Did anyone see this morning's CPI (consumer price index) data?
It beat analyst expectations (in a good way) and showed inflation
pressures are relatively non-existent. The "slight" bump up in food
prices was offset by a drop in energy prices. Now let's see a show
of hands: how many people paid less in their energy bills or at the
pump? That's funny, no hands are up. Oil and gas prices are spiking
and the energy price data shows a decrease! Yet another reason why
I keep saying the environment for investors remains quite limited
as far as income opportunities go.
Getting back to the markets, earnings results helped move shares
of Abercrombie & Fitch (
) and Target (
) higher following their numbers. On the flipside, Deere &
) and Staples (
) got hit hard on numbers that disappointed investors. Wall Street
analyst downgrades pushed stocks like Barnes & Noble (
) and Entergy (
Google Buy Surprises Markets (And May not be Good news for
Late Monday, Google (
) announced it would be acquiring Frommer's, one of the
best-selling travel guidebooks in the world. Even though the terms
were undisclosed, several sites believe the purchase price was in
the $23 million neighborhood. This deal follows Google's strategy
to buy Zagat, a restaurant review giant that has been around for
many years. Now this piece isn't so much about Google making smart
acquisitions as much as it is about what real revenue-generating
businesses can sometimes go for. Now again, we don't know what
Frommer's financials looked like, but on the surface, the price
looks very cheap.
Recent overvalued tech IPO's like Yelp (
), Groupon (
), Zynga (
), as well as Facebook (
) should now be worried about the possibility Google is coming
after their business - and making smart acquisitions in the
Investors need to take note how dangerous hype can be for
companies, both public and especially private soon-to-be IPOs,
which are pumped all over the various mainstream media channels. By
the time the retail investor can get their hands on company shares,
the best part of the investment angle has been picked clean many
times over in most cases. It's clear that VC's and private
investors tend to be the best-positioned in many of the deals we
see on Wall Street. By the day of the IPO, these insiders are ready
to cash out a good portion of their investment and move on to the
next opportunity. (For obvious reasons, you won't see this kind of
critical commentary on mainstream business media outlets).
Turning to real estate for a minute, a good friend of mine who
dabbled in commercial real estate would often tell me the best
properties were often the ones that never saw a public listing.
This fact often struck me as odd. Why wouldn't property owners list
their buildings publicly and try to get the best possible price for
them? Well, many times, property owners don't want their tenants to
panic about a potential sale affecting their leases. So to keep
things quiet, the listings never see the light of day. Many of the
shrewdest real estate moguls buy properties almost exclusively this
way (in private, secretive deals).
At the end of the day, there are deals to be had out there, but
you need to be in the right place at the right time. And more
importantly, you must have the liquidity to make things happen.
Otherwise, most mom-and-pop investors need to work really hard to
make sure they aren't purchasing properties that plenty of smart
money has already passed over.
The same concept applies to the equity markets. Always be sure
your hard-earned money is being invested wisely. Look to buy
quality not quantity, strength not weakness, and never base your
decisions on misguided hype. As always, we'll be right here at
Dividend.com helping steer you toward the best possible ideas, and
perhaps more importantly, warning you about the ample dangers that
exist in the markets these days.
An Important Note Regarding the Best Dividend Stocks List
We want to make sure everyone understands that the stocks on our
Best Dividend Stocks List
are the names we currently like for new investor capital,
regardless of what date the stock was first recommended on. If and
when a stock is removed from the list, we will clearly state
whether the stock should be sold (which is rare but occasionally
will happen), or simply held in one's account until we see a better
entry point or catalyst.
And here's one last thing to remember about what we do here at
Dividend.com: it's not just the names that we recommend that can
help you build wealth, but also the things we try to steer you away
from that are just as important. Forget about speculative or penny
stocks, chasing unprofitable IPOs, and listening to the manic
talking heads in the business media!
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Thanks for reading everybody. I'll see you tomorrow!
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