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curreyr

curreyr
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  • Dividends Matter If They Matter To You [View article]
    retailinvestor,
    My interpretation of the academic research is that indeed "growth needs funding". I also see research that indicates a point which excess retained funds fail to fuel growth, and hence the BOD _should_ be returning that excess to shareholders.
    This isn't an incongruity.
    Aug 16, 2014. 05:42 PM | 1 Like Like |Link to Comment
  • Dividends Matter If They Matter To You [View article]
    Miguel,
    A short anecdote.
    In the late 90's I was working for a small, yet public, software company that, like others, boomed. I sold 1/2 of my options at roughly $20. The stock continued to climb to about $30. My co-workers derided me for the 'loss' I took for my early sell. Within a month, the stock was at $6 (roughly strike price).

    My co-workers had just seen their 'unrealized return' fall 100%, yet I managed to have a 'realized return'.

    Luck/timing to be sure, but a lesson I learned about the difference between unrealized and realized returns.
    Aug 16, 2014. 05:13 PM | 5 Likes Like |Link to Comment
  • Build A 'Whatever Happens' Portfolio... Now [View article]
    "The earnings for those two companies (or Procter & Gamble (NYSE:PG) or Pfizer (NYSE:PFE) or Duke Power (NYSE:DUK), et al) might continue unabated, but if their P/E falls by half, their stock still falls by half. Are you willing to accept a 50% drop in the value of your portfolio in a correction, smug in the knowledge that you switched to "defensive" stocks?"

    If the earnings continue unabated yet the price is cut in half, I want to BUY!
    That is what makes them defensive stocks.

    The 'price' of a portfolio is not the same as the 'value' of a portfolio.

    Looking solely at P/E (or any metric with price involved) is myopic when it comes to value.
    Aug 16, 2014. 04:55 PM | 2 Likes Like |Link to Comment
  • Why Active Managers Underperform [View article]
    One aspect you fail to mention is the 'herd' effect that active fund managers must endure. (I would posit that so called 'passive' funds suffer the same effects).

    When the herd is exuberant, the fund inflows require buying. This is likely to be at overvalued levels.

    When the herd is running in fear, the fund outflows require selling. This is likely to be at undervalued levels.

    And as mentioned, the cash for liquidity, in order to minimize the herd effect, is a constant drag and rarely enough when panic or euphoria strike.

    I expect we'll see a continued rally for the next 6 months. The reasoning being that some of the herd, that's been on the sidelines, will now see 5 year numbers that don't include the Great Recession. Their sideline cash will result in inflows that cause a buying frenzy. To some extent this is, I believe, already occurring. I also expect the following panic of outflows.

    Good luck being a fund manager.
    Aug 16, 2014. 04:25 PM | 5 Likes Like |Link to Comment
  • Kinder Morgan: Mega Merger Enhances Dividend Growth Story [View article]
    The recapture, offset by passive losses, won't be offset by carry-forward capital losses. That will be taxable as ordinary income, and if in an IRA will have to paid _from_ the IRA.

    CPA's will earn their money this year.
    Aug 15, 2014. 03:52 PM | 1 Like Like |Link to Comment
  • Kinder Morgan: Mega Merger Enhances Dividend Growth Story [View article]
    David stein,

    The ordinary income component of the 2014 k-1 may just bump you a bracket. Remember SS becomes taxable after a certain point
    Aug 11, 2014. 08:00 PM | 1 Like Like |Link to Comment
  • Dividend Growth Investors: Do They Have A Point Or Is It Too Close To Call? [View article]
    MathRulz,

    Don't dismiss so easily. The 'don't exist' argument should be stated as 'don't exist in the same form'. M/A, spinofs, etc make the effort very difficult. Also the '7 tossoffs' were a necessity due to lack of historical data.

    Is it perfect? No. Is it subject to criticism? Sure. Should it be completely dismissed? No!
    Jun 13, 2014. 05:24 PM | Likes Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    Dale,

    My understanding of bucketing is that positive equity returns flow into fixed income (e.g. a bond ladder), fixed income then flows into the cash bucket, and cash is withdrawn for expenses. The fixed portion most likely not a fund either, but instead a ladder of differing maturities.

    The point being that fixed income is replenished from positive equity returns and drawn from during periods equities are in duress. The cash portion is used to smooth the results for extended bear/bull runs (e.g. 2-3 years of expenses).
    Jun 11, 2014. 11:40 AM | 4 Likes Like |Link to Comment
  • Dividend Growth Investors: Do They Have A Point Or Is It Too Close To Call? [View article]
    Fair enough.

    IMO, the DGR is a reflection of a well run companies expected sustainable earnings growth rate. Y/Y earnings can fluctuate, but a well run DG company is likely to smooth that and become observable in their 1/3/5/10 DGR.

    The other aspect is that stock price typically fluctuates around actual and/or expected earnings. So, the history of the DGR, which I consider an insight to the actual companies history and expectations, isn't a bad gauge for price valuation.

    None of this is the extent of my DD, but also not as simplistic as 'pick the top 10 DGR off a list'
    Jun 10, 2014. 06:10 PM | 3 Likes Like |Link to Comment
  • Dividend Growth Investors: Do They Have A Point Or Is It Too Close To Call? [View article]
    Varan,

    "http://bit.ly/Y7VezG

    On the basis of total returns since the inception of the respective portfolios, this strategy beats all of the DG portfolios on SA hands down, and requires only a few hours of work at the beginning of the year. "

    I might be dense, but isn't that a DG portfolio. It appears to simply be champions filtered for the top 10 highest 5 year DGR.

    FWIW, the CCC list is archived back to ~2006 so you could remove some of the survivor bias if you choose.
    Jun 10, 2014. 04:46 PM | 1 Like Like |Link to Comment
  • The All-Aristocrat Team: Dividend Stocks You Can Trust In An Uncertain Market (Part 5) [View article]
    "whichever CPI is used, that index understates the price increases which we all see every day in the supermarkets, in the stores, on the streets, and in the press."

    Every specific individual has a different 'rate of inflation'. For example: The decline in natural gas prices reduced costs for many, but not for me; The effect of gasoline price increases impacts me to a lessor degree than others; etc.

    The biggest issue I have with the SS-COLA is that it's using CPI-W instead of CPI-E. Take a look at http://1.usa.gov/ZfJ4CF
    Jun 10, 2014. 03:36 PM | Likes Like |Link to Comment
  • The All-Aristocrat Team: Dividend Stocks You Can Trust In An Uncertain Market (Part 5) [View article]
    "The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics."

    That's what I said. The COLA is based from CPI-W which does include food and fuel. The detailed tables can be referenced here: http://1.usa.gov/1oIOdCO (includes both the CPI-U and CPI-W tables)

    Yes, the BLS does produce other indices of which some exclude food and fuel, but the SS COLA isn't based on those.
    Jun 10, 2014. 11:04 AM | 1 Like Like |Link to Comment
  • Dividend Growth Investors: Do They Have A Point Or Is It Too Close To Call? [View article]
    chowder,

    That's my 'benchmark' ...

    My yield is a bit lower, growth a bit higher, beta a bit higher.

    Last year, and preceding years of this bull, are difficult to weigh for 'long term'.

    The test will be when we have a 'pullback' or multi-year bear market.
    I suspect the yield will skyrocket (same divs lower price), growth decline (~CPI or perhaps lower), beta increase (portfolio vs. market).
    Jun 9, 2014. 03:52 PM | Likes Like |Link to Comment
  • Dividend Growth Investors: Do They Have A Point Or Is It Too Close To Call? [View article]
    Lowell,
    "Assume one has a goal of generating 3% (or some other percentage) income from a portfolio. What does it matter whether or not that yield comes from index instruments or individual stocks?"

    I measure income in dollars not percentages. The reason for this is that the percentage is based upon the "price" of the portfolio.

    As to benchmarking, the 'return/volatility' I'm interested in is in regard to the dollars received year over year.
    In particular this is a function of the dollars paid and the rate that has increased relative to inflation.
    If there is data presenting that information for 'funds' in general, I'd be interested in seeing that for a benchmark.
    Jun 9, 2014. 02:11 PM | 2 Likes Like |Link to Comment
  • The All-Aristocrat Team: Dividend Stocks You Can Trust In An Uncertain Market (Part 5) [View article]
    "2-3% income from a stock is not income. Its barely meeting Inflation trends."
    The 2-3% is the income but it also has a growth rate (see the CAGR's presented above) that has been well in excess of inflation for the 5 presented.

    "Lets Remember that the Gov't's COLA Numbers exclude, Food, Fuel and other daily essentials in their calculations."
    The COLA (for SS) is based upon the CPI-W which does include food, fuel, and essentials (see http://1.usa.gov/1oNFRYH).
    Jun 9, 2014. 01:56 PM | 3 Likes Like |Link to Comment
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