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2 Dividend Stocks Headed In The Right Direction

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A photograph captures a moment in time. Seconds after the flash dims a tree could have fallen on the object of the photo or the sad looking man in the photo could have been told he just won a million dollars. In much the same way a dividend stock analysis is a snapshot in time, but the real question for the savvy dividend growth investor is 'where is the stock headed?'

A few more miscellaneous market notes

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  • Be cautioned that an ongoing trade that worked for the entirety of 2019 was to short volatility, and this continued to work until about the middle of February, where sophisticated quant funds that structured paired trading (namely taking extreme advantage of volatility/index rollovers) were absolutely crushed as a result of the Coronacrisis.
  • I do not frequently have macro convictions but this is one of them where I do.
  • Unlike marijuana companies, however, you have a much smaller cost of carry to hold a short position on volatility.

A few miscellaneous market notes

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  • You can’t eat on relative performance is a good cliche to describe this.
  • The marijuana sector is regarded as one positive recipient of everybody that is forced to go on lockdown (and anecdotally when biking around Vancouver I get the impression a lot more people are smoking it!
  • Dividends will be cut.

Continuing An Optimistic Assessment of COVID-19

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  • Before I go on, I want to point out some useful sites for getting data and resources.
  • The absolute numbers of total cases, new cases, total deaths and new deaths make great headline fodder, but the real news should be looking at the percentage rates of growth of total cases and new cases.
  • The data also tends to be more noisy, but that’s what the regression analysis is for — smoothing out the data in a theoretically consistent way, and allowing tracking to be done so that a policymaker could estimate if they are doing better or worse than expected.

Howard Marks: The Most Important Thing Is To Be Ready To Respond To And Take Advantage Of Declines

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  • Here’s a summary of the memo:
  • Bear case: Unemployment goes to 20%+.
  • Everything does NOT go back to normal before at least a year or two, and in the meantime, there is a huge demand shock.

Value Companies Using Comparative M&A Deals In Similar Industries

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  • So the first part is what I just mentioned, is the stock trading at a substantial discount to our conservative estimate of intrinsic value based upon M&A deals.
  • So this idea of having cash flow support and not necessarily looking too far out in terms of making judgments, how far out to go in assuming that the current earnings are going to continue.
  • You can find out more about Tobias’ podcast here – The Acquirers Podcast .

David Einhorn: Top Buys, Top Sells (Q4 2019)

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  • These documents allow investors to track their favorite superinvestors, their fund’s current holdings, plus their new buys and sold out positions.
  • This week we’ll take a look at David Einhorn (12-31-2019).
  • The current market value of his portfolio is $1,347,682,000.

How We Can All Become A Positive Force In Our Local Communities

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  • Bill Brewster:
    Yeah, we do it for the people.
  • Bill Brewster:
    I’ll tell you for real something that… And I don’t know how you can do it, and it would be tough.
  • Tobias Carlisle:
    So what’s the stock market done while we’ve been talking?

Nassim Taleb: Why Are We Bailing Out Companies That Spent Their Cash And Took On Debt

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  • They’re bailing out investors and corporations.
  • Because if you don’t have extra protection you may face difficulties.
  • We should bailout citizens not corporations who made these mistakes.

How Do Stock Options Work?

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  • Employees make money from these options as the price of the underlying stock increases, giving them the “option” to purchase the stock at the lower grant price.
  • To determine a fair strike price, it is helpful to know where the stock has been trading in past times frames.
  • You believe this is a fair price for the stock and speculate that the stock will continue to increase, and you decide to buy a call option.

When Will Stocks & The Economy Recover?

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  • If Italy reopens on May 4 th , that would be about 6 weeks since its peak in the number of daily new cases on March 21 st .
  • Q2 estimates have fallen to -9.05%.
  • If its Q1 prediction is right, then we will see the rare time when estimates are missed because they won’t be cut that much by the time earnings season starts in 2 weeks.

Getech PLC (GTC:LON) - Buying at the point of maximum pessimism

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  • GTC is down 76% on the five year chart.
  • A few years of hard times are ahead.
  • Maybe the downturn in the energy industry is a painful drawn out affair and GTC ends up on the scrapheap of business history like most other tiny firms do.

A Viral Market Meltdown V: Bailouts and Buybacks

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  • Download data As in the previous week, stocks and bonds moved together, albeit with positive, not negative, returns.
  • In keeping with my practice in prior weeks, I will break down the equity movement last week by region and sector first, looking to see if there are divergences.
  • Put simply, there is very little evidence, at least during these six weeks, that the market is punishing high growth stocks or high momentum stocks more or less than other stocks.

Start the money taps

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  • The Government of Canada has signed new procurement agreements with Canadian companies Thornhill Medical, Medicom, and Spartan Bioscience to purchase and boost capacity to manufacture equipment and supplies including portable ventilators, surgical masks, and rapid testing kits.
  • The government has ordered millions of supplies to ease the pressure on health care facilities.

The All-Terrain Dividend Portfolio

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  • I have been asked many times by IMA clients if we could build a diversified portfolio of high-dividend-paying stocks.
  • (Today, because of the market decline, these stocks are very, very cheap.)
  • Therefore, I’ll invest my own money into this product – if it’s good for IMA’s clients it should be good for me.

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