I recently wrote to you about how the drop earlier this week GlaxoSmithKline wasn’t a big deal in the slightest, and how a hypothetical family in 2019 reviewing their reinvested GlaxoSmithKline dividends may actually look back fondly on the share price drop in the middle of Summer 2014 as it provided an opportunity to get a lower price, and thus a higher ownership position in the form of additional shares due to the decline.
Now, I want to discuss a company that does not share GlaxoSmithKline’s outlook. If you follow Amazon, you may have seen that the company reported a $126 million loss for the second quarter of 2014. Although the stock … Read the rest of this article!
Many of you saw the news today that JP Morgan Chase had decided to forgive the outstanding balances of its Canadian credit card holders as it exits its business in the country. When a bank makes a decision to effectively forego millions of dollars (plus interest) that is due and owing to it, many intelligent readers wonder: “What’s the catch?”
The answer to the question concerns the cost of collecting debt. The affected accounts concern debt that is mostly between one and three years old. Typically, the average collection rate if pursued through all legal recovery methods is 19% for debt over a year old. As in, if JP Morgan or some debt collector … Read the rest of this article!
One of the advantages of holding a stock for a long time and reinvesting the dividends into the same company that paid out the dividends is that you become very receptive to the idea of falling stock prices. In fact, sometimes I think that only affluent or aspiring affluent private investors that are reinvesting the dividends are the only ones who truly appreciate how falling dividends can aid the income production process.
I want to use GlaxoSmithKline as an example because they are in the news today. The management has a long history of being honest and candid with investors, and actually, they usually get punished for it (that’s why it’s hard for … Read the rest of this article!
Far and away the most common question I receive through e-mail from readers could be paraphrased as this, “Okay, I’ve finally reached a point in my life where I got a little money set aside, and I want to start putting together a collection of individual dividend stocks. Where should I begin?”
Because I do not know the future, there’s no right way to answer that. And plus, there are so many different answers that would to you putting together something that will result in permanent wealth down the road. Someone opens a DRIP account that puts $200 per month each into Johnson & Johnson and Procter & Gamble, allowing it to benefit … Read the rest of this article!
Perhaps more than anything else, the theme here on this site is that great things can happen to your financial life if you can separate the headlines and stock prices from the actual business performance of the company, and then methodically strike when an opportunity arrives for you to take advantage of the low prices in the moment.
I’m not just interested in this stuff in the abstract; I like to focus on real, specific companies and discuss what it means to be a value investor in real time. Over on Seeking Alpha, I have written about how value investing in this day and age takes you in the direction of the … Read the rest of this article!