What happens with dividend stocks that makes them "somewhat" safe -- is that their share price gets supported on the way down -- by the rising percentage of dividend payout.

AT&T (T) pays 5.08% dividend at this mornings per share price... It doesn't take much of a dip in the share price and it's suddenly paying 6%.... That's where you get the downside protection. And even better --- is that you don't need to sell when they're down to earn a return on your investment. Which is why they (dividend payers) become better holdings during market downturns.

WHAT DOES HAPPEN though is that interest rates COMPETE for dollars when the rates are rising... money flows from "other" interest rate paying investments and flow to where there is equal safety with equal or better rates. The problem with attempting to follow this money trail by selling one asset class to buy the "new" asset class is that individual investors are never ahead of the curve. They will sell at the wrong time every time. That's a game better left for the big boys with armies of economists and accountants on their team. They figure it down to the last 1/4% on a daily basis. That's why we just have to become INVESTORS...

That doesn't mean that if interest rates on Muni Bonds etc start to look like they're headed to 6 or 7% TAX FREE --- that I wouldn't lighten my stock portfolio and add some Munis. But you don't do that in your 401K or IRA or ROTH....

Any CFA's in the house?

Weld, I'm sure you know of a few but maybe they are not on latg.

jason

I don't use any "professional" investment advisors except for Muni Bond investing.

I just don't think they're any smarter than I am... and if it involves THEM making money on my money -- then their interests are ahead of mine.

grrrr, kind of wishing my MCD stocks were in a different account today. They are some what "locked in" sitting in my Roth IRA. If they were in my simple brokerage account I'd snatch up a few shares right now. Looking at my cost basis over the last couple years of owning the stock, the current share price is lower than every cost entry except one maybe two entries. Would be a good time to buy right now I say.

I bailed on McDonalds (MCD) - as documented in this thread - and while we are not discussing particular stocks or what to buy... this name can be used as an example of "Fundamental change". What's that? That's a business that is experiencing sales declines or profit shrinkage or declines -- BECAUSE -- Because their business is positioned wrong. I think that is where MCD is right now. I say this because Chipotle Mexican Grill (CMG) just reported 17% sales INCREASE and a profit margin increase - vs - MCD reporting (now for a number of quarters in a row) another sales decline and weaker profit margins. These are both fast food retailers. One is growing - one is shrinking... I don't want to own companies that are shrinking. That's not to say they can't change and or react to market forces... but so far they don't seem to be able to find that magic bullet. There are better dividend payers if you just want to be paid to wait - and I want dividend AND growth (total return). This name doesn't seem to be in the mode to deliver that.... so that means those employees (you investment equals one employee per dollar invested) seem to be on vacation. I don't pay employees to be on vacation.... which means they need to be retrained (sold and buy something better).

Each investment is up to the individual... and I'm not saying anyone should buy sell or hold.... it's just a "way to look at an investment".

MCD is right back down to where my cost basis is with my current holdings...might have to think about picking some more up myself.

I think American's are finally waking up to the fact that what you eat matters. Chipolte is a solid business model pushing hot buttons with where they source their components.

I think this is right on about where things are going. I'm a big organic food, healthy eating kind of person and have been for a long time. Up until recently I would talk about it and people would look at me like I was nuts. Not so anymore,
tons of people are now waking up to what their food contains and so on. I asked a 22 yr old kid at work today if he or his buddies ever went to McD's. He said, "not really, we don't really eat fast food like that".

I go to Chipotle a lot and there's almost always a line to the door and they put up a sign when any of their ingredients had to be sourced from "conventional" suppliers.

I agree with you guys to a large extent. I do think people are starting to care more about where they eat. What I do worry about when it comes to places like Chipotle is the price. It's expensive to eat there. Is it more of a new fad versus a fundamental change in eating habits? I wonder if they can keep the people coming in the door in the long run. Chic-fil-a seems to be able to and they are fast food. Quality fast food but fast food all the same. Time will tell that's for sure.

Thanks

100% agree with you here Todd!



RE: Chipotle Mexican Grill and similar stocks that are "priced for perfection" or have HUGE P/E Ratios they MUST grow in to... Just look at Amazon (AMZN) today. This is why - as much as I'd like to - I don't own them. You absolutely get murdered IF -- always the big IF - ANYTHING happens along the way that the street doesn't like. Instantly taken to the woodshed!!

Once in awhile I'll bite on a "big / fast growth" name.... I'll do this is tiny way (relatively) and I'll flip it if I get lucky... sometimes I win - sometimes I loose. I don't mention that stuff here because it's not pertinent to THIS thread. So I'm not against growth stocks and in fact think that you young guy SHOULD own them - because even if they hiccup - if the fundamentals are there - then long term the growth "should be" too. But in the meantime it can be ugly.... so you have to have the guts AND conviction to hold this stuff and or average down (what I'd be doing this AM if I owned Amazon). Just look at NetFlix (NFLIX) when the CEO did a major faux pas... if you were smart enough (do ya feel luck, punk?) to buy that one... I wasn't - but a friend that's on their board did... and he's absolutely killed it!

Sounds like I really need to move into your shop, so i can use your tools and then you can advise me on stocks while I live there. sound good? I will agree with you though you have to be in it to win it with stocks, sort of like a marriage.

Sounds like I really need to move into your shop, so i can use your tools and then you can advise me on stocks while I live there. sound good? I will agree with you though you have to be in it to win it with stocks, sort of like a marriage.

I read this article with a much different perspective than I would have had just a short while ago...

http://seekingalpha.com/article/2343...erything?ifp=0

Thanks to Investing 102...

It's a good article and I like the honesty of it. WE ALL HAVE DOUBTS and we all sometime worry about whether or not what we're doing is right. Here's where I personally sit. Everyone needs to take a longer term perspective. This is why I preach DIVIDENDS and being paid to wait - as long as you're in the best of the best. Because if you're reinvesting those dividends -- then they'll be buying more shares when the market does take a dive. That's EXACTLY WHAT YOU WANT. More share paying dividends buying more shares.... that's the power of compounding.


If Warren Buffet sold his Coke (KO) shares every time he was worried about this or that --- then he wouldn't be getting that dividend that is now larger or equal to what his original investment was.

Everything goes up and down -- the key is what your reaction is to that. Nature has us buying when prices and things are high - and we sell when they're low... the key to the whole investing thing is to stop doing that --- and buy when things SUCK.

The problem is -- we never know when those things are going to occur. I've learned over time - to just let the great law of averages make me a winner - and the law of market averages tells me that over the LONG RUN I'll be fine. In the meantime I spend my dividends and I don't worry much about what the market is going to or not going to do 'cause I've never been able to figure it out.

I never thought once about the market as I watched a GTR run 237MPH or a Bugatti run 246 today.... 'cause I know I'll get my dividends whenever they're paid.

You Twitter (TWTR) holders will be happy campers this morning....


A good example for 102 -- Twitters (TWTR) metrics were better than "expected" so the stock will get a nice boost.... but Amazon (AMZN) got shot in the head because of a lack of profit...

My point is - that for me personally.... I can't own this kind of stuff because I don't like waking up to a 30 point drop in a name, even when it's fun as hell to wake up with a 10 point gain. And if I do own them - they're very very fractional stakes. I might buy 1000 shares of something like this - when a normal position in my accounts is 20,000 to 40,000 shares. Tiny positions. That way I can 'enjoy' a nice gain (if I owned TWTR I'd wake up to a nice 9 to 10K dollar gain this morning)... but I don't get whacked with a big haircut that affects my retirement when they drop like rocks.

It's taken me a long time - but I've learned to watch from the sidelines... and not be upset with myself when some other lucky bastard scores big. My dividends just keep plugging along and keep Gwen and I near the style we'd like to live for a long time. You YOUNGER GUYS should be taking some risk with some of these names... just don't get crazy betting the farm on them.

Just checking in to say hello...I still follow this thread religiously! I will try to post more and earn my keep.

Due to dividend growth alone, I am earning $75 MORE per quarter now than at the beginning of the year. Gotta love it!

Money for nothing and your chicks for free! Gotta love that Steven!

Remember what I've been saying about interest rates! The economy will take a real hit if we see a sudden spike up in rates. We are at a crossroads here where the economy is okay/decent which should support stocks --- but the FED can kill that party real quickly if they lose control of the rates.

Watching closely. Saw the news last night....and I started thinking of a few thing, ie. time to buy, why dropped so big, things like that. First time I can remember hearing news of the stock market, and me thinking about it.

On a side note, over the last year to year and a half, we have cut our credit debt in half, and pay things in cash now. What credit we have is no interest for another year. Hope to be completely payed of by April next year. I am dying to make changes to the car, but this thread has taught me not until the cards are payed off, and you can pay cash.

Thanks

I've got an itchy finger on the buy trigger myself.

Good job and good luck, Mike. It'll feel great being out of debt.

Nice headline if you own this name.... I'd still prefer Wells Fargo (WFC) over it but that's beside the point... if you own BAC you just got a nice raise. It's the yield that kills it for me.



Bank of America Corp. (BAC) Raises Quarterly Dividend 400% to $0.05; 1.3% Yield

400% wow. Now there's a raise. ;)

Kinder Morgan Partners (KMP)
 

It's not my job - or desire - to keep everyone informed about companies we've discussed in this thread over the last couple of years.... but we have discussed Kinder Morgan Partners (KMP) and it's various other companies quite a bit.

This is a Master Limited Partnership -- which has many rules about distributions etc.

I just read where they're are going to abandon that structure and consolidate their various companies under one name. What that's going to look like - or do to the dividend and share price etc is anyones guess at the moment.

I own a fairly substantial stake in these shares (11,000 shares) -- so obviously I hope that it's beneficial. My guess is - there will be some selling pressure as people tend to bail when they don't understand (or don't want to understand) what's going on.


http://www.bloomberg.com/news/2014-0...tnerships.html

I'm due for some KMP love and certainly need it after last weeks pummeling! LOL

It's a long term hold for me - so I'll just trade my KMP in for the KMI (when they offer the swap) whatever that looks like. I'll roll with Richard Kinder whom seems to have a very good handle on the oil and gas and pipe biz. I liked the tax free income (they do this as a "return of equity" vs a dividend) but that's not really a big deal as it's only $60K per year in "tax free" income...

What I hope is that the savings of Admin etc --- is given back to the shareholders in the form of higher dividend - which will offset the taxes.

You'll be happier when you pick up the $1.39 dividend on the 14th.....

Haven't lost sight of that! I bought it at what looked like a good price and it went lower thanks to my Midas touch. Then the legality issues surfaced and now for phase three. It's still minimal, so no worries, not compared to the 35% hit I took on Sprint last week! :sieg:

Yeah, there's been a lot of talk about KMP for a while now. I figured I'd just be patient with it as they aren't going anywhere. There may be bumps along the way but Kinder Morgan has their stuff together. This, however, is news to me. Guess I'll have to be a little more vigilant until they get this sorted out.

KMP is up big pre-market. Here is more information on the deal
http://seekingalpha.com/article/2408...&uprof=45&dr=1

Im late to the party, but yes there was a big hike in KMP. Im still holding though!

Okay --- We'll use this Kinder Morgan Partners (KMP) as a good example today of how I work.

I owned 11,000 shares at a cost of $81.43 a share = $895,730

These shares paid me $15,290 per quarter. The dividend is already "X" for the period - so on August 14th I'll be paid.

I sold this morning - the entire lot - for $1,120,290 netting a nice $224,560K

Add in the dividend capture and it's $240,000 this quarter.


My point in all this is --- whenever I have an unexpected windfall like this -- I'm going to take that gain. I'll buy the new entity when and if it's approved and takes place if the new dividend meets my needs --- or I can buy something else. Nobody ever went broke taking a profit.

OKay -- but for "102" -- you guys should be longer term thinkers and your profits (actual real dollars) are probably not quite as large as mine. Nearly a quarter million dollars is real money. Not that $2500 isn't -- but I'm saying that you have to balance the gain against your total - and whether or not this is a taxable event for you (long or short term hold). And then make a judgement call. For me -- that gain pays for the Pinkee's build... so I'll take it and say thank you very much. If it was in a 401K or IRA or ROTH -- and was only a $200 or $1000 gain - I'd probably let it ride and pick up the dividend - and the cash that's going to get paid and the shares in the new entity. I still LOVE this company so will bet with them again.

Nice 1 day gain there Greg... Hard to say no to that especially when you figure in the toiling for so long in the red...

I bought some KMI a couple of times early on when I got back in and the 9% gain today put me at about 22% gain overall since February. I'm keeping my couple hundred shares in hopes that Richard keeps paying his shareholders back like he has been for years. Nice to see the big green days though, they sure are fun.

So if this deal is approved, does that mean those of us who owned KMP will be cut a check for $10 per share and have it sent to us? Will it be received simply as a payout like the dividend is/was? I wonder what the tax implications are since KMP was an MLP. Not knowing any better, I'm looking at the shares received in KMI and cash payout as a return for the sale of the business I am a partner in.

You will receive the appropriate amount of shares in KMI... some 2+ for 1... and yes -- a cash payment deposited to the account holding your shares of $10.77 per share you hold in KMP.

That will be treated as a return of capital - which is how a MLP does things. So it's not a gain and while I'm not an accountant -- I don't think it's taxable.. but it depends on how the paperwork goes for the transaction. If they SELL the shares to KMI it might be taxable --- but I'm thinking they're doing a dissolution of KMP and giving you back your $10 and then swapping the balance for the new KMI.

These things can change - so up until it actually happens -- it's fluid.

Every once in awhile even a blind squirrel finds a nut. LOL

I fully intend to re-invest in the new KMI -- at what level remains to be seen but I believe in their business and I like the way ownership has treated the investor... and that goes a long way for me.

I maybe should have explained how I arrived at the sales numbers. I live the market and wake early... and saw the premarket trading activity and put in a sell order... The early bird gets the worm sometimes.... LOL

In other words --- the premarket HIGH this morning was $104 per share.


Pre-Market Volume: Pre-Market High: Pre-Market Low:
1,424,588
(08:17:37 AM)
$ 104

(04:00:00 AM)
$ 84.23

For those interested in seeing a HISTORY of a particular stocks dividends -- and or when they pay and go ex etc... this is a freebie NASDAQ site with that info... you just have to put in the symbol or name.


My other link didn't work as modified and posted..... so here's a "starter link" -- this chart is showing Wells Fargo (WFC) so just change the symbol to check the stock of your choice.


http://www.nasdaq.com/symbol/wfc/dividend-history

To all of you that bought Kinder Morgan Partners (KMP) --- you've enjoyed an 18% Year to date gain.... and you just got your dividend posted today.... You're welcome! LOL


As posted earlier - I captured my gain in KMP and then started to build a position - 25,000 shares so far - in Kinder Morgan Inc (KMI) the parent company and acquirer of KMP. I already now have a nice gain in it (3% but that's in just a few days).


Here's the point for Investing 102... The market is both kind and an evil douche at any given time. But you'll never reap any of the rewards if you're not "in" it. Being on the sidelines and watching or waiting for just the right moment - will always have you OUT when good things happen. While it's true that being out when bad things happen might save you some sleepless nights... you'll never get ahead that way.

Build your trust over time... average your way in to positions over time - but most importantly - continue to put money to work when it's the darkest days. Know that you're buying the best companies in the world and that eventually they will go your way and you will be rewarded.

Good stuff!