Wall Street is apparently not OK with the $1.6 trillion in tax
hikes being proposed by President Obama in the latest emphasis
surrounding the so-called "fiscal cliff" and all the talks that go
with it. Again, this topic will be the subject of many rallies and
sell-offs between now and the new year.
Looking at some of the movers in today's tape, Abercrombie &
) and Cisco Systems (
) bucked the selling and pushed higher following both companies'
earnings results. Fertilizer play Mosaic (
) ended lower after management announced production cutbacks from
lower demand. Competitor Potash Corp (
) was also down on the news. Home improvement giant Home Depot (
) gave back some of yesterday's pop as some analysts believe most
of the real estate rebound we have seen (depending on where you
live of course) has already been priced in the shares. I would
venture the storm damage and repairs needed on the east coast from
Hurricane Sandy could keep a bit of the recent momentum going
however. Starbucks (
) made some headlines this afternoon, announcing a $620 million
cash takeover of specialty tea retailer Teavana Holdings (
). Investors of the coffee retail giant weren't too excited about
the news as the shares fell nearly 3%. The thought could have been
for Starbucks to get into the tea market without having to shell
out a boatload of cash to buy a retailer that was struggling
following its IPO and was trading way off its 52-week high.
Lastly, we couldn't help but notice the unusually strong rally
in shares of Facebook (
), coming on the day nearly 800 million shares are set to be
unlocked (allowing many more insiders to sell their stakes). Only
on Wall Street!
Investing Through the Great Divide
Over the last couple of days of dodging headlines of ECB and
their biggest economic problem child, Greece, we're also being
inundated with "Fiscal Cliff" stories. Well, add another inevitable
topic we knew was on the horizon: how companies will start to
embrace the certainty of the Obamacare health program.
We have already heard corporate backlash as well as small
business owners (which make up a good part of the overall country's
labor force) talk about how they can not afford the changes coming.
Some have even gone ahead with preemptive layoffs and changes to
their payroll like forcing full-timers to consider hourly cuts to
become part-timers. The media is picking up on all the stories and
the reactions of course. All this coverage will stir up emotions of
many different mindsets, from business owners to politicians to
employees who may be directly impacted by what should have been an
improvement of benefits, but may turn out to be a net loss in some
people's cases (layoffs, salary and hour reductions).
Are We Going to be Like Europe?
The Obamacare initiative has all the makings of increased
government controls and jurisdiction. From an investment
standpoint, this will be a new element of analysis that we will
have to give a certain level of credence to.
If the road is indeed headed toward more government intervention
(some will call it forced "socialism"), and using Europe as an
example of how this may play out, higher unemployment may become
the standard. If you look at the unemployment levels in Europe,
especially focused on the younger populace (25-34 years old), the
reality is stark. I must reiterate the stance that we should all be
expecting the employment picture for the next decade or so to be
quite brutal, regardless of the numbers the government puts
Being Average Will Get You Nowhere
Doing what may be described as "average work" in today's world only
makes a worker more expendable. Unless you provide an element that
others lack (personality can be one), you'll eventually find
yourself on the chopping block many times, likely to be replaced by
a less costly replacement.
I bring the subject of career up often because it is the
foundation of where our investment dollars come from. Despite the
governmental jobs numbers getting better, I believe there are
wholesale changes happening in today's workforce, and with that I
see job opportunities to make big money dwindling for the masses -
unless you acquire and develop a special skill set that is needed
in today's world. With declining education-based scores in the
U.S., many of our younger generations may be on the outside looking
in when it comes to global opportunities if there is not enough
emphasis placed on schoolwork and education. This needs to come
from the home front as much as from anywhere else.
From an investing perspective, you cannot ignore the changes
taking place today, especially if you're looking to achieve great
investment results from your dividend holdings. Talking to
"regular" folks each and every day can remind you that there are
systemic fractures in different areas.
Financial Incompetence is the Norm in Government
The damage from Hurricane Sandy on the east coast highlighted how
poorly some power companies have been preparing for breakdowns in
their systems. Rather than putting money into upgrading systems
that have been antiquated for decades in some cases, money lined
the pockets of those running the companies. In some cases, these
were state-appointed positions, showing us yet another reason that
most forms of governmental controls have major gaps and little to
no accountability until problems are front and center.
We all know the games played in municipalities all around the
country when it comes to pensions and wages, because it hits us
every year in the pocket with rising property taxes and other fees.
Reuters just ran a story about the town of San Bernadino,
California, where analysts found almost 75 percent of the city's
general fund is now spent solely on the police and fire
departments, most of it on wages and pension costs. And by the way,
the San Bernadino filed for bankruptcy back in August if you hadn't
Yep, there are many fires that still need to be put out (pun
intended). You see, it's not really about one event ever being the
main factor. There are many smaller factors that when added up
paint a picture of much-needed solutions of the permanent kind, not
the "extend and pretend" methodology we have all grown accustomed
Investing Still in Focus
Besides our global macro views, we still have our regular job to
do, and that is to find the areas of the market that still makes
sense for new capital, all the while hoping to avoid investment
traps and what may fool some as "value" opportunities. As always,
we'll sound the warning bell to
subscribers whenever necessary.
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!
A Dividend Capture Strategy for Active Investors
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members, so anyone that focuses on "Dividend Capture" trading
strategies should have plenty of good stuff to research each day.
Just check our enhanced
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Thanks for reading everybody. I'll see you tomorrow!
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