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Bruce7b

Bruce7b
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  • Dollar Cost Averaging: When Not Playing The Game Can Make You A Winner [View article]
    No doubt that Investor A will win most of the time and is the best bet for most investors but your market timing comparison is contrived. A market timer won't buy once a month. He might buy once a year or wait until the market corrects. He might wait until there is blood in the streets. You notice how often Buffett talks about having $40 billion in cash and nothing to buy? You notice how Bob Rodriguez often has 40% cash in his mutual funds. Those market timers make it work. If you want to make the valid case that we small investors don't have the skills and knowledge to be market times I will agree with you but save us the artificial and pointless analysis.
    Feb 10 11:41 AM | 3 Likes Like |Link to Comment
  • CatchMark Timber Trust: The Newest Timber REIT [View article]
    Tom: Do you know if MWV has a controlling interest in CTT (now or after the conversion of the B shares)?. Many other writers on SA continue to use PE in analyzing the timber REITs and you point out this doesn't make a lot of sense. Do any of your articles provide a cash flow to price number for the 8 timber REITs? Would your cash flow number be equivalent to the FFO number used to value most other REITs?
    Feb 9 08:40 AM | Likes Like |Link to Comment
  • Pipeline Delay Kills, Benefits Railroads [View article]
    Traanscript--I think I agree with your point but there obviously aren't 62 Republican Senators. I could look it up but I think they have about 43. If they had 62 we wouldn't be having this discussion.
    Feb 8 07:22 PM | 1 Like Like |Link to Comment
  • Warning: This Bubble Is Hiding In Plain Sight [View article]
    Good points Bryan. John Bogle would love this article but he would make most of the same arguments against actively managed open end and closed end mutual funds. He is also generally against owning individual stocks. The increase in ETFs have come at the expense of open end funds (look at the fund withdrawals) and, I assume, individual ownership of stocks. There are scores (if not hundreds) of emerging market open end funds ( I own four of the Matthews funds). Every investment option has pros and cons. If people have niche ETFs they probably had niche open end funds. If they overtrade ETFs they probably overtraded stocks before that. So I own the Guggenheim Solar ETF--I am guessing that it is less risky than owning two or three solar stocks and I am no more likely to trade the ETF than I would the stocks. ETFs are popular because they are tax efficient and generally have lower expenses than closed and open end funds. And can be traded quickly--that can be a pro or con to be determined by each investor.
    Feb 8 12:16 PM | 1 Like Like |Link to Comment
  • Enerplus: The Blue Flame Of Marcellus Gas Is Heating Up The Stock [View article]
    Michael: The foreign tax credit doesn't max out at $300/600. At those levels it just requires using the 1116 form. At that point the amount refunded slowly is reduced from 100%. Someone above made it sound like the form is complicated but to me it pretty basic, especially compared to the K-1. Also, in some states (such as NC) you can also get a state foreign tax credit. Check your state since it is easy to miss--in NC it is referred to as "credit for income tax paid to another State or Country".
    Feb 8 08:18 AM | 1 Like Like |Link to Comment
  • Worried About This Market? Knock On Wood! Invest In A Secular Growth Story [View article]
    David; Could you tell us what "FPE" stands for? I am guessing forward PE but have never seen that abbreviation. And also, since the companies you talk about are REITs, why you don't use FFO to value them?
    Feb 7 10:34 AM | Likes Like |Link to Comment
  • What To Pay Attention To In Friday's Jobs Report [View article]
    Headline "print" and weak "print". Is there some purpose in that jargon? Are you an insider and proud of it?
    Feb 6 07:25 PM | Likes Like |Link to Comment
  • The Warren Buffett Argument Against Paying Dividends [View article]
    Giorgiolb: You are exactly right. I should have said something like "the vast majority of SA readers don't..." Thanks for the correction.

    If I was in the 15% tax bracket I would be a DGI. Like you say, that is a huge break that, unfortunately, most in those tax brackets are unaware of, or if aware of the law those folks generally are afraid to invest in stocks (that was my experience from doing volunteer taxes for 8 years for a mostly lower/middle class audience). Another example of Congress passing a law and just assuming the citizens will become aware of it and understand it.
    Jan 30 02:39 PM | 1 Like Like |Link to Comment
  • The Warren Buffett Argument Against Paying Dividends [View article]
    Your article has that "whistling past the graveyard" feel. Not sure if you are trying to convince yourself or other DGIs.

    Buffett has often said that he "LIKES dividend paying stocks but LOVES stocks that buy back their shares". You seem to have skipped over the buyback option in your article.

    But Buffett liking dividends doesn't mean you should. Corporations get a special break on dividend income that us small investors don't--provided to them by Congress to soften the triple taxes paid on dividend income if corporations turn around and issue a dividend themselves.

    And Buffett doesn't have a whole lot of choice in buying dividend paying stocks. He regularly moans about the very limited options he has to use his ever growing cash horde. Since most stocks come with dividends, if he eliminated them from consideration the universe would be that much smaller.

    Buffett has said in every annual report since 1970 that his first choice is to buy the total company, not stock. If he buys the total company there is no dividend received. Sees Candy does not pay a dividend--the earnings are directly a part of Berkshire (no double taxation).

    Berkshire bought Coke in 1988 when the dividend was less than one percent. He did not buy the stock for it's dividend. Based on Buffett's comment above, about loving share buybacks, I am guessing he would have preferred Coke to buyback more shares --especially at market bottoms.

    And yes, I will agree with all DGIs that share buybacks don't occur at the lowest price. Just live your dividend reinvestments don't occur at the lowest price.

    Yes, non dividend paying companies make bad acquisitions. So do dividend paying companies. But when dividend paying companies make acquisitions they are more likely to either issue stock or use leverage whereas a non dividend paying company can make use of its retained earnings.

    And Varan--there is at least one investor who opposes dividends (at least those from C-Corporations).
    Jan 30 02:00 PM | 3 Likes Like |Link to Comment
  • Why I'm Not A Passive Investor [View article]
    Kevin: I can't disagree with anything in your article but I think the reality is that the vast majority of investors (including me) don't and won't beat the indexes over the long haul. We might have a few good years and make a few good decisions that we fondly remember forever. When active investors discover that they can't beat the indexes, instead of conceding defeat and buying index funds, they find reasons to stick with the active approach--such as not paying attention to benchmarks--guess we can call that the "head in the sand" investing style. Others decide that getting monthly dividends is so valuable that they can ignore total return.
    Jan 17 11:57 AM | 2 Likes Like |Link to Comment
  • Berkshire Hathaway: Shooting Dead Fish In A Drained Barrel [View article]
    Christopher: Few comments on your assumptions. (1) If I am not mistaken, Berkshire has repurchased shares exactly once since Buffett took over the company in 1965--and that was in a private transaction last year. If buying the shares is like shooting fish in a barrel why hasn't Buffett bought shares in each of the major pullbacks? He has had excess cash many times. (2) if Berkshire trades at 25-30% discount why would they not be buying now instead of waiting? Are you assuming you can value the company more accurately then they can? (3) what is special about Berkshire other than Buffett and Munger? Without those two guys how is it any different than Markel (mkl)? If it sells for a 25% discount with those two why would the discount disappear when they depart?
    Jan 17 11:34 AM | 1 Like Like |Link to Comment
  • 2013 - My Toughest Year As A Money Manager [View article]
    William: One nit and one comment of more substance. The nit-- In 1999 Buffett had the luxury of not having to worry about "losing" shareholders. For ever seller there was a buyer of his stock. He doesn't run a hedge or mutual fund. Same number of shares outstanding after 1999 and my guess is very few of the A share owners switched. Of course the value of the shares might have dropped because of an inbalance between buyers and sellers and I think he has kicked himself for not buying back shares during that stretch.

    The second comment--there is a difference between being a contrarian/ value investor and believing that all stocks revert to a mean. Sometimes stocks and sectors go down for a reason and stay down. From 1880 well into the 1950s the commuter railroads were big dogs and they quickly disappeared forever--see Penn Central. You can look back over the last 100 years and find hundreds of similar examples. The world changed and continues to change. It looks to me that coal and gold are going the same way. Does Buffett or Grantham claim to own either?
    Dec 31 02:32 PM | Likes Like |Link to Comment
  • REIT Tax Loss Selling Creates Opportunity [View article]
    Rick: I am guessing that few, if any, funds sell to capture tax losses. Funds don't pay taxes. They pass the tax liability to their customers who would only benefit if they hold the investment in a taxable account. More importantly, funds are measured by their returns against their benchmark and being tax efficient will buy them nothing (or close to it). My other guess is that a large percent of REITs are held in IRAs where tax loss selling has no benefit so I wonder if there is any appreciable tax loss selling in REITs? But it does make for an entertaining article this time of year.
    Dec 29 09:03 AM | 3 Likes Like |Link to Comment
  • Can You Hear Me Now? If So, You Should Be Buying American Tower Corporation [View article]
    Barron's had an article last week on AMT and they were positive on the REIT. They did mention that AMT is currently not in the S&P 500 and when they are included that should help the stock price (forcing index funds to buy the stock). What neither Barron's or your article mentioned (at least I didn't see it) was the lack of a dividend. Many REIT investors buy for the dividend and until AMT initiates one they will lose out on those retail investors. That tells me AMT has no taxable income (much depreciation for all those towers). A little research might provide the author with a good guess on when the company is likely to issue that first dividend.
    Dec 29 08:47 AM | 1 Like Like |Link to Comment
  • ModernGraham Valuation Of Realty Income Corp. [View article]
    Marissa: I agree that FFO should be given some weight and that the use of PE in this article's analysis isn't real valuable . I was just trying to get one of the REIT writers to think a little more on the problems with FFO and most importantly how the investor should compare FFO with PE. Some seem to think (maybe without really thinking much about it) that it should be equivalent--a PE of 16 is equivalent to an FFO of 16. I think the FFO should be lower for the investment to be of equal value and have never seen any discussion of that on this (or any other) site.
    Dec 26 12:52 PM | 1 Like Like |Link to Comment
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