Is Your Dividend Portfolio DeepSeek-Proof? Let’s Discuss

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Many of you have written in asking about DeepSeek’s latest release and its potential effects on our income portfolio and strategies. Let’s discuss the latest in AI because, yes, there are ripples into Dividendland that are not fully appreciated by mainstream investors.

(And tariff questions, we’ll get to you in the coming weeks!)

First the DeepSeek disruption in AI, and let’s take vanilla dividend darling Nasdaq 100 Covered Call ETF (QYLD), which yields 12.2% as our example. Is that big divvie still safe and secure? Income seekers are constantly staring at the fund, writing in to ask me if they have permission to:

  1. Buy QYLD.

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Here’s my take on the DeepSeek selloff we saw last week: It’s a buying opportunity, especially for income investors.

(I wrote a bit about this in last Thursday’s article. Since the market has rebounded a bit since, we’re going to talk about it more today. A preview? It’s not too late to buy the dip.)

Income Investors: 2, Speculators: 0

Why do income investors hold an edge here? Because they have a chance to buy NVIDIA (NVDA) and other AI stocks, including some private-equity firms few people have access to, through closed-end funds (CEFs).

Tapping the selloff this way gives us two key benefits:

  1. Big dividends—the two funds at the heart of our strategy yield an average 10.4% when we buy them as a set.

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Many investors say they buy low and sell high. But how many really do?

Let’s pick on the people buying NVIDIA (NVDA) at atmospheric levels. First, can they even spell NVIDIA? (Hint: Two “I”s).

Second, do they realize it sports a price-to-sales (P/S) ratio of 32? It is usually a really bad idea to pay 10+ times sales for a stock. Let alone thirty-two.

Note that I did not say earnings. I said sales. Revenues. The ol’ top line. Money before everything.

Scott McNealy, the co-founder of Sun Microsystems, famously told investors it was insane to pay 10-times sales for Sun’s stock.… Read more

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I’m sure you probably know this—but it is usually a really bad idea to pay 43-times sales for a stock.

Note that I did not say earnings. I said sales. Revenues. The ol’ top line. Before everything.

Scott McNealy, the co-founder of Sun Microsystems, famously told investors it was insane to pay 10-times sales for Sun’s stock. Ten!

At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends.

 

That assumes I can get that by my shareholders. That assumes I have zero cost of goods… that assumes I have zero expenses… that assumes I pay no taxes… assumes zero R&D.

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Ignore anyone who says share splits have no impact on your portfolio (or your dividends!).

They absolutely do set you up for a nice price bump. I’ve seen it time and time again. It’s easy to see why: when a company—especially a top-notch dividend grower—splits its shares, the move draws in folks who’ve been holding off, seeing the pre-split price as too expensive.

Let’s be honest: we’ve all done this. How many times have you avoided a stock because it trades for $300 a share? Or $500 (or whatever your idea of expensive is)? Never mind the really high traders, like Alphabet (GOOGL), at $2,700, or Berkshire Hathaway (BRK.A),Read more

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Money-losing firm India Globalization Capital (IGC) found the magic formula last October. They put two investing buzzwords side-by-side:

  1. Cannabis, and
  2. Blockchain.

The savvy marketers at IGC then introduced an energy drink infused with hemp, and wow, what a rush!

IGC Jumped 10-Fold on Buzzwords

We rational income investors fortunately avoided this circus. I wrote to you as the blockchain-weed craze was peaking:

We level-headed contrarians should stay away from this circus. In fact, you need to be honest with yourself about the latest weed craze. If you’re tempted at all to buy this junk, it’s better if you change the channel.Read more

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My college buddy AC wrote to me after the bitcoin bubble crashed:

“You were very right! All the cryptos have CRASHED. Good call!”

I didn’t address the crypto situation much as it unfolded because I didn’t want readers mistakenly buying into the bubble. Now that the air has come out of the crypto-mania, I hope it’s safe to talk about the real opportunity.

I’m not talking about Bitcoin. I’m talking about the blockchain – and the dividend growth opportunities that will unfold as this “megatrend” plays out in the coming years and decades.

The blockchain is the nascent technology that serves as the backbone for cryptocurrencies such as Bitcoin and Ethereum.…
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Worried that a bursting bitcoin bubble will sideswipe stocks in 2018?

Don’t be. Because as I’ll explain in a moment, the hysteria over the so-called “cryptocurrency” is actually good for stocks this year, no matter if bitcoin explodes for a 10,000% gain … or flames out and crashes back to earth.

I’ll also show you the one surprising group of stocks poised to benefit from bitcoin in 2018, no matter what happens.

First, if you’re like most people and find bitcoin a complete mystery, stick with me for a minute and I’ll show you how it works—and what’s pumping up the bulging bitcoin bubble.…
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