How about that Fed? They surprised everyone (myself included) by deciding to keep showering the market with easy money via Quantitative Easing, deciding not to slow down the $85 billion per month in securities purchases. I was a bit disappointed by this news. It has a double-whammy effect of meaning that the broader economy is not viewed as strong enough to stand on its own, while also artificially inflating the prices on equities due to the easy money that continues flowing in. It’s a real shame.
But what can we do? Well, if you’re a value-based investor like myself that focuses on accumulating attractively priced equities on an ongoing basis you simply stick to the plan. Pay strict attention to valuation and purchase when it makes sense. Don’t get caught up on in the hysteria of the market. If you can’t find any attractive opportunities today, wait until tomorrow. The market isn’t going to shut down permanently; I promise! Stay focused, vigilant and patient.
Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.
Ten Dividend Paying Stocks I Purchased in September
Dividend Growth Investor clues us in on what he’s buying. A great looking list here, filled with names like Wal-Mart Stores, Inc. (WMT) and Aflac Incorporated (AFL). I see some I like!
One in 8 workers will never retire
CNN Money published a study that shows that one in eight people globally will never have enough assets in their lifetime to sustain themselves enough to quit working. A rather bleak picture, indeed. There was a time when I didn’t take retirement seriously and I was my own worst enemy, financially speaking. But there’s always today. There’s always time to turn it around. Recognize what’s important to you and take control of your life.
RB40’s Exit Strategy Post Mortem
RB40 takes a look at the strategy he laid forth a few years back in order for him to retire by 40 years old, and then goes through step-by-step to review how close he’s stuck to his plan and how things have panned out so far. It’s always interesting to read about a strategy to retire early, but even more so to see how someone who retired young is actually doing and whether or not there are any changes they would have made if they could go back in time.
Lessons from Ecuador
Mr. Money Mustache reviewed his recent trip to Ecuador and what turned out to be a small coalition between blogger friends to team up and adventure off to South America in order to motivate interested parties and perhaps change the world in a small way. For an interesting alternative take on the trip, you can read about Jim Collins’ version as well.
I Hate Debt and Believe You Should Too
My buddy Kraig wrote up a post on why debt is evil and nasty and why he utterly hates it. Can’t say I blame him. I’m mostly debt-free. I have some holdover student loan debt from my college days, but besides that I can honestly say I owe nobody. I sleep well at night knowing that I don’t owe a bunch of institutions or people money. Some people can comfortably leverage themselves and make a lot of money. However, I take solace in knowing that you can’t go bankrupt being debt-free.
Warren Buffett on CNBC: Stocks now ‘more or less fairly priced’
Continuing on from the theme earlier in this post, Buffett is having a hard time finding value out there right now. He doesn’t see a lot of bargains, and I concur completely. There’s simply not a lot to get excited about. While I relish in buying equities and building my dividend stream/wealth snowball, I also abhor buying securities that are overpriced. This is probably why you’ve seen little action from me this month in terms of purchases.
How To Calculate The Intrinsic Value Of Your Common Stocks: Part 1
One of my favorite writers, Chuck Carnevale, decided to take some of us back to school on what it means to value a company, why even some of the investing world’s biggest legends change their methods over time and how important it is to focus on fundamentals and reasonable valuations. Great stuff, as always.
Meryl Witmer On CNBC
Bryan over at The Fast Weekly posted up this great video of Meryl Witmer and some of her best ideas right now. She was recently added to the board of Berkshire Hathaway and I can see why. Seems to be very conservative and very intelligent.
Former Lehman CFO Erin Callan’s Never Going Back
A very poignant take here on the work/life balance and how it can tilt too far very quickly. It looks like Erin has found peace in love and life and I thought the quote at the end was telling as it came from someone who was at the top of the proverbial mountain – “It may seem like a strange thing to say, but sometimes I’ll look around and I’ll see a huge yacht or we’ll go by a beautiful house, and the first thing that comes into my head is not, like, ‘Oh, wow, wouldn’t that be great?’ ” she says. “The first thing that comes into my head is, ‘I wonder what they’re giving up to be able to have that?’”
New Purchase – KMI
Compounding Income tells us about his recent purchase, and why he bought. I personally like this buy, as I think KMI is one of the very few attractively priced stocks in the marketplace right now. Unfortunately, I’m already about as heavily allocated as I’d like to be to this name.
If You Own Stocks, Read This
This article took a look at the shipment of goods around the world, which actually paints a rosier picture than what some economists are putting out there. While I’m no macroeconomic export, nor would I like to be, I do see a little value in peeking at numbers that try to show where the global economy is at, and by extension where it may be heading. While I focus on individual company fundamentals, if a global economy is in the gutter it’s likely that many businesses will be as well.
Full Disclosure: Long WMT, AFL, KMI
Thanks for reading.
Photo Credit: Benoit Mahe
I wouldn’t say QE is a “real shame.” You’re certainly not an economist and I doubt you fully grasp the program, it’s objectives, and how the broader economy would be if it wasn’t in place. I’m not an economist either, and I don’t know the ins and outs either. So I’ll let the people with the PhDs in economics call the shots.
Anonymous,
I stated above that I’m no macroeconomic expert, so I agree with your assertion that I’m no economist.
However, I think there is room for debate on both the effectiveness of QE as well as the benefits and drawbacks of it. While I think Ben Bernanke is a wonderfully smart man, there is always room for two sides. I view the fact that the economy is not seen as particularly strong right now while we simultaneously have a lack of attractively priced equities as “a real shame.” You can disagree, as there is always room for debate.
By the way, there are many economists that are currently debating whether or not QE should be slowed down, so I’m not the only one with a negative viewpoint on the decision to not slow down bond buying.
Best wishes!
Thanks for highlighting my article on the ten companies I added to in September.
I’m not an exper eithert, but have done well in a couple Community College Economics classes. I tend to agree with DM on this post. He is not claiming ot stating everything as fact, but giving commentary of what he sees. Eventually we will have to face the effects of artificially inflating prices on just about anything and everything via QE. I don’t dispute that Ben Bernanke a very smart man if you read his history and how he studied and taught himself some very tough subjects. When they do decide to start tapering more that may or may not be the beginning of a correction and a chance for us to average down.
I still believe one should always research and look for opportunities during all market cycles and execute there plans based on what they feel is attractively valued. In other words worth the risk of losing money as there is no 100% guaranteed strategy.
DGI,
No problem! Keep up the great work. 🙂
Best regards!
SWAN,
Thanks for your thoughts and adding that. I agree with you that there are always opportunities, if one looks hard enough. I certainly have my binoculars out!
Take care.