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Articles by Tom Au
Why The Dogs Of The Dow Strategy Will Likely Succeed In 2023
The "Dogs of the Dow" strategy (the practice of buying the 10 highest yielding Dow 30 Industrial stocks (or a subset thereof) works better some years than others. Below, we will list the reasons why we think that 2023 will one of the better years. The Dow Jones 30 Industrials is a highly visible index of 30 major stocks.
The Market Doesn't Believe QuidelOrtho's Good Fortune (NASDAQ:QDEL) Original
Summary The earnings of the former Quidel, a diagnostic testing company, exploded in 2020 because of COVID-19, and have been going strong ever since. The market doesn't believe this "nouveau riche" story, valuing the company at a single-digit multiple of current earnings. Though earnings are expected to decline from current peaks, the stock would still be cheap on its pre-Covid earnings trend.
The Market Doesn’t Believe Quidel’s Good Fortune
Quidel Corporation (NASDAQ:QDEL) is a diagnostic testing company. Although it covers other important areas such as flu, respiratory, viral and herpes testing, it was “put on the map” by COVID-19 tests after 2019. Earnings jumped more than tenfold in 2020 to $18.60 a share, up from $1.73 a share in 2019.* They “declined” slightly to $16.49 in 2021.
A Dividend-Based Strategy For The Year Ahead
Graham and Dodd viewed stocks as special cases of bonds. That is, they bought stocks for their dividends, rather than for potential capital gains. There was, however, one noticeable difference between stocks and bonds. The former carry an inflation fighter in the form of potential rises in the dividend, whereas the latter represent a fixed income stream.
A Dividend-Based Strategy For The Year Ahead
Graham and Dodd viewed stocks as special cases of bonds. That is, they bought stocks for their dividends, rather than for potential capital gains. There was, however, one noticeable difference between stocks and bonds. The former carry an inflation fighter in the form of potential rises in the dividend, whereas the latter represent a fixed income stream.
Why are German numbers backwards?
Why a new answer to an eight years old question which has already received excellent answers? One point has not really been addressed so far. Quote from the question: Latin languages, as well as English, speak numbers from left to right, in the same direction in which they are written, e.g. forty-two, quarante-deux, but in German, you write from left to right but speak numbers from right to left, in the opposite direction.
A New Tool For Measuring Berkshire Hathaway’s Stock Performance Original
Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) has modestly underperformed the S&P 500 since the beginning of 2002 (up to the end of 2020). The difference is not large, an average of less than 30 basis points (0.3%) per year, basically a statistical tie. But if you throw in one additional measure, Berkshire has OUTperformed during that 19-year period, as well as in the 37year outperformance during the period from 1964 to 2001. The new measure is that of a stock’s safety.
How The DJIA Can Be “Managed” For A Wide Range Of Values Original
Is the Dow Jones Industrial Average (DJIA) really pushing its 2019 year end close during a period of a global coronavirus epidemic? Strangely enough, the answer is dependent on the answer to another question, “what do you mean by the Dow?” That question is particularly germane this year, when the 30 stocks of the Dow have experienced an unusually high turnover of three positions (10%). So the index is not “apples to apples” between even one end and the other of 2020.
When did a mother giving birth become the deliverer instead of the deliveree?
The OED recognises both uses of the verb 'deliver', under their meaning 3. In both cases, and fundamental to the meaning of 'deliver', is the idea of freeing and releasing. Note that they refer to the second (or b) as the passive. a. To disburden (a woman) of the fœtus, to bring to childbirth; in pass., to give birth to a child or offspring. Rarely said of beasts. (The active is late and chiefly in obstetrical use.) †b.pass. Of the offspring: To be brought forth (lit. and fig.). Obs.
The Market Does Not Seem Particularly Worried About COVID-19
More seasoned market observers have been scratching their heads as to why, after the initial hiccough, the recent bear market curbed its losses to the point where those losses, at least to April 22, 2020, look like nothing more than a speed bump. To quote Howard Marks, Chairman of Oaktree Capital on CNBC, from a few days ago, "We’re only down 15% from the all-time high of Feb. 19...
A Sector Analysis Of Market Mayhem
Summary The most pessimistic analysts fear that the COVID-19 crisis will bring about an economic dislocation comparable to the 1930s, or at least 2008. The stock market has been saying that investors don’t believe this hypothesis. “Other” factors seem to do a better job of explaining this year’s bearish market action.
A Sector Analysis Of Market Mayhem
Summary The most pessimistic analysts fear that the COVID-19 crisis will bring about an economic dislocation comparable to the 1930s, or at least 2008. The stock market has been saying that investors don’t believe this hypothesis. “Other” factors seem to do a better job of explaining this year’s bearish market action.
One Caution On Dogs Of The Dow Stocks
Having touted the merits of the "dogs of the Dow" strategy, we put forth one major cautionary. It can be misapplied, especially in parlous times like these. The COVID-19 virus has no real precedent, but the temporally closest approximation to "parlous times like these," that it makes sense to go back to, is the Great Recession of 2008 and 2009. That was a time when stocks exited the "dogs of the Dow" or even the Dow itself the wrong way, via dividend cuts, and in one case, bankruptcy.
Kohl's: A 'Hybrid' Between Macy's And Some Stronger Companies
Kohl's (NYSE:KSS) annual yield based on its most recent quarterly dividend is about 20%, putting it on par with that of Macy's (NYSE:M), before its recent elimination. But, as will be shown below, Kohl's is decidedly stronger than Macy's. This is not to say that Kohl's will maintain its dividend, if the pressure becomes too great. In fact, our recommendation is for a "cut," but not total elimination, to relieve some of the pressure.
Now Is A Good Time For The Dogs Of The Dow Strategy
The "Dogs of the Dow" is a strategy for managing the index by buying the ten highest yielding stocks (out of 30). This strategy assumes that the Dow stocks are enough like each other in "maturity" so that a yield advantage will allow one stock to outperform another. This theory works when the yield advantage is fairly large, and fails when it is too small. But the yield advantage for the "dogs" is now about as large as it has ever been.
Back To A 20th Century Stock Market
The Dow 30 Industrial stocks provide the best illustration of what we mean. When we talk about pre Persian Gulf War valuations, we do not mean pre Persian Gulf War levels in the 2000s. Instead, we refer to the multiples of our proprietary metric that prevailed during that era, which would put the Dow below 20,000, and (probably) somewhere above 15,000. There is a fundamental reason why we should return to say, 1980s valuations.
Why does "Leidenschaft" mean "passion" while "leiden" means "to suffer"?
There is a very interesting fact about »leiden«, »leid«, »Leid«, »leidlich«, »leider«, »erleiden«, »Beileid«, »beleidigen«, »Leidenschaft« and similar words: They do not derive from the same root. There are two distinct etymological roots for this words. root 1: leid Ich bin es leid, dir jeden Tag die Wäsche zu waschen. I am weary/tired from washing your laundry every day.
How severe were the casualties in ancient/medieval battles?
35 I've heard that in most battles prior to the introduction of gunpowder weapons, the casualties were usually very low (around 5% even in long battles) prior to the moment when someone's formation was broken and the side stopped really fighting and just ran away (or was fighting without the benefits of proper formation if the side couldn't retreat), and that most people killed in battle were killed by the pursuing victorious force. Is it true? Is it a matter of debate between historians?
What is the origin and meaning of conniption dido
This answer is mostly a follow-up to issues that StoneyB raised (justly, in my opinion) in his answer regarding the claimed connection between the term dido and Dido of the Aeneid. Webster's American Dictionary of the English Language (1864) has this entry for dido: Dido, n. pl. didos. A trick; an antic; a caper. To cut a dido, to play a trick:—so called from the trick of Dido, who having bought so much land as a hide could cover, cut it into a long string to inclose more than was intended.
How Warren Buffett Differs From Ben Graham
My younger sister, who works in a "social" profession (college professor) asked me recently if Wall Street trading wasn't a game of exploitation. I replied that ideally, Wall Street traders acted as financial "traffic cops" that directed the flow of money to its most productive uses. She conceded that some traders, yours truly perhaps, might perform this function, but railed against investors in "toll bridges" that were meant to "stop traffic" and take tolls from people.
A Graham And Dodd Approach To Market-Plus Returns
The first question is why we should buy stocks over bonds or money market instruments? The (current) answer is that the record in the twentieth century showed that "cash" produced only a 4% return a year on average, bonds averaged 5% a year, and stocks recorded total returns (dividends plus capital gains) averaging 10% a year. The downside is that stocks are more volatile than cash and bonds, typically by a factor of two or three or more times.
'Disguised' Growth Is The Best Growth
As Graham and Dodd investors, we like stocks that are selling much like bonds, around our proprietary "investment value" metric of book value plus 10 times dividends. Ben Graham regarded stocks as a special (high return) case of bonds. That's because in the 1930s (and currently), many blue chip stocks' dividend yields were higher than the yields to maturity of the bonds of the same company. That's true even if their earnings and/or dividends can rise.
Why A Deep Value Strategy Does Not Appear Optimal At This Time
I have been a deep value investor for much of my career. In fact, I published a book on deep value investing, "A Modern Approach to Graham and Dodd Investing" (Wiley, 2004) in the middle of a decade (2000-2009) when it served me well. That said, I also recognize the limitations of that strategy, and realize that it doesn't work all the time. More to the point, "now" appears to be one of those times.
Pair Trading "Dogs Of The Dow Stocks" For 2017
One way to manage the 10 highest-yielding "Dogs of the Dow" stocks is to buy them in preference to non-dog stocks. Another way to manage them is to "pair" them off by industry and buy the ones with the more attractive yields relative to each other or to their own history. In this article, we are exploring the latter method, since it is the more rigorous of the two.
Why The Dogs Of The Dow Strategy Succeeded In 2016, And What This Means For 2017
A year ago, we opined that the Dogs of the Dow, or the ten highest-yielding stocks, would outperform the whole index in 2016, citing as the reason a high incidence of "rotation" and the lack of "perennials" (the latter held back the strategy in the 2000s decade).
A List Of Graham Growth Candidates
In an earlier article, we listed Helen of Troy (NASDAQ:HELE), Novo-Nordisk (OTCPK:NONOF), and Ross Stores (NASDAQ:ROST) as Graham growth stars. OK, one might ask, those stories are in the past, what have we learned from them about potential future stars with similar (starting) characteristics today, or at least in the foreseeable future? In reviewing the "growth" portion of our (past) portfolios, we have sorted them into "A", "B," and "C" stocks.
A Tale Of Three 'Graham And Dodd' Growth Stocks
The Graham and Dodd philosophy is normally associated with "deep value" investing. "Growth" is not really part of the lexicon, although toward the end of his career, Ben Graham demanded earnings growth of "one third in ten years." Such a gain of 33% would translate into the 3% annual earnings growth that was enough to match inflation.
'Bond Math' For Stock Investors
Ben Graham felt that stocks should be bought as special cases of bonds for income more than for capital gains. Although we like capital gains, we share Graham's preference for buying "bond-like" stocks trading near "par" (book) value and yielding good dividends in lieu of interest. In his later years, Graham demanded earnings growth of "one third in 10 years," that is 33 1/3% in that time frame, or 3% a year compounded. That is a level of growth that roughly matches inflation.
Why Beta Has Different Implications For Value And Growth Investors
I've been a value investor for most of my career, at least until 2012 (when I stopped publishing on Seeking Alpha). That's when I began a stint with some growth investors for that year, and through 2013, before returning to my value roots in 2014. But at least I've seen the other side of the fence. And that taught me some lessons about the desirability of volatility. The "beta" of a stock refers to the volatility of a stock, relative to the market.
Something That Value Investors Often Overlook
As the author of "A Modern Approach to Graham and Dodd Investing," I am a hard core deep value investor, and have moderately outperformed the market for fairly long stretches of time. This is in spite of, and not because of, some fairly gruesome mistakes. So it was intriguing to read this article about how more famous, but fellow value investors suffered from making the same mistakes as yours truly.
A Midyear Review Of The Dogs Of The Dow
Although June 30th is usually considered midyear, the 183rd day in a 366-day leap year is actually July 1, so we have no compunctions about dating "midyear" as of Friday's close. Coming into 2016, we noted that the "Dogs of the Dow" had outperformed the Dow itself in 2015, and would probably do so again this year, because of the "rotation" of "non-perennial" stocks.
What I Learned About Warren Buffett From His Daughter-In-Law, Mary
An observation of stock prices on charts such as those provided by Value Line would show that stock prices of most companies follow a trend (tied to earnings) over time. It would also show that the prices of most companies sometimes fluctuate wildly around such a trend, within a band. Mary Buffett is the divorced former daughter in law of Warren Buffett (through his second son, Peter). After her divorce, she received numerous offers to write a "tell all" book about Warren and his family.
A Quarterly Review Of The Dogs Of The Dow Strategy
In an article early in January we opined that the recent relatively high turnover in "Dogs of the Dow" stocks suggested that the strategy of selecting the ten highest yielding stocks, would outperform the whole index this year. Out to April 1, 2016, the Dogs did just that. As of that date, the ten dogs were up 7.0% versus 2.3% for the whole index.
Down Pre-Election Year Is Precursor To A Down Election Year
The U.S. stock market "always" goes up in the year before a presidential election. Except that 2015 was a glaring exception to this rule. What's worrisome is the fact that the two previous exceptions were in 1931 and 1939. The earlier year signaled the depths of the Great Depression. The later year marked the start of World War II (in Europe). The associated election years, 1932 and 1940, were down years as well.
Why did the Japanese expect the United States navy would attack the Home Islands?
The Japanese navy had a fundamental misunderstanding of the American navy, in large part because of its experience with other, European navies such as those of Russia and Britain. In the 1905 war with Russia, that country had a (Far East) naval base at Port Arthur, Manchuria. The Japanese won the naval war by defeating the Russian fleet there, and then winning a second battle at Tsushima Straits against a reinforcing fleet headed to Port Arthur, and took the most obvious route there.
Stranded writer has his leg hobbled by a woman
There was a movie about a man, a famous writer, who broke his leg in a snowstorm, and was given shelter in the "boondocks" by a woman. The storm lasted about a week, during which time the writer's leg healed, and he was ready to move on when the weather cleared. But the woman, who had developed a "crush" on him, or at least his fame, didn't want to let him go, so she made plans to "hobble" him by re-breaking his leg.
What did Germany do in World War II about the different rail gauge in the Soviet Union?
One reason it was so hard for Germany to invade Russia/the Soviet Union in World War II (and I) was because the Russians had a different (wider) railroad gauge than that of the rest of Europe, making European rolling stock useless on Russian railways. How did Germany resolve that problem in World War II? Did it capture enough Soviet rolling stock to use on Soviet railways? Did it build "trunk" lines in the Soviet Union to e.g. Stalingrad and other critical points on the European gauge?
Is it socially/culturally acceptable for Indian/Sri Lankan people to visit the Oktoberfest?
Oktoberfest is a major international tourist festival in a modern, progressive country. No one will question your attendance, no matter how you look. The only reason it would be awkward is if you told everyone that you didn't like German beer! [The only suggestion of racism I could find was where an Asian customer was asked to move from a table at Hofbräuhaus, and then a white person sat down.
Can a character arc "overshoot" and then revert?
It is possible, as the other answerers have given examples. However, it requires more care. If you are exploring a balance between two character traits, the method the character uses to about their journey becomes more important than the journey itself.
How do I promote my pawn when the king blocks it?
This position is a draw with White to move. However, the same position would lead you to win if it was black to move (Zugzwang).
What was Finland's role in the siege of Leningrad?
My understanding was that Finland was not really pro Nazi Germany, but merely wanted to recover the lands lost to the Soviet Union in the Winter War of 1939-40. That is, "the enemy of my enemy is my friend." My further understanding was that individual Leningraders had a chance of obtaining food by going to the border with Finland and trading valuables for food with the local farmers, with minimal interference from Finnish soldiers.
Before entering WW II, why was the US so against Japanese aggression in China but did nothing about Germany in Europe?
There was considerable political opposition to the US becoming involved in European affairs again. Perhaps the most influential of these was Charles Lindbergh and the America First organization he was affiliated with. When you read through his speeches and other non-interventionist, you'll see that their main focus was on Europe. These groups fell silent for the most part after the German declaration of war against the US following Pearl Harbor.
Why was the US so against Japanese aggression in China but did nothing about Germany in Europe?
There was considerable political opposition to the US becoming involved in European affairs again. Perhaps the most influential of these was Charles Lindbergh and the America First organization he was affiliated with. When you read through his speeches and other non-interventionist, you'll see that their main focus was on Europe. These groups fell silent for the most part after the German declaration of war against the US following Pearl Harbor.
English Language & Usage Stack Exchange
As an inhabitant of India by birth, I would like to share my viewpoint with the community. Actually, IMHO, the problem arises because Asia is a vast continent (the biggest AFAIK) and therefore a different number of cultures, casts and creeds from different religions reside here.
united states - What did sectionalism have to do with the American civil war? - History Stack Exchange
Sectionalism was in fact a major element of the civil war. At the risk of oversimplifying, the strongest conflict was between the Northeastern industrial states (New England, New York, Pennsylvania, and New Jersey), and the "South,"( basically the 11 states that made up the Confederacy). In addition, there were two other sections: the Midwest, and border states such as Maryland, Delaware, Kentucky, and Missouri.
What started the US Dust Bowl of the 1930s, and could it happen again?
The Dustbowl occurred during the 1930s because of a combination of man-induced drought and the (mis)use of relatively new farming practices. In the 1920s, the spread of automotive (and tractor) technologies made it possible to "plow up" the Great Plains. This resulted in the loss of a lot of natural moisture and the creation of drought conditions in lands that had been marginal to begin with regarding the adequacy of the water supply. Even by the 1930s we still had not learned our lesson.
English Language & Usage Stack Exchange
In complement to Kosmonaut's answer, I'd like to add a few pieces to the jigsaw puzzle. The undisputed etymology of the English noun screw is from Middle French "escroe" (pronounced "escrow") which evolved into present-day French "écrou" (pronounced a-crew) and designates the nut (of a bolt). Its use in English is recorded as early as ca 1400. Interestingly enough there are in present-day French a number of expressions related to the jail system bearing the word "écrou".
Why did Saladin show kindness to Richard I?
Saladin was an unusual man who tried to win the "hearts and minds" of people he conquered. When he occupied Jerusalem, he ordered his men NOT to kill and plunder (in contrast even to the crusaders). When he occupied Cairo, Egypt, he built hospitals and universities for the city, even though he had to take harsh measures against the leaders of his former enemies.
English Language & Usage Stack Exchange
Although an old question I feel I might have something to add to the above answers and possibly help other confused visitors. I don't know if 'salty' is used in the same sense in other languages, but at least here in Finland, we might use it like your friend did: "This apartment is way too small for the rent to be that salty", meaning that the rent of the apartment is too pricy and doesn't correspond to its surface area.
What started the Dust Bowl, and could it happen again?
The Dustbowl occurred during the 1930s because of a combination of man-induced drought and the (mis)use of relatively new farming practices. In the 1920s, the spread of automotive (and tractor) technologies made it possible to "plow up" the Great Plains. This resulted in the loss of a lot of natural moisture and the creation of drought conditions in lands that had been marginal to begin with regarding the adequacy of the water supply. Even by the 1930s we still had not learned our lesson.
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