Lately, I have been studying periods in stock market history typically known for “poor performance” to see if it were possible to craft an intelligent dividend strategy during that time period. In particular, I was looking at the 1966 to 1981 bear market period. If you read commentary during that period in stock market history, you will often come across comments such as this: “The price of the S&P 500 components only rise 1.8% annually over that sixteen year time frame.”
The first problem with a data point like that is the fact that it does not include dividends. Because the 1966-1981 represented “the good old days” before stock buybacks rose to compete with dividends, the S&P 500 had a 4.1% average dividend yield over the 1966 to 1981 period. Right off the bat, that time period was not so bad because investors actually earned 5.9% (as opposed to 1.8%) … Read the rest of this article!
How many of you wish that your grandpa bought $1,000 worth of General Electric stock during the Great Depression that would be generating $400,000+ in dividends today, allowing you to buy homes outright, fund children’s education by writing checks, and most importantly, inherit the “life infrastructure” that would allow you to dare to be great and pursue your dreams without making decisions based on scraping by and getting the bills paid.
Or maybe you wish your grandpa hid a couple hundred shares of AT&T stock certificates in the sock drawer sixty years ago so that you would be collecting over half a million dollars in annual dividends that you could use to jumpstart your own art museum that would allow you to have almost $150,000 coming your way every ninety days so that you could spend your life purchasing artwork around the world and sharing the beauty with others. That … Read the rest of this article!
In 2008 and 2009, during the heat of the financial crisis, Altria sold off its real estate divisions, and then spun off Kraft to its existing shareholders, and followed this move with the subsequent divestiture of Philip Morris International.
It was an eyebrow-raising move because the 1970s tobacco executives believed that the sale of cigarettes would eventually come to an end in the United States, so the obvious response was to load up on food companies that would serve as a bridge of shareholder continuity when the tobacco music stopped (most notably, the old Philip Morris acquired Kraft and the the old Reynolds acquired Nabisco).
Altria decided in 2008 that it wanted to become a pure-play American tobacco manufacturer and chose to divest of everything but its American tobacco brands, a 10.2% ownership stake in what is now Anheuser-Busch Inbev, and a small random winery that accounts for 0.4% of … Read the rest of this article!
Yikes. Unfortunately I’ve been tending to some of my fun real-life summer plans the past couple of days, and I have not gotten a chance to set aside as much time for writing as I would like. Usually, I try to have my posts on autoset weeks in advance, but for some reason, the “hole” for July 30th was left unplugged. And since I have been building some nice momentum in terms of page views lately, I wanted to put something out there today.
Anyway, long story short, I dug up an answer I gave in the “comments” section to one of my Seeking Alpha articles, and it is the most well received commented I have ever written, having registered over forty “likes” as of the last time I checked. I had received a question from a young twenty-something that was wondering how to approach investing now that he … Read the rest of this article!
One of my favorite quotes from famous UCLA basketball coach John Wooden is that it is not our performance in relation to others that counts, but rather, our performance in relation to our highest potential that matters in the end. I don’t think anyone wants to reach a point at the end of their lives when they realize that there is a large gap between who they are and who they could have been.
Whether we want it to be the case or not, money plays a big role in determining whether or not we can maximize our potential. After all, Walt Disney had to spend big chunks of time dealing with rejection while raising capital to build Disneyland, and all that time he spent begging for funds represents time he wasn’t able to spend doing what he loved by further developing characters like Mickey Mouse, Snow White, and Mary … Read the rest of this article!