Below are the valuation targets for Intel (INTC) for the next 10 years. Continue reading
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- Market Indicator
- Price Momentum Indicators
- Richard Russell
- Silver
- Speed Resistance Lines
- U.S. Dividend Watch List
U.S. Dividend Watch List: August 7, 2020
The market is now just a few percentage points away from the all-time high set in February 2020. This test is a critical one for the S&P 500. However, our team will monitor that, as well as, the Dow Theory indicators as a true test of the market sentiment. With the market near the high rather than the low, there are only a handful of companies on our watch list this week. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
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Income Bellwethers: September 2019
In September 2019, Morningstar.com published their DividendInvestor which contains their Income Bellwether Watchlist. Below is the performance of the stocks based on the top highest and lowest dividend yield from August 9, 2019 to August 7, 2020.
As the data continues to demonstrate, low yield generally outperforms high yield. This has been resoundingly shown in our Dogs of the Dow in the period from 1996 to 2019.
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Of the stocks that beat the performance of the S&P 500 gain at +14.82%, 74% had dividend yields below that average yield of the entire watchlist.
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The entire list of stocks gained +1.72%.
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The conversion/merger of United Technologies marginally impacted return data.
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Of note is the change in the performance by selecting the 2nd, 3rd, 4th stocks versus the top 3.
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No group beat the S&P 500 which is severely affected by lopsided market weighting.
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Top 10 low yield stocks beat the Dow Jones Industrial Average.
see also:
Posted in Dogs of the Dow, Income Bellwethers, Morningstar
Public Storage (PSA) Q2 2020
Industry representatives say that steadiness of FFO is more reflective of a REIT’s health. For the purposes of determining the future direction of the stock price, we prefer the wide variability of the net income figure. (data source)
see also:
Dogs of the Dow: 1994
In our continued pursuit to gather data that contradicts our view that low yield stocks outperform the high yield stocks (aka Dogs of the Dow) as presented in Michael O’Higgins’ book Beating the Dow, we have obtained the performance of the top ten, top five, top three and the 2nd, 3rd, and 4th stocks in the high and low yield groups then contrasted their performance against the Dow Jones Industrial Average for the same year.
In this case, the year under consideration is 1994 and we have added the list of ten stocks and their price with the dividend yield.
1994 Data Breakdown
After reviewing the data and adjusting for splits, the Dogs of the Dow (High Yield stocks) again underperformed the Low Yield stocks.
Average Return 1991-1994
On average, from 1991 to 1994, the Low Yield stocks continue to outpace the Index and the High Yield (Dogs of the Dow) stocks at more than double the rate.
see also:
Posted in 1994, Dogs of the Dow, high yield, Low Yield
1920-2020: New York Times Inflation Reference Index
Below is the annual New York Times Inflation references from January 1920 to 2020.
See also:
Posted in NYT, NYT Recession/Depression Index
Rising Secular Trend in Interest Rates
As we have long advocated, the declining trend in interest rates is coming to an end and the secular trend in rates is up. To provide a decent level of analysis on what might happen going forward, we have a comparison of the Dow Jones Industrial Average to the 3-month Treasury from 1934 to the peak in May 1981.
Conventional wisdom says that as interest rates rise then stocks should underperform. However, when contrasted to the interest rate sensitive Dow Jones Utility Average, we see that the index increased +1,321% from the April 1942 low to the March 1965 peak.
We contrast the change in the Dow Jones Utility Average to the 3-month Treasury to highlight what happened to the price of Silver in the same secular trend.
Historically, it is understood that rising interest rates mean rising commodity prices. In the last secular trend, the price of silver increased modestly until, in the late stage of the cycle, all commodity prices go wild. We believe that such a trend is likely to occur again.
Our general conclusion on the secular trend in rising interest rates is that the best alternative in the initial stages is stocks and commodities in late stage of the same trend.
“For the past 25 years the commodity market and the stock market have moved almost exactly together. The index number representing many commodities rose from 88 in 1878 to 120 in 1881. It dropped back to 90 in 1885, rose to 95 in 1891, dropped back to 73 in 1896, and recovered to 90 in 1900. Furthermore, index numbers kept in Europe and applied to quite different commodities had almost exactly the same movement in the same time. It is not necessary to say to anyone familiar with the course of the stock market that this has been exactly the course of stocks in the same period ( source: Dow, Charles H. Review and Outlook. Wall Street Journal.February 21, 1901.)”
Margin Debit-Credit: August 2020
Below is the Year-Over-Year percentage change data from FINRA’s Margin Statistics.
see also: Margin Debit-Credit August 2019
Posted in Margin Debit-Credit
Dogs of the Dow: 1993
In our continued pursuit to gather data that contradicts our view that low yield stocks outperform the high yield stocks (aka Dogs of the Dow) as presented in Michael O’Higgins’ book Beating the Dow, we have obtained the performance of the top ten, top five, top three and the 2nd, 3rd, and 4th stocks in the high and low yield groups then contrasted their performance against the Dow Jones Industrial Average for the same year.
In this case, the year under consideration is 1993 and we have added the list of ten stocks and their price with the dividend yield.
1993 Data Breakdown
This is the first year where High Yield stocks (Dogs of the Dow) exceeded the returns of the Low Yield stocks.
Average Return 1991-1993
The average return for the period from December 31, 1990 to December 31, 1993 continues to show the Low Yield stocks exceeding the index in each grouping. However, the High Yield stocks are gaining ground with the top ten stocks failing to prove their ability to beat the Index.
see also:
Posted in Dogs of the Dow, high yield, Low Yield
Digital Realty Trust Inc. (DLR) Q2 2020
Industry representatives say that steadiness of AFFO is more reflective of a REIT’s health. For the purposes of determining the future direction of the stock price, we prefer the wide variability of the net income figure. (data source)
see also:
Dogs of the Dow: 1992
In our continued pursuit to gather data that contradicts our view that low yield stocks outperform the high yield stocks (aka Dogs of the Dow) as presented in Michael O’Higgins’ book Beating the Dow, we have obtained the performance of the top ten, top five, top three and the 2nd, 3rd, and 4th stocks in the high and low yield groups then contrasted their performance against the Dow Jones Industrial Average for the same year.
In this case, the year under consideration is 1992 and we have added the list of ten stocks and their price with the dividend yield.
1992 Data Breakdown
For the second year in a row, the top ten stocks in the high yield category underperformed the Dow Jones Industrial Average AND the low yield category.
Average Return 1991-1992
The average return for the period from December 31, 1990 to December 31, 1992 highlights the strength of the low yield stocks. However, for the top ten high yield stocks, they could not outperform the Dow Jones Industrial Average.
see also:
Posted in 1992, Dogs of the Dow, high yield, Low Yield
Digital Realty Trust Inc. (DLR) Q1 2020
Industry representatives say that steadiness of FFO is more reflective of a REIT’s health. For the purposes of determining the future direction of the stock price, we prefer the wide variability of the net income figure. (data source)
see also:
A Strategy For the Coppock Curve
On, August 1, 2020, we said the following:
“Last month, the Coppock Curve dipped into negative territory flagging us to closely monitor this indicator for a buy signal. In addition to monitoring the Dow Jones Industrial Average, we created a model to back test this strategy against individual stocks. So far, we are very satisfied with the outcome.”
Based on our prior work, we have developed a strategy to compliment the indications made by the Coppock Curve when applied to the Dow Jones Industrial Average. Continue reading
Dogs of the Dow: 1991
In our continued pursuit to gather data that contradicts our view that low yield stocks outperform the high yield stocks (aka Dogs of the Dow) as presented in Michael O’Higgins’ book Beating the Dow, we have obtained the performance of the top ten, top five, top three and the 2nd, 3rd, and 4th stocks in the high and low yield groups then contrasted their performance against the Dow Jones Industrial Average for the same year.
In this case, the year under consideration is 1991 and we have added the list of ten stocks and their price with the dividend yield.
1991 Data Breakdown
The data should be considered amazing because the exceptional yield that is offered by the high yield stocks (Dogs of the Dow) an investor generally foregoes nearly double the return. Also notice that the high yield stocks had 4 of the ten companies on their list that failed (bankruptcy, forced liquidation) while only one company in ten on the low yield list has failed (so far).
see also:
Posted in 1991, Dogs of the Dow, high yield, Low Yield
Silver Review
On August 25, 2019, we said the following of silver:
“The trend is up, what remains are the buying opportunities (based on the upside targets above) and a lot of patience.”
Since that time, silver has had the following price action.
Clear buying opportunities have opened up in the intervening period from August 2019 to the July 2020 period. In addition, our point that precious metals prices decline during stock market declines has continued to hold up as highlighted in our articles published on November 8, 2008 and September 14, 2014. The mistaken belief that precious metals are the place to be if the stock market “crashes” because they act as a hedge, meaning generally increase, is mistaken.
Our next update on the price of silver will review the upside resistance targets so that those interested in the precious metal can be more selective of where they plan to initiate positions. We hope to continue the tradition of providing the least expensive lesson on the behavior of precious metals.
Posted in Silver