How can you bear Morningstar?

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umfundi
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How can you bear Morningstar?

Post by umfundi »

http://thetrustadvisor.com/headlines/beat-the-market

I believe that some Bogleheads use Morningstar for advice and analysis. I can't imagine why.

Keith
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Soren Aabye
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Re: How can you bear Morningstar?

Post by Soren Aabye »

I use Morningstar's website for one reason: to create custom charts for a quick comparison of stocks, funds, indexes, etc. It's free and easy. It never occurred to me to think that I was bearing anything.
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Kevin M
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Re: How can you bear Morningstar?

Post by Kevin M »

I don't even know how to find the articles. I think I might have even poked around once or twice looking for them. On the other hand, it's easy to get to a growth chart, and unless you want to get in trouble with nisiprius, you'd better be using a growth chart and not a price chart.

Also the 9 grid stylebox breakdown of funds is useful sometimes, as are the x-ray and Portfolio X-Ray tools.

So, it's all about the free tools.

Kevin
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Igglesman
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Re: How can you bear Morningstar?

Post by Igglesman »

umfundi wrote:
I believe that some Bogleheads use Morningstar for advice and analysis. I can't imagine why.

Keith
+1

I agree 100%
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nisiprius
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Re: How can you bear Morningstar?

Post by nisiprius »

Morningstar seems to be the preeminent source of actual data. I don't know how that happened or why. Maybe there are better sources available to professionals who can pay thousands a year, I wouldn't know.

Morningstar is sort of in a bind, because they have to go along with the idea that detailed information actually leads to better results, otherwise they just become an academic research department with no funding. It was pretty gutsy of Morningstar to publish their own stuff showing that star ratings don't have any persistence at all!

I don't have their paid service. Based on what leaks through, e.g. Christine Benz' and other articles, they seem like darned good intellectually honest reporters.

The column you cite is an opinion piece. I don't like it. I'll call it "unbearable" if you like. But I don't call it "Morningstar." It's not being published by Morningstar, it's being published by someone else.

Yes, it's bragging, It's dishonest; whenever the "dividend" discussion comes up in the forum, there is always a legitimate debate on whether stock buybacks are just as good as dividends, and a fair discussion would address that question, since it bears on the meaning of the trend toward lower dividend payments in the stock market generally. But he doesn't mention it, because he's trying to promote his point of view and doesn't want to introduce complications. Just like Buffet dumping on "bonds" because of inflation risks and not mentioning the existence of TIPS, if this guy is going to dump on low dividend payments, he has to explain, even if briefly and dismissively, why stock buybacks aren't equivalent.

I have no idea what Morningstar DividendInvestor might be. Based on that opinion piece I wouldn't pay a nickel for it, and if it's free I wouldn't take more than a curious peek into it. I can't even bear the name: merging two words for no particular reason, other than to make it look like a C# instance variable name?
Last edited by nisiprius on Fri Mar 16, 2012 7:46 am, edited 2 times in total.
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Random Musings
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Re: How can you bear Morningstar?

Post by Random Musings »

I find some of the free data there useful for breaking out my portfolio.

You have to separate the wheat from the .......

RM
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sscritic
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Re: How can you bear Morningstar?

Post by sscritic »

Morningstar is more than one thing. I go to Morningstar for the TIAA-CREF forum, a source of experienced voices. That forum is often recommended here for people with questions about TIAA-CREF. There is even a Diehards forum, where people like Mel and Taylor post, but then, who would want to read what they have to say? :)

[For the joke impaired - I added a smiley for a reason.]
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Spades
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Re: How can you bear Morningstar?

Post by Spades »

I like the charts. I'm not too interested in the argument about morningstar articles or analysis. I don't use it.
KyleAAA
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Re: How can you bear Morningstar?

Post by KyleAAA »

So that guy has an opinion you disagree with. Big deal. Doesn't make Morningstar unbearable.
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Re: How can you bear Morningstar?

Post by ObliviousInvestor »

As others have said, Morningstar is super useful for the data.

As far as the advice, it seems to me like any other major publication with many writers. Some of the writers give good advice. Others give less-good advice.
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Re: How can you bear Morningstar?

Post by texas_archer »

M* is a great asset with a ton of free data available to investors. I use it daily to keep track of my total portfolio.

Your citing a opinion piece by someone who is probably making money off tearing down M* through advertisements of M* competitors.

You know everyone doesn't Index and there are dozens of different investment styles. M* tries to inform all of them.

If you don't like it, don't read it.
swyck
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Re: How can you bear Morningstar?

Post by swyck »

KyleAAA wrote:So that guy has an opinion you disagree with. Big deal. Doesn't make Morningstar unbearable.
I agree. I didn't see anything that was outright inaccurate, misleading or incorrect. Certainly nothing that merited the OP headline and post.

Typical Boglesnobbery IMO, or maybe just the typical mindless dividend bashing we often see here.
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PaddyMac
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Re: How can you bear Morningstar?

Post by PaddyMac »

How does DividendInvestor propose to meet this challenge? My analysis of individual stocks centers entirely on the dividend: Is it safe? Will it grow? And what is the total-return potential? Though simple, these three questions drive right to the heart of what makes a business tick. Though straightforward, strikingly few stocks meet my requirements. Most large American companies still prefer to retain most or all of their earnings to fund growth, but that growth (especially if pursued through acquisitions or heavy share repurchases) simply hasn’t created wealth for shareholders. But for the few firms that do meet my demands, I’m exactly the kind of shareholder they want: well-informed, patient, and willing to support efforts at enduring success.
I'm not sure what was in that article that rubbed you the wrong way. We've found Josh Peter's analysis at DividendInvestor to be quite useful. He turned us onto KMI Kinder Morgan well before the stampede began, and his thoughtful indepth analysis of the funds he owns or watches has helped us average a 7-9% return in dividends over the past few years, enough to pay our mortgage and then some. And he does it without recommending companies that are paying a high dividend because they are in trouble. His list of companies is surprisingly small. He's one of the good guys.
MP173
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Re: How can you bear Morningstar?

Post by MP173 »

And what exactly was the issue with the linked article?

I use Morningstar several times a week (often daily). Been a premium subscriber for nearly 10years.

ed
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BigD53
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Re: How can you bear Morningstar?

Post by BigD53 »

Go easy with the criticism of Morningstar. For it was Morningstar that gave the original "Vanguard Diehards" a platform and a discussion forum (for free!)

If not for the generosity of Morningstar, there would probably be no "Diehards", no name recognition, no financial forum, no discussions, and nobody would've ever heard of those guys.

...and down the road, probably no spin-off, and no creation of a "Bogleheads" forum. :beer
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nisiprius
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Re: How can you bear Morningstar?

Post by nisiprius »

Another thing, and again someday I'd like to winkle out the history, Morningstar took the Fama-French methodology, reduced it to style boxes, showed people what style box funds were in, and measured funds, not against the S&P 500, but against benchmarks appropriate for their style. Really drove home to everyone paying attention that most of what people were admiring in high-performing funds was not manager in picking individual stocks, but simply the statistical consequence of the broad kinds of stocks the manager was choosing. And also made people aware of "style drift."

That's a huge contribution, and highly praiseworthy.
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Sheepdog
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Re: How can you bear Morningstar?

Post by Sheepdog »

Morningstar has been a source of all types of investing including indexing. They give good advice on retirement planning and living in retirement. They have forums on "Vanguard Funds" and "Bogleheads Unite". Christine Benz is a source of sage advice. Morningstar is where I found Boglehead philosphy in 1998.
I visit and contribute there as much as here. Yes, there is junk, but there are jewels as well.
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gkaplan
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Re: How can you bear Morningstar?

Post by gkaplan »

One needs to separate the kernel from the chaff.
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Re: How can you bear Morningstar?

Post by Mortgasm »

I think they have done a lot for retail investors, while still (apparently) making a profit. Where are the better sources of information for the consumer?

Yes, you have to be careful and not believe everything you read.
pastafarian
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Re: How can you bear Morningstar?

Post by pastafarian »

someday I'd like to winkle out the history,
Umm, will you be selling tickets for that? :wink:
likegarden
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Re: How can you bear Morningstar?

Post by likegarden »

I only have mutual funds. Morningstar is great to provide all that unbiased data of mutual funds. Without Morningstar data I would not be able to verify the performance of my portfolio, and people would not be able to ascertain if an administrator or adviser actually was worth it paying money for his services. Without public access to Morningstar data, performance of mutual funds would be nebulous. Via Morningstar I found the Vanguard Diehard forum, the predecessor to the Bogleheads forum, thanks to M for hosting that forum then.

I am signed up to the Morningstar Fundinvestor to have access to all the Fundinvestor 500 funds and their data, which I then use to periodically check on the performance of my portfolio.
theresa
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Re: How can you bear Morningstar?

Post by theresa »

Josh Peters is a Morningstar employee. The DividendInvestor is a monthly newsletter. I don't subscribe to the newsletter but I did buy and read his book on dividend investing about 5 years ago. He recommended Master Limited Partnerships in the book and I ended up investing in one. Come tax time I regretted that decision. It took me days to understand how to fill out all the forms required. I quickly sold my shares after that tax season and have never been tempted to buy a MLP again. I wish Mr. Peters had mentioned the tax considerations in his book.

Having said that, I'm a big Morningstar fan. I appreciate all the free tools it makes available. I like the forums and I enjoy reading the articles by Christine Benz.

I'm also a big admirer of the CEO, Joe Mansueto. I think he is the most ethical CEO of any public company. I've been a stockholder in Morningstar since it went public in 2005. I invest mostly in index funds but view the Morningstar investment as my lottery ticket.

Theresa
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Mel Lindauer
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Re: How can you bear Morningstar?

Post by Mel Lindauer »

Lots of good and valid comments about Joe Mansueto (a real great guy), Christine Benz and the data M* provides (much of it for free). And let's not forget (some have touched on it) that it was the birthplace of the Bogleheads (nee Vanguard Diehards).

FWIW, M*'s Christine Benz was on the Experts Panel last year at Bogleheads 10 and will be on the Experts Panel again for the Q&A with the Experts session at Bogleheads 11 this October in Philly.

http://www.bogleheads.org/forum/viewtop ... 8#p1322518
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stratton
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Re: How can you bear Morningstar?

Post by stratton »

theresa wrote:Josh Peters is a Morningstar employee. The DividendInvestor is a monthly newsletter. I don't subscribe to the newsletter but I did buy and read his book on dividend investing about 5 years ago. He recommended Master Limited Partnerships in the book and I ended up investing in one. Come tax time I regretted that decision. It took me days to understand how to fill out all the forms required. I quickly sold my shares after that tax season and have never been tempted to buy a MLP again. I wish Mr. Peters had mentioned the tax considerations in his book.
He does warn about the tax issues in the book which is why I don't own anything with a K-1.

The Dividend Investor blog (free) is here.

Paul
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ruralavalon
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Re: How can you bear Morningstar?

Post by ruralavalon »

I use Morningstar for:
free fund data;
free portfolio manager;
free instant x-ray; etc.

I have no complaints. I sometines read their oipinons pieces, and agree with some and disagree with others.
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investor
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Re: How can you bear Morningstar?

Post by investor »

stratton wrote:
theresa wrote:Josh Peters is a Morningstar employee. The DividendInvestor is a monthly newsletter. I don't subscribe to the newsletter but I did buy and read his book on dividend investing about 5 years ago. He recommended Master Limited Partnerships in the book and I ended up investing in one. Come tax time I regretted that decision. It took me days to understand how to fill out all the forms required. I quickly sold my shares after that tax season and have never been tempted to buy a MLP again. I wish Mr. Peters had mentioned the tax considerations in his book.
He does warn about the tax issues in the book which is why I don't own anything with a K-1.

The Dividend Investor blog (free) is here.

Paul

Re the Book: "]The Ultimate Dividend Playbook]..."check the appendix 2 and in particular page 254-256 where it talks about UBTI and tax deferred investments. Also why I no longer own MLP's.

investor
theresa
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Re: How can you bear Morningstar?

Post by theresa »

Paul and Investor,

I'm sure you two are right about the warnings in the book. I just didn't realize the extent of the tax implications at that time. I gave the book to Goodwill years ago so I can't check what he did write. Doesn't matter. I'm happy now with my index funds plus investing in a few companies I can totally understand and cause me no angst at tax time.

Theresa
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umfundi
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Re: How can you bear Morningstar?

Post by umfundi »

umfundi wrote:http://thetrustadvisor.com/headlines/beat-the-market

I believe that some Bogleheads use Morningstar for advice and analysis. I can't imagine why.

Keith
Oh, my! I have not yet assessed the size of the crow I need to eat.

I received the text of the Josh Peters article in a direct e-mail from Morningstar. It seemed interesting, that a focus on dividends had done so well, then became a little unbelievable that some person could predict "good" dividends, then it turned out to be a pitch for some new newsletter. With the full stamp of Morningstar's approval.

Not wanting to post the full text of my e-mail, I went looking for the text online, and found it at the link I posted. I also searched the Bogleheads Forum for any mention of Josh Peters, and did not find any.

My complaint still stands. This is cherry picking some recent good performance with a plausible justification and a promise of some guru who has the smarts to make the picks. I expect better from Morningstar, hence my post.

I am not bashing dividends or value. I am bashing the idea that there is a "dogs of the dividends" strategy (or vice-versa) that is unrecognized in an efficient market.

I could have expressed it better.

Nonetheless, I think the thread evolved into something good, once we got beyond (justifiably) bashing my OP. I decided to lay low, so as not to get into arguments about my OP.

I think this discussion about Morningstar has been quite instructive, in spite of the OP. Thank you.

Keith
Déjà Vu is not a prediction
Topic Author
umfundi
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Re: How can you bear Morningstar?

Post by umfundi »

For what it's worth, here is part of the e-mail I received. There is no doubt it was only from Morningstar:

Keith

>>

Morningstar


Josh Peters, CFA
Chief Equity-Income Strategist, Editor, Morningstar DividendInvestor

EASY CHECKOUT
Morningstar DividendInvestor
Annual digital subscription
(12 issues) $189
Premium members save $10

Buy It!


How We Beat the Market With Dividends
By Josh Peters, CFA | March 2012

During the stock market's correction in the late summer and early fall of 2011, I found myself thinking about sardines, of all things. Not because I like sardines, or for that matter, any other canned fish. Instead, sardines popped into my head because of a little homily by Seth Klarman, the highly accomplished (and admirably media-shy) value investor, in his 1991 book, Margin of Safety:

"There is the old story about the market craze in sardine trading ...
As stock prices plunged, ... (Text removed by Umfundi) ... Over the past seven years, with dividends as my guide and principal source of reward, I've beaten the market--without even trying.

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