Tag Archives: GE

The Major Bubble That Nobody Is Talking About

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By Eric Parnell:

“Be fearful when others are greedy and greedy when others are fearful”

–Warren Buffett

A major bubble is currently inflating in investment markets. Yet nobody is talking about it. It’s not that the category in question isn’t getting any attention. To the contrary, it is being talked about at length nearly every day. But what is missing from the discussion is the fact that all of the signs of a massive bubble are now falling into place.

For the purpose of this article, I have taken a different approach with the analysis. Instead of introducing the investment that is showing signs of a bubble, I will be exploring the evidence first in order to avoid any behavioral biases associated with the specific investment in question.

While the bull market for this investment has been underway for nearly two years, it has only recently entered into a parabolic advance over the


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

Top Stories
In its quest for cool, Yahoo nabs Tumblr. Yahoo’s (YHOO) board approved the $1.1B acquisition of popular blogging service Tumblr Sunday, the latest step in Marissa Mayer’s quest to give the internet heavyweight a much-needed makeover. AllThingsD notes the deal is indicative of Mayer’s strategy to increase YHOO’s “cool factor” and relevancy with younger audiences. Tumblr, whose founder/CEO David Karp will reportedly stay at YHOO for the foreseeable future, also comes with a treasure trove of user-generated content, something YHOO covets. As for comparisons between Tumblr and YHOO’s ill-fated 1999 acquisition of Geocities, Forbes notes Geocities faltered in part because a flood of ads drove users away; Tumblr seems to be avoiding that pitfall.

Actavis in $8.5B deal for Warner Chilcott. Actavis (ACT) confirmed it will buy Warner Chilcott (WCRX) for $8.5B in a stock for stock transaction Monday morning. The deal will see WCRX


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What If Long-Term Dividend Investors Buy Before A Crash?

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author name submits:

One of the funny paradoxes of long-term dividend investing is this: as soon as you make your stock purchase in a company that you plan to hold for a significant chunk of your investing lifetime (we’re talking an investment horizon of decades here), it can often be in your financial interest to “root” for lower stock prices the moment you make your purchase. At the surface, this may seem annoying because you will see a stock that you just purchased for $100 fall to $80 and think, “Dang, I wish I could buy it now.”

But nevertheless, rooting for lower stock prices may be in your long-term financial interest considering that 317 S&P 500 companies are currently buying back shares, and lower buyback prices mean higher earnings per share growth and freed up capital to increase the dividend. And if you choose to reinvest your dividends back into the company


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The Case For A 100% Dividend Stock Portfolio

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author name submits:

This post is aimed at investors who are not at all bothered by volatility and make investments based solely on the long-term earnings power (and dividend potential) of the companies they select. If the thought of experiencing price declines of 30%, 40% or 50% would cause you to abandon the strategy, then I will be the first to say that the construction of a 100% dividend portfolio is not for you, and would possibly erase years and years of hard work and savings if you tried to implement it.

However, if you do make decisions based solely on earnings power, it is possible that you may consider a portfolio that consists exclusively of high-quality companies that pay dividends to shareholders, and have strong records of increasing their payouts to shareholders by growing profits at satisfactory risk-adjusted rates over almost all five-year rolling periods.

A large part of the reason why


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Escape Strategies For When The Stock Market Starts To Burn

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By Eric Parnell:

It was one of the most infamous building fires in U.S. history. The date was November 28, 1942. The place was the Cocoanut Grove, arguably the finest nightclub in all of New England. Up until that fateful day, The Grove was the place to be seen and was frequented by sport stars, celebrities and power elites. It was also, however, a place with dubious ties and there was a tragic accident just waiting to happen. And so it did on the Saturday after Thanksgiving in 1942 when a fire rapidly engulfed the establishment in just 15 minutes, killing 492 guests and severely injuring another 166. The Cocoanut Grove fire resulted in important changes in building code fire safety as well as advancements in the treatment of burn victims. And over 70 years on, it also provides some important lessons about the strategies that should accompany investing in the stock market


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Key Signals To Watch For A Major Stock Market Top

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By Eric Parnell:

It is a question that is on the minds of many investors today. They are watching the stock market relentlessly rising nearly every single trading day, with even the smallest of dips being bought in pushing the stock market to new highs. Yet they stand back and look at the fundamental data and see a complete disconnect between the direction of stock prices and the underlying economic reality. And believing that the rally is being completely fueled by the flood of monetary liquidity that continues to flow into the markets, they remain convinced that this will all end badly just as it has a few times before since the start of the new millennium. But this leads to the key question – exactly when will the market finally reach a major market top and plunge into a sharp correction? Fortunately, the recent past has provided us with some key signposts


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Dividend Growth Investors – Prepare For The Correction

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ByCranky:

There have been many fine articles on how dividend growth companies (and portfolios) fared in the Great Recession. There is tons of statistical analysis to consider. And many articles paint a rosy picture, as there were many great dividend aristocrats (companies that had raised their dividend for 25 straight years and counting) that held up very well and even increased their dividends from 2007 through 2009.

But while many dividend growth companies breezed through the recession, there were many more that provided a challenge to investors. And what will separate those who succeed and those who fail will be how they react to the stress of the stock picks that don’t quite work out.

The Great Recession delivered the greatest period of dividend cuts and suspensions in over 50 years. In all of 2008, there were 61 cuts by S&P 500 companies totaling $40.6 billion in lost dividend income. From


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Team Alpha Retirement Portfolio: Impressive Returns Plus Impressive Dividend Hikes

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By Regarded Solutions:

This month’s update for the Team Alpha Retirement Portfolio is unique. Not because the month was wonderful, actually the gains were minor, but because for the month of April, we made no major changes to the portfolio aside from swapping PFF for WFC. When all was said and done, the portfolio continues to show impressive gains.

The Team Alpha portfolio consists of Ford (F) Chevron (CVX) Apple (AAPL), McDonald’s (MCD), Exxon Mobil (XOM), Johnson & Johnson (JNJ), AT&T (T), General Electric (GE), BlackRock Kelso Capital (BKCC), KKR Financial (KFN), Procter & Gamble (PG), CSX Corp. (CSX), Realty Income (O), Coca-Cola (KO), Annaly Capital (NLY), Cisco (CSCO), Bristol-Myers Squibb (BMY), Healthcare Select Sector SPDR (XLV), and Wells Fargo (WFC).

I wrote this article, in which I stated that there are


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