My oldest son was born in 1999. America was still experiencing what many believed was an endless nirvana of economic prosperity, so it’s no surprise that I sometimes jokingly referred to him as my “bull market baby.” With a generous gift from friends of the family… Read More

In a rising market, bad news for a company can be shrugged off as investors focus on the positives. But in recent weeks, investors have been less forgiving, meting out punishment to any company that delivers bad news. Let’s take a look at all of the companies that have lost… Read More

Have you ever wondered what it would be like to trade stocks alongside corporate insiders? There is a way you can do this — and it is perfectly legal. Information about insider share purchases and sales is readily available to anyone who wants to view it. That’s because corporate officers,… Read More

I know what income investors like. If I put a double-digit yield in the headline of an article, it will see thousands more reads than an article without a big headline yield. I can put “safety”… Read More

In the investment business, we’re very good at talking about when to buy. We can wax poetic about the single-digit piece-to-earnings (P/E) ratio and the deep-discount to book value or the return on equity. It’s the selling part we all need to work on… The reasons investors hang on to a stock are so vast and complex, it would take a team of psychiatrists at least a decade to begin analyzing them. Typically, the two major reasons are greed and emotional attachment. Greed is… Read More

In the investment business, we’re very good at talking about when to buy. We can wax poetic about the single-digit piece-to-earnings (P/E) ratio and the deep-discount to book value or the return on equity. It’s the selling part we all need to work on… The reasons investors hang on to a stock are so vast and complex, it would take a team of psychiatrists at least a decade to begin analyzing them. Typically, the two major reasons are greed and emotional attachment. Greed is simple: we like making money and we want to make more. The emotional attachment is the weird part. I’ve always been a big fan of the Warren Buffett philosophy on how to deal with the emotions involved in holding stocks: that stock doesn’t know that you own it. The hundred shares of Cisco (Nasdaq: CSCO) doesn’t tell you it loves you when you come home from work. If it does, we’ve got bigger problems. It’s OK to sell stuff. Look at it like you would a party. Eventually you have to… Read More

Business school professors often speak of the “efficient-market hypothesis,” which posits that stock prices reflect all available public information and therefore are never overvalued or undervalued; they’re, instead, are perfectly valued. These professors are wrong. In many instances, the market gets it wrong, and a stock can remain mispriced, even after an important piece of news is digested by buyers and sellers. I was reminded of this after looking at the stock action of Assured Guaranty (NYSE: AGO) on Friday, April 15. The company’s stock rose 24% in just one day, but as you more… Read More

Business school professors often speak of the “efficient-market hypothesis,” which posits that stock prices reflect all available public information and therefore are never overvalued or undervalued; they’re, instead, are perfectly valued. These professors are wrong. In many instances, the market gets it wrong, and a stock can remain mispriced, even after an important piece of news is digested by buyers and sellers. I was reminded of this after looking at the stock action of Assured Guaranty (NYSE: AGO) on Friday, April 15. The company’s stock rose 24% in just one day, but as you more deeply analyze the news that affected the stock, it’s easy to conclude that shares should have risen by a good deal more than that. The process may take several weeks or months, but when complete, this $17 stock could shoot up into the low to mid-$20s. Bank of America’s mea culpa Assured Guaranty provides insurance to bond buyers. If those bonds default, then the buyers can make a claim. It’s been a very lucrative business for many years, controlled by Assured Guaranty, MBIA (NYSE: MBI) and Ambac Financial (Nasdaq:… Read More

Income investing has an unfair stigma attached to it. The conventional wisdom says invest in dividend payers — also known as “widow and orphan” stocks — if you’re just trying to stash your money somewhere. If you actually want to earn a decent return, then… Read More

New income investors sometimes make the mistake of looking no further than a stock’s current dividend yield. After all, a stock such as biotech firm PDL BioPharma (NASDAQ: PDL) looks mighty enticing, based on its 10% yield. But looks can be misleading. A closer look at PDL reveals a dividend that may be in trouble. The company’s net income fell by more than 50% last year, and PDL paid out more in dividends than it earned as income. The company earned $92 million, but paid $130 million in… Read More

New income investors sometimes make the mistake of looking no further than a stock’s current dividend yield. After all, a stock such as biotech firm PDL BioPharma (NASDAQ: PDL) looks mighty enticing, based on its 10% yield. But looks can be misleading. A closer look at PDL reveals a dividend that may be in trouble. The company’s net income fell by more than 50% last year, and PDL paid out more in dividends than it earned as income. The company earned $92 million, but paid $130 million in dividends. When earnings decline sharply, even blue-chip companies can sometimes find their dividends in danger. A good example is General Electric (NYSE: GE), which was forced to trim its dividend by two-thirds during the economic downturn. Quarterly payments dropped from $0.31 to just $0.10. [See: “Forget GE, Buy These Stocks Instead”] Another high-profile casualty of the downturn was oil refiner Valero Energy (NYSE: VLO). Valero cut its quarterly dividend from $0.15 to $0.05, which is where the dividend remains today. So how do you protect yourself… Read More

Did you know the United States withholds a portion of dividends paid to many foreign investors? This amount comes right off the top, before the payment even hits an investor’s account. Even after this cut, the foreign investor will still have to pay taxes on what’s left. But the United States isn’t just being greedy. Just about every nation does something similar. Switzerland withholds up to 35% of dividends paid to foreign investors… Israel withholds up to 25%… Canada takes 15% off the… Read More

Did you know the United States withholds a portion of dividends paid to many foreign investors? This amount comes right off the top, before the payment even hits an investor’s account. Even after this cut, the foreign investor will still have to pay taxes on what’s left. But the United States isn’t just being greedy. Just about every nation does something similar. Switzerland withholds up to 35% of dividends paid to foreign investors… Israel withholds up to 25%… Canada takes 15% off the top. Typically the higher yields found abroad can make up the difference. For instance, the high yields on foreign utilities can still make them worthwhile to most investors, even with the withholding. And truth be told, you can get this withheld money back. Investors filing for a foreign tax credit via IRS Form 1116 can reclaim foreign dividends withheld. But you won’t receive this cash until you file your tax return, sometimes up to a year after the… Read More

I counted twice, just to be sure… $41,161.63. That’s the amount in “daily paychecks” — more commonly known as dividends — I received from my investment portfolio in 2010. That total comes to $112.77 for each day of the year. Cash. Read More