Comments for Demian Perry

Comment on Why do wages rise in a recession? by Stephen Sweeney

Stephen Sweeney — Wed, 09 Sep 2009 22:29:34 +0000

Great article. Yet again, “common sense is not too common”.

Comment on Honest investments: how do your stocks rate? by andrew

andrew — Sat, 21 Mar 2009 21:11:47 +0000

Proposed “Quality Index” Criteria:
A blueprint for better
When it comes to companies that value their shareholders and shareholders’ capital, here are the measurable criteria we (the writer of the article and his analyst partner) like to see:

* Insider ownership between 5% and 50% of outstanding shares (showing a management team that’s committed to the company but doesn’t necessarily control the company).
* Limited to no takeover defense provisions such as poison pills that protect entrenched management.
* Limited shareholder dilution over time (indicating a respect for the company’s owners).
* Either good returns on invested capital or a common stock dividend (evidence that the company thoughtfully allocates capital).

Comment on Honest investments: how do your stocks rate? by Demian

Demian — Sat, 21 Mar 2009 20:58:51 +0000

@andrew
Investing in good companies is certainly the right thing to do, at least in the Kantian vision of morality (if everyone did it, it would be good for the world).

But I sense that you are sniffing a little at moral investing. Does it seem a little namby pamby to you?

Yeah, I can see that. But I also think there are two practical reasons to invest in companies with good character.

1) There is no honor among thieves…if they’re out to screw the world, they’re out to screw the shareholder.

2) Immoral organizations may be less operationally efficient. If you get sued often, you’re spending a lot on lawyers (even if you win). If you don’t get sued, but you’re worried about getting sued, you’re paying a bunch of lawyers to sit around and consume your working capital. And if your organization is full of crooks, you’ve got to have lots of people minding the till (or just managing people, rather than the business).

More and more, I’m beginning to think that the character of an organization’s management team is the single driver of future returns. Honesty may very well be a competitive advantage.

Comment on Honest investments: how do your stocks rate? by andrew

andrew — Sat, 21 Mar 2009 17:50:13 +0000

http://www.fool.com/investing/mutual-funds/2009/03/20/its-time-to-reinvent-the-index-fund.aspx

How does one reliably quantify honesty? Is honesty really what you’re trying to identify and measure here? Or are you in fact after something more broad like “transparent integrity” or “honorable stewardship”? Either way, standard definitions of moral terms and precise measures of same are hard to come by. Social sciences are considered “soft” (read: less-reliable) because they derive statistical data from fuzzy sources (like polls of individuals’ personal assessments) and then treat them as if they were culled from ruler & scale.
You are in a way making a timely and timeless argument for buying companies that do good because their demonstrated moral virtue will result in them and us doing well.

Jesus expelled the money changers from the temple – charging interest on money lent is damned as usury by most religions – Martin Sheen’s speech in the final scene of Wall Street chastised Bud
Fox and us to “make something instead of living off the buying and selling of others”.

$ and morality are hard to reconcile because $ is about competitive self-interest, while morality is all about altruism. $ rewards shrewd savvy while M honors innocence and its consequent poverty. $ icons have nicknames like “The Grave Dancer” (Sam Zell) while Nuns have names like Prudence and Constance. Their respective views tools and armor are “out of element” when used in the other field.

“Honesty Index” draws the same skepticism as does “Quality Index” (click link above to read the article) when quality is defined in moral terms (constancy, honesty, integrity etc.) vs. $ terms.

The creator of the proposed quality index said: “I wasn’t necessarily looking for quality operators as measured by profit margins or ROIC, but rather honest companies that seemed to treat shareholders, employees, and customers right.”

Lovely thought – but he’s singing to the wrong choir.

Comment on Honest investments: how do your stocks rate? by Ron Robins

Ron Robins — Tue, 17 Mar 2009 13:46:42 +0000

You make a good case for an ‘honesty index.’ Seeing that you are really interested in ethical business and investment behaviour, you should visit my globally popular ethical investing site. It also carries the latest global green-ethical investing news and research.

It’s at http://investingforthesoul.com/

Best wishes, Ron Robins

Comment on Do we need a corporate honesty index? by Demian

Demian — Mon, 16 Mar 2009 22:32:23 +0000

@Cynical Synapse I know! I'm trying hard to avoid getting angry by doing something about it. I'm reading a biography of Warren Buffett right now, and I've been impressed with how he seems to very carefully consider the integrity of management whenever he makes an investment. But he's able to meet directly with executives, so he's able to better judge their character. I hope to find, over the next few weeks, some ways that average investors like us can avoid rewarding bad behavior with our investments.

Comment on Do we need a corporate honesty index? by Cynical Synapse

Cynical Synapse — Sun, 15 Mar 2009 20:33:12 +0000

I thoroughly enjoyed your post. We need to do something to get the attention of our elected officials. As far as I'm concerned, AIG’s all just the world’s biggest Ponzi scheme! Of course there’s no transparency. The people who claim to be fixing it were all in positions to have had something to do (or look the other way) with the making of the Wall Street debacle. I was opposed to the bailout from the very start. While I knew there would be consequences with AIG’s failure, I figured at least the executives would have to take their lumps, too. And I figured my share would be less. Instead, we’re all paying and the executives are pocketing it. With no end in sight.

Comment on Philip Fisher: Warren Buffett’s lesser-known mentor by Andrew Peck

Andrew Peck — Sat, 14 Mar 2009 15:24:30 +0000

http://www.thesunsfinancialdiary.com/investing/where-to-find-dividends-a-comparison-of-dividend-paying-etfs-and-stocks/

How to Invest in Dividend-Paying Stocks?
Since long-term qualified dividends are taxed at a much lower rate (at most 15%) than short-term capital gains and interest, it makes sense to add them to our portfolio, even outside the tax deferred accounts.

To invest in companies that pay dividends, we can choose either to buy individual stocks, or purchase a mutual fund or ETF that invest in dividend-paying companies.

ETF’s: Top 10 holdings among the widely held Div ETF’s show lots of overlap. For example, Vanguard High Dividend Yield Index ETF (VYM) and PowerShares Dividend Achievers (PFM) have 8 in common.

Build your own div/gen portfolio:

* Use stocks that are mostly used in the dividend-paying ETFs
* Use stocks that have the highest dividend yield
* Use stocks that pay the most dividends in dollar amount

And the three lists are:

10 mostly used dividend-paying stocks

1. Altria Group (MO) — $3.44 (5.00%)
2. Bank of America (BAC) — $2.24 (4.40%)
3. Pfizer (PFE) — $1.16 (4.30%)
4. Verizon Communications (VZ) — $1.62 (4.00%)
5. Citigroup (C) — $2.16 (4.00%)
6. AT&T (T) — $1.42 (3.60%)
7. Chevron (CVX) — $2.32 (3.00%)
8. General Electric (GE) — $1.12 (3.00%)
9. JPMorgan Chase (JPM) — $1.52 (2.90%)
10. Exxon Mobil (XOM) — $1.40 (1.70%)

10 highest yield dividend-paying stocks

1. MCG Capital (MCGC) — $1.76 (10.00%)
2. Thornburg Mortgage (TMA) — $2.72 (10.00%)
3. Vector group (VGR) — $1.60 (8.70%)
4. Allied Capital (ALD) — $2.56 (8.60%)
5. American Capital Strategi (ACAS) — $3.56 (7.50%)
6. Lexington Corporate Properties Trust (LXP) — $1.50 (7.10%)
7. American Financial Realty Trust (AFR) — $0.76 (7.00%)
8. Istar Financial (SFI) — $3.30 (7.00%)
9. Southern Copper (PCU) — $6.00 (7.00%)
10. Corus Bankshares Inc. — $1.00 (6.10%)

10 highest payout dividend-paying stocks

1. Southern Copper (PCU) — $6.00 (7.00%)
2. American Capital Strategi (ACAS) — $3.56 (7.50%)
3. Altria Group, Inc. (MO) — $3.44 (5.00%)
4. Istar Financial (SFI) — $3.30 (7.00%)
5. Thornburg Mortgage (TMA) — $2.72 (10.00%)
6. Integrys Energy Group (TGE) — $2.64 (4.40%)
7. Comerica (CMA) — $2.56 (4.10%)
8. PNC Financial Services Group (PNC) — $2.52 (3.30%)
9. Embarq (EQ) — $2.50 (3.90%)
10. Progress Energy (PGN) — $2.44 (4.70%)

Demian – According to your Ben Graham value sniffing decoder ring, which of these are also sound & oversold?

That’s a list I’d buy and hold

Comment on Philip Fisher: Warren Buffett’s lesser-known mentor by Demian

Demian — Sat, 14 Mar 2009 12:57:29 +0000

Thanks Andrew! I also saw a bunch of the above listed in a stock screen I ran last week (looking at strong fundamentals), and on valuecruncher.com. P&G, McDonalds, 3M, Coke, Pepsi and McGraw Hill, among others. I haven’t done a deep dive into their numbers yet, but perhaps it’s a good time to look at a few of these.

Comment on Philip Fisher: Warren Buffett’s lesser-known mentor by Andrew Peck

Andrew Peck — Sat, 14 Mar 2009 03:55:33 +0000

http://dividendsvalue.com/1924/the-best-dividend-stocks-in-the-world/

The following is an aggregate list of 45 U.S. stocks which meet the criteria to be dividend “aristocrats” “achievers” & “champions”

I. S&P 500 Dividend Aristocrats – s&p500 stocks that have increased dividends every year for at least 25 consecutive years. (dividendsvalue.com)

II. US Broad Dividend Achievers™ Index – comprised of companies incorporated in the United States or its territories, trade on the NYSE, NASDAQ or AMEX, and have increased their annual regular dividend payments for the last ten or more consecutive years. In addition, Indxis requires that a stock’s average daily cash volume exceed $500,000 per day in the November and December prior to the annual reconstitution date on the last trading date in January. The Index is calculated using a modified market capitalization weighting methodology
(indxis.com)

III. The U.S. Dividend Champions – increased their dividend for at least 25 consecutive years, but, as explained below, the definition was broadened to include additional companies that had paid higher dividends without having increased the quarterly payout in every calendar year. DRIP also decided to follow companies that had increased their dividend for 20-24 straight years, since they are likely to join the 25-year “Champions” soon. (DRIPinvesting.org)

3M Company MMM [Aristocrat] [Achiever] [Champion]
Abbott Laboratories ABT [Aristocrat] [Achiever] [Champion]
AFLAC Inc. AFL [Aristocrat] [Achiever] [Champion]
Air ProductsChemicals APD[Aristocrat] [Achiever] [Champion]
ArcherDanielsMidland ADM [Aristocrat] [Achiever] [Champion]
Automatic Data Processing ADP[Aristocrat][Achiever] [Champion]
BB&T Corporation BBT [Aristocrat] [Achiever] [Champion]
Becton Dickinson and Co. BDX[Aristocrat] [Achiever] [Champion]
Bemis Inc. BMS [Aristocrat] [Achiever] [Champion]
C.R. Bard Inc. BCR [Aristocrat] [Achiever] [Champion]
CenturyTel Inc. CTL [Aristocrat] [Achiever] [Champion]
Chubb Corp. CB [Aristocrat] [Achiever] [Champion]
Cincinnati Financial CINF[Aristocrat] [Achiever] [Champion]
Clorox Company CLX [Aristocrat] [Achiever] [Champion]
Coca Cola Co. KO [Aristocrat] [Achiever] [Champion]
Consolidated Edison ED [Aristocrat] [Achiever] [Champion]
Dover Corp. DOV [Aristocrat] [Achiever] [Champion]
Emerson Electric EMR [Aristocrat] [Achiever] [Champion]
Exxon Mobil Corp. XOM [Aristocrat] [Achiever] [Champion]
Family Dollar Stores FDO [Aristocrat] [Achiever] [Champion]
W. W. Grainger Inc.GWW [Aristocrat] [Achiever] [Champion]
Integrys Energy Group TEG[Aristocrat] [Achiever] [Champion]
Johnson & Johnson JNJ [Aristocrat] [Achiever] [Champion]
Johnson Controls Inc. JCI[Aristocrat] [Achiever] [Champion]
Kimberly Clark Corp. KMB [Aristocrat] [Achiever] [Champion]
Leggett & Platt Inc. LEG [Aristocrat] [Achiever] [Champion]
Eli Lilly & Co. LLY [Aristocrat] [Achiever] [Champion]
Lowe’s Cos. Inc. LOW [Aristocrat] [Achiever] [Champion]
McDonald’s Corp. MCD [Aristocrat] [Achiever] [Champion]
McGraw Hill Cos. Inc. MHP[Aristocrat] [Achiever] [Champion]
PepsiCo Inc. PEP [Aristocrat] [Achiever] [Champion]
Pitney Bowes Inc. PBI [Aristocrat] [Achiever] [Champion]
PPG Industries Inc. PPG [Aristocrat] [Achiever] [Champion]
Procter & Gamble Co. PG [Aristocrat] [Achiever] [Champion]
Questar Corp.. STR [Aristocrat] [Achiever] [Champion]
Rohm & Haas ROH [Aristocrat] [Achiever] [Champion]
Sherwin Williams Co. SHW [Aristocrat] [Achiever] [Champion]
Sigma Aldrich SIAL [Aristocrat] [Achiever] [Champion]
Stanley Works SWK [Aristocrat] [Achiever] [Champion]
State Street Corp. STT [Aristocrat] [Achiever] [Champion]
Supervalu Inc. SVU [Aristocrat] [Achiever] [Champion]
Target Corp. TGT [Aristocrat] [Achiever] [Champion]
V.F. Corp. VFC [Aristocrat] [Achiever] [Champion]
Wal Mart Stores Inc. WMT [Aristocrat] [Achiever] [Champion]
Walgreen Co. WAG [Aristocrat] [Achiever] [Champion]