Saturday, April 20, 2024
Dear Investor, Share buybacks have become the rage for companies with large amounts of excess profits or free cash flow. Wall Street analysts love share buybacks as a way to “return capital to shareholders,” and many boards of directors give a lot of weight to what the analysts who follow their companies say. My opinion […]
Dear Reader, Those of us out in the real world, buying gasoline, bacon, Christmas gifts, and renting homes, understand that inflation is real and probably higher than the official government inflation number. However, interest rates on fixed-income investments such as Treasury bonds and CDs remain very low. One exception is the U.S. government’s inflation-linked savings […]
Dear Reader, Last week, one of my recommended stocks, Starwood Property Trust (STWD), announced a $400 million secondary offering of common stock. The new shares will go to institutional investors and typically get priced at a discount to where the stock currently trades. As a result, the STWD share price dropped 3.5% the day after […]
Dear Reader, The recent stock market volatility reminds me again of the power of reinvesting the income from your dividend investment strategy. Once you understand the compounding power of dividend reinvestment, you realize that it’s very good for your long-term wealth when the stock market goes through a period of decline. It’s something my Dividend […]
Dear Reader, A recent Wall Street Journal article, “The Rules of Retirement Spending Are Changing,” did not bring good news. Instead, the article clearly reveals that traditional financial planning rules for retirement will not work for those who have diligently saved to fund a comfortable life after decades of work. I want to propose a […]
Dear Reader, Recent earnings coming out of the retail sector show how important management decisions have become in this era of supply chain challenges and high inflation. Stocks have stopped moving in tandem with their peers. Those who can pick the best companies, with the best management teams, as their investments will significantly outperform the […]
Dear Reader, “It’s different this time” might be the four of the most dangerous words in investing. Market crashes occur when investors believe that traditional valuation metrics no longer apply. Another way to put it is that grossly overvalued investments eventually come back to earth, often violently. Yet, I am going to go out on […]
Dear Reader, Each quarter, my favorite earnings conference call comes from Starwood Property Trust (STWD) and its CEO, Barry Sternlicht. As the leader of both the publicly traded REIT and the private equity firm he founded, Starwood Capital Group, Sternlicht is excellent about sharing his thoughts on a wide range of financial topics, and recently […]
Dear Reader, I have seen and heard about a wide range of stocks that investment pundits recommend you buy to profit from the recovery from the coronavirus pandemic. With stock prices zooming higher through 2021, it’s hard to determine which “recovery” stocks still have room to run. Here is one that will do very well […]
Dear Reader, Corporations’ renewed focus on “returning cash to shareholders” is laudable, but misleading. As with all things investment-related, you can only determine whether something is a good deal for investors by understanding the nuances of how companies implement these policies. When business results are good, corporate boards of directors often choose (as they should) […]
