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Yields, anyone???
Old 11-23-2007, 05:42 PM   #1
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Yields, anyone???

OK, it's the day after Thanksgiving and I see that there are some tempting yields to be had. Are they just too dangerous to get involved with (i.e. the yield might be cut and/or the stock tanking even more than it already has)?

WM (Washingto Mutual) yield is approx. 12%

C (Citigroup) yield is approx. 7%

BAC (Bank of America) yield is approx. 6%

I imagine there are a bunch of other yields out there, where the risk/reward may make some sense.
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Old 11-23-2007, 07:12 PM   #2
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Wait a minute (or so). I posted the above today at about 4:00PM. PST.
But, FIRE says I posted the above yesterday at 11:43 PM. How did I do that? Can I use this power to benefit humankind? Actually, I'm really into helping myself, but, if someone benefits along the way, that's alright with me.
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Old 11-23-2007, 07:15 PM   #3
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Originally Posted by redduck View Post
Wait a minute (or so). I posted the above today at about 4:00PM. PST.
But, FIRE says I posted the above yesterday at 11:43 PM.
I see your prior post at 3:42PM Pacific today.

I think you might need to change to a better brand of booze.
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Old 11-23-2007, 07:20 PM   #4
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there was an anaylst note recently where they said the dividend might be cut on C. they are cash flow negative from operations, a lot of loans going bad and they still have a lot of debt to repay
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Old 11-23-2007, 11:40 PM   #5
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Yesterday, 11:42 PM

No problem, I'll start drinking a better brand of booze (how could I argue that)? But I just copied the very top part of my initial post (see above with the blueish(sp)?-grey area. It does say: Yesterday, 11:42 PM (again copied from the original post)
Or, am I reading something incorrectly, or, just misinterpreting it? Wouldn't be the first time.
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Old 11-24-2007, 02:08 AM   #6
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OK, it's the day after Thanksgiving and I see that there are some tempting yields to be had. Are they just too dangerous to get involved with (i.e. the yield might be cut and/or the stock tanking even more than it already has)?

WM (Washingto Mutual) yield is approx. 12%

C (Citigroup) yield is approx. 7%

BAC (Bank of America) yield is approx. 6%

I imagine there are a bunch of other yields out there, where the risk/reward may make some sense.

WaMu latest earnings barely covering dividend. Likely a dividend cut on the horizon there.
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Old 11-24-2007, 08:16 AM   #7
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Some of the European banks are hitting 8% yields or higher on their preferred's.

I think they are going to make it out a lot better than the US banks in this case. Might be something for you to look at.
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Old 11-24-2007, 08:37 AM   #8
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Mr Warren Buffett bought a few shares of BAC - he didn't even call me up and ask how my DRIP shares in the file cabinet were doing!

Also a few C shares via a prior DRIP action.

No Washington Mutual though.

Have no idea which to add right now - maybe EGLE if I'm gonna chase yield!

heh heh heh - After LSU's loss last night and after the KU/MO in Kansas City today - I may have to wait a bit for 'my stock picking ability/crystal ball to start working. And no I don't bet football - just pick a few stocks on cold winter days - once in a while .
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Old 11-26-2007, 02:50 PM   #9
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My price target on BAC is 12, if it never gets there and the entire subprime mess reverses and banks make a dramatic reversal then perhaps I will reevaluate my outlook and price, but nothing that has happened from February on has changed my opinion that banks are a total catastrophic investment. Right now I am keeping on eye on that by watching HBAN and seeing if it drops to 10 and if BAC drops below it's multiyear low of 40.

If all is well and these things reverse course there will be plenty of time for me to buy at 50, it is inconceivable to me that the banks stops will just stop and make a reversal like a Google stock.

The banks and Bernake are saying it is getting worse and they don't know where the bottom is, the wisest and most experienced are really in a panic right now and are praying that rate cuts fix all. But how can the Fed cut rates with a collapsing dollar? Bernake knows he is in a pickle right now with all his tools not at his disposal.

My price target of 26-28 on KRE is looking better with every passing week
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Old 11-29-2007, 07:59 PM   #10
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Check out FUN (Cedar Fair). Current yield is 8% tax deferred. It's a limited partnership. Also check out FGP (Ferrell Gas Partners). It's at 9% right now. It's been paying $2.00 per share for years. It's also tax deferred.
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Old 11-29-2007, 08:56 PM   #11
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Although I track C, BAC, and WM, and consider them well run companies, I have red-flagged them
in my database because I no longer can figure out how much I think they are worth. There is just
too much off-balance-sheet activity and unknown or unrevealed losses for me to have an opinion.

The highest yields of the other stocks I track (and which I consider safe, well-run companies) are
REITs : DRE 7.5% and WRE 5.2%. Both are somewhat lower-growth, but have long records
of increasing dividends and earnings over the years. GGP and KIM pay about 4.3% and have
considerably higher growth rates.
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Old 11-29-2007, 11:16 PM   #12
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Quote:
Originally Posted by redduck View Post
Yesterday, 11:42 PM

No problem, I'll start drinking a better brand of booze (how could I argue that)? But I just copied the very top part of my initial post (see above with the blueish(sp)?-grey area. It does say: Yesterday, 11:42 PM (again copied from the original post)
Or, am I reading something incorrectly, or, just misinterpreting it? Wouldn't be the first time.
redduck,

There's an option somewhere to set what your "timezone" is on the board. The times you see listed on posts are based on this setting - the board software automatically adjusts those dates to be in your local time zone. Since I live in MST, I see your post's time as 4:42 PM, which makes sense since I'm one hour ahead of you.

Probably you have never set that setting, so the board thinks you live in Greenwich Mean Time, which is probably about 9 hours ahead of your PST. To fix this I think you go in under "User CP" somewhere. It should be obvious if you go looking for it.

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Old 11-30-2007, 07:03 PM   #13
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I need to post this to see what day and time I'm doing this. So,
SecondCore521 wish me luck.

Bingo, SecondCore521, I followed you suggestion (see above if anyone else has the same problem as I had). Got the day and the time right.

Got another situation now because REWahoo suggested I change to better brand of booze (I guess to fix the problem or maybe just to not care that I had a problem). Anyhow, the new problem is: I have all this better brand of booze that I no longer have a need for.
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Old 11-30-2007, 07:26 PM   #14
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Glad to help.

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Old 11-30-2007, 08:11 PM   #15
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Anyhow, the new problem is: I have all this better brand of booze that I no longer have a need for.
Thats not a problem, its an opportunity...
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Old 12-06-2007, 02:40 PM   #16
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Originally Posted by redduck View Post
OK, it's the day after Thanksgiving and I see that there are some tempting yields to be had. Are they just too dangerous to get involved with (i.e. the yield might be cut and/or the stock tanking even more than it already has)?

WM (Washingto Mutual) yield is approx. 12%

C (Citigroup) yield is approx. 7%

BAC (Bank of America) yield is approx. 6%

I imagine there are a bunch of other yields out there, where the risk/reward may make some sense.
I think dividend yields are an oxymoron of sorts. Here's an example:

Stock XYZ is at $40 and pays a 4% dividend $1.60 for 20 years.

Stock XYZ reveals that the CEO has been lying/cheating/making up numbers, etc. Stock goes down to $20, but NOW has a 8% yield.

Bottom line, did I get any MORE money in my pocket, all things being equal? NO..........

I'm not saying you could not get capital appreciation, be able to buy more, etc. What I am saying is you would get $1.60 a share no matter what the price is, but the YIELD looks good even though the stock may NOT be a good buy for awhile.........
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Old 12-06-2007, 05:23 PM   #17
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OK, F Dude: Let's go over this again. I'm talking about buying the stock now that it has an 8% yield--after the damage has been done--you know, the CEO lied (does that really happen)? But, let's look at Washington Mutual (WM). Let's say I bought it when it was yielding 12%. Suppose that WM then cuts its dividend by half (it really was at 12% for several days). I'd still be earning 6% while waiting for WM to gain some traction. And if it's stock goes down because of the dividend cut, well, maybe I buy some more and get an 8% yield). Anyhow, I'm probably too conservative to buy a WM. But, I can't imagine it going out of business completely. (Can it)?
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Old 12-06-2007, 06:08 PM   #18
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OK, F Dude: Let's go over this again. I'm talking about buying the stock now that it has an 8% yield--after the damage has been done--you know, the CEO lied (does that really happen)? But, let's look at Washington Mutual (WM). Let's say I bought it when it was yielding 12%. Suppose that WM then cuts its dividend by half (it really was at 12% for several days). I'd still be earning 6% while waiting for WM to gain some traction. And if it's stock goes down because of the dividend cut, well, maybe I buy some more and get an 8% yield). Anyhow, I'm probably too conservative to buy a WM. But, I can't imagine it going out of business completely. (Can it)?
Sure it can - wouldn't be any fun otherwise - the level of uncertainty priced into the stock is part of that chewy thing referred to as the value premium.

I already own C and BAC in DRIP plans - may buy some more/or not. Also watching WM - having no special expertise/crystal ball - may buy some with any mad money I can scrap up - but not enough confidence to bet the farm - just a little dollar cost averaging over the next seven yrs as a short term holding.

heh heh heh
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Old 12-07-2007, 09:31 AM   #19
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OK, F Dude: Let's go over this again. I'm talking about buying the stock now that it has an 8% yield--after the damage has been done--you know, the CEO lied (does that really happen)? But, let's look at Washington Mutual (WM). Let's say I bought it when it was yielding 12%. Suppose that WM then cuts its dividend by half (it really was at 12% for several days). I'd still be earning 6% while waiting for WM to gain some traction. And if it's stock goes down because of the dividend cut, well, maybe I buy some more and get an 8% yield). Anyhow, I'm probably too conservative to buy a WM. But, I can't imagine it going out of business completely. (Can it)?
No....but the fallacy of high dividend yield RATIOS tricks plenty of investors.

Perhaps the damage is done, perhaps not. I believe a lot of banks and firms damaged by the subprime mess will be cutting their dividends.

Do I think some large banks are VALUES now? Yes, but I will buy in over time.

Bottom line? I would rather have a boring stock that cranks out a steady 4%+ than playing the game too aggressively.

In other words, I would rather have MO than C at this point in time, but that's subject to change.......
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Old 12-07-2007, 09:58 AM   #20
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My greed and lust meter / kibbutz Buffett radar is also watching WFC, Wells Fargo and USB, US Bancorp.



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