but i see the consolidation taking prices down to the $250-$300 range over the coming 3-5 years: might get a pop to $500+ by late summer, but then it will reverse and continue downwards. personally i'd rather deal with companies that have already experienced years of beatdown, have proven they can survive, and have a dividend. that means MSFT, INTC, BCO, for example. just my 2 cents.
In Defense Of Apple: Battling The Mounting Hysteria [View article]
- Steve Jobs dies
- Lawsuit bonanza with Samsung and others. As usual, the only clear winner is the lawyers
- More Apple stores --> more overhead & rents to pay
- More employee benefits and better pay --> more expenses
- Dividend --> less cash for bottom line. Also indicates slowing growth and recognition by execs to slow/moderate growth, hence dividend established to attract & maintain shareholders
- Android platform continues market share dominance, led first by HTC - now by Samsung
- Apple maps snafu --> indicates Apple arrogance at thinking they can "do it all" and take on GOOG, which has spent the past decade-plus building their Google Maps and Google Earth products
- iPad mini - while a good product - obviously cannibalizing regular iPad sales
- AAPL becomes largest company on Earth (how much growth can you realistically expect from $500bn+ market cap?)
- no one wants iPhone 5 -- amongst my circle of friends & acquaintances, i have seen only 2 iPhone 5's. not what you expect out of prime-earning 30's and 40's crowd
i own Apple products and love them, but their poor treatment of shareholders (measly dividend started WAY too late), their fading product line (Jobs' death), and their bully tactics and ridiculous lawsuits ("App Store" lawsuit? rounded corners? really?) are all indicative of poor prospects for the shareholder. i've said it elsewhere but will say it again: a company's products are separate and distinct from its stock.
the stock market is a completely ruthless beast. ignore the numbers - which are undergoing rapid changes while sales slacken and margins compress - and take out a chart. strong support for AAPL doesn't occur until $350-$400 range. wait for it to drop until those levels before getting in.
Beware The Seasonal Market Trap [View article]
Love your articles. Very talented at distilling the chaos into sensible advice. Your last two sentences are classic:
"Apple closed at $500.00 exactly, rendering all 400,000 of those contracts worthless. It's a wonderful world."
Agree with your fade sentiments - the trickier part will be knowing when to get back in the game. I can't imagine that with QE-fueled everything markets will sink that much, but they certainly do look ripe for a pullback now.
Looking forward to your next article as always.
In Defense Of Apple: Battling The Mounting Hysteria [View article]
best thing AAPL execs could do now would be to either split company up into parts, institute a massive special dividend, double the regular dividend, or all of the above. barring that, my guidepost is simple: open up a chart of AAPL and see where the first respectable levels of support are: looks to be roughly the low $300's to $400. so, likely the stock will continue biting into people's stop orders on the way back down to at least those levels. regardless of the company's prowess or impressive numbers, i wouldn't even think about touching this until at least $400, and likely <$350.
Today's Icarus [View article]
always liked this clip from the Onion, by the way (a little humor):
http://bit.ly/10BhAYu
Outlook 2013: Americans Are Going Broke [View article]
I appreciate you looking at a factor that few others out there have addressed. That being said, the charts you showed, I believe, merit closer scrutiny.
The St. Louis Fed chart, for example, indicates that hourly earnings are now bottoming. Once they peak, you look for a recession within a year or so. The inflation-adjusted earnings chart seems to indicate too that infl-adj earnings are bottoming. So I would argue that now is the time to invest in the consumer sector, particularly with rates so low. Once hourly earnings and infl-adj earnings are seen peaking, then it's time to go into cash or short.
Betting On Apple's Operations Team And Gross Margins [View article]
big test showing up now: whether or not it can maintain >$500. if not then there is really no support until ~ $400. who knows: maybe i'll buy some AAPL if it can make a convincing move above $550, or preferably $600. for now though - however ridiculous it may seem to analysts - the trend is clearly rotating out of AAPL into names with more room for growth.