Rich Talking Stocks

[richravizza 25]

VALUE TRUMPS GROWTH,
again this week, Sky high P/E stocks Get Slammed.

Value holds it own,or up little.

I've noticed most Consumer Staples,the slow growth katchup,soup and cracker type companies.
Have High p/e's..

I don't own any, but this may be the next to be re-valued.

The Colgate-palmolive(CL)and(PG),of the world, have had a Huge runs, most up 20+% this year.

The P/E's for this group; 20+ range.With slow growth,
Why not book some Profits.

I expect them to drop 8-20%, to a P/E that's relative.
Relative to the market,18.5
Then to their Historical averages.

With good dividend payers,the decline wont' be that huge.

We can always Buy it back, when the dividend is Higher.

This will happen when the stock price goes Down.

I Know this can be confusing, any Questions?

[richravizza 25]

Another Great Week For Investors..
AAPL over $600.

Rite Aid (RAD)and JCpenny(JCP) got highlighted by Jim Cramer on MAD MONEY tonight, as Great American Retail Turnaround Stories.
I beat him to the punch.
but I recommend everyone watch tonights show.

MCK partnered with RAD.

Tonight Cramer also interviewed the CEO of Carrizo Oil and Gas(CRZO).
This is the Type of Company I am looking for My #2 theme.
A small/medium sized independent Oil Co. with 40% production growth SELLING @ 14 times earnings.,,

the inhailable insulin company,
Mankind (MNKD) goes up 5% every week, 20%this month!!!

Pessimist SHORTS,have 64 Million shares or 17% of the 400 million share Float, GOOD LUCK with that...
If the FDA won't play Ball,I think Mr.Mann will take his Ball, and Go to Europe to Play, and Partner.Maybe Pfizer ?
Shorts have 2 months to buy this, befor the FDA rules on 7/15
They must feel stupid with a 27-1-1 advisory approval in april.

and ..... GO PRO will be listed as (GPRO)
latest news they Doubled revenue every year since 2004.
bad news,the latest quarter missed on revenue by 25 million.

[richravizza 25]

WOW,
WHAT A MONTH ITS BEEN!!
Go Pro doubled on it's IPO.
then the next Day El POLO Loco did the same.
Can't make this shit Up !!

The KMP/KMI deal seems Great.
If you own the Master Limited Partnership KMP,your shares will just be converted to KMI shares.Simple.
You wont own an MLP anymore.
I think this makes KMI a better investment, More people will want to own it, Because its NOT an MLP,with all those Tax/IRA issues.
Rich Kinder is one of the Best. He created the MLP structure.
if he says they can Grow faster,why doubt the man.

I chose ETP, been in for 2 yrs,Compounded Dividend is now at 9% and it';s growing again.
Been tempted to switch from ETP to KMP/KMI.

Time to Eat Crow,

Mannkind got FDA approval.
Sanofi as a Partner,
All totaled a 975 million dollar deal.
MNKD is down 20% WTF

[richravizza 25]

Etp is the MLP and partner of ETE.It's smaller than KMP and has a larger dividend, so I bet they could grow both dividend and market share faster than the Big Dog KMP.But KMP has that leadership in Rich Kinder, Like having Tom Brady on your team!!

I used to own Mutual Funds,But never the S&P Index.

The sacrifice of saving, made the value of what I saved so great. Average was never my Goal.
I couldn't let my/families future depend on the averages.
I don't make alot, can't afford large contributions, have no Defined benny plan,ect...Some would say I'm screwed.. LOL

I love it when my dividends roll in, ETP is now paying me a dividend of $500 that get reinvested and the next one will be $510, and then $520 so on,and so on.....
AT&T is 20% of wifes account,the dividend like doubled in the last four yrs now,they contribute a grand a yr for me LOL.

I try to have at least 50% in good dividend stocks,so at least two or three positions.

20% AT&T
20% KMI
20% Altria/ PM chose one.
20% big tech with a dividend
20% a growth co.NOT in the industies above.
What would your dividends payments BE?
I invest in them because:
When the Correction Does Happen the dividend players will be on sale and the dividends will be larger, so I have confidence to buy them.and when they do go down they will go down less than the averages because of that dividend yield.

[kelpdiver 2]

Iago

That makes me start to wonder if I've been doing this all wrong. The S&P500 is a fine investment vehicle and it's pretty bulletproof, but I'm beginning to think that having a large chunk in solid dividend payers reinvesting should be part of my overall strategy. I have a few like AT&T, Altria, PM but they're a pretty small percentage.

I think total market is better call than S&P 500. I also favor a biasing towards dividend stocks, particular as you get older and closer to wanting the income flow. As I've said, I think those writing off the indexes as merely the average returns are closer to gamblers - few can sustain alpha returns over the broad market for long. However, Vanguard's dividend focused fund beat the total market by 60 basis points from 2000 on.

Short of spectacular meltdowns (2009), the dividend flow keeps going during a market downturn, so you may be able to avoid having to sell any assets at the low. (financials slashed their dividends, so may want to think about the selection process) And during the asset build phase, reinvesting the dividends during poor markets gets you more shares.

[richravizza 25]

kelpdiver

***
That makes me start to wonder if I've been doing this all wrong. The S&P500 is a fine investment vehicle and it's pretty bulletproof, but I'm beginning to think that having a large chunk in solid dividend payers reinvesting should be part of my overall strategy. I have a few like AT&T, Altria, PM but they're a pretty small percentage.

I think total market is better call than S&P 500. I also favor a biasing towards dividend stocks, particular as you get older and closer to wanting the income flow. As I've said, I think those writing off the indexes as merely the average returns are closer to gamblers - few can sustain alpha returns over the broad market for long. However, Vanguard's dividend focused fund beat the total market by 60 basis points from 2000 on.

Short of spectacular meltdowns (2009), the dividend flow keeps going during a market downturn, so you may be able to avoid having to sell any assets at the low. (financials slashed their dividends, so may want to think about the selection process) And during the asset build phase, reinvesting the dividends during poor markets gets you more shares.


Absolutley,
Over the Last 40 yrs, 70%+ of gains in the Markets are because of Dividends and their reinvestment.

Lot of people say "Cash is King".
Most think CASH,as Sell all your equity(STOCKS)and hold the cash or Buy Bonds.
AS you said in times of SYSTEMIC RISK, this may hold true but only in the Finanials that were at risk in that system collapes and of course a complete elmination of their dividends.

Cash is King when I getting some,without my Labor.

The "dividend aristocrats" are a great place to start your search.
Companies that have consistently payed a dividend for 20+ years.
Never reducing.
Never eliminating.
and allways increasing that dividend every year for 20+ years.

So I can earn a Great dividend every year.
the amount payed increases every year or so.
Then because of Compounding.(your div. is reinvested, then it pays a dividend).

When the Markets really starts heating up because of economic Growth,or if Bond Yeilds Increase.These Stock do perform rather poorly compared to the growth stocks, but I feel slow and steady will win the Day!!!

Mutual funds are Great, your instantly diversified in the fund sector, you can put it on Auto pilot as the Fund managers will do the Buy/Sell, Try'n to beat the averages for you.
The initial amount,contibutions every week/month can be made with smaller dollar amounts,without excessive buy/sell fees.I still own a mutal fund I use it as my Cash Position.
Mutual fund where the Only investment I could afford for Years and they served me well.

- few can sustain alpha returns over the broad market for long.

But if your in a mutual fund Alpha is what 1. something, so if your looking for alpha/risk, Mutual funds won't give you much.Unless you find a niche like,mutual fund.Check out Fidelity Selects Biotech up 80% in one year down 40% the next.
This is why I hold my favorite Mutual Fund as cash.I can sell some in a day with no Fees, use it to buy my winners when they're down.When I sell stock at a profit I can Dollar cost average back in to the fund.

This is the reason I manage my own portfolio, Alpha is Risk?
NO?

[kelpdiver 2]

richravizza

This is the reason I manage my own portfolio, Alpha is Risk?
NO?

Alpha is your return in excess of what the market return (total market or the appropriate index) is. If you're not achieving alpha while taking on greater risk and higher tax bills (capital gains) and trading costs, there's a problem.

[richravizza 25]

I found this for you,It's not complete Hope it helps.
Like a real estate investment, Master Limited Partnerships offer investors the benefits of depreciation and depletion--the assets owned by each partnership deteriorate over time and are constantly being kept up and replaced. Barriers to entry are enormous, as it is extremely difficult and expensive to begin construction on an underground pipeline that spans thousands of miles. This lack of competition provides a built-in business cushion to the best-positioned companies already in operation. It's the same logic that explains Warren Buffett's love of railroads. Today the benefits are enjoyed by those investors who understand this tax treatment and how these vehicles tend to trade. And most don't--including Barrons' Andrew Bary, who wrote yet another bearish article on Kinder Morgan (Symbol : KMI
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) this past weekend. An MLP does not itself pay corporate taxes. This responsibility is passed on to its unit holders, which is what MLP shareholders are called. As such, the majority of an MLP's cash flow is also passed along to its unit holders, giving them some similarities with other pass-through entities like REITs. But this is where many stop digging. MLPs pay quarterly distributions. Their distributions are not traditional dividends, hence the "distribution" moniker. These distributions are largely coded as"'return of capital" from a tax standpoint, which means--in non-technical terms--they are giving you back your own money. This portion of the distribution is not taxable today. It does, however, reduce the investors' cost basis (which increases the future tax liability). Unless, of course, the units are passed to the next generation as cost basis steps up to market value at the unit holders' death. For these reasons we treat MLPs as both a municipal bond surrogate as well as an estate planning vehicle in client portfolios. Bary and others seem to think MLPs, because they trade like equities, ought to be valued using traditional equity valuation metrics. Dissecting the deal Owners of KMP are scheduled to get 2.1931 shares of KMI plus $10.77 when the deal officially closes (expected is December). When the deal was announced last Sunday, KMI had most recently closed at $36.12, putting the immediate implied value of KMP units at $89.98 on Monday's open. But the stock opened at $96 and closed out the week around $99. In order to value KMP units, investors should only be paying attention to what KMI is doing. Unless you think the deal is going to fall through, this is the only metric that matters now. Reading through the terms of the deal a bit, you can find that with the added cash flows the deal brings to KMI, the C-Corp plans to boost its $1.68 annual dividend up to $2.00 for 2015. Kinder added that he expects the now giant KMI to be able to grow its dividend 10% annually from 2015 to 2020. Historically, Rich Kinder has under-promised and over-delivered. So what is KMI worth? KMI Dividend Yield (TTM) data by YCharts KMI's yield has been around 4% for some time. And while that would be nothing special for an MLP, it's quite healthy for a C-Corp with serious growth prospects. Using the projected $2.00 dividend for 2015, KMI shares could trade to $50 before its yield gets back down to 4.00%. If KMI is worth $50, KMP units are worth over $120. Shares of eachmay have 25% upside.
If you have already owned KMP for at least a year, consider selling now to lock in recent profits and your long term capital-gain rate. If you don't want to lose exposure to the deal, simply buy KMI with your proceeds. The two are in lock-step at this point and only one will exist a year from now.
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[richravizza 25]

Now I'm confused.

If a fund has a Higher alpha and the markets were in downward move would the fund move more to the down side than the market/sector or Lose less than it sector/market ?

[kelpdiver 2]

richravizza

Now I'm confused.

If a fund has a Higher alpha and the markets were in downward move would the fund move more to the down side than the market/sector or Lose less than it sector/market ?

Alpha = ( fund return - index return )

target index returns 11%, A fund returns 13%. Alpha = 2%
or more realistically, A fund returns 9.7%, alpha = -1.3% for fees and higher running costs.

In down market,
index drops 16%, A fund drops only 10%. That's an alpha of 6%. If it drops 32% (double leveraged index), it's alpha is -16%.

what you described is "beta." A stock or fund with a beta of 1 moves up and down proportionally with the market. If it is 1.2, then it gains more substantially and loses more substantially.

[richravizza 25]

Thanks for the Alpha,Beta clarification.
I thought any alpha created would imply Risk.
But the Beta is where the risk is implied.Cool.

What do you think of the MLP sector,it went from like 30 companies to 100,the Alarian MLP index, and now there are mutual funds like Clearbridge Capital now in the sector.
The returns are a terrible so far..

I think finding a winner in this sector is the way to Go.
Getting juicy dividends that are growing, and organic growth from an infrastucture buildout that will take years to complete.
USA,USA.. LOL
What do you think?

[weekender 0]

richravizza

Thanks for the Alpha,Beta clarification.
I thought any alpha created would imply Risk.
But the Beta is where the risk is implied.Cool.

What do you think of the MLP sector,it went from like 30 companies to 100,the Alarian MLP index, and now there are mutual funds like Clearbridge Capital now in the sector.
The returns are a terrible so far..

I think finding a winner in this sector is the way to Go.
Getting juicy dividends that are growing, and organic growth from an infrastucture buildout that will take years to complete.
USA,USA.. LOL
What do you think?

My personal 2cents. not the opinion of anyone but me and speaking totally as a layperson.

MLP's are moving from utilities to other sectors purely as a tax move and a way to get around regulators and distribute money to shareholders. a lot of very smart people, smarter than me, see the gov't not tolerating this. i agree wholeheartedly. i think there is a huge risk the gov't steps in and ends this. they are losing tax revenue and control of distributions. the gov't always hates to lose taxes but right now, with Dodd Frank, the environment is very much against losing regulatory control. they dont like companies deciding to give money to shareholders without their permission.

MLP's are coming on the market at an increased pace and brokers are pushing them hard. they have larger than average payouts and seem to me as the flavor of the month for sales managers.

there is a reason MLP's are marketed to retail and largely skipped by institutions. think about it.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[kelpdiver 2]

weekender

MLP's are coming on the market at an increased pace and brokers are pushing them hard. they have larger than average payouts and seem to me as the flavor of the month for sales managers.

there is a reason MLP's are marketed to retail and largely skipped by institutions. think about it.

They do seem very easy to pump and dump, and poor liquidity stands out as a big risk.

[weekender 0]

kelpdiver

***
MLP's are coming on the market at an increased pace and brokers are pushing them hard. they have larger than average payouts and seem to me as the flavor of the month for sales managers.

there is a reason MLP's are marketed to retail and largely skipped by institutions. think about it.

They do seem very easy to pump and dump, and poor liquidity stands out as a big risk.


i apologize. I am a big compliance nerd so want to clarify im making no accusation of improper behavior. i agree with your thinking but disagree with the term pump and dump. to be clear, im not implying manipulation or anything unethical. my point is there is a lot of legislative/regulatory risk in these and institutions seem to have very little interest.

no institutional interest should make a retail customer think twice.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[richravizza 25]

weekender

******
MLP's are coming on the market at an increased pace and brokers are pushing them hard. they have larger than average payouts and seem to me as the flavor of the month for sales managers.

there is a reason MLP's are marketed to retail and largely skipped by institutions. think about it.

They do seem very easy to pump and dump, and poor liquidity stands out as a big risk.


i apologize. I am a big compliance nerd so want to clarify im making no accusation of improper behavior. i agree with your thinking but disagree with the term pump and dump. to be clear, im not implying manipulation or anything unethical. my point is there is a lot of legislative/regulatory risk in these and institutions seem to have very little interest.

no institutional interest should make a retail customer think twice.

So the KMI deal removes the risk you both mentioned.

It removes the regulatory risk,by removing the MLP structure, By doing so, they increase liquidity by way of its consolidation.

As for regulatory risk,do you really think in the next couple of years our Gov't can get anything accomplish?? LOL

[weekender 0]

"As for regulatory risk,do you really think in the next couple of years our Gov't can get anything accomplish?? LOL "

you do not need an act of congress to change securities regulations. they are quite independent of outside influences and very adept at making changes. there is a reason banks and companies have teams of lawyers and compliance officers constantly reading pubs.

people at the Fed and SEC are not bumbling bureaucrats or politicians grandstanding for populist appeal. they are highly educated professionals. well meaning and very good at their jobs. they make common sense changes quite quickly. for this reason, institutional investors are not buying into the MLP craze.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[richravizza 25]

Would they have to change current tax law to destroy the MLP structure?

I didn't mean to diss anyone,I just don't see the motivation to make those"common sense changes" anytime soon.
This has been the argument against owning them,since they where formed.
In the meantime the long term income seeking investor has done quite well.
As Historic low interest rates grind on for years,these MLP produce CASH for retirees some 300% more than a bond.
I don't see that common sense changing any time soon.

Besides KMI is getting OUT of the GAME.

[weekender 0]

richravizza

Would they have to change current tax law to destroy the MLP structure?

I didn't mean to diss anyone,I just don't see the motivation to make those"common sense changes" anytime soon.
This has been the argument against owning them,since they where formed.
In the meantime the long term income seeking investor has done quite well.
As Historic low interest rates grind on for years,these MLP produce CASH for retirees some 300% more than a bond.
I don't see that common sense changing any time soon.

Besides KMI is getting OUT of the GAME.

my best answer as i understand it and how it is explained to me by people who know this stuff well. our analysts, customers and compliance people:

They have the right to not allow a company to change its corp structure to become an MLP. the Fed and the Sec regulate publicly traded companies and have complete authority on ruling distributions, mergers, buy backs etc.... they do not need to change any laws or tax codes. all they have to do is say they reject the request to re-org into an MLP or to pay a dividend.

my comments are not stock specific. im not making a trading call or even voicing an opinion. its a commentary on why retail is buying MLP's and not institutions. there is the belief they have a huge regulatory risk. not looking for an argument. as we say on the trading desk, "im just telling you what i'm hearing."

"The point is, I'm weird, but I never felt weird."
John Frusciante

[richravizza 25]

MLP's are necessary to the infrastructure buildout of the USA.

There is 680 billion in investment needed in the next 10 yrs.
Enough Pipe lied in the U.S, for oil & gas to go around the Planet 14 times.

Our Gov't can not promote these fossil fuel projects directly and at the same time a Green agenda.

MLP are a great compromise.
I feel good that I am part of this story.
We did build it.We are Building it.and I will own some of it.
and when KMI is a 5.5%+ dividend play. I will buy more

[richravizza 25]

The Market Definitly gives us opportunity to Buy "tuna" on sale!!

The Hedge Funds That OWN netflix at a P/E of 135,
Will get their faces ripped off come morning with a $100 drop.

because of desperate hedge fund selling and Margin calls in the Oil patch,These leverage to the Max,managers sold everything!!!
Giving us Awsome Buying oppeortunities.
I added to to my ETP and CQP and the wifes Disney.

I WILL NOT TOUCH OFF SHORE OIL PRODUCERS.
Oil has Crashed and may go down even more.The fundies have changed, $100+ oil is no more.
OPEC would love to kill the North American Energy Boom
and will try with super cheap oil.
I wonder if a new thread :
"American Oil Independence Leads to OWN Demise"

Amazon has a Crazy high p/e, and now with BABA out their Amazon will be re-valued and should have a netflix moment soon.

And so "The Correction" is apon us, just 2% more down and it is official.

Locked n Loaded.