With the looming fiscal cliff, the politically charged uncertainty artificially induced created a cloud that may prompt an equity market sell off.  While the value investor in me don’t usually condone timing the market, the trader in me is thinking perhaps I can try to time my entry by getting myself ready if a sell off materializes, as Buffett said, be greedy when others are fearful, and be fearful when others are greedy.

The iShares Dow Jones Select Dividend Index(股票代號: DVY) yields an impressive 3.49% while the ten year treasury yields 1.7%, for comparison.  Some of the yields here on this list can easily surpass 3.49% and many great companies have terrific dividend growth policy.  To put it in perspective, social security check is indexed to the Consumer Price Index, the CPI, which has a long term average of about 3%.  The dividend growth rate of many of these companies can easily reach 10% or more annually.  This is important because health care costs are increasing at a rate that far exceed of the CPI, who knows if medicare would bankrupt this country with the way our government is handling its own finance.  Seniors beware, I do not recommend aggressively buying dividend paying stocks ahead of any decision from congress on income and capital gain tax.  However, there might be a point at which the price is so low and the yield is so good, that makes the purchase an offer you cannot refuse.

I think dividend is important to not only seniors, but to most younger investors, especially the Facebook millionaire employees, whose selling restriction was just lifted a few days ago. The dividend income is a great way to increase spendable cash position that can help purchase even more undervalued stocks.  Make no mistake, without dividend or regular savings and contributions, the only way you can raise cash is to sell your position.  Unless your position is overvalued, selling it to raise cash for other new position is rarely a good idea.

The lowered stock price makes the dividend yield relatively larger;  this should be especially attractive to seniors and people needing income.  It is generally recommended for those needing to live off of income primarily from their investments or investor at the later stage of his or her life to diversify among different companies or even asset classes, I have neither problem with nor endorse that recommendation except I would object when people over diversify given the level of homework done I required on every investment purchase, as the Bond King himself, Mr. Bill Gross of Pimco, once said “GOOD (INVESTMENT) IDEAS SHOULD NOT BE DIVERSIFIED AWAY INTO MEANINGLESS OBLIVION.

The buybacks performed at  lower prices provide the shareholders greater bang for the buck.  In fact, I would be thrilled if the price continues to be depressed because the buybacks would then be done at significantly below intrinsic value,   The goal here is, with proper studying and understanding, there might be companies from the following list you would like for long term investment.  The greater dividend and huge buybacks would further enhance value.  Bear in mind any possibility of conflict of interests by Goldman Sachs, as it is allegedly evident in the Greg Smith Goldman Sachs Debacle.  Therefore please do your homework before purchase.

 

TE Connectivity Ltd.(股票代號: TEL) 

Price Target
$45
Dividend Yield
2.3%
EPS Accretion From Buybacks
2.7%
Accretion + Yield
5%
Description: TE supplies connectors for the telecommunications industry. It’s hiring 3,000 new employees in Bangalore.

Cummins Inc.(股票代號: CMI)

Price Target
$116
Dividend Yield
2%
EPS Accretion From Buybacks
3%
Accretion + Yield
5%
Description: Cummins manufactures engines and motor vehicle parts. It just signed a partnership with Hyundai to build mid-range engines.

INVESCO(股票代號: IVZ)

Price Target
$28.50
Dividend Yield
2.7%
EPS Accretion From Buybacks
2.6%
Accretion + Yield
5.3%
Description: Invesco is an investment management service company. It recently announced it’s expanding into India.

Corning Inc.(股票代號: GLW)

Price Target
$16
Dividend Yield
2.4%
EPS Accretion From Buybacks
3.2%
Accretion + Yield
5.5%
Description: Corning makes specialty glass and ceramic products. Goldman just upgraded the stock.

St. Jude Medical(股票代號: STJ)

Price Target
$48
Dividend Yield
2.1%
EPS Accretion From Buybacks
3.5%
Accretion + Yield
5.6%
Description: St. Jude develops medical technology. Wells Fargo recently reaffirmed the stock’s “outperform” rating.

JP Morgan(股票代號: JPM)

Price Target
$42
Dividend Yield
2.9%
EPS Accretion From Buybacks
2.7%
Accretion + Yield
5.7%
Description: JPMorgan is an investment bank. Seeking Alpha says the stock is “deeply discounted and ready to soar long term.”

Baxter(股票代號: BAX)

Price Target
$68
Dividend Yield
2.5%
EPS Accretion From Buybacks
3.5%
Accretion + Yield
6%
Description: Baxter develops pharmaceutical products. It just set an annual sales-growth target of 5 percent.

Republic(股票代號: RSG)

Price Target
$32
Dividend Yield
3.3%
EPS Accretion From Buybacks
2.9%
Accretion + Yield
6.2%
Description: Republic is a waste management company. It saw huge YOY Q2 gains.

JM Smucker(股票代號: SJM)

Price Target
$90
Dividend Yield
2.3%
EPS Accretion From Buybacks
3.9%
Accretion + Yield
6.2%
Description: Smucker makes food. It generated $713.0 million cash while it booking net income of $459.1 million in the past year, turning 12.5% of its revenue into free cash flow.

Source: Goldman Sachs
To Be Continued….

 

上次要大家注意SBUX日線圖200天均線, 和周線圖43EMA的重要支撐, 在財報過後, 這個支撐被突破了. 現在要大家注意一下兩件事情, 如果這兩件事都發生了, 那SBUX開始轉為熊勢的機率就會很高. 第一是周線圖中的紫色, 大約40左右價位的支撐. 再一個就是圖中藍色開始下降的17EMA, 如果突破40左右的支撐, 加上17/43EMA出現死亡交叉的話, 熊勢的機率將會很高.

 

 

再來看一下高盛Goldman Sachs(股票代號: GS), 從日線圖上可以看到很明顯的打底的狀況, 87 – 90的價位範圍是很明顯的打底範圍, 有興趣的人可以找尋機會進場, 止損設在底部以下.

 

國際信評機構穆迪在今天宣佈調降15家銀行評等,調降級數介於1至3級不等.  這當中不乏美國幾家大家常在交易的大銀行: Bank of America(股票代號: bac), Citi(股票代號: c), Goldman Sachs(股票代號: gs), Morgan Stanley(股票代號: ms), JP Morgan Chase(股票代號: jpm).   下調的原因是這些銀行皆相當容易受到”市場波動性影響”且存有資本市場活動內的鉅額虧損風險。  我在幾個禮拜前也有做過 MS 摩根士丹利的技術分析, 也提到了13 元是非常重要的支撐, 在之後它有不錯的回調, 一路回到14塊左右, 直到今天信評調降, 美國銀行股都是呈現大跌的情況。    大家可以關注這幾支銀行股最近的走勢,摩根士丹利依舊可以以13塊來做為進出場指標性的考量。  JPM 現正卡在200均線上, 也很適合關注它。  GS 本來在突破$97.5的時候會進場不過因為今天的負面新聞, 看來還需要在等等多觀察。

 

本週有一個很重要的, 就是Google(股票代號: GOOG) 4/12 財報出.

 

 

What is the meaning of being a public company?  Simply in three words, to make money, period.

A couple of days ago, a former Goldman executive vented his frustration through an op-ed announcing his resignation.  In the piece, he blasted the company’s cultural shift since going public, especially how Goldman employees on multiple occasions preyed on clients’ lack of sophistication.  His disdain for his co-workers’ apathy for clients well being disgusted him, and resulted in him pulling a Jerry McGuire, or more aptly, an Andrew Ladhe.

About a month ago, I read another article about how the once idealistic “micro-lending” business model became a toxic
scheme in India when investors try to bring it public and in the process allegedly resulted in multiple borrowers committed suicides.  Most of these borrowers where unqualified to borrow, with no capacity to repay nor understood the purpose of the “micro-loans.”  The misalignment of the objectives of helping poor farmers in rural India while making a profit doing it gave the whole industry a bad rep.

Bottom line: public company and ideology don’t mix well, often.  Solution: stays a partnership or a charitable non profit organization.  Once you are public, your primary concern is maximizing shareholders value.  To achieve results, managers would often incentivize employees with perks and rewards to achieve a certain sales goals.  Employees’ own moral fibers is the first, and often the only defense against choosing to do the wrong thing.  I fault the less than optimal placement of incentives, employees’ apparent disregard for rules, guidelines, as well as any lack of oversight by the supervisors.  It might be too much to ask for ethics.  Perhaps the best we can ever ask for is simply Do No Harm.
But let’s be realistic.  You probably won’t consider investing in a company unless you think it has the potential to make more money than the others.  There are less than perfect people in every field and no exception where Mr Smith worked.  There are ample opportunities to make lots of money by simply taking advantage of clients.  We have all worked for firms with those few sneaky individuals that firmly believe greed for lack of a better word, is good.  They burn every bridge, dupe every clients, have no repeat business and believe they can get away with it.  However, for every one of those short-sighted folks out there, I still believe there are many more hard working individuals that strive hard for win-win situations, and draw mutual benefits from their ongoing working relationships with clients.  As the Chinese proverb suggests, always(may I add) 飲水思源。

In the mean time continue to educate yourselves not to be the muppets on the other side of the trades.  Do not resort to investing in inferior products such as underperforming actively-managed mutual funds with absurd management fees.

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