Seeking Alpha

TS Douglas

TS Douglas
Send Message
View as an RSS Feed
View TS Douglas' Comments BY TICKER:
Latest comments  |  Highest rated
  • The Most Deceptive And Dangerous Financial Headline I Have Ever Seen [View article]
    I think we would all agree it's tough to "fight the Fed" and government manipulation, but I really think the criticism is overdone today. Bulls and Bears have points of view that either reinforce our views of the world or allow us to rethink and reconfirm our positions. Both add value when well thought out.
    Apr 2, 2012. 01:03 PM | 4 Likes Like |Link to Comment
  • Retirement Without Income Growth Leads To Financial Death -- Bonds Won't Pull The Wagon [View article]
    CrankGuy,

    Asset allocation is a lot of work and requires a lot of time and money to really diversify ($10m in my opinion). Unless of course you are talking about ETFs, which I only find useful as a hedge.

    I agree with you about Modern Portfolio Theory. It decimated investors in ’08 (unless of course you were on the inside with the wife of MorganStanley’s CEO and allowed to buy a portfolio of bonds at a 90% discount to par). As I recall, the only place to hide in ’08 was on the short side, in Credit Default Swaps or in gold.

    I’m no shill for JeremySiegel, but he has written a terrific book called “The Future For Investors” which uses historical data to suggest that liquid (large-cap), dividend paying stocks,with consistent earnings results, and a propensity to raise payouts have beaten all other investments over time. I like the book’s conclusion and although I still try to hit the homerun (trade) from time to time, I have been through a cycle and prefer to ignore the “talking heads” and watch the dividend grass grow.
    Apr 1, 2012. 11:11 PM | 1 Like Like |Link to Comment
  • Retirement Without Income Growth Leads To Financial Death -- Bonds Won't Pull The Wagon [View article]
    The article states the obvious and is not disingenuous in its sales pitch. To be fair it’s a gentle reminder that divided investors need to know that their dividend portfolio can outrun inflation (currently 6-8%, when food and fuel are baked in and housing is removed). I would disagree with some of today’s commentary that suggests investors need asset allocation among different asset classes in order to win. Without going into all of the reasons why, very few portfolio managers actually beat the averages and asset allocation allows Wall Street marketers to hide behind one asset class in a client’s portfolio when another is underperforming. It’s a popular pitch for the “experts” and probably makes a lot of sense if you have $10m or more to invest. However, if you are like a majority of people, you can still protect yourself by buying a stock yielding 3-5% and growing its dividends 6-8% per year, e.g. MO. In my humble opinion, you may be bored, but you won’t be poor.
    Mar 29, 2012. 11:13 AM | 1 Like Like |Link to Comment
  • A Demand Side Revolution? [View article]
    When did this become a discussion about Democrats and Republicans? Sir, you undress yourself!
    Mar 28, 2012. 08:20 AM | Likes Like |Link to Comment
  • A Demand Side Revolution? [View article]
    This article appears to be a shill for “political Keynesian economics.”

    “Public spending can pay for itself.” Let me see if I understand this correctly. The paper was co-authored by the same Larry Summers, who, under Clinton helped pass the Gramm-Leach Act (Nov ’99), which drove the economy off a cliff with the repeal of the Glass Steagall Act and enforcement of negligent lending standards under the Community Reinvestment Act?

    And now that people are tightening their belts and paying (through higher taxes, lower rates of return and diminished services) for their neighbors who bought their homes with no money down and in many cases took out a second mortgage (line of credit) to buy fancy toys and take expensive trips, the “man behind the curtain” believes the government should continue to offset the decline in consumer spending (sensible debt reduction) with government largesse (aka deficit spending)? I mean I’m just guessing here, but this deficit spending will have to be repaid, right? It’s not like a home mortgage, credit card, car loan, or home equity line of credit that people can just walk away from, right?

    Is this new paradigm, the Demand Side Revolution really new? I’m doubtful. It sounds a lot like classic Keynesian Economics to me, i.e. spend when times are bad and let the politicians de jour decide if they should save when times are good. In other words, just spend all the time.
    Mar 25, 2012. 07:26 PM | 1 Like Like |Link to Comment
  • The Equity Rally Has Legs [View article]
    I am sorry, but I must disagree.

    It’s just my humble opinion, but if we are not in a market inflated by cheap money then we must be in Alice’s Wonderland. The USD has been egregiously debased by B. Bernanke’s printing press (QE 1, QE 2, TWIST/QE 3) and if and when Treasury rates rise to 5% the taxpayer’s net interest expense on gov’t bonds will more than double to $543bn/year. Not to worry, last Jan ’11, the Fed announced in the future (now) its treasury and mortgage mark-to-market losses would be treated as a liability and not a reduction of Fed Reserve capital. I guess our Fed Reserve has become a credit card (to be paid at sometime in the future) with a hedge fund like kicker.

    In effect, the current gov’t borrows gobs of money, to spend on unproductive vote buying schemes, then lowers rates to (almost) zero, so it looks like the borrowed money comes at no increase to taxpayers. They do this with the knowledge taxpayers interest expense will “balloon” on someone else’s watch. It’s the same pmt trap recalcitrant banks set for homebuyers during the housing bubble, except when the balloon came due homeowners still had an underlying asset.

    Please check the volumes on the exchanges. They are down ~30-to-40% and inhabited mostly by quant/flash traders, ETF/Index funds (who must chase their tails in order to rebalance nightly) and a few money managers who buy on the fringe while maintaining mostly market weight positions. The retail investor, thanks in part to the non stop noise provided by the ubiquitous talking heads, remains in a bunker and, in my opinion, knows something is not right in Wonderland, but does not have the skills to verbalize it.

    Full Disclosure: I remain 90% invested in the market with 100% in equities, but I have limit loss instructions on many of my positions and I accept my dividends in cash with the expectation to reinvest at lower levels. If I lose anything this year it will be opportunity, not capital.
    Mar 20, 2012. 10:51 AM | 2 Likes Like |Link to Comment
  • Market Update: In The Zone For A Potential Pullback [View article]
    In my humble opinion it's really tough to predict market corrections when domestic and foreign governments are flooding the markets with cash. (well maybe not cash, but currency anyway). This is an election year, a time when (historically) the sitting Administration will do anything to get re-elected and often the press will play its part by ignoring the negative data points and touting the weakest signs of economic life. However, I am heartened by your capitulation. Change is in the wind when the bears start to roll-over.

    FD: I am 90% invested in this market, but have made no new investments since Jan. As of March 1st, I reset my accounts and now take all of my dividends in cash. I plan to reinvest the cash when the market corrects. With trading volumes on the exchanges cut in half and 80% of those trades made by either quant (flash) traders, Index/ETF funds rebalancing, or marginally by investment managers, it may be time for the press to stop its wishful thinking.

    I’m just saying ….
    Mar 19, 2012. 09:37 AM | Likes Like |Link to Comment
  • When Can You Retire On Dividends? [View article]
    If experience is any guide I would “skip the DRIPs.” The paperwork and accounting is a nightmare. In today's world you can open an on-line account and have your dividends reinvested at no charge. The accounting and the paperwork are done for you and you might even enjoy the portfolio charts they provide. No, I am not a broker and I do not work for a mutual fund or an on-line brokerage provider. I have learned the hard way, through experience.

    Also, many of the comments I have read suggest that a portfolio is safer if it is diversified by the purchase of dozens of stocks. Wall Street analysts, i.e. professionals, rarely follow more than 15-20 stocks within a given industry at any one time. To follow 20, 30, or 40 stocks across multiple sectors and industries would be a herculean task and one I doubt anyone could accomplish successfully. I try to stick with 10 companies or less in industries I like from a macro point of view. Today that would be sin stocks (MO), energy (CVX), healthcare (ABT) and consumer staples/Food & Bev (PEP).

    Enough ranting, I'm not a bookseller, but I want to point out that many of the previous comments have been addressed in Prof Jeremy Siegel's book, “The Future For Investors.” If Graham & Dodd are the icons for Value investors then Siegel is the icon for DGI investors.
    Mar 8, 2012. 09:37 AM | 3 Likes Like |Link to Comment
  • Philip Morris Is Overbought - Wait For A Pullback [View article]
    Investors interested in owning PM at these levels would be best served by buying the stock and then putting a Limit Loss/Good until Canceled (GTC) order on the stock. If PM goes higher, splits or raises its dividend you win. If it goes lower you are out the cost of the trade (~$7.00 in an on-line account).
    Mar 5, 2012. 07:45 AM | Likes Like |Link to Comment
  • S&P 500 Sector P/E Ratios [View article]
    Wall Street analysts historically exude earnings enthusiasm at the beginning of the year. As the year winds down the same savants tend to temper those expectations, on a Friday, before a long weekend. Earnings expectations for the SPX this year are between $90 and $105. If you share the same risk aversion as I do then you will be best served by erring on the side of caution. If the S&P 500 comes in at the high end of expectations you will have lost nothing but opportunity.
    Mar 3, 2012. 01:45 PM | 2 Likes Like |Link to Comment
  • Stocks Poised For Another Severe Decline [View article]
    Excellent analysis. Thanks. Of course it's hard compete with an organization that has a printing press at its disposal.
    Mar 1, 2012. 07:03 PM | Likes Like |Link to Comment
  • Accumulating Dividend Stocks Is A Long-Term Process [View article]
    Thanks for making me think about my investments, but ... you lost me when you said "The typical valuation guidelines I use include ... a maximum of 20 times earnings I am willing to pay for a company. " Dividend investor's, I believe, are a conservative bunch. At 20 x I would need a very compelling reason to commit new money and a 2.5% dividend would not be enough insurance to support the potential underlying depreciation of the asset.
    Mar 1, 2012. 06:51 PM | 1 Like Like |Link to Comment
  • 12 Stocks With Growing Dividends For Succesful Retirement Investing [View article]
    I always appreciate it when someone else takes a look at stocks I might consider owning. Thanks for doing the work. However, without doing an in-depth analysis, I must admit LEG does not meet my personal investment hurdles.

    One hurdle is macro. I believe we are headed for a double dip recession (an exhausted consumer, declining global GDP, foreclosures counted as home sales, fuel prices, etc., etc.) and LEG is fairly dependent upon consumer demand. If I am wrong I will lose an opportunity, not my hard earned money.

    The second hurdle compares a stock’s current and future return with inflation. I believe real inflation (excluding declining home prices) is clocking in at better than 6%. Therefore, before I put a new stock in my portfolio it must meet at least one of two criteria: The annual growth of the dividend must meet or exceed the inflation rate so my return is not inflated away (e.g. MO, a tobacco stock, grows its dividend 7-8%/year) or the return must exceed the inflation rate so that I am actually generating a real return (e.g. CYS, a mortgage REIT, returns 14.7% or about 10.3% after-tax).

    Once these hurdles have been met I then decide whether or not to do a deep dive valuation analysis. Thanks again, but I think I will pass on LEG.
    Feb 25, 2012. 11:26 AM | 2 Likes Like |Link to Comment
  • Why The Market Is Not Necessarily Cheap [View article]
    2% inflation. What! Exclude housing and I believe you will find inflation trending closer to 6%.
    Feb 24, 2012. 02:23 PM | Likes Like |Link to Comment
  • The Price Of Gas Is Outrageous, And It Is Going To Go Even Higher [View article]
    Thanks for the interesting article. However, I think you have erroneously placed the blame for higher energy prices on demand.

    “…there is one thing that would likely bring down the price of gas substantially. A global recession.”

    I think we agree that historical demand for oil tracks global GDP (confirmed on IEA’s website), but demand has been flat to down during this recession so beating the victim (the consumer) with another job killing recession seems a bit aggressive. I would look to exogenous events for the source of our troubles and for the solution.

    I believe gasoline has doubled in less than four years due to economic polices engineered to decrease demand (working) and to make solar technology more competitive (not working). A sample of gov’t meddling includes a weaker U.S. dollar (global oil is priced in USDs), ethanol mandates (10%/gal rising to 15%/gal), taxes (depending on the state ~$0.30-$0.60/gal), and energy discovery moratoriums (Gulf of Mexico, Alaska and the Keystone Pipeline).

    If Marie Antoinette had been born a 21st century politician I think she probably would have said “Let them eat electric vehicles!”
    Feb 21, 2012. 11:45 AM | 2 Likes Like |Link to Comment
COMMENTS STATS
95 Comments
95 Likes