Down goes the Dow

investing noob wrote:

agip wrote:

Dig it:

1M:

Tech (VGT): +4.8%

Dividend Strat (SCHD): +7.3%

1 Year:

Tech (VGT): +32%

Dividend Strat (SCHD): +33%

Standard Deviation

Tech (VGT): 19.9%

Dividend Strat (SCHD): 18.1%

Higher returns, lower volatility.

More cats need to be checking out dividend stocks. Esp now, when tech is so rich.

Wow I never knew about these. Will consider adding SCHD.

Keep in mind, as the share prices of value stocks have risen, companies have borrowed more money to keep up the dividend yield. That money has to be paid back thru earnings or refinanced.

SPYD had higher returns than SCHD. It targets the top 80 dividend yielders. Any reason to get SCHD over SPYD? Fees?

“Past performance is no guarantee of future returns.”

agip wrote:

Prof. Racket wrote:

OK boomer

omigod dude gag me with a spoon

Lol

How are you feeling agip? Race-ready?💪

investing noob wrote:

SPYD had higher returns than SCHD. It targets the top 80 dividend yielders. Any reason to get SCHD over SPYD? Fees?

morningstar as SCHD at 5 stars and SPYD at just 1 star. So sounds like they have big problems with SPYD.

Just looking at returns, SCHD has been far superior:

3 yrs:

SCHD +24.1/yr

SPYD: +13.1/yr

5 yrs

SCHD: +16.9%/yr

SPYD: +8.9%/yr

Noob just keep in mind I am not giving financial advice in any way. High dividend paying stocks have their own risks that you should know about before investing. they might be terrible performers due to elements out of their control.

Noobs should often own all-in one funds such as Vanguard's life-strategy or target date funds. Rather than go buy what they read about on message boards.

Maser wrote:

agip wrote:

omigod dude gag me with a spoon

Lol

How are you feeling agip? Race-ready?💪

I'm feeling great, thanks. I cleared the 5 day isolation and have just a couple more days before the 10 day mark.

I'll know more about my running fitness in a few hours. I plan to do something like 2 x 2 miles at 10k pace and see how that goes. To see what I lost sitting on my tushie for a few days. If it goes well I might do the race.

Typically you should feel sluggish on your workout. If so, I wouldn’t let that discourage you from racing.

agip wrote:

Maser wrote:

Lol

How are you feeling agip? Race-ready?💪

I'm feeling great, thanks. I cleared the 5 day isolation and have just a couple more days before the 10 day mark.

I'll know more about my running fitness in a few hours. I plan to do something like 2 x 2 miles at 10k pace and see how that goes. To see what I lost sitting on my tushie for a few days. If it goes well I might do the race.

Great to hear. No racing for me, I have to go to Madison WI for a few days of meetings. Anybody have any good food recommendations? I will get in some good workouts, so I’ll be hungry, and I can’t live off those catered lunches.

Funny you guys mention dividend funds, something just came across my desk this morning, but I haven’t read it yet. Also on my desk is info from that older inflation study we did, of products that have stayed exactly the same over the years, produced by the same businesses. All will have to wait until I get back.

Ghost of Igloi wrote:

investing noob wrote:

Wow I never knew about these. Will consider adding SCHD.

Keep in mind, as the share prices of value stocks have risen, companies have borrowed more money to keep up the dividend yield. That money has to be paid back thru earnings or refinanced.

Well, borrowing rates are near zero and earnings are sky high, so ….

Face the fax wrote:

Ghost of Igloi wrote:

Keep in mind, as the share prices of value stocks have risen, companies have borrowed more money to keep up the dividend yield. That money has to be paid back thru earnings or refinanced.

Well, borrowing rates are near zero and earnings are sky high, so ….

Sure, just like borrowing money on home equity. Feels great until interest rates rise and the value of your home drops.

Ghost of Igloi wrote:

Face the fax wrote:

Well, borrowing rates are near zero and earnings are sky high, so ….

Sure, just like borrowing money on home equity. Feels great until interest rates rise and the value of your home drops.

No, it’s not like that at all. I’m surprised you don’t know the difference. Weren’t you supposedly a financial advisor?

Bitcoin $45.5k

ARKK new 52 week low $88.80

SARK YTD +9%

Ghost of Igloi wrote:

investing noob wrote:

Wow I never knew about these. Will consider adding SCHD.

Keep in mind, as the share prices of value stocks have risen, companies have borrowed more money to keep up the dividend yield. That money has to be paid back thru earnings or refinanced.

Good general suggestion Igy, and company-specific evidence to back it up? Within the 2 funds mentioned, I mean

Feeling good about SARK now, glad I held. Will hold til 60.

Maser wrote:

Ghost of Igloi wrote:

Keep in mind, as the share prices of value stocks have risen, companies have borrowed more money to keep up the dividend yield. That money has to be paid back thru earnings or refinanced.

Good general suggestion Igy, and company-specific evidence to back it up? Within the 2 funds mentioned, I mean

Maserati,

One of the top holdings in SCHD is Verizon, from their most recent annual report:

“During 2020, our net cash provided by financing activities of $1.3 billion was primarily driven by $31.5 billion provided by proceeds from long-term borrowings, which included $5.6 billion of proceeds from our asset-backed debt transactions. These cash flows provided by financing activities were partially offset by $17.2 billion used for repayments, redemptions and repurchases of long-term borrowings and finance lease obligations, which included $7.4 billion used for prepayments and repayments of asset-backed long-term borrowings, $10.2 billion used for dividend payments and $2.7 billion used for other financing activities.”

A few short years ago the annual report first highlighted the balance sheet where you could clearly see liabilities. Increasingly these figures are relegated, and twisted among data toward the rear. Today the annual report is more about image creation. If a company share price continues to go up at a faster rate than earnings, and the said company wishes to keep the same percentage dividend yield, then intuitively the funds to purchase shares, or pay the dividend must trickle down to increased debt. This trend is better seen by examining balance sheet, stock prices, dividend and share buybacks over a period starting in 2015. Two of the more egregious examples would be IBM and McDonalds.

Igy

On Dec 20 the 10 year was at 1.38%

Now it's at 1.69% and rising fast. Bonds getting smashed.

That's a wicked-fast move.

In the recent past, the 10 year has topped out at around 1.75% a couple times.

Would be meaningful if it got above that zone.

I've been sitting on 5.5% of my portfolio....keeping it in cash until the 10 year gets close to 2.0%...a real test of my will is coming...when I put that to work.

Yep, big article somewhere today on bonds getting crushed. Muni’s less so, but still bad. Look at the TLT 1-year.

But it is my stupid trbcx that is really getting hammered. Will take a body blow today with nasdaq megacaps getting killed. As my only market play at the moment, it pisses me off. I have lobbied for funds to be added to that 401k offering, we will see what happens.

My sense is, most companies be it growth or value, have sacrificed prudent management for the benefit of corporate insiders. Stock buybacks to fund non-GAAP executive compensation and dividend payments. The Republican corporate tax cuts, Congressional Covid relief response, and Fed monetary policies has only encouraged more playing loose with finances. If any break in the chain of such short term financial fiddling will collapse the scheme. Pretty clear Hussman will be vindicated; ARKK performance shows where the weakest participants are, other companies still have the confidence of magical things.

Igy - on another thread 4 years ago you suggested that the market had hit a high. Are you sticking with that?