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  • 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 07:53 PM | 6 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 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 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 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 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 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 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 09:15 AM | 4 Likes Like |Link to Comment
  • Why Buy Overpriced Hamburger When You Can Get Filet Mignon For The Same Price? [View article]
    I originally acquired PG stock when it bought Gillette, which I had acquired by owning Duracell. I was initially happy to own PG but sold it because I was concerned with the growth of generic brands. This growth has been much slower than I expected, so perhaps I was wrong, but still it has put pressure on companies like PG who sell much higher priced products than the generic or store brand product. Many still are willing to pay an extra two or three dollars for Tide instead of a store brand but I see this willingness slipping. I find it difficult to buy PG with a PE of 20 or more considering this issue. Plus, while I understand that everybody (well, maybe not everybody) buys soap how much growth does the soap industry have in it's future? I have the same concern for all of PG's products.
    Jun 29 09:13 AM | 2 Likes Like |Link to Comment
  • The Dangers Of Following Celebrity Stock Picks [View article]
    I don't understand the problem with celebrity stock picks. If they are qualified to testify before congress on whatever their favorite issue is, surely they are qualified to pick stocks.
    Jun 26 09:44 PM | 4 Likes Like |Link to Comment
  • The Most Hated Economic Recovery Ever [View article]
    And don't forget that the labor participation rate is the lowest in many, many years. Many desire to work but cannot find work and have given up trying and so are not counted as unemployed. Many can find only part-time work.
    Jun 17 08:16 AM | 6 Likes Like |Link to Comment
  • The One Thing That I Know For Sure: I May Be Wrong [View article]
    The "I may be wrong" concept is probably the most important concept in investing. I find that more money is lost by people "doubling down" on losing investments than by any other mistake. Certainly "buying the dip" can be very rewarding but it is so hard to admit when we've made a mistake that too often we keep buying as the dip gets deeper and before long a small loss turns into a disaster that can take years to overcome. The "I may be wrong" concept should also be applied to position sizing.
    Jun 13 09:31 AM | Likes Like |Link to Comment
  • Retirees Please Don't Index, You Deserve Better Than Average [View article]
    You make a good argument here. However, there are other issues to consider. I am retired and have 30+ years of experience investing on my own nearly always in individual stocks and now stocks and individual bonds I select. I am very comfortable managing my own investments and have little desire to pay an advisor 1% or even 0.5% of my accumulated savings to manage my accounts. But here is why I am considering changing to a group of index based funds: I recently had to add fuel to my weed-whacker which is a 2 cycle engine requiring a mix of oil and gasoline. My oil bottle instructions were "Mix contents of this container with 2.5 gallons of gasoline". That much fuel would last months and besides, I have a one gallon container to use for the mix so I wanted to prepare only 0.5 gallons for the weed-whacker. A few years ago I could have arrived at the answer in my head in about 2 seconds but after 2 minutes or so I realized I can no longer do this. I had to get a pencil and paper to make the calculation which I'm pleased to say I managed in a couple of seconds.

    My point is that my brain, like my back, is not what it used to be. We all lose our cognitive abilities as we age. I want to make a change away from individual stocks before I make some blunder (or more accurately more blunders than I have always made from time to time over the years). You are correct that returns available with index funds and ETFs based on indices can be improved by good individual stock selection but a few blunders can overcome many good choices.

    Another issue is that sometime in the near future I want to retire from investing just as I retired from my profession. Index based investments are a compromise between true do-it-yourself and an investment manager. Of course, mutual funds are another compromise but in my opinion not worth the high expense fees charged.
    May 29 03:49 PM | 31 Likes Like |Link to Comment
  • How To Invest In Limbo [View article]
    I wonder about BJSE. They plan to terminate the portfolio on or about 12/31/14 but many of the holdings actually mature in 2018, 2019 and 2020. To me this means that they will have to sell these bonds before the termination. Consequently, if interest rates rose rapidly between now and then would they not be forced to sell at reduced bond prices thus producing loss of capital? The consensus appears to be that rates will not rise quickly between now and then, and I agree with this consensus, but they might. This should be considered by anyone buying this ETF. Likewise BJSF would be subject to losses. Am I understanding this correctly?
    May 28 09:09 PM | 1 Like Like |Link to Comment
  • American Realty Capital Properties: Rapid Growth At A Cheap Price [View article]
    Thank you for this info. As an investor in CHK years ago I am all too informed about Mr. McClendon, though the board at CHK was as much to blame as he was. This taints ARCP seriously in my mind. This will probably be the last straw for me with ARCP. Maybe it's a good thing I have a couple of days to think about it because I would sell this very minute if the markets were open.
    May 24 04:47 PM | 2 Likes Like |Link to Comment