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  • Otter Tail Corporation: Diversifying With Diversification [View article]
    By the way, I was in Fargo, ND, yesterday and it really is booming even though it is far from the Bakken.
    Dec 20, 2014. 11:06 AM | Likes Like |Link to Comment
  • Otter Tail Corporation: Diversifying With Diversification [View article]
    Thanks for the reply. Yes, I am invested in AEP, SCG, and SO. Combined they constitute about 2.5% of my present portfolio. I have never been a big fan of utilities but I understand they can be an important part of the portfolio. Actually, now that I am retired I would like to buy more of them but I do not think they are good values now. Some consider that telecommunication companies are utilities and they behave in similar fashion often but I think they have better potential, especially lately. I prefer the telecommunication companies to classic electric, gas or water companies and currently own TLSYY, VOD, T and VZ which combined represent 6% of my portfolio.

    Regarding diversification practiced by individual companies as opposed to individual investors, I have seen over and over how companies buy some unrelated entity and management touts the great diversification potential only to sell the same entity a few years later (usually at a loss) as they tout their new "focus". The one that burns me still is ATT buying NCR, grrrr. Sometimes I think it's just management's way of showing they are actually doing something to justify their big salaries. Of course companies often buy mostly unrelated businesses because they want one part of the business that really adds something to their core. They can then sell the parts that are unrelated. To my way of thinking OTTR just seems to be holding unrelated business for no good reason.
    Dec 20, 2014. 11:03 AM | Likes Like |Link to Comment
  • The Decline Of McDonald's [View article]
    I agree. This article is a waste of time and the line "stale, unhealthy burger" really is not worthy of an article on SA.
    Dec 18, 2014. 06:32 PM | 7 Likes Like |Link to Comment
  • Otter Tail Corporation: Diversifying With Diversification [View article]
    I live in an area served by Otter Tail. They have a good reputation here so I have followed them for some time. I have not purchased their stock because I cannot see a valid reason for them to be diversified into these manufacturing segments. I cannot see any synergy between the manufacturing and the electrical distribution. I think this is a distraction for management. Why don't they buy liquor stores? That's always a good business. Peter Lynch pointed out that diversification is usually diworsification. For the investor it would generally be better to buy stock in two different names, an electric utility and a manufacturer and let each stick to what they do best.
    Dec 18, 2014. 03:13 PM | 1 Like Like |Link to Comment
  • Weaker oil prices dim prospects for LNG projects [View news story]
    Yes, well I am a main street kind of guy as are millions of other small investors. Many of us need investment income to live on. And no it does not feel good. The fuel station would feel better, however, except that I drive a diesel Jetta and the price of diesel has not followed gasoline down.
    Dec 11, 2014. 11:20 AM | 3 Likes Like |Link to Comment
  • The Real Reason Saudis Didn't Cut Oil Production [View article]
    Well, there surely has been plenty of rouge in the energy names on my screen.
    Dec 1, 2014. 11:41 AM | 30 Likes Like |Link to Comment
  • No, Higher Velocity Will Not Necessarily Mean Higher Inflation [View article]
    So why does inflation happen? Can it be predicted? Are we at risk of much higher inflation?
    Oct 21, 2014. 09:39 AM | Likes Like |Link to Comment
  • The Forest Vs. The Trees Of The Offshore Drilling Industry [View article]
    Cornhusker is too hard on this author. The article raises a valid point about lack of moat with these companies. However, they are not all the same. One differentiating feature is debt: high for sdrl, low for esv. I own esv as a small part of my portfolio for this reason. I am confident that the industry is not going to disappear and the high dividend offered by esv is well covered. The company is well suited to survive a downturn. If I get no stock price appreciation for two or three years I still have the dividend. Total return will probably be much better than just the dividend over a few years. Good enough for me.

    In spite of arguments to the contrary, the hydrocarbon industry is not going away and the demand for oil will continue to grow so the sea drillers should do fine.
    Sep 14, 2014. 07:53 PM | 7 Likes Like |Link to Comment
  • Nestle: Swiss Food Giant With Compelling Dividend [View article]
    I believe R Garneau is correct: Swiss withholding is 35%. As I understand it, even if one holds this in a regular account, as opposed to an IRA, the USA income tax credit is limited to a maximum of 15%. Held in an IRA, there is no income tax credit so the 35% withholding is totally lost to tax.
    Sep 4, 2014. 10:52 AM | 1 Like Like |Link to Comment
  • Stock Screen: Bargain Basement Stocks [View article]
    This article reminded me of VSH which I owned for quite awhile in the mid 90s. I see it is still bargain priced. it seemed like a solid company with mundane but needed products. All true. But my experience was that it was always ready to do well in the near future but it never did. Considering the low dividend, lack of growth, and thus lack of stock price appreciation, why buy it now?
    Aug 21, 2014. 01:32 PM | 2 Likes Like |Link to Comment
  • Here's The Alarming Table Kinder Morgan Doesn't Want You To See [View article]
    I agree with ronstaug, this complicates my plans. But I trust Kinder more than Hedgeye or Barron's.
    Aug 12, 2014. 12:25 PM | 6 Likes Like |Link to Comment
  • Three Chart Alarm: The Fed Has Set-Up The Corporate Bond Market For A Big Fall [View article]
    The value of VWEAX recovered because interest rates have fallen since 2009. Had they not fallen the fund would not have recovered. This is not a theory. Bond funds really do get hit with mass redemptions when interest rates fall though the redemptions are usually not as great as stock funds. But maybe this time is different?
    Aug 6, 2014. 08:06 AM | 1 Like Like |Link to Comment
  • Three Chart Alarm: The Fed Has Set-Up The Corporate Bond Market For A Big Fall [View article]
    5731311: As you know, when interest rates rise the value of this fund will fall. Even if you do not sell, unfortunately many of your fellow fund holders will sell. If enough sell the fund managers will be forced to sell bonds at whatever they can get for them. Since this is a mutual fund, you are mutually selling along with everyone else at reduced prices and your capital will be impaired. Don't be fooled into thinking you will not be affected. The asset value of the fund will be reduced, your retirement balance will be reduced and your income will be reduced. Yes, the remaining bonds will continue to pay their due interest and as they mature they will be replaced by higher yielding bonds but the lost principle will not ever be recovered. This may not be a disaster for you, it may only be a few percent but it will cost.
    Aug 5, 2014. 05:32 PM | 2 Likes Like |Link to Comment
  • Gilead: 50% Upside From Here [View article]
    One never knows what unexpected event may transpire that can sink a company and it's stock value. Believe me, I've been sunk several times in companies I was certain would continue to do well. Only you know your own situation and hopefully your own tolerance for loss but if you are near retirement you should think carefully about the risk of having 20% in any one company. Maybe you can tolerate the loss if the stock price of that company drops in half. Maybe not. Maybe some new, horrendous, side effect of Sovaldi will be reported tonight. You cannot know. Risk is always present and the key to success is to be ready for it.

    I own GILD at 2% of my portfolio and that is quite enough for me.
    Jul 18, 2014. 08:05 PM | 6 Likes Like |Link to Comment
  • Winners and losers in fast-food survey [View news story]
    Not a representative survey and probably not important investment-related news. Consumer Reports subscribers are a highly select group. I don't know what their median income and education level is but I'm willing to bet it is much higher than the average Joe or Jane. Average Joes and Janes make up the vast bulk of McDonald's customers. And, do these competitors have play areas or Happy Meals?
    Jul 2, 2014. 09:15 AM | 4 Likes Like |Link to Comment