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Archives for May 2016

Dividends are Back!

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Dividends are back. “The humble dividend is reclaiming its rightful place as the arbiter of stock-market value. In three of the four biggest developed markets, shares offer a higher yield than the longest-dated government bond, and in the fourth—the U.S.—the dividend yield beats even a 20-year bond,” writes James Mackintosh at The WSJ. But offering higher yields than the longest-dated government bonds is like jumping over a candle stick. “The low returns on the longest-dated bonds are extraordinary: 0.3% on Japan’s 40-year government bond, 0.9% on Germany’s 30-year bund, 2.1% on Britain’s … [Read more...]

These Stocks are Crushing the Competition

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For dividend focused investors, the last three years have been a tough row to hoe. From year-end 2012 through year-end 2015, the speculative NASDAQ took a big lead over the more conservative and more Prudent-Man-centric Dividend Achievers Index. This seemingly long run (3yrs does not make an investment cycle) for speculative shares encouraged many to jump ship for what were believed to be greener pastures. Investors who had neither the ability nor willingness to ride out the wicked downturns that accompany such speculative portfolios allowed greed and relative performance comparisons to drive … [Read more...]

Jobs, Inflation, Wages: Bad for Stocks

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European Parliament Rejects China’s Bid for Market Economy Status (WSJ) Global bank hackers strike again (CNN) Retail Slump Shows Amazon Effect (WSJ) Hong Kong GDP Tumbles At Fastest Pace Since Financial Crisis (ZeroHedge) Jobs, Inflation, Wages: Bad for Stocks (WSJ) OPEC sees rival oil production declining as markets rebalance (MarketWatch) Gas Firms Rally on Signs Glut Is Easing (WSJ) … [Read more...]

“We Are in the First Innings of a Washout in Hedge Funds”

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“There is no doubt that we are in the first innings of a washout in hedge funds,” said Dan Loeb of Third Point LLC in a quarterly letter dated April 26. $15 billion has been withdrawn from hedge funds in the first quarter and a lot more is headed that way. Why? The 2 and 20 game seems to have rubbed investors the wrong way—an arrangement where they collect a 2% management fee and 20% of the profits leaving you with the letters e, t, and s of your assets. Then you pay taxes. What’s the word on the street as this dreadful group gathers in Las Vegas for the SkyBridge Alternatives conference … [Read more...]

“It Makes a Great Deal of Sense to Own Gold”

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Gold is here to stay. Make sure you own some. As I’ve said in the past, I don’t worry too much about the short-term action of gold. And I don’t buy it to make money. I buy it to hedge against the unexpected. It’s an insurance policy for my portfolio if you will. Is there any insurance for a reckless Federal Reserve the world over? No one knows exactly how this race to the bottom by Central Banks will end. But it is clear that they don’t have much regard for maintaining the value of their currencies. “It makes a great deal of sense to own gold. Other investors may be finally starting to … [Read more...]

Worthy Reads: Gold Rally Just Starting

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What a China U-Turn Would Mean for Global Growth (WSJ) Singer: Gold Rally Just Starting (Bloomberg) Saudi Aramco Likely to Step Up Production (WSJ) Musk's Hyperloop vision races toward first public test (Money) Crop Prices Rally on Sign Glut Will Ease (WSJ) Carl Icahn Is Betting Big on a Stock Market Crash (Fortune) Luxury Condo Boom Is Ending in Manhattan (WSJ) … [Read more...]