That leads to over-confidence, over-investment, over-capacity and subsequent underperformance of the stocks in this sector.
Search found 1313 matches
- Mon Mar 25, 2024 12:34 pm
- Forum: Investing - Theory, News & General
- Topic: International (Non-US) versus US Equities (The "Arguments")
- Replies: 5351
- Views: 906867
Re: International (Non-US) versus US Equities (The "Arguments")
- Fri Mar 22, 2024 10:32 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
P/E is not a very meaningful valuation measure for oil production companies, is it? Isn't it more about remaining reserves, expected cost of exploration depending on the location of the reserves, expected oil price, etc.? P/E is useful when you compare similar oil companies. For example, if you compare Petrobras vs Chevron: * Reserves very close, 10.9 BBOE vs 11.1 BBOE * Production very close, 2.78 MBOED vs 3 MBOED * Breakeven cost both around $30 to $35/barrel with Petrobras’ oil of higher quality and commanding a premium * 2023 adjusted net income $27.2B vs $24.7B But Petrobras is worth $95B market cap while Chevron is worth $287B. That’s why Petrobras is 4x P/E while Chevron is 12x P/E. That sounds like an arbitrage opportunity. Short C...
- Fri Mar 22, 2024 10:28 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Gazprom was never paying a 15% dividend. With high shareholder returns your risk is lower - if Brazil doesn’t collapse in 7 years you got your money back just from the dividends.comeinvest wrote: ↑Fri Mar 22, 2024 6:41 pm B.t.w. I started similar "deep value" positions vs. the U.S. companies in the same industry a few years ago with Gazprom, Lukoil, and Surgutneftegas, thinking I "must" eventually hit the jackpot with these positions due to the extremely low valuations, if I just wait long enough. My positions currently have an indicative value of zero. I guess some risk materialized
Diversification is also helpful. I don’t have more than 30% in any single country (US included).
- Fri Mar 22, 2024 12:51 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
gougou, what are your thoughts given today's PBR slump amidst their dividend decision? Good buying opportunity. The regular dividend + buyback is already 15% and any extraordinary dividend is icing on the cake. The stock is trading at 3x recurring P/E and 4x GAAP P/E. It is the cheapest oil major and probably the cheapest large cap company in the world. If you are bullish on oil, there’s no better stock than Petrobras. P/E is not a very meaningful valuation measure for oil production companies, is it? Isn't it more about remaining reserves, expected cost of exploration depending on the location of the reserves, expected oil price, etc.? P/E is useful when you compare similar oil companies. For example, if you compare Petrobras vs Chevron: ...
- Thu Mar 21, 2024 7:47 am
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
gougou, what are your thoughts given today's PBR slump amidst their dividend decision? Good buying opportunity. The regular dividend + buyback is already 15% and any extraordinary dividend is icing on the cake. The stock is trading at 3x recurring P/E and 4x GAAP P/E. It is the cheapest oil major and probably the cheapest large cap company in the world. If you are bullish on oil, there’s no better stock than Petrobras. P/E is not a very meaningful valuation measure for oil production companies, is it? Isn't it more about remaining reserves, expected cost of exploration depending on the location of the reserves, expected oil price, etc.? P/E is useful when you compare similar oil companies. For example, if you compare Petrobras vs Chevron: ...
- Wed Mar 20, 2024 2:13 pm
- Forum: Investing - Theory, News & General
- Topic: Alibaba & Tencent
- Replies: 43
- Views: 4101
Re: Alibaba & Tencent
Hmm, how do you know any of the S&P 500 companies have real accounting numbers? Did you verify their numbers yourself?
Or do you have proof that Chinese companies commit accounting fraud at a higher frequency?
Or is this some sort of discrimination? Because it’s Chinese so it can’t be real?
- Sun Mar 17, 2024 5:24 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Good buying opportunity. The regular dividend + buyback is already 15% and any extraordinary dividend is icing on the cake. The stock is trading at 3x recurring P/E and 4x GAAP P/E. It is the cheapest oil major and probably the cheapest large cap company in the world. If you are bullish on oil, there’s no better stock than Petrobras.
- Sun Jan 07, 2024 7:34 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
2023 max drawdown was about 3%.Jaylat wrote: ↑Sun Jan 07, 2024 4:25 pm Thanks so much to gougou for updating us on your fascinating investment strategy. Congrats!
Question: how much volatility did you see over the course of the year? You ended up at 40% profit, but were there times when your portfolio was underwater? It looks like the dividend yield was 16%, so perhaps it stayed positive throughout?
- Sat Jan 06, 2024 11:10 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
deleted .. It sounds like we prefer different types of companies. I like undervalued with high shareholder returns. I think they are a powerful combination that will give me reasonable returns. As for Petrobras, they are investing close to $20B a year and will grow oil production every year. The company will likely make more money in the future even after paying big dividends. I think the company is investing a lot for the future. And yet, the market thinks the company deserves a low valuation, hence believes the future poor or uncertain at best. Again, you may be right, but I couldn't evaluate your opinion without an explanation of why the market is wrong to price the company ... to not grow. What information are you understanding better ...
- Fri Jan 05, 2024 4:57 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Have you considered that there´s a reason why e.g. Petrobras has a P/E of less than 4 while peers are anywhere between 8 and 13? Maybe the market knows something you dont know? Petrobras is excellent operationally, has good resources and it is in a monopoly position in its market. It’s a Brazilian state-owned company and market doesn’t know how to price it so it’s cheap. Huh. I'm curious what you think you know that the market doesn't also know. The market priced this excellent company at 2x P/E and 30%+ dividend yield a year ago. After getting a market beating 90%+ return in one year, the market still hasn’t told me or anyone what mystery was behind such pessimism. It appears Mr Market didn’t know anything special about this company and s...
- Fri Jan 05, 2024 2:28 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Have you considered that there´s a reason why e.g. Petrobras has a P/E of less than 4 while peers are anywhere between 8 and 13? Maybe the market knows something you dont know? Petrobras is excellent operationally, has good resources and it is in a monopoly position in its market. It’s a Brazilian state-owned company and market doesn’t know how to price it so it’s cheap. Huh. I'm curious what you think you know that the market doesn't also know. The market priced this excellent company at 2x P/E and 30%+ dividend yield a year ago. After getting a market beating 90%+ return in one year, the market still hasn’t told me or anyone what mystery was behind such pessimism. It appears Mr Market didn’t know anything special about this company and s...
- Fri Jan 05, 2024 7:15 am
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
I'm intrigued. I think the OP has a circle of competence unlike everyone else. Bilingual capability in both Chinese and English languages and cultures is one of his advantages. I can see how this advantage gets levered into stock picking. China ghost cities, Chinese telecom, US vs Chinese loans for developers vs homeowners are all cases in which the common [U.S.] view is skewed by not understanding China. And you can't learn about China and its culture by reading a book or reading web pages. Even if you live there, it will take years [decades?]. What investment analyst is going to do that? Only one who has already lived the experience. And how many of those also understand U.S. culture and are fluent in English? Finally I think OP's posts ...
- Thu Jan 04, 2024 11:11 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
deleted .. It sounds like we prefer different types of companies. I like undervalued with high shareholder returns. I think they are a powerful combination that will give me reasonable returns. As for Petrobras, they are investing close to $20B a year and will grow oil production every year. The company will likely make more money in the future even after paying big dividends. I think the company is investing a lot for the future. And yet, the market thinks the company deserves a low valuation, hence believes the future poor or uncertain at best. Again, you may be right, but I couldn't evaluate your opinion without an explanation of why the market is wrong to price the company ... to not grow. What information are you understanding better ...
- Thu Jan 04, 2024 9:33 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Thank you for the link. Very interesting ETFs. But it appears to only focus on shareholder yield. There’s no mention of undervaluation.
- Thu Jan 04, 2024 8:37 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
deleted It’s not trivial to outperform an index. There’s no reason to believe my portfolio/strategy will outperform the index. I like to invest for cashflow. I feel good about an investment trading at 4x P/E that’s willing to share more than 45% of their cashflow with shareholders. I try to find more stocks like such to construct a somewhat diversified portfolio. I do not understand the vast majority of the companies in SP500. I do not find them attractive trading at 20x P/E paying very little to shareholders. So I don’t invest in those. But SP500 could easily outperform my portfolio like many things that I don’t understand. I would feel *bad* about an investment returning that much of their cashflow. It strongly suggests to me that the co...
- Thu Jan 04, 2024 8:30 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
I just want to say thank you for sharing your strategy and results. Very impressive! A couple of questions: 1. With so much dividend income, would it make sense to use a portion of the incoming cash flows to buy protective PUT options to guard against idiosyncratic risks? 2. For an investor without the time or inclination to research individual companies, are there any ETFs or mutual funds that follow your strategy that you would recommend? 1. The put options for high dividend stocks are expensive so it’s not a cost-effective way to hedge downside risks. I’d recommend diversification or a higher allocation to cash/bond to hedge risks. 2. I’m not aware of any ETFs focusing on undervalued stocks with high shareholder yield. As for individual...
- Thu Jan 04, 2024 8:20 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
None of my stocks are in Russell 3000 so I can’t.er999 wrote: ↑Thu Jan 04, 2024 8:07 pm Gougou you should put your top three choices in your portfolio in the bogleheads hedge fund content:
viewtopic.php?p=7631786#p7631786
- Thu Jan 04, 2024 1:23 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
gougou, Thanks for posting here. My bet’s on you. I have one question; but first let me say I’m very impressed with your level headed, informed and intrepid way of investing. How few people could accomplish this? I think in practice so few, that it positively supports passive index investing for the rest of us. My question is about scaling up for outside investors. I recall somewhere in this thread you mentioned it was just within the family. But considering the management difficulties of large funds, what are your thoughts? Yes this is just within the family. I don’t think anyone wants to pay me to manage their money. It’s pretty hard even to convince my own family to invest in oil/shipping/Chinese stocks. You need to have some shiny back...
- Thu Jan 04, 2024 11:42 am
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Have you considered that there´s a reason why e.g. Petrobras has a P/E of less than 4 while peers are anywhere between 8 and 13? Maybe the market knows something you dont know? Petrobras is excellent operationally, has good resources and it is in a monopoly position in its market. It’s a Brazilian state-owned company and market doesn’t know how to price it so it’s cheap. State owned companies often trade at a discount, many a times a steep discount, because their whole business model can be overthrown politically. Chinese Telecom companies are a classical example... State owned companies in an economy that has a history of tight regulations (up to being a planned economy of sorts) have an even steeper discount. I dont know enough about Pet...
- Thu Jan 04, 2024 10:56 am
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Have you considered that there´s a reason why e.g. Petrobras has a P/E of less than 4 while peers are anywhere between 8 and 13? Maybe the market knows something you dont know? Petrobras is excellent operationally, has good resources and it is in a monopoly position in its market. It’s a Brazilian state-owned company and market doesn’t know how to price it so it’s cheap. I'm glad the strategy is working well for you, and I certainly believe that an individual investor can ... at times ... beat the market via some combination of luck and/or skill. (The person that beats the market usually thinks it skill, and sometimes is even right to think that). But a belief that the market doesn't know how to value a particular (large and well known!) c...
- Thu Jan 04, 2024 10:01 am
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Primarily tax-deferred/tax-free accounts, and I’m in the process of moving to a country that doesn’t tax capital gains and dividends.er999 wrote: ↑Thu Jan 04, 2024 9:58 amAre you investing primarily in tax deferred vs taxable? If taxable, you should report the after tax returns since with Petrobas (and your other high dividend picks) the returns are dividends (so pay tax same year you make them) vs a low or no dividend stock where the returns aren’t taxable until you sell.
- Thu Jan 04, 2024 9:54 am
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Have you considered that there´s a reason why e.g. Petrobras has a P/E of less than 4 while peers are anywhere between 8 and 13? Maybe the market knows something you dont know? Petrobras is excellent operationally, has good resources and it is in a monopoly position in its market. It’s a Brazilian state-owned company and market doesn’t know how to price it so it’s cheap. I'm glad the strategy is working well for you, and I certainly believe that an individual investor can ... at times ... beat the market via some combination of luck and/or skill. (The person that beats the market usually thinks it skill, and sometimes is even right to think that). But a belief that the market doesn't know how to value a particular (large and well known!) c...
- Thu Jan 04, 2024 7:58 am
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Petrobras is excellent operationally, has good resources and it is in a monopoly position in its market. It’s a Brazilian state-owned company and market doesn’t know how to price it so it’s cheap.
- Wed Jan 03, 2024 8:20 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Thanks for posting. Even though this isn’t a stock picking forum interesting to read about different approaches. Your Petrobas pick was very successful — I bumped it up your other thread last month to congratulate you on your doubling but no one else seemed interested. It’s safe to say your portfolio won’t track the market for good or bad. Easy to hold when beating the s&p500 not so easy if it lags — look at how difficult broad based international indexes are hard to hold with years of underperformance vs the s&p500. I think my portfolio is easier to hold than index funds. I own stocks that pay big and growing dividends under reasonable assumptions. For example Petrobras can easily afford to pay $3 per share and still grow its oil ...
- Wed Jan 03, 2024 7:08 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Full year 2023 update: Total return for year 2023: 40.85% vs SP500 26.29% Total return since my first post 6/1/2022: 46.02% vs SP500 18.4% 2023 returns: Ticker Shares 2022 Close 2023 Dividends 2023 Close Return PBR.A 150,000 $9.29 $2.95 $15.28 96.23% DAC 23,000 $52.66 $3.05 $74.06 46.43% DMLP 35,700 $29.93 $3.40 $31.83 17.7% MPLX 31,000 $32.84 $3.18 $36.72 21.5% ET 74,300 $11.87 $1.24 $13.8 26.71% MPCC.OL 300,000 $1.6588 $0.66 $1.3112 18.83% MOMO 22,000 $8.98 $0.72 $6.95 -14.59% CANG 60,000 $1.31 0 $1.02 -22.14% GSL 900 $16.65 $1.5 $19.82 28.05% Total * $6,361,947 $1,039,932 $7,920,669 40.85% Current stock holdings: Ticker Shares Close Value PBR.A 200,000 $15.28 $3,056,000 DMLP 35,700 $31.83 $1,136,331 MPLX 31,000 $36.72 $1,138,320 ET 74,3...
- Mon Jan 01, 2024 8:58 am
- Forum: Investing - Theory, News & General
- Topic: Market Return vs Earning/Price Ratio
- Replies: 10
- Views: 1336
Re: Market Return vs Earning/Price Ratio
Return = Earnings Yield + Earnings Growth + Multiple Expansion
The growth in E was higher than inflation. So it was wrong to use inflation there.
Multiple expansion has added some returns as well.
The growth in E was higher than inflation. So it was wrong to use inflation there.
Multiple expansion has added some returns as well.
- Sun Dec 31, 2023 9:49 pm
- Forum: Personal Finance (Not Investing)
- Topic: Share your net worth progression
- Replies: 4288
- Views: 1082160
Re: Share your net worth progression
Rental properties with mortgages. Picking the bottom on oil stocks in 2020/2021/2022.mtwistercapitalist wrote: ↑Sun Dec 31, 2023 9:26 pmYour progression for past few years is insane!! How did you do this??
I have a thread detailing my stock picks. It has worked well so far. Future performance is not guaranteed. Extremely not boglehead. https://www.bogleheads.org/forum/viewt ... p?t=378782
- Sun Dec 31, 2023 12:02 am
- Forum: Personal Finance (Not Investing)
- Topic: Share your net worth progression
- Replies: 4288
- Views: 1082160
Re: Share your net worth progression
2014 50K
2015 200K
2016 500K
2017 800K
2018 1.3M
2019 2M
2020 3.4M
2021 6M
2022 8M
2023 11.9M
About 1.4M in real estate equities, 10M in stocks, 400K in options and about 100K cash/gold/platinum coins.
- Sat Dec 30, 2023 11:03 pm
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
Full year 2023 update: Total return for year 2023: 40.85% vs SP500 26.29% Total return since my first post 6/1/2022: 46.02% vs SP500 18.4% 2023 returns: Ticker Shares 2022 Close 2023 Dividends 2023 Close Return PBR.A 150,000 $9.29 $2.95 $15.28 96.23% DAC 23,000 $52.66 $3.05 $74.06 46.43% DMLP 35,700 $29.93 $3.40 $31.83 17.7% MPLX 31,000 $32.84 $3.18 $36.72 21.5% ET 74,300 $11.87 $1.24 $13.8 26.71% MPCC.OL 300,000 $1.6588 $0.66 $1.3112 18.83% MOMO 22,000 $8.98 $0.72 $6.95 -14.59% CANG 60,000 $1.31 0 $1.02 -22.14% GSL 900 $16.65 $1.5 $19.82 28.05% Total * $6,361,947 $1,039,932 $7,920,669 40.85% Current stock holdings: Ticker Shares Close Value PBR.A 200,000 $15.28 $3,056,000 DMLP 35,700 $31.83 $1,136,331 MPLX 31,000 $36.72 $1,138,320 ET 74,3...
- Wed Nov 29, 2023 2:58 am
- Forum: Investing - Theory, News & General
- Topic: AlphaArchitect launches BOXX: 1-3 Month Box Spread ETF
- Replies: 308
- Views: 44851
Re: AlphaArchitect launches BOXX: 1-3 Month Box Spread ETF
So if I buy BOXX and short the same amount of SPX box, it seems that I can generate capital loss that I can use immediately.
- Tue Sep 26, 2023 5:14 pm
- Forum: Investing - Theory, News & General
- Topic: Investing in Gold: How sure are we GLD holds real gold bullion?
- Replies: 40
- Views: 4343
Re: Investing in Gold: How sure are we GLD holds real gold bullion?
Maybe it gets to the point whereby there isn't enough physical gold on the market to support the asset under management, what happens? Then GLD will likely trade at a premium to physical gold prices if they find it difficult to buy more gold while everybody is rushing to buy GLD. Related to this question is how sure can we be that GLD holds real gold? Can easily see this being another oopsie in the next recession, kind of like how ETNs turned out to be unstable and failed to live up to expectations in the 2008 crash. https://www.ssga.com/us/en/intermediary/etfs/funds/spdr-gold-shares-gld Looks like BNY Mellon is trustee, HSBC and JPMorgan Chase are custodians. So they'll likely have to make you whole if they lied about anything. Similar to...
- Wed Sep 20, 2023 1:05 pm
- Forum: Investing - Theory, News & General
- Topic: Investing in Gold: How sure are we GLD holds real gold bullion?
- Replies: 40
- Views: 4343
Re: Investing in Gold: How sure are we GLD holds real gold bullion?
Then GLD will likely trade at a premium to physical gold prices if they find it difficult to buy more gold while everybody is rushing to buy GLD.
https://www.ssga.com/us/en/intermediary ... shares-gld
Looks like BNY Mellon is trustee, HSBC and JPMorgan Chase are custodians. So they'll likely have to make you whole if they lied about anything.
- Thu Aug 10, 2023 12:23 pm
- Forum: Personal Finance (Not Investing)
- Topic: Tax strategies for high income
- Replies: 86
- Views: 15383
Re: Tax strategies for high income
Conservation easement. But I have never done it myself. I heard Trump and Gates do it regularly and there are some shops that let small investors pool money together for tax benefits. That loophole was closed this year. https://www.propublica.org/article/syndicated-conservation-easements-tax-scam-irs-biden Apparently it has not closed the loophole. My colleague has been doing it every year and is still doing it this year. He claims he's still getting 4x to 5x deduction value. It appears the syndicators found some other loopholes to exploit or there are some exemptions in the new law that they can exploit. And the rich people who can do whole deals without syndications have always been able to do it with much higher conversion ratio.
- Tue Aug 08, 2023 3:16 pm
- Forum: Personal Finance (Not Investing)
- Topic: Tax strategies for high income
- Replies: 86
- Views: 15383
Re: Tax strategies for high income
Conservation easement.
But I have never done it myself. I heard Trump and Gates do it regularly and there are some shops that let small investors pool money together for tax benefits.
But I have never done it myself. I heard Trump and Gates do it regularly and there are some shops that let small investors pool money together for tax benefits.
- Wed Jan 18, 2023 6:39 pm
- Forum: Investing - Theory, News & General
- Topic: Stock Market Game with my HS daughter
- Replies: 76
- Views: 6909
Re: Stock Market Game with my HS daughter
She should pick one penny stock and put 100% of the play money in it. Go big or go home.
- Sun Jan 15, 2023 4:39 pm
- Forum: Non-US Investing
- Topic: FT article on withholding tax and switching to synthetic ETFs
- Replies: 34
- Views: 6163
Re: FT article on withholding tax and switching to synthetic ETFs
Just buy and roll over S&P 500 futures to avoid withholding tax. Doesn't "time-value" incorporate dividend and taxation factors? I thought it did but would be happy to be informed otherwise. It doesn’t incorporate taxation. But it does incorporate an implied financing cost of cash margin. Let’s say index total return is X pre-tax Cash margin can earn risk-free R If you buy index you make X pre-tax. If you buy a risk-free instrument like the SPX Box Spread you make R. If you buy futures you should make X - R. Since futures don’t cost cash margin you could buy the Box Spread at the same time to make R + X - R = X. Now if futures only return X - R - T (T is expected tax). Then some US based hedge funds can buy index, borrow cash...
- Fri Jan 13, 2023 1:18 pm
- Forum: Investing - Theory, News & General
- Topic: What are these abrupt changes in stock prices happening within minutes?
- Replies: 6
- Views: 1381
- Sun Jan 08, 2023 3:13 am
- Forum: Personal Investments
- Topic: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
- Replies: 63
- Views: 6068
Re: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
On the topic of REITs MLPs BCDs mREITs ... one of my favorites is Chesapeake Energy. It pays 10%, and is up about 95% since 2021. It also went bankrupt in 2020. Exciting to watch. Too exciting for any real money. CHK was an MLP before it went bankrupt. Not sure of the structure now :happy https://en.m.wikipedia.org/wiki/Chesapeake_Energy CHK was not an MLP before bankruptcy. It was (and still is) an Exploration & Production company which cannot be organized as MLP. For the company that I used to work for, they were a customer of sorts. It is disturbing when I see many companies go bankrupt or shutdown (including the company that I worked for). Having to shutdown a company from the technical side is not a pleasant experience. It is a to...
- Sun Jan 08, 2023 2:56 am
- Forum: Personal Investments
- Topic: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
- Replies: 63
- Views: 6068
Re: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
CHK was not an MLP before bankruptcy. It was (and still is) an Exploration & Production company which cannot be organized as MLP. Hi gougou, I bow to your superior knowledge of MLPs. :beer If one searches for "chesapeake energy mlp" you get a bunch of hits like Barrons, yahoo finance, etc. A poor defense no doubt :wink: , but I wasn't trying to mislead. Still, CHK is a fun story. One heck of a return right after bankruptcy. I must ask, why did you not correct KMI as an MLP? They got into their dividend/debt mess as a c-corp ... Iirc. Regards PS ... Here's the KMI reference. I guess they didn't say MLP. But KMI is not one. BUT they are another great story 😉 They started as "Enron Liquids Pipeline". I'm not saying tha...
- Sat Jan 07, 2023 2:43 am
- Forum: Personal Investments
- Topic: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
- Replies: 63
- Views: 6068
Re: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
I wish that I had purchased ET shortly after their secondary unit offering ($7.50/unit) in 2022 when it traded below $8.00/unit. However, at that time, I read many complaints from existing unit holders about how the unit offering was not offered to existing small unit holders - ET sold units for 10% below the market price to a group of insiders and institutions. When companies do not allow their current investors to participate in a new offering, while at the same time selling for a below market price, then I get a cold feeling. That was an institution unloading its stake in ET, so it wasn't exactly a secondary offering. ET actually bought back a bunch of its own units so there weren't any dilutions. And the ET chairman and other insiders ...
- Sat Jan 07, 2023 2:31 am
- Forum: Personal Investments
- Topic: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
- Replies: 63
- Views: 6068
Re: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
On the topic of REITs MLPs BCDs mREITs ... one of my favorites is Chesapeake Energy. It pays 10%, and is up about 95% since 2021. It also went bankrupt in 2020. Exciting to watch. Too exciting for any real money. CHK was an MLP before it went bankrupt. Not sure of the structure now :happy https://en.m.wikipedia.org/wiki/Chesapeake_Energy CHK was not an MLP before bankruptcy. It was (and still is) an Exploration & Production company which cannot be organized as MLP. S&P indexes exclude all MLPs but CHK was in the S&P 500 until 2018 and CHK was only removed from S&P mid-cap index shortly before bankruptcy: https://www.spglobal.com/marketintelligence/en/news-insights/trending/Us395k78YejXEFdJHUs4uA2 https://www.marketwatch.com...
- Fri Jan 06, 2023 7:13 pm
- Forum: Investing - Theory, News & General
- Topic: The Complete Irrelevancy of Dividends
- Replies: 138
- Views: 8235
Re: The Complete Irrelevancy of Dividends
Respectfully, that's absurd. Question: what is the difference if a company gives you some of its capital (dividend), or you take it for yourself (sell some shares)? It's different when a stock is undervalued. If a $100 stock owns $200 of net assets, then it's better the company pays you a dividend vs you sell some of you shares. Not always. Sometimes, it is impossible to sell the assets efficiently (for example, specialized equipment that no one but the company can use, assets distributed across the country/world and it is hard to retrieve the assets, there are costs to have someone sell the assets, etc.). Sometimes, it is better to sell the company for less than the assets are worth because it will cost dearly to sell. I'm not saying the ...
- Fri Jan 06, 2023 6:09 pm
- Forum: Investing - Theory, News & General
- Topic: The Complete Irrelevancy of Dividends
- Replies: 138
- Views: 8235
Re: The Complete Irrelevancy of Dividends
A stock that doesn't pay dividends is like being married to someone that doesn't let you spend any of their money and the only way you can get some of their money if you divorce them. Respectfully, that's absurd. Question: what is the difference if a company gives you some of its capital (dividend), or you take it for yourself (sell some shares)? It's different when a stock is undervalued. If a $100 stock owns $200 of net assets, then it's better the company pays you a dividend vs you sell some of you shares. Not always. Sometimes, it is impossible to sell the assets efficiently (for example, specialized equipment that no one but the company can use, assets distributed across the country/world and it is hard to retrieve the assets, there a...
- Fri Jan 06, 2023 4:59 pm
- Forum: Investing - Theory, News & General
- Topic: The Complete Irrelevancy of Dividends
- Replies: 138
- Views: 8235
Re: The Complete Irrelevancy of Dividends
It's different when a stock is undervalued. If a $100 stock owns $200 of net assets, then it's better the company pays you a dividend vs you sell some of you shares.Charles Joseph wrote: ↑Fri Jan 06, 2023 3:53 pmRespectfully, that's absurd.
Question: what is the difference if a company gives you some of its capital (dividend), or you take it for yourself (sell some shares)?
- Fri Jan 06, 2023 12:56 am
- Forum: Personal Investments
- Topic: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
- Replies: 63
- Views: 6068
Re: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
It pays out almost everything it earns. Therefore, what buffer is there it ensure that you will receive the same payout the next year? Almost none. These "units" of MLPs are often diluted in order to finance projects; again, may cut into payout. Companies can post lower/negative earnings; again, may cut into payout. They earn great returns until the well runs dry as it were. Then what? ET pays out about half of its Distributable Cash Flow. Pipelines have high depreciation expenses but very low economic depreciation just like real estate. So GAAP EPS understates what ET actually earns. Also a P/E ratio of 8.8x isn't expensive. For the past 12 months ET earned $7.1B DCF which is about $2.36 per share or about 20% cash flow yield on...
- Thu Jan 05, 2023 6:29 pm
- Forum: Personal Investments
- Topic: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
- Replies: 63
- Views: 6068
Re: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
ET is going to yield over 10% in 2023 plus annual growth that will most likely beat inflation. MPLX is similar. But the dividend irrelevancy guys here are going to tell you that 10% yield will not last and it will eat into your principal and eventually be cut. If you need 10% annual withdrawal, then a combination of ET, MPLX and a few other MLPs, REITs, BDCs will have a very good chance of achieving that goal, while an S&P index fund is unlikely going to afford you a 10% annual withdrawal. It pays out almost everything it earns. Therefore, what buffer is there it ensure that you will receive the same payout the next year? Almost none. These "units" of MLPs are often diluted in order to finance projects; again, may cut into pa...
- Thu Jan 05, 2023 6:00 pm
- Forum: Personal Investments
- Topic: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
- Replies: 63
- Views: 6068
Re: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
ET is going to yield over 10% in 2023 plus annual growth that will most likely beat inflation. MPLX is similar. But the dividend irrelevancy guys here are going to tell you that 10% yield will not last and it will eat into your principal and eventually be cut. If you need 10% annual withdrawal, then a combination of ET, MPLX and a few other MLPs, REITs, BDCs will have a very good chance of achieving that goal, while an S&P index fund is unlikely going to afford you a 10% annual withdrawal. It pays out almost everything it earns. Therefore, what buffer is there it ensure that you will receive the same payout the next year? Almost none. These "units" of MLPs are often diluted in order to finance projects; again, may cut into pa...
- Thu Jan 05, 2023 4:47 pm
- Forum: Personal Investments
- Topic: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
- Replies: 63
- Views: 6068
Re: Is There Any Room for Income Generating Stocks (i.e. MLPs, REITs, BDCs) in a BogleHead Portfolio?
ET is going to yield over 10% in 2023 plus annual growth that will most likely beat inflation. MPLX is similar.
But the dividend irrelevancy guys here are going to tell you that 10% yield will not last and it will eat into your principal and eventually be cut.
If you need 10% annual withdrawal, then a combination of ET, MPLX and a few other MLPs, REITs, BDCs will have a very good chance of achieving that goal, while an S&P index fund is unlikely going to afford you a 10% annual withdrawal.
But the dividend irrelevancy guys here are going to tell you that 10% yield will not last and it will eat into your principal and eventually be cut.
If you need 10% annual withdrawal, then a combination of ET, MPLX and a few other MLPs, REITs, BDCs will have a very good chance of achieving that goal, while an S&P index fund is unlikely going to afford you a 10% annual withdrawal.
- Tue Jan 03, 2023 12:05 pm
- Forum: Personal Investments
- Topic: Tesla [stock] still a good option?
- Replies: 113
- Views: 15130
Re: Tesla [stock] still a good option?
Would buy at 10x P/E.z3r0c00l wrote: ↑Tue Jan 03, 2023 11:35 am Another really bad day for Tesla, but on the plus side it is inching closer to what I think is a reasonable valuation. A P/E of 25 would make it an interesting stock especially if certain people were replaced by a real CEO. Tesla should find a way to hire Tim Cook...
Anyway they had a good week for a minute there, shipping well over 1 million cars in a year, but that still puts them 8x behind Toyota. I guess this China news hit them hard today though.
- Tue Jan 03, 2023 11:32 am
- Forum: Investing - Theory, News & General
- Topic: gougou's shareholder yield strategy
- Replies: 153
- Views: 20421
Re: gougou's shareholder yield strategy
The MLPs (ET, MPLX, DMLP) are all in taxable. Their dividends are tax-deferred.
I happen to have a pretty big tax-deferred/tax-free account because of some successful bets before. So the non-MLP high dividend stocks are mostly there.