Investment and Speculation

[Colonel Sun]

While this board is fond of macro economic prognostication, I think a thread devoted to the micro economic aspects of investment and speculation may be of interest [Mr. P.?].

Suggest any type of investment and/or speculation be open to discussion: stocks, bond, commodities, options, etc.

____

For example, I'm interested in well run public companies that pay a sizable dividend.

I know this will come across as old school and rather out dated and quaint, but as a shareholder I'd like to participate in the profits not just the hope of future stock value appreciation which can quickly turn into depreciation

So here's some suggestions for discussion:

Annaly Mortage

http://www.google.com/finance?q=NYSE%3ANLY

Canadian Oil Sands

http://www.google.com/finance?q=TSE%3ACOS

Westshore Terminals

http://www.google.com/finance?q=TSE%3Awte.un

The Canadians has some attractive dividend paying unit trusts for many years, but a change in the tax law forced a conversion to standard public companies.
Still trying to understand the implications for intl investors.

Cellcom Israel

http://www.google.com/finance?q=NYSE%3ACEL

Telefonica S.A.

http://www.google.com/finance?q=NYSE%3ATEF

[Yukon Cornelius]

Both Barry Ritholz [FusionIQ] and Keith McCullough [Hedgeye] show they hold SU.

[Colonel Sun]

[Yukon Cornelius]

[Azrael]

Rayonier -- RYN

Proctor & Gamble -- PG

Energy Transfer Partners -- ETP

National Grid -- NGG

North European Oil Royalty Trust -- NRT

Total SA -- TOT

Waste Management -- WM

W. P. Carey -- WPC

All provide good dividends and have good prospects.

[Tinker]

I wonder if the recent arrests will improve Waste Management's profitability.

[Mr. Perfect]

A lot of stocks have hit peaks, although the next chapter is uncertain, flat/up/down.

Perfect time for covered calls.

[AzariLoveIran]

[Mr. Perfect]

I think more in terms of quarters, sometimes months or even weeks. 5 years ago current circumstances not predicted, let alone 10 years ago. Not that it can't be done, just very hard.

[AzariLoveIran]

[Mr. Perfect]

You have to do what works. Charting works very good for me. Also must be aware of fundamentals, of course, but not doing charting is naive. All good tools.

Side of road littered with dead bodies of fundamental traders and technical analysts.

[Mr. Perfect]

[AzariLoveIran]

[Mr. Perfect]

[Azrael]

[Tinker]

[Alph]

Colonel Sun,

People who buy stocks for reasons other than collecting dividends (or getting their nephew a job, at sufficient ownership levels) are engaging in a Ponzi scheme where their only hope is to resell a worthless asset for a higher price later.

But may I suggest that you take a step back from "well run" and take a look at "far too powerful and wide spread to be destroyed excluding situations in which you are also likely either dead or unable to spend money anyway" that also pay large dividends.

Then, out of those categories, choose corporations that either sell something that is a basic human need or vice produced by a strictly limited pool of factors (think agriculture) or are going to continue making a killing off of Moore's law. (So, telecoms, because none of the internet companies, software vendors or hardware manufacturers come close to being "too powerful to be destroyed" even if they did offer reasonable dividends whereas there is a list of telecoms that might as well have government mandated monopoly charters.)

Telecoms: AT&T ~ Verizon ~ NTT Communications

Agricultural Vice: Reynolds ~ Altria

[Azrael]

[Yukon Cornelius]

[Colonel Sun]

[Azrael]

I don't think that telecoms are a good long term investment. Over the last five years, you would have made 2% per year (capital gain and dividends) investing in the telecom index. Considering the inherent riskiness of investing in equities as opposed to bonds (where you have a better chance of getting something in bankruptcy), 2% isn't worth it.

Over the longer-term, it doesn't look much better. AT&T may have a 6% yield (which isn't guaranteed over the long term, BTW), but it's trading about where it was in February 1997 (closed at $28.48 today). Ten years ago (January 2001), it was trading at $50 per share. If you just wanted a nice dividend, you would have been much better off buying bonds.

Alph is probably right about tobacco. Philip Morris International (PM) is probably a good bet. They pay a nice dividend and do a lot of business in China.

[Alph]

[Colonel Sun]

[Mr. Perfect]

Dividends happen when future earnings growth looks bleak. People who are growing like crazy don't pay dividends, they would incur a tremendous opportunity cost doing so.

I like to invest in companies growing like crazy.

[Colonel Sun]