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A Preferred Share Primer
When I talk about dividend stocks here at Money and Markets, I almost always mean common shares of a company.
But today I want to tell you about another class of stock that some income investors gravitate toward: “Preferred” shares.
As the name suggests, preferred stock gives its owner a leg up on common shareholders, especially when it comes to dividends.
Preferred shareholders may receive larger payments, and companies are required to pay these dividends before distributions are made to common shareholders.
This DOES NOT mean the dividend is guaranteed. It simply means that when it comes down to the wire,…
3Nov2009 | Money and Markets | 0 comments | ContinuedThe ‘Super Rich’ and the Recession
Last week Fed Chairman Ben Bernanke spoke optimistically about a global recovery. US home sales have started to improve giving cause for more good feelings. Whether or not Bernanke, EU Monetary Chief Trichet, or any other central banker is correct about pulling out of a recession will be known only in hindsight. However, the effects of recession are already present – especially for the super rich.
The “super rich” are the wealthiest of the wealthy. Think Bill Gates and Warren Buffet. According to CNBC, in 1985 there were only 13 billionaires in the United States. Today there are more than a thousand.…
26Aug2009 | Invest With An Edge | 0 comments | ContinuedWhy Warren Buffett Got Caught Sucking His Thumb
Next buying opportunity could arrive between September and November
In the section of his annual letter to his stock-holders explaining why their stock plunged 32% last year, Warren Buffett said, “I did some dumb things in 2008 … sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.”
Buffett doesn’t often get caught up in the problems that foil ordinary investors.
What is known in studies of human psychology as the ‘status quo bias’ is sometimes one of those problems. We humans dislike change, especially dislike having our minds changed, and usually…
Warren Buffett Might Have Made a Poor Economic Pep Talk
Hope may be getting too far ahead of itself
In my column of February 6, titled ‘Hope Could Be a Powerful Influence’, and of February 16, titled ‘It’s Time for the Next Step’, I ranted about how Fed Chairman Bernanke, the Treasury Department, Congress, the White House, and therefore the media, were driving consumer and investor confidence down further than it would normally be, with their endless doom and gloom assessment of the economic situation, repeated dreary explanations of how we got into it, and dismal predictions of how difficult it will be to get out of it.
I suggested that providing…
Warren Buffett’s 2008 Letter to Shareholders: Bearish or Bullish?
Details of Warren Buffett’s 2008 Letter to Shareholders have been grossly exaggerated. Most media outlets – financial and mainstream alike – opted for the anti-Bing Crosby angle – accentuating the negative, and virtually eliminating the positive.
In fact, every article I read couldn’t keep from latching on to this single doom and gloom line: “We’re certain, for example, that the economy will be in shambles in 2009 – and, for that matter, probably well beyond.”
But don’t be so quick to label Mr. Buffett as a sudden convert to the permabear camp. A careful study of his most recent letter – because they…
6Mar2009 | Investment U | 0 comments | ContinuedWhy Buffett Does What He Does
Several headlines have noted Berkshire Hathaway shares are hitting five-year lows. Some think Warren Buffett, Berkshire’s billionaire CEO, has lost it.
Short seller Doug Kass, for example, says Buffett is guilty of style-drift, i.e., getting outside his "core competencies" as an investor.
Recently, Buffett has spent reams of Berkshire’s cash, and now he’s selling iconic favorites like U.S. Bancorp, Johnson & Johnson, Procter & Gamble, and ConocoPhillips to raise more cash… which he’s using to buy bonds of companies like Harley-Davidson and Tiffany’s.
That might look un-Buffett to you. And Doug Kass may have been right so far. But I don’t buy…
26Feb2009 | Stansberry and Associates | 0 comments | ContinuedWarren Buffett’s Investment Model: Insider Trading Reveals Undervalued Stocks
Almost four months ago, Warren Buffett famously wrote his endorsement of U.S. equities in his op-ed piece to The New York Times entitled “Buy American, I Am.” Since then, it’s dropped 11.4%. It’s hard even for an Oracle to help when people just don’t believe.
Warren Buffett’s investment model and purchase criteria are unbearably fuzzy to analysts since they can’t just go punch numbers from their database – no matter how big or expensive it is.
Don’t let anybody fool you into believing that value investing is based on any kind of ratio analysis, or that looking at one simple financial figure accurately…
17Feb2009 | Investment U | 0 comments | ContinuedRiding High on the Hog: High Yield Bonds are Another Win/Win for Buffett
Once again Warren Buffett makes the best of a bad situation. Today Harley-Davidson (NYSE:HOG) announced it will be raising $600 million through an offering of 15% debt.
As you might expect, Buffett’s involvement in the deal sparked a rally in Harley shares. The shares of the beaten down motorcycle maker surged more than 15% today while the rest of the auto industry had a pretty rough day.
Is it a good move for Buffett?
Yes.
Is it a good move for investors to bid up shares of Harley-Davidson?
Probably not.
Frankly, it still blows my mind how many investors are willing to plow in after…
3Feb2009 | Q1 Publishing | 0 comments | ContinuedNo bones about it: orthopedic stock could outperform
Implants play might see a 50% retracement…
Retail sales are down. Autos and the housing industry are still in the dumps. The financial sector may be under repair – or not. No one knows at this point.
So where is an investor to look for profits in 2009?
Many have apparently given up on the stock market altogether, with record amounts having been pulled out of stocks and mutual funds in recent months.
Historically, bailing out after the market has had a 50% decline has not been a good approach.
Meanwhile, most investors, being buy and hold investors, held through some terrible and stressful losses in…
Investing Like Warren Buffett: Take Your Cue From the World’s Best Investor
Not long ago I excerpted a recent New York Times column by Warren Buffett explaining his take on the recent market sell-off.
Despite the dour economic outlook, Buffett expects U.S. companies to report record profits within five years. He is getting fully invested in stocks in his own personal account.
Since Warren Buffett’s column originally ran on October 14th, however, the S&P 500 has dropped 13%.
Hardly a day goes by that I don’t get emails telling me that Buffett “blew it.” He was “too early.” Or he “failed to call the bottom.”
I beg to differ …
Warren Buffett’s Economic Outlook
For the record, here is part…
9Dec2008 | Investment U | 0 comments | Continued
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