Seeking Alpha


Send Message
View as an RSS Feed
View Bruce7b's Comments BY TICKER:

Latest  |  Highest rated
  • Investment Strategies For Enhancing Required Minimum Distributions From An IRA [View article]
    Brian: You mentioned up front that you have other sources of income and I am guessing that includes taxable investments. I am thinking that most SA readers will also have taxable investments as they near RMD time. It would seem the first thing you might want to do is look at the tax impact/return of the whole portfolio and not look at the IRA in a vacuum. Second thing I would do (am doing) is think about my marginal tax rate now and what will happen when RMDs add to taxable income (and for many Social Security will also boost taxable income in that same time frame). Let's assume you are currently in the 25% Fed rate but will go to 30% Fed rate--if you put your qualified dividend and capital gain investments in your taxable account you will pay 15% tax on those dividends--if you place them in your conventional IRA you have converted that tax to 30%. Do you really want to do that? The only real benefit of a conventional IRA is to defer taxes--putting qualified dividend stocks in an IRA does defer taxes but it also increases them. If you put foreign dividend paying stocks in an IRA it will be even worse--you will pay the foreign tax on those dividends (and in most cases not get a credit) and then you will have converted a 15% tax to a 30% tax.

    If you look at the entire portfolio you will probably place the highest taxed items in your IRA--taxable bonds, REITS, BDCs, royalty trusts and the lowest taxed items in your taxable account--munis, qualified dividend stocks, long term capital gain stocks.

    Also be aware that at the time of death your IRA tax liability will pass on to the beneficiary whereas for most (except the super rich who pay an estate tax) the unrealized long term capital gains tax will disappear--a crazy gift from Uncle.
    Aug 27, 2015. 12:40 PM | 1 Like Like |Link to Comment
  • My Favorite Ratios - Part 1 [View article]
    Mepat1111: I don't disagree with most of what you are saying. I guess it comes down to what one of our recent Presidents might have said. "What is the meaning of cash"? The article wasn't dealing with the benefits of share buy backs. It was making the case that share buy backs provide cash to shareholders. Your comment says nothing of cash. When you get a dividend you get cash. You might choose to reinvest that cash but that is your choice. If you want cash to spend in retirement you have it with dividends-that is the reason this site is overflowing with dividend growth investors. Where is the cash from share repurchases? As I mentioned, it goes to ex shareholders. None of it goes to the shareholder who retains his shares. Maybe I am being too literal in reading the authors view of cash--if so let him make that point instead of paraphrasing some unknown comment of Warren Buffett who in 50 years has only repurchased shares twice at Berkshire Hathaway. As to your statement that buying back shares "benefiting remaining shareholders"--apply that theory to IBM over the last three years--would shareholders have not been better off with real cash from dividends instead of buy backs at falling stock price? I will summarize my point--share buy backs might or might not be beneficial to the shareholder but they are never a return of cash to shareholders.
    Aug 15, 2015. 12:43 PM | Likes Like |Link to Comment
  • My Favorite Ratios - Part 1 [View article]
    Douglas: I am always surprised to hear CFAs talking about share buybacks and how they "return money to shareholders". Think about it--in most cases the cash is going to ex shareholders. If the stock is being purchased in the open market the ex shareholder doesn't even know the company is buying the shares. And he doesn't care. He gets the same amount of cash regardless of who buys the shares. You might be able to make a case that share buybacks are a good use of company cash (which depends on the price and other uses for the cash) and you can even make the case that share buybacks are more tax efficient than dividends (only true if the stock is held in a taxable account) and you might stretch things to say the ex shareholder might get just a slightly better price based on the increased demand for stock resulting from the buybacks. But the cash is not going to the shareholders!
    Aug 11, 2015. 11:53 AM | 2 Likes Like |Link to Comment
  • How To Build An Early Retirement, Tax-Free Income Portfolio With Closed-End Funds [View article]
    Not clear (to me) if you think this approach avoids state income taxes. Many states (maybe most) tax qualified dividends and long term capital gains as general income and will tax it. Doesn't matter if you are in the 15% marginal tax rate. But maybe you are saying you live outside the country and file no state return?
    Aug 4, 2015. 02:24 PM | 1 Like Like |Link to Comment
  • Whole Foods Market increases focus on value brand [View news story]
    Tricky: You're right that they don't have as extensive a line as many grocery stores--and far less than Walmart super. But they never did and that was never their goal. And their customers knew that the minute they walked in the store for the first time. Nor does Costco, Trader Joe's, Fresh Market and many others including every food coop in the country (and most of the Whole Foods have a larger range of products than any of those). A lot of people focus on the organic nature but I always thought of them as more of a gourmet outlet, with a focus on organic. If you want to see high prices go into the typical food coop. Go into Whole Foods at lunch and you will see a huge crowd buying salad bar, pizza by the slice, sushi, etc and I'm not sure organic has anything to do with those customers being there. Don't know Wegmans or HEB (seems like I went into one in San Antonio long ago and was impressed with their wine selection)--but competition is good--it drives the A&Ps of the world out of business and forces the Whole Foods to improve and adapt--I think the 365 is part of that process.
    Aug 2, 2015. 11:52 AM | Likes Like |Link to Comment
  • Whole Foods Market increases focus on value brand [View news story]
    Funny--all these comments and nary a comment about the 365 line of products. I assume that will be the backbone of the new concept. I mostly avoid generics but have found the 365 products as good or better than most name brands and at a lesser cost. They also seem to do well in product reviews in Consumer Reports and Cooks Illustrated. A lot of moaning about the prices at Whole Foods--check out the 365 line. I think it is a concept that might work and if it does it will result in adding more 365 products to their regular stores--great economies of scale and maybe margin expansion. Costco has been doing a lot or replacing name brands with their Kirkland brand with mixed results (to my taste buds). I think there is a lot of psychology in how each of us select our favorite grocery store/restaurant/wines... IS no accounting for taste. But as investors I think we need to do more than assume the rest of the world has tastes similar to our own.
    Aug 2, 2015. 10:15 AM | 2 Likes Like |Link to Comment
  • It's Not Rocket Science: STAG Is Now Grossly Mispriced [View article]
    gstromb: Good idea and if the analyst can't be grilled it would seem that someone reading this article must know what that one analyst said in his sell report. Sell ratings are rare (and often dangerous for the analyst to make) so wouldn't it be valuable to know what he said?
    Jul 29, 2015. 10:55 AM | 6 Likes Like |Link to Comment
  • Unlikely Break Up Of Eurozone - One Crucial But Ignored Reason [View article]
    Marion: Even though there is some redistribution of taxes (and borrowings) among U.S. states, such as the location of military bases (think Georgia) and Federal employees (think Virginia and Maryland) and Social Security checks (think Florida) that still doesn't do away with all the problems that U.S. states (and territories) can get themselves into and need to get out of. U.S. states make most of their own decisions on things like state employee pensions, levels of taxation, teacher tenure, minimum wage laws, etc. So you see Puerto Rico, Illinois and California (just to name a few) with major financial problems in recent years that they need to fix--how different is the Illinois budget problems with that of Greece? Can Illinois devalue their currency? So I don't think it is "economically impossible" for the Euro to work--it just requires that countries live at a level that matches their level of production. My guess is that the pensions of Alabama government employees are a lot less generous than those of Oregon (and the cost of living is less to match it) . Not to say that it wouldn't work better if the Euro union developed some additional income redistribution along the lines used in the U.S.--and I think they are moving in that direction--it will just take time and maybe they don't have that time. My guess is Germans would be far more willing to accept some income redistribution among Euro countries, as compared to constantly being asked for more loans and loan haircuts.
    Jul 26, 2015. 11:44 AM | 1 Like Like |Link to Comment
  • Amerco: The Security I Like Best [View article]
    Francisco: Do you know anything about the litigation accrual you mention?
    Jul 21, 2015. 06:14 PM | Likes Like |Link to Comment
  • No Growth, No Profit, No Problem [View article]
    Wolf: I always thought it would be great for SA to require all authors to answer the basic question when submitting an article--do you think the markets are efficient? Stock market. Bond Market. If the answer is no, then why do so few mutual fund/pension fund/hedge fund mangers outperform? If the answer is yes then what is the point of your article?
    Jul 20, 2015. 06:56 PM | 3 Likes Like |Link to Comment
  • Reflections On The Greek Tragedy [View article]
    Steven: I was making no case that Greece should stay in the Euro. My comment related to Bob's statement that a new currency and devaluation would solve their problems (or at least improve things). Based on their history, I don't think it will. Sometimes there are no good choices--staying or leaving the Euro might be equally bad if they don't make the tough decisions that they have avoided for the last 70 years. They seem to have a political/economic system stuck half way between communism and capitalism.
    Jul 19, 2015. 01:42 PM | 1 Like Like |Link to Comment
  • Reflections On The Greek Tragedy [View article]
    Bob: I see many articles like yours that concludes with "Greece desperately needs a currency it can devalue". They had a currency they could devalue, for the 150 years before they joined the Euro --did it solve their problems? Obviously not or they wouldn't have joined the Euro in the first place. After reading scores of these articles over the last six months (but never having spent 16 days in Greece!) it seems obvious they have structural flaws that won't be remedied by a new currency--corruption across the board and a people who don't want to pay their taxes, just to name a few. Like Argentina and Venezuela they have been eating that free lunch and the bill is finally coming due (of course we could say the same about the U.S. who hasn't run a trade surplus in 50 years and has run up sovereign debt of $18 trillion--talk about free lunches).
    Jul 19, 2015. 07:29 AM | 7 Likes Like |Link to Comment
  • A Pre-Earnings Look At Gilead Sciences [View article]
    I have wondered whether companies can buy back shares based on insider information. You seem to have no doubt that they are doing that. No "quiet period" for share buybacks?
    Jul 14, 2015. 07:46 PM | Likes Like |Link to Comment
  • Tax Efficient Large-Cap Portfolio Management System With Minimum Volatility Stocks Of The S&P 500 [View article]
    George: Your idea of tax efficiency is maybe unique. Paying a long term capital gain tax after holding the stock for 13 months is efficient only compared to a short term capital gains. And selling some 20% and paying a short term capital gain is just short of suicidal. If you want to be a market timer put them in your IRA and ignore the time period.
    Jun 29, 2015. 04:34 PM | Likes Like |Link to Comment
  • Ignore The 'Buffett Indicator' [View article]
    Todd: I have seen many articles and discussions on this topic over the years and your #2 comment is the first time I have seen any mention of the obvious flaw in the Indicator. Production of S&P 500 companies overseas are excluded from our GDP (but the profit is included as you say) and production of foreign corporations (non S&P 500 companies) that occurs in this country is included in our GDP but the profits are not included in the equation. My guess is that the information is available from the Federal Reserve or Commerce Dept and could be incorporated into an adjusted indicator. Since Buffett has to understand this issue at least as well as we do, maybe the Indicator is using adjusted numbers and all that is missing is a better explanation of the indicator.
    Jun 18, 2015. 11:08 AM | Likes Like |Link to Comment