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TS Douglas

TS Douglas
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  • Economic Outlook Worsens, Stay In Cash [View article]
    Good stuff. Thanks!

    The analog companies (ADI, ISIL, TXN, etc.) are in front of the supply-chain for durable goods and while the Book-to-Bill for their products is currently above 1.0, it remains at ridiculously low levels (as does capacity utilization). This would support your work and suggest we are either in or headed for a recession.
    May 8 09:12 AM | 1 Like Like |Link to Comment
  • Delusional Analysts Setting Investors Up For Disappointment [View article]
    Thanks! Your article quantifies what Wall Street insiders have known for decades, i.e. Wall Street analysts are paid to be bullish. Does anyone doubt 2012 consensus expectations will be revised downward between now and year-end?

    Still, the shorting game is a difficult one and many shorts have been wiped-out despite being correct (eventually). Maybe it's best to just write calls, collect the premium and take profits if and when the market implodes, and come back to play another day.
    May 6 08:54 PM | 1 Like Like |Link to Comment
  • A Barrage of Keynesian Advice for Europe [View article]
    Congratulations Peter!

    Your article provided an excellent critique of tax and spend governments. Thomas Jefferson (the anti-Federalist who lowered taxes, debt and the need for more political class employees), Adam Smith (a pioneer in financial liberty with his views on capitalism and the “Invisible hand”) and Frederic Bastiat (the law of unintended consequences of gov’t intervention explained in the “broken window fallacy”) are smiling today.

    While true Keynesian theory makes a lot of sense (increase gov’t spending in weak economic times and reduce spending when the economy improves) politicians are perversely rewarded for spending “other people’s money” all the time. No doubt a decade of zero based budgeting would fix many of the ills that plague our economy today, but this solution remains anathema to the progressives (Hoover, FDR, Obama). One can only hope the political class will learn something from the implosion in Europe, but until then ...
    May 3 11:28 AM | 1 Like Like |Link to Comment
  • Retirement Without Income Growth Leads To Financial Death -- Bonds Won't Pull The Wagon [View article]

    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 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 11:13 AM | 1 Like 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 07:26 PM | 1 Like 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 06:51 PM | 1 Like Like |Link to Comment
  • CPI Up 0.2% - Both Headline and Core [View article]
    Thank you for putting in print what everyone knows, but is terrified to admit!

    "Unfortunately, irrespective of the intentional distortions in the data, the CPI still discloses an inflation rate that is a full 50% higher than Bernanke's bogus (and, I argue, unlawful) "target." Not that I believe he (or anyone else in government) cares."

    Bless his soul, Jimmy Carter’s Administration of unqualified Hogan’s Heroes (Hamilton Jordan, Billy Carter, et al) is losing its mantle as the worst caretaker of the United States in our lifetimes. If we bring back the Misery Index and add “real” inflation + “real” unemployment the current Administration would standout as the poster child for mismanagement. Fuel has doubled, meat has doubled, corn has tripled … etc., etc., etc.

    In my humble opinion, despite the gov’ts attempt to goose the economy in front of the Nov election, year-end 2012 will look a lot like 2011 (SPX flat). Traders might win a few bets (most lost last year), but widows, orphans and pensioners need to stay defensive and clip coupons (aka dividends).
    Feb 18 10:28 AM | 1 Like Like |Link to Comment
  • Altria Group Keeps Smoldering [View article]
    Jim, One can only assume you are being facetious. If you can find me another stock that consistently grows its EPS 7-8% per year, raises its (inflation beating) dividend by the same amount every year, and did not reduce its dividend during the '08-'09 meltdown, then I would like to know about it.

    PS: I'm surprised you did not compare MO with PM. I believe PM is one of the few Tobacco stocks that outperformed MO over the last 6 months. But that's another story.
    Feb 15 01:32 PM | 1 Like Like |Link to Comment
  • Who Is Buying This Market? [View article]
    A famous Bernanke quote: "The US gov't has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost. " "Under a paper-money system, a determined gov't can always generate higher spending and, hence, positive inflation."
    Feb 14 10:11 AM | 1 Like Like |Link to Comment
  • Who Is Buying This Market? [View article]
    The Fed does not have to buy stocks to create a stampede. With fixed income returns so low (thanks to the Fed) money naturally flows to other investments. In the early '90's the money flowed into real estate, today it is stocks.
    As for timing, last year the market rallied until about April 15th, but finished the year flat (thanks to the Oct/Nov rally). In my opinion, "Let the buyer beware."
    Feb 12 06:50 PM | 1 Like Like |Link to Comment
  • Stocks: Navigating The 4 Phases Of QE [View article]
    Excellent job. Thanks! I could not agree more. As long as the "punch bowl" is full investment valuations (real estate, financial, commodity, energy, FX) will continue to be distorted. If we look for examples of how this might end (Japan) the next decade looks pretty bleak. We may avoid Japan's deflation, but me thinks the inflation cost will be staggering.
    Feb 12 06:24 PM | 1 Like Like |Link to Comment
  • The Right Decision Is For Greece To Finally Default [View article]
    I agree. If Greece walks away from the EU it is possible that the country would flourish. When Argentina reneged on its sovereign debts, it plowed the cash, formerly used to pay debt, into social (vote buying) programs. It was good times all around for over 3 Presidential terms. Admittedly, Argentina was aided by an inflating commodities market, but still, the country outpaced the rest of Latin America. Unfortunately for Greece, the only resources available for export are sunshine, sand and history, but for a local selfish politician, 10 years of debt free spending probably looks pretty good.

    One caveat: The good times are coming to an end in Argentina as commodities have stop inflating, sovereign debt is hard to sell, and the proletariat is becoming restless.
    Feb 1 10:07 AM | 1 Like Like |Link to Comment
  • A Big Collection Plate, A Small Congregation [View article]
    Excellent read today. Thanks! I would like to know what the inflation number is ex housing, but inclusive of food and energy (6%?). The housing starts number is pos for some additional job growth, but much ado about nothing (I think) as the banks are about to release the foreclosure Kraken and that will put further upward pressure on un-sold inventory. Ditto for Capacity Utilization as we are likely going through a typically inventory rebuild after 3 quarters of drawing down inventories (the semiconductor stocks are rallying on this data point as we speak). This rebuild does not represent sales growth. One only need look at the new car advertisements ($159/month to lease a Jeep for 24 months) to know that all is not well in Hoover (Obama) ville.
    Jan 19 09:54 AM | 1 Like Like |Link to Comment
  • 6 Types Of Dividend Investment Strategies, Part I [View article]
    Good food for thought. Thanks. Surprised we didn't see CYS on your high-yield focus list.
    Dec 20 02:34 PM | 1 Like Like |Link to Comment