Articles

Ackman’s Looking At This All Wrong

Brett Owens, Chief Investment Strategist
Updated: February 2, 2016

Top-20 hedge fund Pershing Square Capital Management just announced heavy losses last year, and a tough start to 2016. The fund is currently down a little over 11 percent YTD in 2016, after losing 20.5 percent in 2015.

The problem, CEO Bill Ackman explains: “We believe that our continued negative outperformance in the first few weeks of the year relates primarily to forced selling of our holdings by investors whose stakes overlap with our own.”

I’m guessing that’s his way of admitting his market timing hasn’t been the best of late. And his short-term focus is hurting the timing of at least one company he’s currently involved with.… Read more

The Easiest Way To Time The Market

Brett Owens, Chief Investment Strategist
Updated: August 9, 2017

January’s financial dumpster fire torched nearly every portfolio on the planet. Easy to say, “buy the dip” but harder to do effectively. Most portfolios underperform the stock market at large because investors sell low, only to buy higher later!

Except for DRIP investors, that is. They scale up their stock purchases during pullbacks, and scale down their buying during run-ups. That’s how wealthy people invest… they buy more when prices are low.

If you’re not familiar with a DRIP, I’ll explain what they are, and show you how to set one up in a minute. And if you know DRIPs, I’ll show you a new technique you can use to maximize your performance.… Read more

3 Dividend Stocks To Buy Now And Hold Forever

Brett Owens, Chief Investment Strategist
Updated: August 10, 2017

With the S&P 500 down nearly 7% in the last three weeks alone, you can’t be blamed for wanting to throw up your hands and sell all your stocks.

But that’s the worst thing you could do, especially if you have a long time horizon and you mainly hold dividend-paying US companies. In fact, if you’re in this camp, you can largely ignore the market’s daily gyrations. And really, you should take advantage of them.

The numbers tell the tale: according to Ned Davis Research, dividend-paying stocks returned an average of 9.3% a year from 1972 through 2014, compared to 2.6% for non-dividend payers—and they did so with less volatility.… Read more

Four Big Dividends Living on Borrowed Time

Brett Owens, Chief Investment Strategist
Updated: January 22, 2016

This week oil crashed below $30 a barrel, the broader domestic indexes continued to pull back, and economies around the world – namely China’s – are growing riskier. There might be what some consider panic in the streets… but this isn’t entirely a buying opportunity.

After all, there are lots of dividend traps, falling knives and paper payout tigers ready to obliterate your value buying. It pays to be cautious and careful right now. Especially for asset-price dependent firms.

Over the past few weeks I’ve been digging into some of the worst dividend payers whose shaky business earnings are putting their payouts at risk.… Read more

The Worst High Yield Investment Today

Brett Owens, Chief Investment Strategist
Updated: January 20, 2016

There’s a new bond king in town – and he’s warning investors about a high yield darling that’s really a backdoor energy trap.

Barron’s swapped out Bill Gross for Doubleline Capital founder Jeffrey Gundlach in its 2016 Roundtable. The publication says that Gross decided to resign his post. Whatever the case, it’s a good trade as Gundlach has had better calls and performance for years. Long live the new bond king!

His magistrate is currently warning investors about unexpected “collateral damage” from $30 oil. His warnings will sound familiar to regular readers, as we’ve already called out big oil as a big dividend trap, and picked on MLPs with unsustainable payouts.… Read more

This Stock Will Boost Its Dividend 4 Times in 2016

Brett Owens, Chief Investment Strategist
Updated: January 19, 2016

Call it China’s revenge—and the sequel to last summer’s horror show is no less terrifying than the original. Just ask the thousands of panicked investors who are, yet again, madly tossing their stocks over the side.

But time and again, history has shown you’re far better off buying into hysterical markets like these than selling. But where should you look for safety AND upside?

I recommend the good old US of A. By doing so, you’ll instantly dodge two big headaches: the grinding emerging market slowdown and the surging greenback, which is pummeling any profits American companies earn overseas these days.… Read more

3 Double-Digit Dividends Set To Fall Hard

Brett Owens, Chief Investment Strategist
Updated: January 15, 2016

Oil’s hitting 12-year lows as we speak – and that’s crushing a favorite vehicle of many income investors. If you’re not yet out, get out.

Reason being, it could easily get even worse for the goo. In fact, it probably will. A surge in either the U.S. Dollar or a depreciation of the Chinese yuan of just 15% could send crude in the $20 range. So could a continued liquidation of massive hedge fund bullish bets – they’re still long nearly 50,000 futures contracts. Yikes.

In 2015 alone the Alerian MLP Index lost 31%. Oppenheimer’s senior oil and gas analyst Fadel Gheit suggested that half of U.S.Read more

9 Dividends Stocks To China-Proof Your Portfolio

Brett Owens, Chief Investment Strategist
Updated: January 13, 2016

China’s financial grease fire has officially spread to American stocks. If your portfolio isn’t yet “China-proof” then you’d better protect yourself now. Sell your dividend-paying disasters and get your capital into issues that do pay yields but aren’t hooked on dragon dust.

I get it – you probably didn’t think good ol’ U.S dividend-paying stocks would get crushed like this. They do outperform the market over time, after all.

Problem is, not all stated yields can be taken “as is.” For example, the big oil and BDC dividend dogs that I warned you about last month are underperforming in an already-bad market.… Read more

1 Dividend Stock To Buy, And 1 To Dump Immediately

Brett Owens, Chief Investment Strategist
Updated: January 11, 2016

Plenty of investors see telecom stocks like AT&T Corp. (T) and Verizon Communications (VZ) as cornerstones of any income portfolio. Heck, many even like Comcast (CMCSA) as a dividend-growth staple.

But do they really deserve that honor? And if so, which stock is best for you?

Below, we’ll zero in on a few crucial numbers that tell the tale.

But first, I should point out that none of these three tops my list of favorite dividend-payers now. That title goes to a company throwing off a safe 7.3% dividend yield I’ll tell you about a little further on.

That said, in a head-to-head matchup between AT&T and Verizon, I do have a clear favorite.… Read more

5 Dividend Stocks to Avoid and 5 to Buy for 2016

Brett Owens, Chief Investment Strategist
Updated: January 14, 2016

Most stocks that pay meaningful yields today do so because their stock prices are cheap. Their dividends are being paid from earnings that aren’t there.

Big oil is a big dividend trap. A low payout ratio – the percentage of earnings a company pays out to investors – is generally a good thing. Until that number turns negative, that is.

BP plc (BP) lost $2.49 per share over the last 12 months while stubbornly paying out $2.40 in dividends – for a big yet unsustainable current yield of 7.8%.

How’d it fill the gap? Almost $5 billion in additional long-term debt.… Read more