Amazingly brazen, but I guess that's what gets attention these days.
OT: Stock and Investment Thread
- Thread starter RU05
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Just like Sears or JCPenny....
JK but nothing last forever unless it can adept, so should your portfolio.I think the likes of Buffett, whether he is still running that ship over there or not, are always going to go after companies like VZ.
Then again Grantham is in QS which was a recent SPAC merger. Somewhat similarly, Berkshire bought GOLD, which was both new for them, but maybe behind the times given BTC and crypto miners are dominating their analog counterparts. So even for those guys they are doing things that they may not typically do.
I also hear a fair amount the WMT is actually fairly expensive, in terms of earning multiples, relative to it's historical average. Thinking is that multiple expansion is warranted given it's transition to digital, earnings are expected to outpace rev's in upcoming years, but something to consider there. There might be better value plays out there.
VZ and T for instance.
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FYI - interesting timing for me this morning! I have been in the process of combining our 2 largest old 401ks into a Rollover IRA (T Rowe and Fidelity into just Fidelity). It just happens that I now have a f-load of cash waiting to be reinvested.
Great timing for the Nasdaq to take a dump. Need to buy up ARKK, SOXX, XSD, FTEKX. I have my positions set for FDGRX and my T Rowe funds (PRGTX, PRNHX, PRHSX, PEXMX, and RPGEX).
Or should I just buy a ton of BTC?
Great timing for the Nasdaq to take a dump. Need to buy up ARKK, SOXX, XSD, FTEKX. I have my positions set for FDGRX and my T Rowe funds (PRGTX, PRNHX, PRHSX, PEXMX, and RPGEX).
Or should I just buy a ton of BTC?
And WMT does appear to be adapting.Just like Sears or JCPenny....
But I agree, whether we are talking a sale because a stock has run way past it's valuation, or a legacy company is on a declining trend, I think you have to keep a finger on your portfolio. I wouldn't plan to keep anything forever
I've got some bonus money coming my way as well.FYI - interesting timing for me this morning! I have been in the process of combining our 2 largest old 401ks into a Rollover IRA (T Rowe and Fidelity into just Fidelity). It just happens that I now have a f-load of cash waiting to be reinvested.
Great timing for the Nasdaq to take a dump. Need to buy up ARKK, SOXX, XSD, FTEKX. I have my positions set for FDGRX and my T Rowe funds (PRGTX, PRNHX, PRHSX, PEXMX, and RPGEX).
Or should I just buy a ton of BTC?
I'll spread it around, but my crypto has grown pretty heavy, so don't think I'll add there.
What you have to understand is that Berkshire gets a 50% "dividends received deduction" on it's corporate tax return. It was 70% until the 2017 tax legislation. He has a natural (and quite rational) bias towards dividends.
+1
I'm set with my cryptos (and lottery ticket stocks). I'll likely put more in after a big correction, but that may not happen until next year.
Which is interesting because I've heard him say he's anti dividend, preferring the company to reinvest and grow, in part because of the tax implications. But I guess if you get a 50% reduction that changes the equation a bit.
Still they must like the fundies more for VZ then say T, because T's pays a higher dividend, yet he went with VZ.
I did buy some ELYS this morning. Interesting little momentum, both stock price, and revenue's, story growth there.
Online gaming-gambling. Canadian company. Sub $1b market cap.
As always with these homerun plays, just a tiny bit.
Edit:Not to be confused with ESYL, which I mentioned last night. Just got up over a penny. Up 133% yesterday, up 25% today. I'm not going to mess with this one, but funny the similar tickers.
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Buffett isn’t anti-dividend. He follows a perfectly well articulated and rational capital allocation policy,
First, he seeks to deploy cash into businesses with high returns on equity (without using unsafe or excessive amounts leverage- that’s the true beauty of his insurance float). In essence, he views his abilities as an investor to be superior to others. And of course he is without equal. These businesses can either be owned or acquired, and those unfamiliar with BRK should note that the future growth of the company is more likely to come from large acquisitions of wholly owned businesses than from stock purchases. BRK‘s stock portfolio is simply too big to expect it to materially outperform the market (As an aside, those who would like to understand how Buffett would likely invest the amounts in most peoples personal accounts should review his partnership letters from 1957-1969, and read the chapters on his activities when running his hedge fund from Alice Schroeder’s The Snowball. He wouldn’t be buying the same stuff as he targets today).
if you are unable to deploy capital at rates of return above what is available in an index fund, then you should return capital to shareholders. This can be accomplished by either repurchasing shares in the market, which he has been doing, or paying out a dividend, which he has not. He will repurchase shares provided they are available at a price mateailly below what he deems them to be worth. In the past, he was less enthusiastic about doing so since BRK shareholders historically were long term holders, many of whom knew Buffett personally. He appropriately viewed them as partners, and didn’t want to make a buck off his partners by being in the other side of a trade with them. Today, with the B shares, that dynamic has changed. I’d like to see him more aggressively repurchase shares, as I see that being A smart path to increase IV (Though not at today’s prevailing price).
That decision matrix is how he views investee capital allocation decisions as well. Cash flow from dividends is welcome, because he can tax efficiently transfer funds from one source to another under his conglomerate structure. And many of his wholly owned businesses earn reasonable rates on capital, and require tons of capital (such as BNSF or MidAmerican). It’s also a way for him to hard wire investment decisions once he’s no longer running the company.
First, he seeks to deploy cash into businesses with high returns on equity (without using unsafe or excessive amounts leverage- that’s the true beauty of his insurance float). In essence, he views his abilities as an investor to be superior to others. And of course he is without equal. These businesses can either be owned or acquired, and those unfamiliar with BRK should note that the future growth of the company is more likely to come from large acquisitions of wholly owned businesses than from stock purchases. BRK‘s stock portfolio is simply too big to expect it to materially outperform the market (As an aside, those who would like to understand how Buffett would likely invest the amounts in most peoples personal accounts should review his partnership letters from 1957-1969, and read the chapters on his activities when running his hedge fund from Alice Schroeder’s The Snowball. He wouldn’t be buying the same stuff as he targets today).
if you are unable to deploy capital at rates of return above what is available in an index fund, then you should return capital to shareholders. This can be accomplished by either repurchasing shares in the market, which he has been doing, or paying out a dividend, which he has not. He will repurchase shares provided they are available at a price mateailly below what he deems them to be worth. In the past, he was less enthusiastic about doing so since BRK shareholders historically were long term holders, many of whom knew Buffett personally. He appropriately viewed them as partners, and didn’t want to make a buck off his partners by being in the other side of a trade with them. Today, with the B shares, that dynamic has changed. I’d like to see him more aggressively repurchase shares, as I see that being A smart path to increase IV (Though not at today’s prevailing price).
That decision matrix is how he views investee capital allocation decisions as well. Cash flow from dividends is welcome, because he can tax efficiently transfer funds from one source to another under his conglomerate structure. And many of his wholly owned businesses earn reasonable rates on capital, and require tons of capital (such as BNSF or MidAmerican). It’s also a way for him to hard wire investment decisions once he’s no longer running the company.
I don't doubt this at all, as his portfolio certainly says he is not anti dividend, but I do remember reading something, that I believe someone posted here, about how he prefers a company to reinvest and grow as opposed to dispersing dividends.
The taxing of those dividends played into his thinking.
It's actually quite logical. Berkshire get no deduction for dividends paid, and paying them reduces funds that can be reinvested. Any investor who need cash can sell shares.
And if he expects VZ shares + dividends to appreciate more than T + dividends over the long term it makes sense.
He prefers a company reinvests in itself provided it can earn a rate of return on that investment higher than other readily available alternatives. The proviso in that first sentence means everything. this isn’t some academic theory. It is literally what de did with Berkshire Hathaway when he acquired it, redeploying its capital away from a dying New England suit liner business to what it is today.
Correct me if I'm wrong, but aren't dividends paid by 100% owned subsidiaries totally tax free to the parent company as the income is consolidated on a single federal tax return ?
Yes, that’s correct. That’s why a conglomerate structure really only works if you have an extremely talented capital allocator as CEO. It’s why BRK has been an enormous success, whereas GE has not, it’s no coincidence that the capital allocation talents of the CEOs was determinative in both instances.
@Frida's Boss
Your thoughts on HEQ and it's 12% dividend?
I often hear a high dividend is a danger signal, but in some cases it seems to me that is merely indicative of stock trading below it's fair value.
Your thoughts on HEQ and it's 12% dividend?
I often hear a high dividend is a danger signal, but in some cases it seems to me that is merely indicative of stock trading below it's fair value.
HEQ is a pure hedge (hence the name). If you fear a downturn or want to avoid volatility it’s probably a good option although I don’t know anything about the underlying fees.
I'm curious about some knowledgeable posters' opinions (@Frida's Boss , @RUAldo , etc) on TDF (Templeton Dragon Fund), a closed end fund focused on China with currently a 21% distribution rate. I looked at it on Morningstar and CEF Connect, saw it trades at a significant discount, has a long history of high distributions since its onset. Distributions are biannually, in Sept and Jan, which seems like an odd timeframe.
That depends on your outlook. Quick money or hold? If the former, yes, you probably should have taken profit. Those stocks got way out in front!
Not familiar with this fund, but looked into several other China-based funds. Very inconsistent with big swings. Definitely not a candidate for a long-term hold. However, it may pop for the rest of 2021 or so.
I don’t get everyone’s fascination with CW other than the fact that she is a woman in a male-dominated industry and ARKK did amazing in 2020. Well, just about everyone did amazing in 2020. From a personal stand-point, it’s my greatest single year in the 17 years I’ve been in the market. It’s easy to look like a genius when the market skyrockets from COVID stimulus, retail trader boom, etc. From 2016 to right before the market’s collapse ARKK went from $20-$44. Not bad but definitely not rockstar returns.CW is also anti-dividend.
You pretty much answered your own question in your first sentence. ARKK crushed the market in 2017, out performed it in 2018 (8-10%), did very well in 2019, and destroyed the universe in 2020. And is up +22% YTD in 2021.
That's 4+ years of nothing but net. Sorry, can't downplay this performance with a straight face.
Yes everyone has done well, but in terms of fund mgmt, she's up there at the top. Will that hold up long term? Maybe not, but she def deserves the spotlight right now.
Edit: What T2K said.
I’m not saying I would have been disappointed in CW’s ARKK return over 5 years, but this chart doesn’t scream rockstar in light of the market circumstances in 2020. I can tell you this much - I’m not a professional investor and my returns are comparable and in some years even better.
ARKK:
YTD10.40%
1-Month10.40%
3-Month53.87%
1-Year169.69%
3-Year52.15%
5-Year54.45%
I want to be in for awhile, but the move yesterday was begging for a trade. I acually did sell RIOT at $70, see if I can pick it back up a little cheaper.
Got out of BTCS as well, a homerun play that never got going, At least not the 2nd time at bat, blasted it out of the park the first time up.
ARKK YTD = +22.2% (as of yesterday). You are probably looking at trailing returns.
If you start early 2017, and end right before the covid dip, ARKK smoked the S&P and the Nasdaq.
If you base it strictly off the dip, it has also smoked the S&P and the Nasdaq.
Combined early 2017 till now 500% for ARKK. Little overr 100% for Nasdaq. About 80% S&P.
I guess you have to compare it to other funds, but vs the major indexes it's a blowout.
Edit:corrected #'s above, not sure what I was looking at before.
If you base it strictly off the dip, it has also smoked the S&P and the Nasdaq.
Combined early 2017 till now 500% for ARKK. Little overr 100% for Nasdaq. About 80% S&P.
I guess you have to compare it to other funds, but vs the major indexes it's a blowout.
Edit:corrected #'s above, not sure what I was looking at before.
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I agree with you about 2020. Last year was an incredible year. You have to work hard to not go up by at least 40-50%. Take company like Nikola. Nikola wants to make a car that needs a complete new infrastructure. This itself is difficult. Then on top of it, their prototype does not work. They lose their contract with GM. If they came to present to me, then I would laugh them out of my office. This company should be struggling with bankruptcy. But not in 2020. Stock of NKLA was up 50%. Crazy. The beginning to this year has been even better. My personal portfolio (not our hedge fund) is up 100%. This is insane. My guess is correction is around the corner.
Back to ARKK, Cathie is smart and will do well in the long term, but I don't see her replicating her success in 2020, for the next few years. She was late to buy into Draftkings and Palantir. She should have waited for a pullback. It seems to me that she is trying very hard to find he next TSLA. She was so right on TSLA and so early on that it was impressive. She is looking for the next TSLA.
Nobody rational is expecting another 150% return year. However, I'm optimistic that ARKK will perform very well moving forward.
ARKK is 12.7% of our largest retirement account (which represents 55% of our retirement assets). Got some more in our E-Trade account (12% of our retirement assets).
Nice position, but we have at least 3 other funds with larger allocations (probably 4 if I add up a few similar index funds).
NKLA is really trying to be a hydrogen producer. The car was just a shiny object(one that hooked the market for a month or two). Bankruptcy isn't really a consideration given it's just in the developmental stage. Plenty of cash currently, though they did say they will likely have another stock offering sometime this year. Might be a pretty good long term play.
But like many of the recent spacs, it is pre rev's.
As one of the BTC guys said the other day on fastmoney, some of the spacs in the public market are acting more like private equity stage investments. Is that bad? Doesn't sound terrible but I'm super new to this so I don't give my opinion too much weight.
I am a big believer in Cathie. I rarely put any of my money in funds. I have the means to and can do my own research. I don’t need to pay fees to someone else. Having said that, I do invest a small percentage of my personal portfolio in the ARKK funds.