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Seeking Alphalfa

Seeking Alphalfa
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  • Municipal Bond Mark-Ups: Measuring 'Reasonable' [View article]
    Excellent info for SA readers that might not be familiar with this area of the markets. IMO this is an area that is sorely lacking in disclosure -- especially on the retail side of the market.

    MSRB has made some progress here but until the SEC mandates better disclosure, retail investors will continue to overpay for munis in many cases. I agree that Schwab and other online firms do a great job with pricing.

    The author's advice regarding riskless (principal) vs. agency trades is great; though some firms may only do riskless trades on a principal basis. One can always use EMMA (trade info on MSRB's website) to determine the markup charged on a riskless trade.
    Apr 15 10:29 AM | Likes Like |Link to Comment
  • The Richest Man In History Reveals His Simple Wealth Generating Secret [View article]
    Mathman - yes -- as my IQ drops precipitously when quoting Ricky Bobby :)
    Mar 27 10:20 AM | Likes Like |Link to Comment
  • The Richest Man In History Reveals His Simple Wealth Generating Secret [View article]
    For those readers (and this author for that matter) inclined to do some research on John Rockefeller, his financial story is exceedingly interesting. He spent the first half of his life ruthlessly (the nicest word I could choose) creating and defending a monopoly -- and the second half giving away his money. With all due respect to the magic of dividends, attributing his financial "success" to dividend investing is quite a stretch.
    Mar 27 10:05 AM | 20 Likes Like |Link to Comment
  • Debunking The 'Dividends Don't Add Shareholder Value' Myth [View article]
    I think Benjamin Graham just rolled over in his grave.
    Mar 13 04:26 PM | 8 Likes Like |Link to Comment
  • Retirees: What Is The Best Choice For A Small Income Portfolio? [View article]
    PendragonY is correct -- you may distribute assets "in-kind". The assets then assume a cost basis per their value when distributed. It is fairly common when processing RMDs.
    Nov 15 11:55 AM | 6 Likes Like |Link to Comment
  • Open Letter To Exxon's Board: It's Time To Sell Assets To Reward Long Suffering Shareholders [View article]
    Michael - you've simply cherry-picked your time frame to support your argument. You can do that with nearly any stock. Intelligent people don't fall for that nonsense; and, as a matter of fact, XOM was in the low 70s five years ago -- making the return (without divs) 25%-30%.
    Nov 5 03:37 PM | 2 Likes Like |Link to Comment
  • Does It Make Sense To Implement The Taleb Portfolio? [View article]
    Back in the early 90s, UIT products that guaranteed principal were fairly popular. With 10-year US Treasury zeros at about 7%, you could fix the UIT term to match the maturity of the bonds. That would cost you about 50% of the principal. The manager would then take risk with the other 50% -- with its ultimate value being the profit for the investor. Other than the associated fees, it was a great concept.
    Nov 5 01:38 PM | Likes Like |Link to Comment
  • Does It Make Sense To Implement The Taleb Portfolio? [View article]
    I am a long-only investor (except for the occasional selling of cash-secured puts). I'm also a strategic asset allocator -- meaning I maintain constant core exposure to specific asset classes (no market timing) with little variation. That said, I'm always looking for ways to maintain that core exposure while taking less risk. For example, if one has a core position in SPY, he could instead own the Dec 2015 at-the-money LEAPS. They would cost you about 9% of your allocation to that core holding. The remaining 91% could be allocated to a risk-free investment. Over the next 25 months, you maintain exposure to that asset class, while limiting your downside to 9% (less the earnings on the remaining 91%). When risk-free rates are 5-6% this is obviously much more appealing (albeit implied volatility of the option might also be higher). Note that you also forego the opportunity to collect dividends on the core position. The market is pretty efficient and there is no free lunch but this is a low cost way to limit your downside while maintaining core exposure and most of the associated upside.
    Nov 5 01:28 PM | 1 Like Like |Link to Comment
  • Does It Make Sense To Implement The Taleb Portfolio? [View article]
    I have explored the possibilities of buying at-the-money leaps while holding 95% or so of a portfolio in cash -- thereby eliminating the chance of loss over the given period. The numbers look great when the risk-free rate is high and implied volatilities are low. At the moment we only enjoy half of that scenario.
    Nov 1 03:18 PM | Likes Like |Link to Comment
  • A Right Time To Fix An Investment Wrong? [View article]
    Cranky - have a look at IEFA as an alternative to EFA -- broader market cap (mid/small cap) diversification, lower expenses -- but less liquid.
    Oct 18 01:58 PM | Likes Like |Link to Comment
  • Better Than Buy And Hold Over The Last 13 Years [View article]
    "The way to make money in the stock market is to buy a stock. Then, when it goes up, sell it. If it's not going to go up, don't buy it!"

    -- Will Rogers
    Aug 1 11:12 AM | 3 Likes Like |Link to Comment
  • Collectors Universe: Great Future [View article]
    dbtunr - PSA/DNA certification is a different process & holder than the typical trading card certification & standard PSA holder (and a much smaller percentage of PSA's business). It's the standard PSA holder that is being counterfeited. As I suggested earlier, simply search "fake PSA holder" and you will better understand the issue. Also try this link for some interesting info -
    http://bit.ly/1725c8J
    Jul 9 12:57 PM | 1 Like Like |Link to Comment
  • How To Get Excellent Returns With Utility Stocks [View article]
    Pizza -
    I expect you can find time periods when they have done well when rates were rising and periods when they performed poorly. The conventional thinking is that relatively higher dividend payers are more sensitive to interest rate changes -- similar to how bonds behave. The recent increase in rates certainly favors that conclusion That said, interest rates are merely one of many drivers of equity prices.
    Jul 3 09:05 AM | Likes Like |Link to Comment
  • How To Get Excellent Returns With Utility Stocks [View article]
    I would expect that utilities as a group will outperform the S&P over any material period of time in which interest rates fall dramatically (like the period discussed here). I would also expect that the cherry-picked sample of the better dividend growers would do even better.
    Jul 2 11:35 AM | 3 Likes Like |Link to Comment
  • Why Dividends? A Review Of The Literature [View article]
    Robert - that is exactly what I meant by that comment.
    Jun 19 08:55 AM | Likes Like |Link to Comment
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