Seeking Alpha

xbureaurat

xbureaurat
Send Message
View as an RSS Feed
View xbureaurat's Comments BY TICKER:
Latest  |  Highest rated
  • The Average Investor's Biggest Mistake [View article]
    Chris,

    I understand what your saying and the numbers are indisputable. I feel comparing almost any stock to MO is not a fair fight.

    On the other hand in 1999 if I gave a group of investors a choice of buying Lucent which I believe was responsible for many great developments for T as opposed to putting the money in a company that produces a product that kills people,has a never ending string of lawsuits and is selling less cigarettes every year which would you have bought? I think a fair amount of people would have gone for Lucent which looked like a sure thing at the time.

    Back in 3/1997 I sold 500 shares of MO at a price 100.75. I don't think I'll ever stop beating myself up over terrible decision.

    I believe the main reason investors underperform is they overtrade. It took me a long time to learn that lesson but I finally got it. My EXC sale was the only sale I've made in the 4 plus years that I switched to a strictly dividend growth strategy.

    x
    Sep 6 03:30 PM | 2 Likes Like |Link to Comment
  • The Average Investor's Biggest Mistake [View article]
    Chris,

    Your example of Lucent spinoff from T made me curious so I went to longrundata.com and punched in the numbers for T back to 7/19/84(earliest I could go back) and the results were $1000 invested with dividends resulted in $28,346.77 through today. This is an 11.73% CAGR.

    It is my belief the buy and monitor approach generally begets trading,trimming or rebalancing whatever you want to call it. If the articles numbers are correct I feel this is what leads to the average investor having a 2.3% average annual return from 1993 through 2012 as opposed to stocks returning 8.2% during this period.

    To further illustrate suppose an investor had $5000 to invest 06/15/1970.

    $1000 invested in MO with dividends reinvested amounted in $4,339,000 for a CAGR of 20.83%

    $1000 invested in XOM amounted to $451,181 for a CAGR of 14.81%.

    $1000 invested in JNJ amounted to $267,743 for a CAGR of 13.46%.

    $1000 invested in Eastman Kodak amounts to 0.

    $1000 invested in GM 0.

    I could live with the 2 clunkers out of 5. I am long MO,JNJ,XOM and have no plans to sell.

    Where I disagree with B&H is he holds large amount of cash hoping for a 20% general market correction while I stay fully invested. While during a bear market my net worth can decrease substantially it will accelerate the rate of increase in my income which is what I am primarily interested in.

    That said I have to confess a couple of years ago I sold my position in EXC at a loss. About five minutes after that sale I bought MO with the proceeds so I could stay fully invested.

    In the end I guess I see merit in both arguments.
    Sep 6 10:51 AM | 5 Likes Like |Link to Comment
  • Is Altria Still A Super Income Stock? [View article]
    Hardog,

    "Sure comrade Putin rides his horse with those In tow."

    Maybe he wants to be the new Marlboro Man.
    Sep 5 03:22 PM | Likes Like |Link to Comment
  • Does Trend Following Work? [View article]
    ZK,

    When I looked at the trades made in the article some of them appeared to be short term trades and some long term trades for US tax purposes. Could you please explain what you are talking about since I don't have a clue.
    Sep 1 02:54 PM | Likes Like |Link to Comment
  • Does Trend Following Work? [View article]
    Harry,

    Thanks for the article.

    Do you have any idea how this might work out when taxes rear their ugly head? I think it would be fairly common for any long term gains to be taxed around 20% if you live in a taxable state and short term gains to be taxed around 35%. While tax losses can be carried over at the federal level I am not sure if most states allow losses to carry over from year to year. Governments want you to trade. Not for your financial well being but for theirs.

    When taxes and trading commissions are figured in I think most investors might have better luck going to a casino and betting on red.
    Sep 1 10:34 AM | Likes Like |Link to Comment
  • Is Altria Still A Super Income Stock? [View article]
    What happened to all the hate mongers of MO stock? I liked it better when they were around. They helped keep the stock price depressed.

    I guess they threw in the towel and bought MO.
    Aug 29 04:44 PM | 1 Like Like |Link to Comment
  • Why I Will Start Social Security At Age 62 [View article]
    AuCoaster

    I think your talking about the ARF(automatic reduction factor). If your still working at age 62 and decide to file for early retirement because you can receive some checks each month once you hit FRA(full retirement age) your benefit is increased for each month you did not receive a full retirement check.

    One of the main benefits of this is each year you will probably receive one partial check prior to reaching FRA. If your lucky your partial check will be close to your full benefit rate and is essentially free money to you. If your an hourly worker and have a good relationship with your employer you could probably plan it so your partial SS check would be very close to a full benefit check.

    I retired from SSA a few years ago and I assume it still works this way.
    Aug 26 04:37 PM | 4 Likes Like |Link to Comment
  • Why I Will Start Social Security At Age 62 [View article]
    Robert,

    Thanks for your article.

    My advice to anyone regarding SS is to first research the SSA website and then make an appt. to discuss your particular situation with a T2CR(t2 claims rep). Write down your questions beforehand such as how much you and your spouse will receive under different scenarios(life,death). Go into the office with your spouse and take information you have on any prior marriages. Tell them up front about any non covered govt. pensions either of you receive.

    Glancing through some of the comments on this thread I think I noticed at least 3 statements that were at least partially incorrect regarding benefit rates.

    I am a retired SS claims rep.

    From my personal perspective I would tend to take SS as early as possible. When I used to work I would generally get a couple applications a week from nursing homes applying to be a beneficiaries representative payee because they could not handle their own affairs. The break even statistics fail to take that into account. That money is generally paying for the nursing home. The beneficiary is not getting any enjoyment out of it. Keep in mind I was only one CR. Other CR's would also be receiving these payee applications.
    Aug 26 12:41 PM | 8 Likes Like |Link to Comment
  • How Do You Hold Cash When Realty Income Or AT&T Are Available? [View article]
    "Buffett also has a sizable cash stake right now,"

    I think we are talking about the money the publicly traded BH has. This is not W. Buffett's personal cash horde. If virtually all of Buffett's wealth is held in BH stock his personal cash would be essentially what he has in his personal checking account.

    If Buffett decides to put a pool in his backyard and wants to pay cash but does not have enough in his checking account he could sell some BH stock. He does not have the option of taking Berkshires corporate cash and using it as his personal piggy bank. In essence he has elected to stay fully invested through good times and bad with his personal money.
    Aug 13 02:11 PM | 3 Likes Like |Link to Comment
  • Why I Ignored My Own Advice And Bought Johnson & Johnson Sans Pullback [View article]
    Michael,

    Thanks for your article.

    I would argue the price you initially pay for a stock is extremely important.

    For example $1000 invested in JNJ on 6/15/70 results in a CAGR of 13.39% and $258,025 through the present.

    $1000 invested in JNJ on 6/15/73 results in a CAGR of 11.79% and $98,656 through the present.

    That said once you have made the decision to buy a stock such as JNJ it is important to reinvest dividends if in an IRA and not try to trade it thinking you are smarter than everyone else. If not in an IRA for tax simplification you could simply save up dividends and buy whatever stock seems to be a good value when you reach a target amount of cash.

    From my own research which would include reading comments from individuals on SA the ones who seem to be the most successful bought companies such as JNJ,MO,XOM,etc and held them for years.
    Aug 13 12:26 PM | 2 Likes Like |Link to Comment
  • Why I Ignored My Own Advice And Bought Johnson & Johnson Sans Pullback [View article]
    Michael,

    Thanks for your article.

    I would argue the price you initially pay for a stock is extremely important.

    For example $1000 invested in JNJ on 6/15/73 results in a CAGR of 13.39% and $258,025 through the present.

    $1000 invested in JNJ on 6/15/73 results in a CAGR of 11.79% and $98,656 through the present.

    That said once you have made the decision to buy a stock such as JNJ it is important to reinvest dividends if in an IRA and not try to trade it thinking you are smarter than everyone else. If not in an IRA for tax simplification you could simply save up dividends and buy whatever stock seems to be a good value when you reach a target amount of cash.

    From my own research which would include reading comments from individuals on SA the ones who seem to be the most successful bought companies such as JNJ,MO,XOM,etc and held them for years.
    Aug 13 12:20 PM | 1 Like Like |Link to Comment
  • New P&G product aims to kill off the dry cleaning business [View news story]
    "New P&G product aims to kill off the dry cleaning business"

    Since P&G has dry cleaning franchises I doubt they are trying to kill off the dry cleaning business.
    Aug 13 11:41 AM | 1 Like Like |Link to Comment
  • Think Strategically About Income During Market Volatility [View article]
    Adam,

    Thanks for your article.

    "I think an investor should always have at least a modicum of cash around to take advantage of attractive entry opportunities - especially when there is a "feel" that the markets are vulnerable."

    Could you please explain the above statement. I seem to read different articles and comments telling people they should always have cash for buying opportunities. If you spend the cash on a perceived opportunity that would leave you with no cash unless you sell something else so that you will always have cash.
    Aug 7 09:22 AM | 1 Like Like |Link to Comment
  • Dividend Yield Or Dividend Growth: My Experience With Both [View article]
    DGI,

    Thanks for your article.

    As a DGI I think I would have to take a pass on WMB. Looking at a long term chart on Yahoo finance I was not sure if it was a stock chart or a mountain stage in the Tour de France. I don't think I could handle the extreme volatility it has shown.
    Jul 31 01:43 PM | Likes Like |Link to Comment
  • The Day I Sold Everything: Questions Answered [View article]
    dar43054;

    " He has taken his chips and cashed them in. He has protected his profit."

    I would say maybe. Suppose the investor spent $10000 30 years ago to purchase stocks such as MO,JNJ,PG,MCD,etc. Assuming the stock or stocks are now worth $100000 and the now retired investor receives a dividend of 3.5% to meet his/her basic expenses.

    After the sale taxes of approximately 20% on the gain are paid leaving the investor $82000. The investor now has to take approximately $291 per month out of the $82000 to meet basic living expenses while he/she waits for these stocks to correct by 40% so they can be repurchased.

    Keep in mind all of these stocks have increased their dividend each year for well over 30 years. While a 40% correction or crash if you like can occur for these type of stocks it is not that common nor do I believe anyone can predict it with any certainty. I feel much more comfortable predicting these companies will continue to increase their dividend on a yearly basis than trying to guess when they will correct by 40%.

    I would argue the investor has actually put his/her financial well being in jeopardy by selling the stocks.

    I am long the above stocks.
    Jul 28 12:20 PM | 2 Likes Like |Link to Comment
COMMENTS STATS
158 Comments
268 Likes